Prepare for social upheaval

Prepare for social upheaval

WE can fully understand the predicament that Finance Minister Moeketsi Majoro found himself in this week as he presented his third budget speech in Parliament.

It would be very easy to cynically dismiss his speech arguing we have heard these arguments before and that there was really nothing new in his presentation.

That would be tragic as it would not add any value to the current debate surrounding the budget.
This is why we think it is important that we add our two cents to the debate.
Of course, we acknowledge that Majoro found himself caught between a rock and a hard place. It was not easy to strike a balance between competing interests.

 

The budget speech came against a background of a massive dip in revenue with SACU revenue alone falling by a massive M600 million last year.
Domestic tax is also expected to fall short of target by some M400.9 million. This has put a massive strain on what Majoro could do given the limited resources.

To deal with the declining revenue, Majoro has suggested that the government could eventually lay off some civil servants to reduce the ballooning wage bill.

The other option, he said, would entail ensuring that Lesotho’s economy grows faster than the wage bill.
We acknowledge that laying off civil servants, who number about 45 000 strong, could trigger social upheaval. With an unemployment rate currently hovering around 25 percent, laying off workers could result in more misery for Basotho.

But will Majoro get the political backing to go that route?
Will the politicians allow Majoro to go that route which we suspect the majority might consider politically suicidal?
That is where the challenge lies.

Majoro made the right noises in his budget speech. He promised to reduce international travel by ministers. All public servants, apart from the King, the Prime Minister and MPs, will travel economy class.

He also promised to slash telephone allowances for civil servants and freeze all new recruitment.
Critics will likely argue that we have heard this song before. All they want to see is action and more action to cut the expenditure. They want to see the government living within its means.

Majoro must be given the platform to drive change and ensure fiscal discipline within government ministries.
There will of course be howls of protest from civil servants after he announced there will be no salary increment for government workers this year.

It must be noted that civil servants are already in an agitated state. Teachers downed tools early last month demanding a bump on their salaries, among other grievances.

Police officers have also been up in arms demanding a raise on their pay.
We could therefore be heading for stormy times as trade unions mobilise their members to push for salary

increments. The reality though is that there is no money. The unions must accept this reality.
Having decided not to award any salary increments to civil servants, Majoro went on to cut ministers’ gross salaries by a measly five percent. That, in our opinion, did not go far enough.

That measure alone does little to engender confidence that the government is committed to cutting costs.
We want to see a much more radical way of slashing expenditure by cutting, for example, the number of ministries. Ours is just too big a Cabinet. We could do with a merging of a few ministries.

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