Populism killing Zim recovery prospects

HARARE - It is apparent the President Robert Mugabe administration’s populist tendencies and reluctance to implement reforms is increasingly creating headaches for his government.

This is proved by latest revelations by the Finance ministry’s accountant-general, Daniel Muchemwa, on the state of government’s finances.

In his consolidated statement of financial performance of the Consolidated Revenue Fund for January, Muchemwa clearly indicated that government’s income and expenditure account is in shambles — expenditure far exceeds income.

Worryingly, the accountant general pointed out that 86 percent of government’s income in the month under review was gobbled by the bloated civil service wage bill.

“Major costs incurred related to employment amounted to $238 million, which is 86 percent of total expenditure,” Muchemwa said.

That is definitely unhealthy.

Month-in, month-out, public service salaries have continued to gobble a greater chunk of government revenue.

This consumptive expenditure has crowded out capital projects and other important commitments, particularly developmental.

Finance minister Patrick Chinamasa — under pressure to strike a balance between the dwindling national revenue and unrestrained government expenditure — made a commitment in his 2015 mid-term fiscal statement to reduce the wage bill from the average 80 percent of income to 40 percent in the long-term. But two years down the line, it remains to be done.

And the public sector wage bill is anticipated to gobble $3 billion this year, from the country’s $4 billion national budget.

This financial mess stems from government’s reluctance to implement reforms.

The Mugabe administration has been advised to conduct a civil service audit to weed out ghost workers and lay off redundant staff, among other reforms.

Under the International Monetary Fund (IMF) staff-monitored programme, government was advised to streamline its 300 000-plus workforce to almost half, a move that would free up revenue and spur economic development.

Parliament’s Finance and Economic Development portfolio committee has also recommended that government restructures the civil service and reduce the wage bill to 70 percent of the budget within the first quarter of the year.

Recently, the IMF head of delegation to Zimbabwe, Ana Lucia Coronel — who was in the country to hold discussions with government, private sector representatives and civil society for the 2017 Article IV Consultations — warned government against splurging on salaries and wages.

“ . . . excessive government spending, if continued, could exacerbate the cash scarcity, further jeopardise the health of the external and financial sectors and, ultimately, fuel inflation.

“Spending pressures stem from high employment costs, government transfers to support specific economic sectors, and elevated discretionary expenditure . . . Reinforcing the government’s efforts to curtail non-priority spending is also pressing,” Coronel said.

Of interest, she noted that apart from laying off redundant staff, reducing the hefty public service wage bill could involve reviewing allowances and benefits, with a view to eliminating non-essential posts.

That was certainly true.

Actually, Auditor-General Mildred Chiri’s latest reports exposed gross misappropriation of funds by State-run institutions, with some unproductive parastatals’ executives awarding themselves hefty and undeserved salaries and allowances.

Hard-earned tax payers’ money has gone down the drain as government refuses to implement reforms, which include privatising the non-performing and perennial loss-making parastatals, which continue to be a burden on the fiscus.

A case in point, which clearly indicates how Mugabe’s resistance to implement reforms has created a financial mess, is how, in a typical populist approach, he reversed Chinamasa’s move to suspend bonuses, as government could not afford to pay the 13th cheques.

While 93-year-old Mugabe won the hearts of many but up to today, some civil servants have not received their 2016 bonuses, seven months into 2017.

It is hard and almost difficult for populism to prevail against practicality.

It always creates challenges.

Comments (1)

Army and police first in line. Only goes to show how bad Mugabe is when pple try to pass the blame around him. He is responsible period.

Zuze - 7 July 2017

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.