Retrenchment may bleed govt

While government's plan to retrench civil servants as part of efforts to cut expenditure is prudent, analysts say Treasury may bleed in the short term due to massive retrenchment costs.

They said though the move is commendable and in line with recommendations by the IMF, it has far-reaching cost implications.

This comes as 81percent of government's $4.1 billion 2015 national budget will be recurrent expenditure, particularly civil servant's wages.

The issue up to now has always been about retrenchment packages that will obviously be big and unaffordable for government said John Robertson an economist. He said it would be prudent for Chinamasa to change labour laws with regards to retrenchment packages as industry has been asking all along.

Government has been ignoring industry's outcry for better labour laws with regards to retrenchment, this is a good time to fix that.