via Salary hikes unsustainable, short-sighted — Chinamasa – DailyNews Live 27 January 2015
HARARE – Salary increments are “unsustainable and short-sighted” in a depressed economy like Zimbabwe’s, Finance minister Patrick Chinamasa said.
The country faces waning economic prospects, with its gross domestic product (GDP) expected to barely grow this year.
According to the World Bank, Zimbabwe’s GDP growth declined to 1,7 percent last year from 2013’s 3,2 percent.
“The state in which our economy is in is a sad one… therefore it does not even make sense for anyone to ask for a pay rise let alone threaten to strike over issues to do with remuneration,” the Treasury chief told a Confederation of Zimbabwe Industries (CZI) symposium last week.
“I know there are certain sectors threatening to strike over salary issues, may we please be reasonable, once the economy starts performing everyone can have their raise,” he said, adding that all employers, particularly government, could not afford salary increments.
His remarks come amid strike threats by civil servants, including teachers and doctors.
“I find this salary increment talk very disturbing. Is there a single person out there who does not know that the economy has not been performing? Employers simply cannot afford it, government cannot even afford this,” he said.
Reserve Bank of Zimbabwe governor John Mangudya added that the state of Zimbabwe’s economy does not warrant any salary increases in whatever sector.
“This economy cannot afford any salary increases, there is not a single sector performing well enough to afford this privilege,” the former CBZ Financial Holdings chief executive said.
Civil servants in Zimbabwe are among the lowest paid in the region, a scenario which has resulted in a massive brain drain with most of them leaving for greener pastures in neighbouring countries, and some to as far afield as New Zealand and Australia, among other countries abroad.
The country’s wage bill — expected to gobble 81 percent of government’s $4 billion 2015 budget — has been a major issue among calls for reforms, with Chinamasa moving to audit the civil service as recommended by the International Monetary Fund.
In his 2015 budget statement, he warned that recurrent expenditure will balloon in 2015, the bulk of it going towards salaries’ of 235 000-plus workforce.
The civil service audit, and consequent retrenchments, come on the back the Zanu PF government’s ambitious economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation — popularly known as ZimAsset — which committed to create 2,2 million jobs.