The combination of two years of the coronavirus pandemic and its resultant economic contractions and a more recent outbreak of war in Ukraine have led to unprecedented hardship in many African countries. Inflation and rising costs of basic supplies such as food and fuel have made it expedient for governments to look at ways to alleviate these pressures. There are conversations now being held around raising the salaries of public workers in order to help citizens deal with the rising cost of living. Kenya and Morocco have already done this to give workers a fair chance of survival in the challenging economic terrain. Following in this stead is Tanzania: the President Samia Suluhu Hassan government has announced a 23% increase in the national minimum wage. The last time a pay rise was implemented was in 2015 and expectedly, the news was received well by the populace. However, the move does have economic implications: the salary increase will balloon Tanzania’s public spending, and this is exclusive of other commitments and infrastructure development programmes. The midweek edition of Business Edge examines Tanzania’s new increased wages and its ability to sustain it while maintaining its economic recovery. The guest is Ali Khan Satchu, Africa geo-economist ad CEO of Rich Management who speaks to Tolulope Adeleru-Balogun from Nairobi Kenya.
The relationship between Tanzania’s former president John Magufuli with the workforce made it unlikely that the salaries would have been increased during his administration. “He was highly sceptical about the civil service productivity… he was very aggressive with visits to ministries and haranguing of public officials,” Ali Khan Satchu says, explaining why it took seven years to review the salaries in Tanzania. On the other hand, the current president understands that there has been significant slippage of earnings for the civil service.
The conversation on Business Edge also touches on the economic drive of the government, as well as the sustainability of the new salary regime.
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