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Economic & Sector Work :: Policy Note

Achieving Fiscal Sustainability in Swaziland : Reestablishing Control over the Wage Bill

ACCOUNTABILITY ACCOUNTING ADMINISTRATIVE REFORMS ADVERSE CONSEQUENCES ALLOCATION ATTRITION AVERAGE WAGE BENEFICIARIES BUDGET DECISIONS CASH FLOW CHECKS CIVIL SERVANT CIVIL SERVANTS CIVIL SERVICE COLLAPSE COMPENSATION PACKAGES CONFIDENCE CONFLICT OF INTEREST DEBT SERVICE DISCRETION DOMESTIC REVENUE DRIVERS EARLY RETIREMENT ECONOMIC DOWNTURN ECONOMIC GROWTH ECONOMIC GROWTH RATE EFFICIENCY GAINS EMPLOYEE EMPLOYMENT EXPENDITURE EXPENDITURE LEVELS EXPENDITURE PLANS EXPENDITURES FINANCIAL HEALTH FISCAL DEFICIT FISCAL DEFICITS FISCAL IMBALANCES FISCAL IMPACT FISCAL IMPLICATIONS FISCAL REVENUE FISCAL SUSTAINABILITY GOVERNMENT POLICY GOVERNMENT SPENDING HEALTH SECTOR HIGH WAGE INFLATION INFLATION RATE INITIATIVE LABOR FORCE LEGAL FRAMEWORK LUMP SUM TRANSFERS MACROECONOMIC POLICY MACROECONOMIC STABILITY MASS LAYOFFS MINISTER MINISTERS MINISTRY OF DEFENSE MINISTRY OF FINANCE PENSION FUND PENSION FUND CONTRIBUTION PENSION FUND CONTRIBUTIONS PERFORMANCE ASSESSMENT PERFORMANCE MANAGEMENT PERFORMANCE MANAGEMENT FRAMEWORK POLICE POLITICIANS POVERTY REDUCTION PREVIOUS ONE PRIMARY EDUCATION PRIMARY SCHOOL PRIVATE SECTOR PRIVATE SERVICES PUBLIC DEBT PUBLIC DEFICIT PUBLIC EXPENDITURE PUBLIC PENSION PUBLIC PENSION SYSTEM PUBLIC REVENUE PUBLIC SECTOR PUBLIC SECTOR EMPLOYEES PUBLIC SECTORS PUBLIC SERVICE PUBLIC SPENDING PUBLIC WELFARE PURCHASING POWER QUALITY SERVICE REASSIGNMENT RECURRENT EXPENDITURE REFORM AGENDA REFORM EFFORTS RESERVE REVENUE LEVELS SERVICE DELIVERY SIZE OF GOVERNMENT SOCIAL WELFARE STRUCTURAL REFORMS TURNOVER UNEMPLOYMENT WAGE BILL WAGE INCREASE WAGE LEVELS WAGE NEGOTIATIONS WORKERS YEARLY BUDGET
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Washington, DC
Africa | Swaziland | Eswatini
2014-08-19T20:47:35Z | 2014-08-19T20:47:35Z | 2010-12

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.

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