Finance minister Patrick Chinamasa says the government has set itself a three-year target to reduce the current wage bill from gobbling over 90% of State revenue to just 50%.
Source: ‘Wage bill will be down by 50% in 2019’ – NewsDay Zimbabwe February 9, 2017
BY BLESSED MHLANGA
Chinamasa, who has been pushing for a huge cut in the government wage bill, yesterday said he was aware that the process would take years to accomplish. He said by 2019, nearly 40% of the bill should be creamed off.
“Currently, over 90% of revenue is going towards wages and that leaves very little room for service delivery. So the PSIP [Public Sector Investment Programme] we are doing, be it in the energy sector, is through borrowing and that increases the cost on the country,” Chinamasa said in an interview with journalists.
“I think it’s correct to say it cannot be done overnight. It’s a process, and already we have taken some steps in the process and up to now I am very pleased with the results of the process. You can’t do it overnight, but we must work consistently to achieve the targets we have set for ourselves, say, by 2019, we have said that we should have done what we could to reduce it to about 55% of revenue going towards wages.”
Chinamasa said the reduction would not necessarily come from staff rationalisation, but this could happen if the government grew the national revenue cake.
“We are tackling it through two routes. One is to basically look at the wage bill itself, what savings we can make to reduce it, what redeployments we can make [and] what rationalisation measures we can take. The other one is to grow the cake. If we succeed, it means the wage bill can achieve its rightful proportionate share within a bigger cake,” he said.
Chinamasa assured civil servants that the government would not fail to pay their salaries despite the cash challenges it continued to face.
“So far, I think we have been lucky that the wages have been capped in a way through consensus and we have not had any wage increases, which is a very good thing for the economy, and the challenge basically is to grow the economy and I do not foresee a situation where we fail to pay salaries. Yes, because we are running a cash budget, we will continue to stagger so that we continue to pay as and when income is made available and revenue is received, but I don’t foresee a situation where we fail to pay,” he said.