Broke Mugabe govt suspends civil servants bonuses

By Ndakaziva Majaka

President Robert Mugabe’s stone-broke government, which is facing growing protests by restive Zimbabweans, has finally scrapped bonuses for all its workers as part of a raft of measures announced yesterday, including pending retrenchments and the cutting of salaries of senior officials.

The emergency measures come as civil service salaries and bonuses have been gobbling virtually the whole national budget, worsening the country’s deepening liquidity and cash shortages.

Presenting his mid-term fiscal policy review in parliament yesterday, Finance minister Patrick Chinamasa — who also revised further downwards the country’s GDP growth projection to 1,2 percent from the 1,4 percent announced in May, after an initial projection of 2,7 percent — admitted that the government was drowning in a $623 million budget deficit, against an annual projection of $150 million.

“The major component of the high expenditures is the wage bill, which is at the centre of the fiscal deficits and hence overall macro-economic instability.

“Failure to contain the budget deficit in the shortest possible time will worsen the deficit to an estimated year-end level of over $1 billion,” Chinamasa told Parliament.

The Treasury chief said the country’s first half revenue collections stood at $1,8 billion — which was 9,8 percent below target, with expenditure standing at $2,3 billion against a target of $2 billion. Consequently, government had overshot budget by $308 million.

“The outlook, based on the status quo, points to a situation where projected revenues fall short of meeting employment costs, leaving no room for expenditures on operations and maintenance, as well as on capital projects,” Chinamasa said.

He outlined several measures aimed at reducing the wage bill, proposing that with effect from October 2016 senior government officials, from deputy directors to ministers, were going to have their salaries and allowances cut by between five and 20 percent.

Chinamasa also announced that the government was going to forego the 2016 and 2017 bonuses after the State struggled to disburse last year’s 13th cheque, with some members of the civil service yet to get their 2015 bonuses.

“The proposal will translate to savings of around $180 million per annum, which will be channelled to essential expenditures relating to the drought.

“But even after implementing the above pending measures, the monthly wage bill will still remain high at $245 million, which is 76 percent of revenue,” Chinamasa added.

This is not the first time that the minister has announced plans to rein in the government’s ballooning expenditure.

He has announced before that the government would trim its wage bill to 40 percent  in line with the recommendations of the International Monetary Fund (IMF), under the Bretton Woods institution’s Staff Monitored Programme (SMP), but did not implement the plan.

Financial experts also say to break even, the government needs to reduce its wage bill to about 25 percent of the fiscus.

In an attempt to lower the wage bill, Chinamasa did say that the government would cut 25 000 jobs in 2017, which would result in annual savings of $155 million.

“In this regard, under the forthcoming 2017 national Budget, I will be proposing measures that target employment costs of $232 million per month by June 2017, and $219 million by December 2017.

“This reduction is proposed to be achieved largely through downsizing the civil service from the current level of 298 000. It is anticipated that the phased rationalisation of the civil service will bring down the size of the work force to 273 000.

“The target to reduce employment numbers from the current 298 000 to 273 000 by end of 2017 will yield annual savings of $155 million, which would go towards supporting various development projects,” Chinamasa said.

The government has for the past few months been struggling to pay its huge civil service as a result of the dying economy whose contraction has triggered waves of protests by desperate citizens.

The parlous state of government coffers has also forced Chinamasa to introduce new taxes on civil servants’ allowances, with effect from next month.

He also stated that he was going to rationalise all public sector foreign travel expenditure, including for ministers, parliamentarians, independent commissions and State enterprise officials. Daily News