Zimbabwe struggles to meet payroll, pay dates to remain erratic

via Govt struggles to meet payroll, pay dates to remain erratic – Chinamasa | The Source on May 28, 2014

Finance minister Patrick Chinamasa on Wednesday admitted that government is struggling to pay its workers as it relies entirely on tax remittances, resulting in frequent changes to the pay dates.

Government this month deferred pay dates for its 230,000 workers, for the second time this year, one month after awarding them a 23 percent wage increase which analysts say is unsustainable.

Last month, the state also paid its workers late, with reports suggesting it was failing to remit mandatory pension, social security and retail credit deductions, among others.

“We run a cash budget, and a cash budget means that we wait for receipts from Zimra (Zimbabwe Revenue Authority) before we can disburse to meet the obligations of government including the salaries of honourable members,” he said in response to a question by Member of Parliament for Glen View North, Fani Munengami, on why government continues to shift pay dates.

“When resources are not of the levels to meet our obligations we have to wait,” Chinamasa said.

Government pledged to fulfil election promises by President Robert Mugabe’s ZANU-PF party last year, to raise the wages of its 235,000 employees to the $543 poverty line, but analysts have warned that such an increase would lead to defaults.

Treasury already spends three quarters of its $4,1 billion budget on salaries for state employees, the bulk of whom are teachers.

Recurrent expenditure, mostly wages, have eaten up 96 percent of monthly revenues since January, crowding out essential capital expenditure.

Revenue agency Zimra passed its revenue collection target for the first quarter by two percent to $834.6 million, an achievement described by its commissioner-general, Gershem Pasi as a ‘miracle’ in the wake of the economy’s poor performance.