South Africa’s finance minister, Enoch Godongwana, announced in his October mid-term budget policy statement that cabinet had approved funding for an early retirement programme to reduce the public sector wage bill. R11 billion (about US$627 million) will be allocated over the next two years to pay for the exit costs of 30,000 civil servants while retaining critical skills and promoting the entry of younger talent.
The statement states that this will assist in improving the structure and organisation of the state.
But past initiatives of this kind have done little to reduce costs. In 2019 there was a similar offer, but it didn’t solve the problem. In 2020, the government took the more drastic step of reneging on the final year of a three-year wage agreement. The main effect of early retirement offers is always to enable capable and experienced people to move on to other careers without losing their accumulated pension benefits.
