via Chinamasa: Govt to cull 500,000 workforce – NewZimbabwe 23 March 2015
THE Government is prepared to take ‘hard’ measures to reduce its crippling wage bill, which consumes 82 percent of its total revenue.
The administration will also amend labour laws to make it easier for companies to retrench, finance minister Patrick Chinamasa said at the weekend.
He was speaking in an interview with The Source on the sidelines of the Zambezi River Authority Council of Ministers meeting in Victoria Falls last Friday.
Reduction of the high wage bill is among key targets under the International Monetary Fund’s staff monitored programme (SMP), an informal and flexible instrument for dialogue between the Fund staff and a member country on its economic policies.
Zimbabwe undertook the programme in 2013 and under the current SMP the policy reform agenda focuses on balancing the primary fiscal accounts, improving the investment climate, restoring confidence in the financial sector and garnering support for a strategy to clear arrears with multilateral institutions.
Government has resisted reducing its over 235,000 workforce, but with the 2015 recurrent expenditure seen at 92 percent, economic growth slowing down and expected to weaken further in the year after poor rains and weak commodity prices, Chinamasa said it was time for the government and companies to face the harsh reality.
“We needed to see whether we are going forward hence the need to take hard decisions which are reduction of the wage bill in relation to revenue collections and reforming the labour laws to build flexibility so that companies which want to streamline their staff can do so without liquidating,” Chinamasa told The Source.
Both government and business have to adjust to the current economic reality to survive, he added, but refused to say if the state was considering reducing its workforce.
“Cabinet mandated the Public Service Commission and us (finance ministry) to look at the wage bill and identify possible ways that can be used to effect its reduction.
“We have been holding meetings whose details I can’t give now because recommendations have to go to Cabinet first,” said Chinamasa.
He said the recommendations will soon be presented to Cabinet.
“Our economy is resilient and we are confident we will overcome liquidity challenges arising from sanctions, failure to access capital and financial assistance from the world and unavailability of lines of credit.
“We know however we will have a way out of these challenges,” he said.
The economy, he added, has also been affected by price distortions and abuse of the United States dollar.
“Already price reductions are taking place in the economy as we give proper value to the US dollar.
“Firms should look at the cost effective structures to make sure they survive and they have to scan the environment and adapt,” said Chinamasa.
COMMENTS
Get rid of the ghosts first. Huh…I don’t think so. Then start whittling out the dead wood. This just proves how bloated our government is. I believe we have the biggest civil service in the world.
So what is the correct number, of government employees 500 000 or 235 000? Chinamasa bumped up the number to 500 000 earlier this year to hoodwink the IMF into believing he could reduce the numbers back down to 235 000, still far too many for what this economy can afford. It’s just more bluff and double bluff, more nonsense from the same bunch of clueless tossers who finally drove the Zim economy into the ground in 2008.
“Firms should look at the cost effective structures to make sure they survive and they have to scan the environment and adapt,” said Chinamasa.
Why should they Patrick? So they can just pay Tax to ghost workers ??
Maybe better for everyone to shut down their businesses for now and then after you cull the 500 000 Ghost workers – then they can re-open.
Do not make people hate IMF for no reason Mr Chiinamasa, sort the economy first
This will never happen. Most of the so-called Government employees are there to get votes for ZANU-PF and it is likely that the total number of ghost workers have been bumped up from 235 000 to 500 000 before the 2013 elections. The 265 000 has been handsomely rewarded for doing nothing – but voting for voting for ZANU-PF in the elections. Add their families to it and it could have represented between 600 000 and 700 000 votes.
This election gimmick is what is backfiring on the Zimbabwe economy now – but is unlikely to cause any real action on the part of the Government. They would probably suspend the ghosts without pay and six months before the 2018 elections start paying their salaries again.
Chinamasa has the money. Where are you hiding the money.During Biti’s term your president and your party often proclaimed that Biti was hiding money. It was there. The diamonds are still being mined so produce the money You are hiding money dear minister.How can you cull 500 000 civil servants when people as old as 91 years are still working.
Then talk of creating 2.2million jobs in five years!!!!!! Sorry guys we were taken for a ride by ZANU PF…once again. We never will learn.
The end is getting very close now