IMF raises concern over wage bill

via IMF raises concern over wage bill – The Zimbabwe Independent March 4, 2016

An International Monetary Fund (IMF) team has raised serious concerns over government’s bloated wage bill and the pace at which labour reforms are moving, businessdigest has learnt.

Kudzai Kuwaza

Sources who attended a meeting between government and the IMF recently said the fund team, which is in the country to evaluate the implementation of the government’s Staff-Monitored Programme (SMP), met on Monday with business and labour.

The IMF delegation, which arrived in Harare on February 23 for the third and final review of the SMP and headed by Domenico Fanizza, held meetings with business and labour representatives who included Employers Confederation of Zimbabwe president Josephat Kahwema and vice-president Callisto Jokonya.

Labour representatives included Zimbabwe Congress of Trade Unions (ZCTU) deputy secretary-general Gideon Shoko and legal officer Zakeyo Mutimutema.

The SMP is an informal arrangement between a country’s government and the IMF to monitor the implementation of the government’s economic programmes.

The two-hour meeting held on Monday was part of the Bretton Woods institution’s consultations with various stakeholders during their three week stay in the country.

Kahwema confirmed the meeting, saying it was a fact finding meeting by the delegation, adding the discussions were “frank”.

“The meeting was basically a fact-finding mission checking where we are and what is happening,” Kahwema told businessdigest on Tuesday. “In the meeting, the IMF raised concerns during the meeting over the bloated number of government employees.”

Government wages gobble more than 80% of collected revenue. Presenting the mid-term fiscal policy review statement in July, Finance minister Patrick Chinamasa said he planned to reduce the wage bill from more than 80% to less than 40% in line with IMF recommendations. The government also conducted a civil audit with recommendations made to restructure the civil service and reduce the wage bill.

ZCTU secretary-general Japhet Moyo said the IMF delegation seemed surprised that the labour reforms were yet to be completed.

“In our view, the IMF seems to have been misled by authorities that the process was completed when government is currently running around to redo the process,” Moyo said.

The meeting comes at a time when government, business and labour are tussling over some contentious amendments made in the Labour Act last year that angered captains of industry. The most contentious amendment relates to a section that obliges employers to compensate workers dismissed after last year’s July 17 Supreme Court ruling. The ruling allowed them to dismiss workers on three months’ notice without paying a retrenchment package.

This prompted employers to drag to court over the amendments in the Labour Act. The case is yet to be heard.