Unions representing South African civil servants and the government agreed to above-inflation increases for workers, the Public Service Coordinating Bargaining Council said.
This ends a stand-off between the government and unions allied to the ruling African National Congress that could’ve put President Cyril Ramaphosa in a bind as his administration pledged to stick to deficit targets while his party seeks to retain its majority in next year’s election.
The deal, to be signed on Monday, will see the lowest-paid government workers get an increase of 7%, and people on the highest salary level will get 6%, the council said in an emailed statement late Friday. The pay rise will be backdated from April 1.
All affiliates of the Congress of South African Trade Unions, an ally of the ANC, have said they will sign the deal, Mugwena Maluleke, joint-mandating committee convener of the country’s largest labor group, said by phone. The Public Servants Association, which represent about 238,000 workers and is not part of Cosatu, hasn’t yet committed to sign, he said.
While the increase exceeds inflation, it’s in line with government spending plans. The state wage bill is projected to rise 7.3% to R587.1 billion ($46 billion) in the current fiscal year, and by a similar increase over each of the next two years, the budget shows. Personnel costs account for about 35.2% of total government expenditure. Unions initially demanded a 12% raise
Inflation reached a seven-year low of 3.8% in March. While central bank Governor Lesetja Kganyago has warned the rate will start rising due to tax increases and high salary demands, inflation will stay close to 5% until at least at the end of 2020, according to the central bank.