Govt appoints experts to look into wage bills

Source: Govt appoints experts to look into wage bills | The Herald June 22, 2017

Africa Moyo Business Reporter
GOVERNMENT has set up a team of technocrats drawn from the Office of the President and Cabinet, the Reserve Bank of Zimbabwe (RBZ) and Ministry of Finance to come up with a framework that would be used to look into the cost running ministries.

This comes as over 90 percent of revenues continue to go towards wage bills. Local authorities and State Enterprises and Parastatals (SEPs) are a major drain on the fiscus because they have higher wage bills that are not in tandem with their operations.

Councils have come under fire for directing over 40 percent of revenues to wages, which is against Government requirement that salaries should take up 30 percent.

Speaking during the launch of the Zimbabwe Economic Update Volume 2 — a report compiled by the World Bank giving its perspectives on the economy — in Harare yesterday, Finance and Economic Development Minister Patrick Chinamasa said last Tuesday, he presented a paper in Cabinet on cost-cutting measures.

“I need to say that last week, I put a paper to Cabinet on cost-cutting measures in ministries and I have since put together a team . . . comprising the OPC (Office of the President and Cabinet), my ministry (Finance) and the Reserve Bank to look and come up with a framework on the basis of which we can see how we can reduce the cost of running those ministries, as well as coming up with measures of increasing revenue generation,” said Minister Chinamasa.

He could not be drawn into revealing when the team would start work and when they would report back their findings and recommendations.

Government believes that if SEPs and local authorities operate efficiently, the economy would be turned around. Zimbabwe has 107 SEPs and less than 20 are operating viably. The rest are dogged by unmitigated corruption and deliberate maladministration by management.

Minister Chinamasa said: “Very few of the 107 SEPs are making a profit. I don’t care about the dividend, but just break-even at the very least. “Don’t be a burden, making a beeline trip to Treasury to ask for contributions to sustain yourselves. But I am happy to say that there is work already advanced where we are tackling parastatal by parastatal in that regard and I am also happy that some of the parastatals that we have supported are beginning to make a difference.

“We have supported TelOne, we have supported NetOne; we have set up a new diamond company (the Zimbabwe Consolidated Diamond Company) which we have capitalised to the tune of US$80 million. “And results are beginning to show (at ZCDC) and we hope that by September, the results would be even better in that regard as they start mining conglomerate diamonds, moving away from alluvial diamonds which are actually depleting.”

As part of measures to transform the economy, which is expected to grow by an average three percent this year, Government is determined to re-engage the World Bank, African Development Bank (AfDB) and the International Monetary Fund (IMF).

Re-engagement efforts are aimed at addressing the public debt which is estimated at over US$10 billion. Government thrashed a deal with its creditors in Lima, Peru, in 2015, which outlines the steps it would take to offset its obligations with multilateral financial institutions.

Already, Government has settled its arrears of 108 million with the IMF.