South Africa Refuses Public Sector Workers’ 12% Pay Increase Demand

The South African government has rejected a 12% pay increase demand from public sector workers, deeming it unaffordable, offering a 3% raise instead, Bloomberg reports, citing Frikkie de Bruin, general secretary at the Public Service Co-ordinating Bargaining Council.

De Bruin said that the workers’ proposal would require a staggering 140 billion rand ($7.83 billion), exceeding the government’s budget. The government has urged labor unions to “reconsider and relook at the position and at the demands,” suggesting a different approach to negotiations.

Further talks are scheduled to resume in October and continue until mid-month, preceding Finance Minister Enoch Godongwana’s mid-term budget update on October 30th.

The state’s offer falls below South Africa’s current inflation rate, which eased to 4.6% in July from 5.1% in June. While price pressures are expected to cool further, the central bank forecasts a slowdown to 4.3% in the final quarter of 2024 and an average of 4.4% next year.

The Public Servants Association of South Africa, representing approximately 242,000 workers, has already rejected the government’s counter offer and will formally decline it on Friday.

In addition to the 12% pay increase, public servants are also seeking a 2,500-rand increase in their housing allowance and a raise in their danger allowance from 597 rand to 1,000 rand.