Industry backs Chinamasa

HARARE - Industry has rallied behind Finance minister Patrick Chinamasa’s recently rejected civil service restructuring reforms and salary cuts saying the measures were a necessary evil for economic revival.

The Confederation of Zimbabwe Industries (CZI) on Monday said the government’s wage bill, which gobbles up $0,97 of every $1 collected, remained unsustainable and detrimental to economic progress.

“We applaud the minister of Finance, for his mid-term budget even though some recommendations were thrown out of the window. We share his disappointment,” CZI vice president Sifelani Jabangwe said the industry body’s recommendations to the 2017 national budget.

“His bold move to temporarily suspend bonuses and his recommendation to cut down on certain jobs are necessary,” he added.

CZI also recommended that some duties in government departments and State-owned enterprises be streamlined.

“… and the government’s wage bill is unsustainable and detrimental to any economic growth initiatives. The move should be complemented by elimination of ghost workers, a hiring freeze except for critical staff,” Jabangwe said.

This comes as the budget master, in his mid-term fiscal review statement, proposed to forego civil servants’ bonuses for the next two years and shed government’s workforce.

While the move was hailed by critics and described as “long-overdue”, President Robert Mugabe, through Information minister Chris Mushowe, rubbished the recommendations days after the announcement.

The Treasury chief’s prescription for sustainable expenditure included taxing civil servants’ allowances with effect from October, along with a rationalisation of the county’s foreign service missions.

Zimbabwe — presently drowning in a $623,2 million budget deficit as of June 30 against an annual projection of $150 million — was expected to save $155 million by the end of 2017 after axing

25 000 workers.

According to Chinamasa, the bonus cut was to translate into savings of around $180 million per annum.

However, even after implementing all these measures, the monthly wage bill was still going to remain high at $245 million, which is 76 percent of revenue.

According to Chinamasa — the country’s first half revenue collections stood at $1,8 billion which was 9,8 percent below target and with expenditure standing at  $2,3 billion against a target of $2 billion — government had overshot budget by $308,4 million, with the huge wage bill causing the overshot.

He even warned that failure to contain the budget deficit would worsen the deficit to an estimated year-end level of over $1 billion.

For years, government has been advised to “live within its means” with the International Monetary Fund (IMF) through its Staff-Monitored Programme recommending that Chinamasa  cut government’s wage bill to at least 50 percent of all total collections.

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