Reducing the wage bill is welcome

The Minister of Finance and Economic Development, Cde Patrick Chinamasa announced in the 2015 budget that government intends to reduce government wage bill from around 78%  to 40% next year.

The wage bill, which is one of the largest in the region, had become unsustainable. Sometime in February last year, though he exaggerated, Tendai Biti, then finance minister in the inclusive government, revealed that the national coffers were left with a paltry $217 after paying civil servants. In September this year, Cde Chinamasa also told the business leader that the wage bill was embarrassing and unsustainable.
However, the situation is not exclusive to Zimbabwe. In most countries, public wage bills represent a large share of public expenditure. According to researches, public wage bills in most countries represent 55% on average.

Although the International Monetary Fund (IMF) has been prescribing retrenchment as the remedy, such prescription must never be considered as an option. What might be needed are some adjustments in cases where there is too much duplication of roles in the civil service as well as in cases where a certain class of civil servants is paid unreasonably high salaries. Otherwise, there are a myriad of other interventions that can be employed to reduce the wage bill.

The utmost remedy to this problem is to grow the economy. Cde Chinamasa along with his counterparts in other relevant ministries and the government at large must be seized with the issue of reinvigorating the industry. The capacity utilization has declined to 30%.  If companies re-open, more workers can be employed, thereby increasing the tax base. Government will also increase its revenue through corporate tax.
As the year comes to an end, the 250 000 civil servants are expecting their traditional annual salary rise next month. It is another burden that will rob Cde Chinamasa of his sleep. The economy is not performing to sustain such pay rise.

This writer has always urged government to offer civil servants some non-monetary incentives in the form of residential stands and houses. It can also offer its workers some loans for cars and income generating projects. There will be no urgent need to increase the salaries of civil servants whose basic needs have been met. Government will have to contain prices of goods and services so that the salaries of the civil servants are not eroded.

It is very unfortunate that the few houses that are being sold to the civil servants are way out of their reach. There is nothing that can stop government from providing cheap residential stands to its workers considering the vast pieces of land available around the cities and towns.

While retrenchment must never be an option for government, the issue of bloated staff in government entities has to be addressed. The first port of call should be the cabinet which itself is unnecessarily large. There is a lot of duplication in some ministries. For instance, in this fragile economy, there is really no need to have separate ministries for primary and secondary education, higher and tertiary education, sports and culture and psychomotor.

There are several other ministries with overlapping mandates and merging them will assist in reducing government expenditure. The ministry of mines and mining development could be merged with that of energy. There is no point in having separate ministries responsible for land resettlement and agriculture, worse still having two deputy ministers for agriculture. As cabinet reshuffle is imminent, it is hoped that President Mugabe would consider a lean but effective government.

The top leadership of the ministries gobbles up about 60% of the wage bill. They get obscene salaries as well as other handsome packages. They drive the Mercedes, Jeeps, Range Rovers, Land Rovers and other top of the range vehicles that are very expensive to buy and maintain. It really does not add up for government to buy such vehicles when the economy is struggling. In Iran for instance, the executives drive Peugeot 406s and they are part of the presidential motorcade.

They use the Peugeots because they assemble them. Zimbabwe should take a leaf from such undivided support for local products. There is nothing wrong for a minister or any other executive to drive a Mazda BT50 that can be assembled by Willowvale Mazda Motor Industries. The ministers should set the pace in reducing government expenditure by driving cheap and local vehicles. The reduction of the wage bill should not just target labour costs.

Parliament, with 350 members is needlessly too big considering our population and economy. It is shocking that the countries that have better economies and bigger populations have lean parliaments. A close scrutiny of the sizes of other parliaments in proportion to the population represented can illustrate how bloated our parliament is.

Each MP in South Africa represents 130 000 people while the Zimbabwean MP   stands for just 40 000.  The ratios of an MP to the populace in Angola, Mozambique and Zambia are 1:81818, 1:96 000 and1:81250 respectively. India has a ratio of 1: 1 518 987. China, the largest country in the world with a population of over 1.3billion and a Gross Domestic Product (GDP) of over US$1.7 trillion, has the largest parliamentary body in the world that stands at 2987 MPs. The ratio, however, is 1:468 697.

The new constitution came up with new bodies such as the prosecuting authority, Land Commission and others. These bodies means additional workforce that will need to eat from the same wage bill.

While retrenchment is not an option, government must make sure that those who have reached retirement age are rested. After all, most of them have been empowered by government through the land reform and other programmes. Their departure will create opportunities for the students that our universities are producing each year. Some of these empowered chefs have even become richer than the state itself but they still want to be paid by government.

 Retired civil servants have been circulated while some continue serving in the civil service on a contract basis. These people are getting double salaries that are both coming from the treasury.