Description:
This report discusses how to establish control over the wage bill in Swaziland, which has become uncommonly large. The wage bill needs to be addressed urgently for two main reasons. The first is that it cannot be afforded any more, as the public revenue base has experienced a significant collapse that will not be reversed in the near future. The second is that wages are crowding out other type of expenditure necessary for quality service delivery. Swaziland needs to consider two sets of options: one set to put the wage bill on a track that will see it decrease permanently over time as a percentage of GDP, and one that will contract it rapidly to achieve fiscal sustainability. The two sets of options, while conceptually different, need to be considered jointly to keep government effective and efficient. The report includes a simple modeling exercise, based on the actual pay scale and positions in the civil service (and estimates for the army) which provides insights as to the drivers of the wage bill. It also evidences the need to act decisively and rapidly to make it sustainable. It is only with a mix of immediate one-off reductions in wages and positions, with differentiated and selective increases in wages and positions looking forward, that the wage bill can be brought down to a sustainable level