Business / Economy
Chinamasa bemoans wage bill
23 Sep 2014 at 23:37hrs | Views
HARARE - The wage bill for civil servants is embarrassing and unsustainable, Finance minister Patrick Chinamasa said yesterday, echoing criticism from the International Monetary Fund (IMF) as the country looks to regain access to international credit lines.
More than three-quarters of the country's revenue goes to paying salaries of more than 250 000 civil servants, leaving little money to pay down debt and to rebuild crumbling public infrastructure such as roads, schools and hospitals.
"I am embarrassed that our wage bill is some 76% of whatever revenue we receive. It's not good, it's not sustainable," Chinamasa told business leaders.
President Robert Mugabe raised salaries for government workers by 14% early this year, making good on promises made in the run-up to last year's election, and moves to roll back the hike would not go down well.
"As to the solution, we have to create the necessary political climate, build consensus in order to tackle the issues. I can assure you that we are working on this issue," Chinamasa said without elaborating.
Starved of foreign investment and donor funding, Zimbabwe's economy has been sluggish since accelerating at near double-digit rates between 2009 to 2012, when it emerged from a decade of recession.
The public wage bill has been a source of friction with the IMF, which sent a delegation to Zimbabwe this week to audit the nation's fiscal health.
IMF country representative Domenico Fanezzi said the bill accounted for 20% of the country's $14 billion gross domestic product and urged the government to channel more money to infrastructure development and health services.
"The wage bill is plainly unreasonable. I don't think Zimbabwe can afford such a high wage bill," said Fanezzi, the first IMF head of mission to Zimbabwe in a decade.
The country has since last year been on an IMF monitoring programme aimed at helping it clear or push back repayments of about $9 billion in external debts, which would give it access to much-needed international credit.
"This is exactly what we are trying to do, where we are trying to get the support from donors and development partners to agree on that and find a way in which your debts could be rescheduled," Fanezzi told business leaders in Harare.
Zimbabwe has not accessed funding from the IMF and other multilateral institutions since 1999 due to policy differences with Mugabe's government. The IMF said in a July report Zimbabwe's performance under the staff programme had been "broadly satisfactory".
More than three-quarters of the country's revenue goes to paying salaries of more than 250 000 civil servants, leaving little money to pay down debt and to rebuild crumbling public infrastructure such as roads, schools and hospitals.
"I am embarrassed that our wage bill is some 76% of whatever revenue we receive. It's not good, it's not sustainable," Chinamasa told business leaders.
President Robert Mugabe raised salaries for government workers by 14% early this year, making good on promises made in the run-up to last year's election, and moves to roll back the hike would not go down well.
"As to the solution, we have to create the necessary political climate, build consensus in order to tackle the issues. I can assure you that we are working on this issue," Chinamasa said without elaborating.
Starved of foreign investment and donor funding, Zimbabwe's economy has been sluggish since accelerating at near double-digit rates between 2009 to 2012, when it emerged from a decade of recession.
The public wage bill has been a source of friction with the IMF, which sent a delegation to Zimbabwe this week to audit the nation's fiscal health.
IMF country representative Domenico Fanezzi said the bill accounted for 20% of the country's $14 billion gross domestic product and urged the government to channel more money to infrastructure development and health services.
"The wage bill is plainly unreasonable. I don't think Zimbabwe can afford such a high wage bill," said Fanezzi, the first IMF head of mission to Zimbabwe in a decade.
The country has since last year been on an IMF monitoring programme aimed at helping it clear or push back repayments of about $9 billion in external debts, which would give it access to much-needed international credit.
"This is exactly what we are trying to do, where we are trying to get the support from donors and development partners to agree on that and find a way in which your debts could be rescheduled," Fanezzi told business leaders in Harare.
Zimbabwe has not accessed funding from the IMF and other multilateral institutions since 1999 due to policy differences with Mugabe's government. The IMF said in a July report Zimbabwe's performance under the staff programme had been "broadly satisfactory".
Source - Reuters
