via ‘Zimbabwe civil servants may soon go without pay’ December 18, 2013 by Veneranda Langa NewsDay
Government may fail to pay civil servants salaries in the coming months as revenue inflows to Treasury continue to dwindle, former Finance minister Tendai Biti has said.
Biti told journalists and diplomats during a media briefing in Harare yesterday on the state of the economy, that the economy was running on auto cruise. He said economic indicators showed that there will be a serious shrink of 23% in the agricultural sector, 32% in mining while the economy will grow by between 1,5 % to 1,8 % next year.
Statements by the MDC-T secretary-general come at a time government has, for the first time ever, staggered the payment of salaries and bonuses for teachers.
The national revenue base, according to Biti, has been 80% to 90% of the wage bill and since September government has accumulated a salaries bill debt of over $300 million resulting in total failure by the ruling Zanu PF to meet its financial obligations towards line ministries.
“Government is in de-facto shutdown because the government income is not sufficient to pay the wage bill. Monthly accumulations of domestic arrears, electricity bills and drugs are not being paid and domestic debt will be around $1 billion,” said Biti.
“The danger line is a situation whereby for the first time in the history of this country, by early next year, government is going to fail to pay public servants’ wages in the month they are supposed to pay, and we are going to have a new lexicon in Zimbabwe of stagnation of salaries in 2014.
“There is no reason why a bonus should not be paid. Paying bonus after Christmas dampens the mood of our workers. To plunge the 245 000 workforce into Christmas without bonus is criminal.
“The day is not so far and it is coming when this government is going to fail to pay the wage bill. Zanu PF managed to rig the elections, but they are not going to be able to rig the economy and the only way out for them is to bring back the Zimbabwean dollar by reopening the printing press.
“The return of the Zimbabwean dollar is not a question of if, but a question of when, because that is the only avenue open to them as they are not going to get money from China or anywhere.”
However, last week RBZ acting governor Charity Dhliwayo ruled out the possibility of the re-introduction of the local currency in the short term while Finance minister Patrick Chinamasa has also repeatedly said the same.
Turning to the 2014 national budget due to be presented tomorrow, Biti said it will be a “mickey mouse budget” because there is no revenue to back it up.
“We can see the logic of Minister of Finance Patrick Chinamasa refusing to present the budget because it is hot air – it is mascara (eyelid make-up). You can put lipstick on an ugly person like me but I can never change to a Madonna. We are going to spend four hours in a hot room (Parliament) where hot air is going to come out because there are no resources,” Biti said.
“Let us resolve the crisis of legitimacy – skewed expenditure patterns. Let us go back to the principles of eat what you kill, go back to supply side economics and engage the international community – not only Beijing and Hong Kong, but we must also engage the European Union and South Africa. Unfortunately though, all these countries want economic stability and political hygiene.”
President Robert Mugabe told the just-ended Zanu-PF 14th National People’s Conference that government should pay salaries above the Poverty Datum Line. The PDL is estimated at $540.
“Minister Chinamasa, you can’t say you don’t have money. Where is our platinum going, where is our gold going, our diamonds? No, no, no! If they are taking it, ensure that we tell them that we the owners are taking our money,” Mugabe was quoted as saying.
“That is why we say the Budget must tell a new story that those who work must be paid well, paid not below the Poverty Datum Line, but above the Poverty Datum Line, beginning with the level of the Poverty Datum Line. Give us time, there will be improvement; there will be a re-awakening. We should not exploit. We can’t be slave masters. We can’t allow our people to work for nothing.”
Meanwhile, Biti said the cash crunch currently being experienced at the banks was due to under capitalisation.
“We have a challenge of small banks that have capitalisation crisis, and the crisis at ZABG is not a liquidity crisis, but a capitalisation crisis,” said Biti.
“What we have at bigger banks is a genuine liquidity crisis resulting in insufficient cash,” he said.
He said the liquidity crunch was symptomatic of the real economic problems the country was facing. Zanu PF, he said, was clueless on how to deal with the dying economy, lacked genuineness and would never implement what it promised in its Zim Asset document.