Source: Cut all govt expenditure, not just bonuses – NewsDay Zimbabwe October 19, 2017
THE recent call by the Confederation of Zimbabwe Industries (CZI) for government to suspend bonuses for the civil service is laudable, as it comes at a time consultations for the 2018 National Budget are underway.
According to CZI president Sifelani Jabangwe, the suspension of the bonuses, the cutting-down of foreign travel by government and removal of ghost workers will go a long way in containing runaway spending.
These vices have no doubt seen government eating more than the revenue it generates.
On two occasions, former Finance minister Patrick Chinamasa proposed to waive bonus payments for civil servants, but was shot down by President Robert Mugabe and other Zanu PF hawks in government who attacked him for leaning more to Western policies.
Yet the private sector stopped paying bonuses some years ago after realising that the economy was heading in the opposite direction.
It boggles the mind why the government has also been reluctant to flush out ghost workers who are bleeding Treasury.
The reason can only be because Mugabe would want to use the youth militia, who are mostly ghost workers, as instruments of violence in next year’s crucial election.
While the CZI’s call is laudable, chances of the Zanu PF regime abandoning its populist policies like paying bonuses are slim as the country heads towards the 2018 elections.
Clearly, calls for reforms will find no takers.
We believe what the government requires is to be pragmatic and deal with the economy with care for the benefit of the electorate. Paying bonuses in such a difficult environment is not one such policy.
Zimbabweans would remember Finance minister Ignatius Chombo, then as Local Government minister, ordering local authorities and parastatals to write off debts owed by residents in the run-up to the 2013 elections. The negative effects of that irrational and populist directive are still echoing across the country with local authorities failing to deliver any service.
Besides, Mugabe’s gallivanting has cost the country millions of dollars, resulting in runaway expenditure crowding out allocations to critical sectors like infrastructure and social services.
In the 2018 pre-budget strategy paper, expenditure for 2018 is projected to be $4,68 billion. Of that, employment costs are projected to be $3,2 billion, representing 80% of total anticipated revenues.
That the revenues are projected at $4 billion gives a budget deficit of $680 million, and hence illustrates a gloomy outlook which should have jolted government into action.
Treasury has been preaching reforms, but that has not been matched by implementation. Recommendations from the civil services audit are still to be enforced.
This means a fantastic document is gathering dust somewhere in some government department. It is difficult to convince civil servants to forgo their bonuses when there are no signs that Mugabe would cut on his many foreign travels that gobble at least $10 million each. Targeting bonuses alone will be met with resistance from the constituency.
A holistic approach is required to cut government expenditure. The sooner this is done, the better.
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