Short-sighted Mugabe at it again

Just over a year ago, President Robert Mugabe overruled his Finance minister Patrick Chinamasa, telling civil servants they will get their annual bonuses, in spite of ample evidence the country could not afford.

Source: Short-sighted Mugabe at it again – NewsDay Zimbabwe June 24, 2016

Mugabe, as has become the norm, chose to go the populist route and threw all sound economic advice out of the window.

With the bonus statement, he received plaudits from civil servants, but fast forward a year later, Mugabe’s government is failing to pay salaries on time.

No matter how painful the bonus suspension would have been, civil servants would certainly have understood the country’s financial position and would have taken it on the chin.

But a salary delay is another matter, as it affects budgeting and normal family routines and practices.

That Mugabe paid the bonuses is now forgotten and has been replaced with anger and hostility over the failure to pay salaries on time.
As has been reiterated several times, Mugabe and his government seem to take short-term measures to appease the populace, with little regard for the future.

If the government had not paid last year’s bonuses, which they paid this year, then this stalemate over delayed salaries would not be there.

The government over-extended itself and paid bonuses with money it did not have and now the chickens are coming home to roost.

Civil servants’ salaries were already gobbling more than 80% of revenue, meaning bonuses made sure all the money government received was dedicated to the 13th cheque, and authorities had to borrow to fund the excess that was dedicated to that futile exercise.

The situation is going to get worse in the coming months, as the Zimbabwe Revenue Authority (Zimra) continues to miss all its revenue collection targets, meaning salaries are likely to be delayed further and further.

With a shrinking economy, increased unemployment, companies shutting down and depressed commodity prices, Zimbabwe’s economic position can only get worse, as the money Zimra can collect will continue dwindling.

If a year ago, the government had taken the hard rather than populist, short-term and myopic decisions, Zimbabwe would not be hurtling towards economic doom as it is happening at the moment.

Government should have allowed for the retrenchment of civil servants and also not paid them bonuses as they were unaffordable and the country is living well beyond its means.

It is generally frowned upon to kick a man when he is down, but it is safe to say “we told you so”.

Going forward, the best thing would be for Mugabe and Chinamasa to issue a clear and unequivocal statement that as much as they would have loved to pay this year’s bonuses, they cannot because of the prevailing economic situation.

Also, as the word bonus denotes, it is an incentive that should be paid when all targets are met, which means as long as the country is in this mess, then government cannot pay any bonuses. On this one issue at least, Chinamasa has now been vindicated.