Cabinet divided over bonus issue

via Cabinet divided over bonus issue – The Zimbabwe Independent April 24, 2015

PRESIDENT Robert Mugabe’s cabinet is now deeply divided over the issue of awarding bonuses to civil servants following the veteran leader’s unexpected outburst against Finance minister Patrick Chinamasa last weekend claiming the suspension of payments was not approved even when it was agreed upon.

Elias Mambo

Information gathered by the Zimbabwe Independent this week shows Mugabe’s stinging attacks on Chinamasa were based on misrepresentations as the bonus issue was actually discussed in cabinet before the minister on April 13 announced the suspension of payments until 2017.

“The President’s remarks were shocking because the issue was certainly discussed in cabinet,” a senior minister told the Zimbabwe Independent this week.

“Vice-President Emmerson Mnangagwa presided over the discussion while the president was out but the bottomline is that it was discussed and agreed upon.

Anything else is simply a misrepresentation. Mnangagwa and all ministers know the truth. A lot of ministers are angry over this issue.”

Chinamasa announced the decision a press conference at Munhumutapa Building flanked by Information Jonathan Moyo and Mugabe’s spokesman George Charamba, who is also Information permanent secretary.

However, addressing the Independence Day 35th anniversary at National Sports stadium in Harare on April 18 Mugabe without warning pounced on Chinamasa, saying his move was “disgusting”. This left the nation dismayed at his outrage and the public castigation of Chinamasa who was attending IMF and World Bank spring meetings in Washington D.C, United States.

Chinamasa, spearheading Zimbabwe’s engagement with the international community and multilateral lenders, is under intense pressure from the IMF in terms of the Staff Monitoring Programme – an informal agreement between Harare and the Bretton Woods institution to monitor Zimbabwe’s economic reforms – to balance government’s primary fiscal accounts.

He is expected to show government’s commitment to eliminate the fiscal deficit to reaffirm Zimbabwe’s intention to further raise its capacity to repay its arrears before getting new funding. His top priority is to move resources from the unsustainably bloated wage bill to capital and social spending, which implies reducing the size of the civil service through retrenchments and bonus cuts.

The IMF warned this week the economy will further deteriorate this year, while urging government to implement macroeconomic and structural reforms, particularly clarifying the damaging indigenisation policy, restoring confidence and improving financial sector soundness, and strengthening public financial management.

Fiscal discipline – which Mugabe says is “disgusting” – is one of those key issues.

Ministers told the Independent that Mugabe’s attacks on Chinamasa were either due to a self-serving distortion or political expediency.

“The bonus issue was tabled in a cabinet meeting where Chinamasa presented ways of cutting the unsustainable wage bill. He reported that government was still to complete payment of 2014 bonuses, while at the same time struggling to raise the US$260 million required monthly for the public service wage bill,” another minister said.

“So after his presentation ministers were divided with only three ministers arguing against scrapping of bonuses. The minissters who wanted bonuses maintained are Walter Mzembi (Tourism), Chris Mutsvangwa (War Veterans) and Walter Chidhakwa (mines).”

Those who argued against the scrapping of the bonuses said the public service is not paid like workers in the private sector, hence the need to help out struggling civil servants who are already poorly paid, a minister said.

By contrast, those who wanted bonuses to be suspended argued government was broke and was in any case already battling to pay civil servants amid dwindling revenues as the tax base shrinks with economic decline.

Mugabe said what Chinamasa did was “disgusting”even though it was agreed upon. “I want to make it clear that the report which was in the newspapers that bonuses were being withdrawn is not government policy,” he said. “The cabinet did not approve that at all and the presidency never was consulted on the matter.”

Government has started an audit to trim the civil service to reduce its unsustainable wage bill for its over 550 000 employees.

The confusion surrounding bonuses started when Labour minister Priscah Mupfumira blasted Chinamasa soon after his announcement for breaching protocol by rushing to announce the decision before consultations in accordance with a cabinet directive issued on April 7.

Under-fire Chinamasa has since backtracked in the face of Mugabe’s withering attack, although he highlighted government’s dire financial problems . “I acknowledge we have committed mistakes and overlooked the procedures but these mistakes are understandable and have been made in good faith,” he said.