Fackson Shamenda looks on at Labour Day celebrations in Lusaka
Hjoe Moono
Last week we got treated to the legendary ‘one minute’ Labour Day speech by our president who seemed to have emphasised the existence of a Public Sector Wage and Employment Freeze. The Labour Minister Mr. Fackson Shamenda deemed the one minute speech ‘Powerful’-whatever that means, we will take his word for it.
Usually a wage and employment freeze is the first step governments facing a recession get at as a way of cutting costs and staying afloat during the recession. It acts as a cost-cutting measure typically taken by countries that are experiencing or anticipating financial difficulties. It involves holding employee monetary compensation constant for a period of time—such as two years proposed by government–with no cost-of-living or merit increases in pay. Indeed, these are commonplace during recessions, and in extreme recessions, they accompany employee layoffs.
When fiscal problems begin to affect a country, as evidenced by our higher than planned for deficits in expenditure, one of the first measures usually taken is an attempt to cut costs. For example, if an employer’s annual budget includes a cost-of-living increase of say 7 %( or any such indexed to inflation) each year, a wage freeze could effectively reduce budget expenditures, thereby reducing future payroll costs.
However, when the wage freeze is targeted at already poorly paid employees, there is a problem there. There could be benefits to government employee morale if the wage freeze applies to all senior government executives as well as the rank and file employees. However, even in the wake of the so called wage freeze, we have continued to be showcased the weekly swearing ceremonies that seem to increase employment for a select few in our society.
Question is are we facing a recession? Or is it a selective recession affecting only the poorly paid employees? If all is well economy wide as we are made to believe, then why the wage and employment freeze? Recessionary periods almost always involve salary freezes as soon as the threat of recession is recognized. Has Mr. Chikwanda sensed some kind of pending recession in Zambia? Or is the two year freeze aimed at a mass salary and employment rise in the year of the general elections in 2016 to woo voters? How different will this be then from MMD’s formula one roads?
Let us take note that less money placed in the pockets of employees means less money stimulating demand for product or services in the country and this would have an inevitable negative impact on our economy. Government being the largest employer, a freeze would entail a ‘society’ cut back on spending, thus reducing demand for goods, which could further worsen employees’ livelihoods and hurt our productive sectors.
Clearly Zambia is not facing a recession to warrant such recessionary measures that will hurt our people. Rather, it is facing probably the most fiscally indisciplined government whose policies have turned our country into a recession like nation—it is only during recessions when digging trenches, as is happening in Zambia, temporarily, is deemed employment! A clear lack of fiscal discipline on the part of government, and the excessive expenditure on large scale investments with vague/low economic return but high political prestige is what has led us to the era one minute speeches—indeed, there is nothing to be proud of.
In the 2015 budget, Mr. Chikwanda needs to explain to the nation exactly what the government’s aim with our economy is, and his address must coordinate effectively with other Ministers’ concerns too, and these must be consistent. Editing out the year in last years’ budget speech template will not do any good to our economy.
We expect that a clearly laid our policy plan be stated, and followed, and that surprises such as those seen previous years be avoided. As stated before, a good finance minister will keep his nation informed about the true state of the economy and prepares public opinion for adoption of appropriate policy measures to keep the economy healthy. A bad one, on the other hand, misreports facts and silences the public into believing that all is well until the economy crumbles.
Budget over-run is not the equivalent of recession, please.
What qualifications do you have in economics, please declare Mr Hjoe (however you pronounce your name)??
We are not fools to be mislead by misinformed zealots regardless of which cause they are following. Please respect your readership and declare your qualifications, interests and conflicts thereof (if any).
@Mulenga and Jelita. I all fairness read the whole article before commenting.
Paragraph 7 of the article says
“Clearly Zambia is not facing a recession to warrant such recessionary measures that will hurt our people. Rather, it is facing probably the most fiscally indisciplined government whose policies have turned our country into a recession like nation—it is only during recessions when digging trenches, as is happening in Zambia, temporarily, is deemed employment! A clear lack of fiscal discipline on the part of government, and the excessive expenditure on large scale investments with vague/low economic return but high political prestige is what has led us to the era one minute speeches—indeed, there is nothing to be proud of.”
Stop misleading people with your comments!
Which I believe you have done yourself?
@Mulenga and Jelita.
The writer is soliciting for answers from PF why they have imposed the wage freeze while Sata is still expanding his family forest in the civil service.
They were challenged to come out clean on whether there was a budget over run or not. But as usual Chikwanda denied that and said the government has not overspent.
Why has the PF government frozen wages then? I, the author and many other serious citizens want to know.
dude just read and analyse what he is saying, recession and wage freeze go hand in hand,US had a recession first thing Obama did was to put wage freeze for government workers, these leaders need to come out and explain these things than trying to hide and pretend everything is ok
This is why I stopped reading useless articles like thos one , people just yap these days. recession and wage freeze ? realyy? i mean the government has over run its budget do you need quantum physics to tell that your country will go into economic cancer if you lift wage freeze? and you sit down wemukulu onse writing this n.o.nsenc and the puclishers even publish ati ni article? realy?
@The Matrix Reloaded
The writer is soliciting for answers from PF why they have imposed the wage freeze while Sata is still expanding his family forest in the civil service.
They were challenged to come out clean on whether there was a budget over run or not. But as usual Chikwanda denied that and said the government has not overspent.
Why has the PF government frozen wages then? I, the author and many other serious citizens want to know.
@The Matrix Reloaded:
What an ar.se you are! Better to shut up than opening your bankrupt and rotten thought process to everyone! You surely are NOT and will NEVER be an intellectual in your lifetime and mine!
How can a normal person equate a budget overrun to a recession? Where did you do your Economics? May be yours is a fake online qualification?
Now we understand why you call yourself a “The Matrix Reloaded” – with SH.I.T to complete the equation!
The Opposit of PF promises…..
1. More money in your pockets…………….Wage freeze
2. More Jobs to the youths……………………increasing retirement age from 55 to 65 thereby denying young people to find jobs.
3.More Jobs…………………………………Employment freeze.
Ndeloleshafye!
Wage does not mean the country is in recession. The author somehow is very narrow minded to think so perhaps he would have known that Zambians are. Lazy and rewarding them more and more for doing less is uncalled for. Many of you trying to justify or hell bent on arguing matters that are beyond your scope. Any develop country encourage people to work hard and are paid by results rather otherwise. If talking is a key to development Zambia would have developed repaid as Zambians are too good at talking. The govt has rewarded the civil servants well and it’s important for civil servant to help their country by accepting a wage freeze for a year and channel that money to develop the country
I am in complete agreement with the writer of the article.The onus is now on the Minister of Finance to confirm or deny whether we are in or about to enter a recession.This is because the measures undertaken by government, such as wage and employment freeze are symptomatic of an economy in the recession mode.The Hon. Minister has to publicly disclose the true state of the economy.
I dont remember Zambia being in any other situation! For as long as I can tell, 80% (Being generous with the figure there) of Zambians live under below the poverty line. Joblessness is the norm, poor health care or no access to proper health care, corruption is rampant. Well….. we all know the Zambian story without stretching so hard! Good luck in trying by asking the same questions asked before and to be asked in the next Hundred years maybe even more!
That does mean that we cannot change the situation. Of we can and MUST work hard to change your poor perception of our country!
An economic analysis devoid of facts; the author of this article needs to provide data backing up his assumption that a wage freeze by this government is due to an expectation of a recession. It could be that the public sector (payroll/pensions) is bloated and unsustainable, so instead of laying off civil servants, the government could have decided on a “shared pain” approach of a freeze. The government needs to focus on restructuring civil service and diversifying the economy. That way Zambia’s long-term economic prospects will be driven by the private sector and not just the heavy reliance on the public sector and copper exports. If I were grading this article, I would give it an F, unless it was a 3rd grader writing it.
I see a lot of similarities between Sata and Zuma. They are both incompetent incorigible and corrupt but they will still be voted back into power.
No but the money is being used in building roads.