Tuesday, 21 June 2016

BROKE GOVT FORCED TO RETRENCH

The government has buckled under pressure and started to retrench civil servants to cut its wage bill as it struggles to pay its 350 000-strong workforce.

Reduction of the public wage bill was part of a plan agreed with the International Monetary Fund (IMF) under the Staff Monitored Programme to help reduce the country’s debt which is estimated at more than $10 billion.

The Civil Service Commission announced last week it had abolished 100 posts in the Women’s Affairs ministry and also retrenched diplomats in Zimbabwe’s 42 foreign missions.
The retrenchments are set to pile on the ranks of the unemployed in a country where more than 80 percent are already jobless.

The civil service will be further culled in the coming months, officials said.
Already, the broke government was this month forced to postpone its pay date to July due to the shortage of funds.

The delay has raised questions over the state of government finances. Latest data shows the government grossly missed its revenue target.

The country’s economy is struggling due to a lack of investment and closure of companies which complain of high wage and other costs as well as shortages of water and electricity.
Cutting wages would allow Harare to free money to develop its failing infrastructure, including roads and power-generating plants, as well as social services like health and education.

In his 2016 budget statement, Chinamasa said the government wage bill was consuming an unsustainable 80 percent of revenue. He conceded that this needed to be reduced to 30 percent by 2018, but insisted that this would be done by growing the economy and generating more revenues instead of retrenchment. daily news

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