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Friday, 6 June 2014

Strike Watch (Public Sector)

Countrywide strikes by civil servants are looming as all the ten Public Service Unions of the country have declared a collective dispute with the Patriotic Front (PF) government for failed salary negotiations. (Source: Daily Nation). 

Zambia Congress of Trade Unions (ZCTU) secretary general Roy Mwamba has charged that government did not honour the 2013 collective agreement which expired in January this year and the salary negotiations have failed because government is not ready to listen to the demands of the workers.

The unions say this is first time since independence that all the public unions had declared a dispute over failed salary negotiations and is blaming the PF government for failing to talk about salaries during the negotiation process. The unions say that if government does not change its position, "workers will have no option but to go on industrial unrest".

Unions also maintain that that the declaration of wage freeze by the PF government is illegal and was undertaken without consulting the labour movement. The wage freeze is against the International Labour Organisation Convention C98 which calls for free collective bargaining.

The PF government cannot sustain the wage freeze for too long because we are just over 2 years away from the elections. It cannot afford any more industrial strikes between now and then. We can therefore expect it to come back to the negotiating table.

The problem for PF is that the financial pressures are coming from every corner. The maize bumper harvest means that GRZ will soon be forced buy more maize than it would like, at a loss to the taxpayer.

We already know that as the Kwacha depreciates external debt repayments costs are rising. The general costs of funding things abroad is on the up. We know for example that many of our embassies abroad are struggling to pay their stuff because of the weakness of the Kwacha.

On top of this government is still subsiding part of the fuel costs because the latest increase in fuel prices did not account for the possibility that the Kwacha would be trading near K7 per US$1.

All of these issues means that the fiscal deficit is likely worse, even with the recent GDP rebasing. Most importantly we can see how all the issues are connected. Weak Kwacha, strikes, rising fuel costs and rising fiscal deficits all have their roots in poor politics.


Will the PF government succeed in resisting union demands for higher wages before 2016?

Chola Mukanga
Economist | Consultant | Researcher
Copyright © Zambian Economist 2014

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