The government of Zimbabwe has decided to handle its inability to pay civil servants’ salaries by laying off some civil service workers, among other measures.
The Zimbabwean government said that civil servants’ salaries take up a whopping 96.8% of the government’s annual budget. This, combined with the worsening economy makes it difficult for the salaries of civil servants to be paid.
The statement was made on Thursday by Minister of Finance, Patrick Chinamasa. While presenting the mid-term budget to the parliament he looked over the growth rate, comparing the forecasted 2.7% to the actual 1.2%, blaming the low growth on the current drought, fall in investment and the cash crunch.
He said: “The economy is facing strong headwinds, with major challenges being experienced in the economy and business activity during the first half of the year than what the 2016 national budget anticipated,” Chinamasa said.
“The outlook, based on the status quo, points to a situation where projected revenues fall short of meeting employment costs, leaving no room for expenditure on operations and maintenance as well as capital projects.”
Minister Chinamasa also added that at the rate things were going, the budget deficit could reach up to a billion US dollars by year’s end.
The government now intends to cut current expenditure by laying off civil service workers, slashing salaries of cabinet ministers and other employees, closing embassies, cutting foreign trips as well as implementing a massive retrenchment exercise.
Hence, 25,000 members of the civil service will be laid off. According to the Finance minister, the funds saved from the retrenchment of these government workers will be used in funding projects and programmes.
Some other cost-cutting measures include: taxing civil servant’s wages, issue one condition-of-service vehicle to deputy ministers and permanent secretaries, rationalize mobile phone and telephone allowances, among others.