Khama digs in against public strikers

Gaborone - Botswana President Ian Khama has ruled out a big pay rise for 90 000 striking civil servants, raising the stakes in a unprecedented bout of industrial action that has shaken the ruling party's 45-year grip on power.

In a meeting with senior government officials shown on state television late on Thursday, Khama said the world's biggest diamond producer was still feeling the after-effects of the 2008 financial crisis and could not afford the salary hikes demanded.

The civil servants, who include doctors, nurses and firemen, want a 16% rise compared with a government offer of 5%. Inflation in the landlocked southern African country stood at 8.2% in March.

Khama said a 16% increase would add another 2 billion pula ($300m) to the public sector wage bill, inflating an already large budget deficit for this year of 7 billion pula - equivalent to 7% of GDP.

With diamond and other minerals revenues recovering, the government, which has habitually run a surplus since its independence from Britain in 1965, hopes to balance its books by next year and Khama said that plan would not be derailed.

"There is no way that, as a responsible government which has all these years prided itself with prudent economic management, we are going to increase our deficit by an additional 2 billion pula," he said.

Now in its second month, the strike has closed schools and hospitals and created a torrent of criticism against Khama, a former general and son of the country's founding father, for being insensitive to the needs of Botswana's 1.8 million people.

In what is one of Africa's wealthier and better-run countries, reports of preventable deaths in hospitals have stirred public indignation and some opposition politicians, scenting blood, have called on Khama to stand down.

The global financial crisis and subsequent collapse of world diamond prices hit hard in Botswana, where gem and other mining revenues account for 40% of the budget.

The economy contracted 5% as diamond mines closed for the first time in the country's history and the government had to obtain an emergency $1.5bn African Development Bank loan to plug a hole in its books.

Despite the economic woes, Khama, a graduate of Britain's elite Sandhurst military academy, won re-election to another five year term in late 2009.