via ‘Mugabe bonus decision dashes recovery prospects‘ – NewsDay Zimbabwe April 22, 2015
LOCAL economists and financial experts have warned that President Robert Mugabe’s decision to override Finance minister Patrick Chinamasa’s recent suspension of civil service bonuses would scuttle any prospects of early economic recovery given the country’s squeezed revenue base.
by PAIDAMOYO MUZULU
Mugabe took government and Zanu PF officials by surprise on Independence Day last Saturday when he reversed Chinamasa’s decision to suspend government employees’ 13th cheque, saying his government could not afford to withdraw workers’ legal benefits.
Independent economist John Robertson said the awarding of bonuses should be based on State revenue levels.
“The budget is already strained, tax revenues are falling and the 2015 budget is already out of step,” Robertson said.
He added: “Chinamasa has got a serious problem on how he can make the revenue improve or increase tax on the heavily-taxed taxpayers. The other option is to borrow, but there are a few new people ready to lend Zimbabwe money because of its poor record in paying back loans.”
The other option, Robertson added, would be to print more money, but this was not feasible in a dollarised economy.
“In other countries they devalue their currencies so that they can pay their bonuses, but Zimbabwe can’t do that because we don’t have a currency,” he said.
Another economist, Maxwell Saungweme, said: “It means the fiscal deficit will continue to balloon as civil service salaries constitute more than 90% of the budget. We are the only country in the region with such a huge civil service wage bill.”
He said the country had to immediately restructure both the civil service and Executive if the economy was to perform better.
“Cutting civil service bonuses alone is not the panacea. We need a whole civil service audit, including trimming of government ministries to, say, only 16 and getting rid of unnecessary packages, unnecessary deputy ministers and remain with a lean and efficient civil service,” Saungweme said.
Zimbabwe currently has nearly 500 000 civil servants with over 70 000 believed to be ghost workers.
The government has since launched a second civil service human and skills audit with a view to retrench excess staff.