PRB Report: High-Level Meeting at the Treasury Building This Monday Afternoon

The government is reviewing the PRB report this afternoon amid a tense economic climate. With high debt, fears of downgrading, and union pressures, the Executive must decide on an implementation plan that remains largely uncertain in terms of financing.

A high-level meeting, chaired by Prime Minister Navin Ramgoolam and attended by Deputy Prime Minister Paul Bérenger, is scheduled for this Monday afternoon at the Treasury Building. The aim is to discuss the Pay Research Bureau (PRB) report and "analyze all options." This document, which aims to revise salary structures and service conditions in the public sector, was initially set to be made public in December 2025 for implementation starting January 2026.

This marks the first dedicated meeting on this topic at such a high level, in a context marked by uncertainty surrounding its publication and financing. No guarantees have been provided by the Prime Minister's Office (PMO) regarding disclosure this month, although sources indicate that the report is more or less ready. "Significant budgetary constraints are holding us back. We cannot let the country go bankrupt. The economic situation remains very fragile. Moody's expects debt to stay below 90%. We inherited a debt of 93%. If we exceed this threshold, Moody's will downgrade us," sources at the PMO indicate.

Currently, the rating agency maintains Mauritius in the Baa3 category with a negative outlook. If the country regresses, it will enter "junk status," which would have particularly detrimental consequences, including more complicated access to credit with higher interest rates, as well as a loss of investor confidence. The PRB has conducted a general review of salary structures and classifications every five years since 1982, except for the 2016 report, which was published after only three years.

In response to a Private Notice Question (PNQ) from opposition leader Joe Lesjongard last Tuesday, Navin Ramgoolam stated: "Since 1982, the Pay Research Bureau has conducted the general review of salary structures and classifications every five years, except for the 2016 report. The 2016 report was published after only three years. However, it restored the five-year periodicity for the general review exercise, and thus the last one took place in 2021. I have been informed that the preparation of the next report began in March 2023, according to a predefined work plan."

He added that, aside from ministries/departments, local authorities, and the Rodrigues Regional Assembly, "there are about 125 parastatal bodies under the Pay Research Bureau. The Bureau must gather as much information as possible to facilitate interaction and exchange views with all stakeholders. So far, the Bureau has held over 675 meetings with staff associations and the management of parastatal bodies and the public service. 1,710 interviews have been conducted related to job description questionnaires, and 17 site visits have been made to examine alleged problem areas highlighted by stakeholders."

The Prime Minister contextualized this preparation in a precarious economic environment, as outlined in the State of the Economy report published in December 2024. This document revealed a much larger deficit than previously announced, an unsustainable level of public sector debt, and all macroeconomic indicators in the red, inherited from the previous government. "It is in this particularly difficult context that we presented a Budget that obviously required drastic measures to restore public finances. It is in this context that the PRB report is being prepared," he added.

Navin Ramgoolam indicated that the preparation is at an advanced stage, but it is difficult to provide an indication of the implementation timeline, as the financial implications of the report remain unknown.

Over Rs 8 Billion

The main concerns revolve around financing. The cost of implementation could exceed Rs 8 billion, according to internal estimates. At the Prime Minister's Office, there are fears that if the debt ratio exceeds 90% of GDP, it could lead to a downgrade of Mauritius to "junk" status. Currently, Mauritius' sovereign rating is Baa3 with a negative outlook, affirmed by Moody's in January 2025. This level indicates an investment status but highlights risks such as fiscal challenges, high debt, and contingent liabilities, despite a strong economic recovery and solid reserves. This situation places Mauritius in an extremely delicate position, where any significant increase in debt could lead to a downgrade.

On the union side, pressure is mounting, with declared intentions to intensify actions. Just last April, the Prime Minister stated in Parliament that the PRB report would be published in December to take effect in January 2026. Narendranath Gopee, an advisor at the Federation of Civil Service Unions, stated last week that "the PRB report is already finalized and is sitting somewhere in a drawer." He estimates that implementation would cost Rs 8.5 billion, which is Rs 3.5 billion more than expected, and he proposes a phased implementation to mitigate costs. "Debt should not enter the PRB discussion. In the interest of both the public and the government, it would be better for Navin Ramgoolam to entrust the Finance portfolio to someone else," he said. "The government has the means. Don't tell us the treasury is empty or that we cannot implement the PRB. We should not destabilize the country's administration," the unionist continued.

Radhakrishna Sadien, a negotiator at the State and Other Employees Federation, expresses concern regarding the lack of a set date for implementation. He notes that the lack of revision will impact recruitment in the public service, as starting salaries for positions such as cooks or Hospital Services Attendants are below the national minimum wage of Rs 16,500, despite a temporary allowance of Rs 2,000 per month since 2024. He insists: "The report must be made public as soon as possible. There is no government without a public service."

Discontent

The Prime Minister reminded that decisions are not made in isolation: "Our sovereign rating from Moody's is at its lowest grade – Baa3. Despite the fiscal consolidation measures taken in the last Budget, our public debt remains substantial due to the legacy of the previous government. This is what we have to deal with. Our sovereign rating is clearly at a tipping point.

Moody's is watching. We are not immune to a downgrade. This is what we want to prevent at all costs. That is why we made difficult decisions. We had to do it! We must act responsibly. We will ensure that our actions reverse the situation we inherited and put our finances on a more resilient path, in line with the commitments made in the Public Debt Management Act."

This meeting could clarify the next steps. However, it has come to our attention that there is some discontent within the government regarding the management of the matter.