IMF says no to Zimbabwe Civil Servants pay hikes

The International Monetary fund says Harare is right to keep a lid on salaries for state employees and maintain a balanced budget, offering encouragement as to future assistance to Zimbabwe in debt restructuring and other challenges.

IMF Deputy Director for Africa Sharmini Coorey told reporters this week that dollarization since 2009 has stabilized prices following the country's period of hyperinflation, noting that adopting the current hard-currency regime has imposed fiscal discipline.

The challenge now, said Coorey, is to contain spending, especially state salaries. The official noted that these were already equal to around 70% of state revenues.

Coorey offered some encouragement as to the level of support the international financial institution might be able to provide in future.

"If the authorities can strengthen their economic policies, particularly on the wage side and if there is support among the donor community to restructure Zimbabwe's debts ... the Fund is looking forward to further relations with Zimbabwe," she said.

The IMF policy prescription comes as Zimbabwean civil servants are demanding that their base salaries be nearly tripled. The lowest-paid public workers receive $186 a month. Worker representatives want that to be hiked to US$502.

A strike has been threatened if Harare does not meet demands.

"It is amazing that the very same people who prescribed the failed ESAP are the very same people who want Zimbabwe civil servants to suffer," said some trade union activist who did not want to be named.