Government increases public servant salary offer

South Africa’s government raised its offer for salary increases to the country’s public servants to 4.7%, well short of a demand by labour unions representing 1.3 million state workers.

According to Frikkie de Bruin, general secretary of the Public Service Co-ordinating Bargaining Council, the offer was increased from 3% after the government rejected civil servants’ initial demand for a 12% increase in the fiscal year that begins April 1.

He said by phone Tuesday that labour unions have lowered their demand to 7.5% after a facilitation process aimed at helping the two sides reach an agreement.

“There’s some progress that was made,” De Bruin said. “We think that we are getting closer to a settlement range, which could be anything between 5.5% and 6%.”

Restraining increases in public-servant wages is pivotal to government efforts to rein in the nation’s debt, which is forecast to peak at 75.3% of gross domestic product in the 2025-26 fiscal year. Compensation accounts for almost a third of state expenditure, crowding out spending on other priorities.

In its offer, the government proposed a multi-year agreement, along with increases to state workers’ housing and danger allowances, according to De Bruin.

The majority of the Public Servants Association of South Africa members rejected the offer, Jannie Oosthuizen, its labour-relations officer, said. The PSA represents more than 240,000 workers.

The government’s latest offer is above South Africa’s inflation rate of 3.8% and near the central bank’s estimate for average inflation of 4.6% this year.

Price pressures are expected to cool further, with inflation expected to remain at the lower end of the Reserve Bank’s 3% to 6% target range for the next three quarters.

Finance Minister Enoch Godongwana, who has committed to reining in spending on state wages, will present his medium-term budget policy statement on Wednesday.