via Massive job cuts for civil service – NewsDay Zimbabwe September 10, 2015 by Richard Chidza
GOVERNMENT has committed to cutting its labour force, the International Monetary Fund (IMF) said in a statement on Wednesday, the clearest hint yet that despite claims to the contrary, fears of massive job cuts in the civil service were real.
While the government has refused to publicly admit that it plans massive job cuts in the public sector, the IMF statement let the cat out of the bag.
In a statement released at the closure of marathon meetings with Treasury officials in Harare, the IMF team, headed by Domenico Fanizza, said it was happy with progress made regarding economic reforms.
“In the context of their reform programme, the authorities have taken important steps to strengthen the financial sector and liberalise the labour market.
“They have also prepared plans to rationalise public expenditure and reduce public sector employment costs,” IMF said in a statement issued at the end of the mission.
“The top priority remains to reduce public sector employment costs to make room for (a) much-needed capital spending to raise growth; and (b) social spending to protect the poor.”
The statement contradicts claims by Public Service minister Priscah Mupfumira, who early this week said “there will not be one job loss except over disciplinary issues”.
IMF’s visit is also likely to highlight policy inconsistencies in President Robert Mugabe’s government, as Finance minister Patrick Chinamasa has hinted on expenditure cuts, while his boss sang a different tune.
Early this year, Chinamasa raised the President’s ire when he announced government had suspended civil servants’ bonuses, only for Mugabe to reverse the move.
The Finance minister has hinted that he hoped to cut government’s wage bill from 83% of revenue to about 40%, an issue IMF conceded “will require time and deeper efforts before their beneficial impact is felt on the economy”.
“Mitigating the impact of this year’s adverse shocks on the external position and growth . . . the authorities plan to further reduce the primary deficit and to achieve balance by 2016,” the statement read.
“This will help increase international reserves, despite the worse-than-expected global and domestic environment.”
On the brighter side, the statement said the IMF was pleased Zimbabwe was committed to the Staff-Monitored Programme (SMP) and was meeting set targets.
“We are pleased that the authorities met all quantitative targets and structural benchmarks for the second review, and two structural benchmarks scheduled for the third review under the SMP,” IMF said.
“The authorities have moved forward with their reform programme, despite increasing economic and financial difficulties.
“Moreover, they have intensified efforts toward re-engagement with the international financial community.”
The IMF has also organised a “dedicated stakeholders’ meeting” for Zimbabwe on the sidelines of this year’s annual meetings of the IMF and the World Bank in Lima, Peru.
The multilateral institution suspended balance-of-payments support to Zimbabwe at the turn of the century following successive defaults.
The IMF team was in Harare for several days for the second review under the 15-month SMP approved by its management in November 2014.
There has been consternation in the public service following the July 17 Supreme Court ruling that gave employers power to terminate employee contracts on three months’ notice leading to massive job losses mainly in the private sector.
The government has since instituted staff audits to weed out ghost workers as it seeks to contain an inflated wage bill.