The South African government has agreed a three-year wage deal with public sector unions, granting modest salary increases only slightly above inflation in an attempt to tame its large budget deficit.
Under the deal, the government will increase salaries of public sector employees by up to 7% in the first year. In the second and third years the government will provide hikes of up to projected inflation plus 1%.
The salary increases are well below the 12% initially demanded by unions and will be seen as a victory for the President Cyril Ramaphosa, who is trying to restore confidence in South Africa’s public finances and stave off ratings downgrades.
Khaya Xaba, spokesperson for the Nehawu union which represents healthcare workers, said his union would sign the wage deal on Monday.
“We are not happy. However, we have done our best in terms of pushing the employer from the 4.5% they were offering,” said Mugwena Maluleke, chief negotiator for Cosatu, the largest trade union federation.
The Public Servants Association, a smaller union, said it had rejected the government’s offer. However, the deal will still go through if larger unions accept it.
The Department of Public Service and Administration said it would brief the media following the conclusion of talks.
The government and public sector unions have been locked in negotiations since late 2017.