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City of Banjul
Friday, July 12, 2024

The new salary increment and its exacerbating challenges

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By Ebrima Jarra

BSc; Islamic Banking and Economics

Aljamdou village

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Tackling poverty and providing decent living standards for citizens should be the sole objective of every responsible government. Formulation of good policies and increasing the take-home of your employees are beneficial if done in good faith.

It’s from this point of view; that I wish to express my disappointment about the new 30 per cent increment of salaries across the board which was tabled by the Honorable Minister of Finance and Economic Affairs last Thursday at the National Assembly.

The Minister revised the 2022 approved budget to be able to cater for the newly created ministries and to fulfil a campaign promise of increasing the salaries of Civil Servants to match the current living costs in the country. It’s quite obvious that our salary scale is abysmally low compared to other countries.

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However, will this new increment improve the living standards of our civil servants as intended? No; because the increment seems to be another callous aim of increasing aggregate demand in a depressed economy. With the coming of Seedy Keita as Finance Minister, I believed, the highly hailed gentleman will emphatically subject the economy to a tight fiscal policy of reducing inflationary pressure and humbling the budget deficit.

However, Mr Keita’s first public economic policy direction is of no difference to his predecessor, Mambury Njie because both have shown us that they are more faithful to their boss than the country; and that they are both strong believers in expansionary fiscal policy.

To disregard the International Monetary Fund and World Bank’s advice against incurring loans is another policy failure of the Barrow administration. A developing country which is serious about economic growth won’t turn a blind eye to such warnings as structural adjustment is among the key policies for developing countries which entails policies promoted by IMF, such as reduced budget deficit and better tax collection.

This new salary increment was a move meant to make the highest earning public servants richer and poor people more vulnerable to poverty as it solely defeats the purpose of the Civil Service Reform Programme, 2018-2027 Strategy which aims to enhance better service delivery within the government ranks that was spearheaded by the Personnel Management Office. 

In the words of my good senior friend “Civil servants are going to be worse off because they did not get what they were promised; and even the 30% increase, approved, will never hit their bank balances due to tax rates”.

I believe that the increment is no different from the ‘asset bubble’ of 2005 in the US. Expectation which is among the determinants of demand, influences some civil servants to take a loan only for their hope to be burst by a 30 per cent increment.

I am of the considered view that the entire process was not diligently done as the supply side determinant of government policy will trigger firms to increase prices for better profit margin.

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