South African Reserve Bank governor Tito Mboweni, facing criticism for accepting a 12% pay rise last year, got another increase above the inflation target he set this year, the bank said on Wednesday.
Spokesperson Cathy Powers said Mboweni got a 9% pay hike for the year ending March 2004. General bank staff received an 8,25% increase.
Political parties and trade unions have reacted angrily to news that Mboweni received a 12% pay rise for the year ended March 2003 — double the country’s inflation target.
But Powers said Mboweni did not have anything to do with how his salary was determined. This was done by the Bank’s remuneration committee, made up of non-executive directors and the governor himself.
His own pay increases were discussed by the committee in Mboweni’s absence, Powers said.
”The governor does insist that the committee takes cognisance of the inflation target, but there are other factors to consider as well.”
She could not say whether Mboweni was able to refuse a pay rise determined by the committee.
The bank declined to comment on widespread criticism of the committee’s decision.
Powers confirmed that last year’s 12% increase put Mboweni’s salary at R2,38-million. This was more than double the R996 654 President Thabo Mbeki would earn this year.
Political and labour representatives accused the governor on Thursday of hypocrisy for repeatedly urging employers to keep the inflation target in mind when deciding on salary increases.
”Mboweni is the first person that should set an example for members of the public who make themselves guilty of greed,” the New National Party said.
Announcing a 1% repo rate cut last Thursday, the governor said the Monetary Policy Committee was concerned about recent wage settlement rates of around 10%.
”Nearly all the salary and wage increases this year have been above the current inflation rate and have been negotiated in an environment of declining productivity,” he said.
”High nominal unit labour costs will inevitably put pressure on price increases.”
The central bank has set the inflation target at between 3% and 6% a year.
The Democratic Alliance said Mboweni should practise what he preaches.
”How can Mr Mboweni expect ordinary South Africans to adhere to the inflation targets when it comes to their salary increases when his own salary increase is above that target?” asked the party’s finance spokesperson, Pierre Rabie.
The Federation of Unions of South Africa accused the governor of applying ”double standards” and of being a hypocrite when criticising labour
unions of fuelling inflation by excessive wage demands.
”Governor Mboweni should ensure his own house is in order before making sweeping statements accusing trade unions and workers of acting irresponsibly and not having the interests of the national economy at heart,” general secretary Chez Milani said in a statement.
The United Democratic Movement said Mboweni could not expect workers to tighten their belts when he failed to comply with his own ”wage restraint gospel”.
”One wonders whether the governor and his staff have any idea of how difficult it is for ordinary workers to afford food and transport on salaries that are eroded a little more every year,” finance spokesperson Jakes Maseka said.
NNP finance spokesperson Willem Odendaal urged Mboweni to lower his pay rise to 6%.
”If this does not happen, South Africa will lose more credibility in international circles where we already have to defend our implementation of a disciplined fiscal and monetary policy system,” he said. — Sapa