Zimbabwe requests WB assistance to tackle high wage bill

via Africa Economy: Zimbabwe requests WB assistance to tackle high wage bill | Shanghai Daily Dec 17,2014

HARARE, Dec. 17 (Xinhua) –  Zimbabwe has requested for technical assistance from the World Bank (WB) to address its bloated wage bill currently gobbling up to 80 percent of state revenue, Finance Minister Patrick Chinamasa said on Wednesday.

He told journalists that government will need to conduct a staff audit first before it can come up with solutions to reduce the wage bill.

He said the productivity audit which will match skills to functions will be done in a manner that is not threatening, adding the exercise could actually partially address the problem.

“In my earlier conversation with the World Bank I also asked them for technical assistance with respect to how to tackle the wage bill. I would want to see what options are there from a technical point of view,” Chinamasa said.

Zimbabwe government’s total workforce has risen from about 315, 000 in 2009 to about 554,000 this year thereby excessively increasing employment costs and leaving very little money for capital projects.

Several multilateral financial institutions including the International Monetary Fund and the World Bank have warned Zimbabwe to take action against its rising wage bill.

Chinamasa last month presented a 4.1 billion U.S. dollars 2015 national budget, of which 81 percent will go towards employment costs.

Chinamasa said a staff audit will help government to ascertain the actual number of its workers and whether there was no any duplication of duties.

“We need to know who is who within the pay roll. We need that rationalization but above all we need to understand what basically composes our pay roll, who are the people and what are their skills?” Chinamasa said.

On Tuesday, Chinamasa told parliament that government will start retrenching thousands of its workers next year as a strategy to cut the high wage bill.

He also said Zimbabwe will soon start negotiations with the WB on how the country can clear its arrears with the multilateral financial lender which it owes 1 billion dollars.

Zimbabwe’s total external debt is 6.9 billion dollars and among its creditors are the African Development Bank which it owes 612 million, European Investment Bank 350 million and the International Monetary Fund 142 million dollars.

The country also owes the Paris Club 3.09 billion dollars.