DOES RECRUITMENT OF TEACHERS AND HEALTH WORKERS DEPEND ON THE IMF DEAL?

By Alexander Nkosi

In one of the post-budget interviews, the Minister of Finance explained that recruitment of teachers and health workers in 2022 will be supported by utilising part of the USD1.3 billion under the IMF Special Drawing Rights. This is different from the USD1.4 billion extended credit facility we are going to receive after the IMF deal is signed.

My analysis is that the actual recruitment in 2022 does not depend on the IMF deal, however sustaining the increased wage bill just like many things to a large extent depends debt restructuring and the IMF deal. So we can recruit this year because funds are available but sustaining the wage bill beyond this years will be hard without the debt restructuring. For a good number of years, our civil service wage bill has been around 50% of domestic revenue.

As of 2022, what we need to spend on the wage bill and debt service is higher than the K98.9 billion domestic revenue. If our debt is not restructured we will have to either borrow heavily or increase domestic resource mobilisation to support the increased wage bill and so many other things. This is why the IMF deal and debt restructuring are key to addressing economic challenges we currently face.

Thank you.