Government forced to delay pay, again

via Government forced to delay pay, again 13/05/2014 NewZimbabwe

THE government has yet again deferred pay dates for civil servants, in a sign the country’s exchequer is struggling to raise money to pay the State’s bloated 230,000 workforce.

Last month analysts warned that government risked failing to pay its workers after cabinet awarded them a 23 percent salary hike at a time state revenues continue to fall as the economy slows down.

Pay dates have been shifted over the last two months and civil service commission secretary, Pretty Sunguro, confirmed the latest delay in a statement Tuesday but did not give any reasons.

Staff in the education sector would now get their salaries on Friday instead of Thursday, while the rest of the civil service, due to have been paid next Thursday, will now be paid on May 29.

Despite admitting a serious cash squeeze, the government this year increased civil servants salaries to honour a promise made by President Robert Mugabe and his Zanu PF party during campaigns for elections last year.

The 23 percent hike, much lower than the doubling initially promised by the politicians, increased the government wage bill to about US$155 million from around US$100 million.

The hike came after Finance Minister Patrick Chinamasa complained, in his 2014 budget statement, that salaries had gobbled an unsustainable 75 percent of State revenues in 2013.

“Where will government get the money to pay the salaries and will it be able to afford such a huge bill given the depressed economic activity?” asked economist Innocent Makwiramiti in an interview with online news agency, The Source.

“You might get a situation where government will be unable to pay after one or two months, given that it has struggled since January to raise that increment.”

“There has to be new or improved streams of income otherwise it cannot be sustained by existing tax revenue. The risk is that government may fail to pay salaries in the coming months.”

But, keenly aware of the unhappy political ramifications of retrenchments, the minister ruled any staff cull, saying the target would be reached by growing the economy and increasing tax revenues.

So far, however, the economy is refusing to play ball although government insists its ZimAsset blue-print will soon begin to bear fruits.