MID-TERM BUDGET REVIEW: E3.1BN FOR SALARIES, HIRING, OTHERS

MBABANE – Government is set to allocate approximately E3.1 billion for salaries, hiring of new employees within the civil service and goods and services.

This figure represents the difference between the projected recurrent expenditure budget of E26.2 billion for the 2025/26 financial year and the E23.1 billion earmarked for the 2024/25 financial year. This will result in the next national budget increasing from E29.4 billion to E32.8 billion. The difference is an independent calculation by this publication, as the minister of Finance, Neal Rijkenberg, did not mention the amount to be allocated to the salary review exercise.

It is worth noting that a consultant is currently engaging civil servants as part of data collection for reviewing their salaries in the next financial year, if the exercise shall be completed by then. There are over 43 751 civil servants, according to the Establishment Register that supports the Estimates of Public Expenditure for the 2024/25 financial year. It states that there are currently 40 096 graded civil service posts alongside an additional 3 655 ungraded positions.

In his mid-term budget review presented yesterday, Rijkenberg projected that total expenditure is expected to reach E32.8 billion in the upcoming financial year, with E26.2 billion designated for recurrent spending and E6.6 billion for capital expenditure. He attributed these projections to various assumptions, including inflation rates for goods and services, the implementation of a salary review, a two per cent employment growth rate and the ongoing execution of major projects such as the Mkhondvo-Ngwavuma 1A and 1B initiatives.
The minister also provided details on future projects, which will include the construction of a new parliament building, water projects in Manzini and Shiselweni, the International Convention Centre, and five-star hotel (ICC &FISH).

Addressing the increased recurrent expenditure, he noted that the total expenditure for the 2024/25 financial year is budgeted at E29.4 billion, representing 33 per cent of gross dometic product (GDP), with E23.1 billion allocated for recurrent expenditure and E6.3 billion for capital expenditure. Rijkenberg informed Parliament that expenditure trends are aligning with mid-year expectations, revealing that E13.7 billion, equivalent to 15.3 per cent of GDP, had been committed against a budget of E29.4 billion, indicating an execution rate of approximately 46 per cent. He highlighted various execution rates, stating that the wage bill accounts for E4.8 billion against a budget of E9.8 billion, representing about 49 per cent execution, while goods and services accounted for E1.5 billion against a budget of E4 billion, at 38 per cent execution.  

Interest

Transfers were noted at E2.3 billion against a budget of E4.5 billion, achieving a 51 per cent execution rate, and interest payments reached E1.25 billion from a budget of E2.3 billion, indicating a 54 per cent execution rate. Looking to the future, Rijkenberg forecasted that total expenditure for the 2025/26 financial year would reach 35.8 per cent of GDP, with recurrent expenditure at 27 per cent and capital at 8.8 per cent of GDP. He attributed these increases to inflationary pressures affecting goods and services, as well as the wage bill due to the anticipated salary review.  He remarked: “The personnel costs remain high, particularly due to government granting a four per cent cost-of-living adjustment (CoLA) and ongoing hiring in the education and health sectors.”

He further indicated that purchases of goods and services are expected to grow at an average rate of eight per cent over the medium term, potentially averaging E5 billion. The minister noted that recruitment activity during the first six months of the 2024/25 financial year primarily focused on contract teachers within the Ministry of Education and Training, with no recruitment reported in the security forces. The mid-term financial statement underscores that the wage bill remains a significant area of expenditure and is expected to continue rising, presenting ongoing challenges for sustainable budget management.

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