The sealing of a three-year wage agreement between the government and about 1.3million public servants is a significant achievement that can only benefit our stuttering economy. Although the public sector is not a key economic driver - our relatively overpaid and under-performing public servants are if, anything, a drag on growth - the settlement averts another potentially debilitating strike that would have further unnerved investors.In terms of the deal, public-sector wages will rise by 7% this year and by inflation plus 1% in 2016 and 2017. In addition, the medical aid cover provided by the state will rise by 28.5% per employee, and the housing allowance is increased from R900 to R1200 a month.Although on the high side - inflation is about 4.5% - the settlement is a far cry from the unions' initial demand of 15% and is achievable in terms of the budget projections of Finance Minister Nhlanhla Nene.It will surely go a long way in convincing the international ratings agencies that the Treasury is serious about reining-in runaway state expenditure and cutting the budget deficit.Even before the wage deal, indications were that South Africa would almost certainly avoid losing its investment-grade rating in the near term - though ailing, our economy is in better shape than those of many of our emerging-market peers.But much work still needs to be done to convince the analysts that our commitment to curbing state spending is not a flash in the pan.The public service wage bill has risen more than 80% over the past decade - fuelled by annual salary increases of as much as 6% above inflation - and today accounts for almost 36% of total government spending.In a country with the socioeconomic challenges of ours, this is not sustainable.Ramping up productivity - both in the public service and the private sector - by improving efficiencies and implementing policies that are investor-friendly is surely the only way to go...