Zambia reverses wage freeze, against IMF and World bank advise

Zambia reverses wage freeze, against IMF and World bank advise

Sata and his officials on labour day

Sata and his officials on labour day

The Zambian government has reversed the proposed wage and employment freeze in the 2014 budget, a move that has cheered Zambian workers but may not go well with with international financing institutions such as the IMF and World Bank.

Public workers were due to go on demonstrations against the imposing of a 2-year wage freeze.

It looks like the 2-year regime of Michael Sata is losing popularity very fast as members of the public are skeptical of almost every pronouncement made by the government.

Posting on his facebook page, Zambia Congress of Trade Unions (ZCTU) Leonard Hikaumba wrote “The meeting with the government is over. We have convinced govt to lift the wage freeze and open negotiations for next year. We thank the support we received from all the affected workers. As a result, the demonstration which was scheduled for Wednesday has been cancelled”.

But the international financial institutions have contended that Zambia is currently sitting on a huge budget deficit that can no longer sustain a huge wage bill due to poor economic policies and numerous unbudgeted projects by the PF government.

Already, a number of highly reputable financial rating agencies have been downgrading Zambia’s economic status based on poor economic management that may result in the country, currently surviving on borrowing, no longer able to qualify for any loans anywhere due to poor credit ratings.

President Micheal Sata is currently running one of the largest group of congregations of relatives in Africa he calls his cabinet ministers and diplomats all paid by tax-payers money.

The Zambia Revenue Authority (ZRA) is for the first time in the nation’s history far below targets when they are normally used to declare huge tax-collections in surplus over the years.

As a result, one of Mr. Sata’s relatives Alexander Chikwanda, the same man who led Zambia into a serious debt trap in the 1970s as Zambia’s Finance Minister, is in the same position again borrowing as if Appollo Enterprises, his company that is currently getting huge corrupt contracts, is the one to repay the money.

The reversal in wage freeze was widely expected because in any case, politicians like Mr. Sata gets the biggest chunk of the salaries and allowances increments all the time.

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