THE reported ultimatum given by President Robert Mugabe to Finance minister Patrick Chinamasa and Labour minister Prisca Mupfumira to give a date as to when bonuses will be paid to civil servants by today is not only unfair, but smacks of desperation.
This is more so after Chinamasa made it clear in April last year government’s inability to pay bonuses due to limited fiscal space in which more than 80% of revenue is gobbled up by civil servants salaries and allowances. This demand by Mugabe is coming at a time the Zimbabwe Revenue Authority (Zimra) has continuously missed revenue targets due to a number of factors which include a tight liquidity squeeze, low capacity utilisation of 34,3%, porous borders, company closures and massive job losses.
The low revenue inflows can also be attributed to the depressed international mineral prices and lower sales than anticipated as a result of non-production and reduced production by some mining companies. Nearly 300 000 workers across various sectors have been rendered jobless as a result of the July 17 Supreme Court ruling which allowed employers to retrench workers on three months’ notice without paying severance packages, while more than 4 610 companies closed down between 2011 and 2014.
The massive company closures and scaling down of operations saw the country’s tax collector raising US$878 million in revenue for the third quarter ending September against a target of US$964 million, official figures have shown. Revenue collections averaged US$211 million per month for the first nine months of 2015, according to Zimra figures.
Already the government needs US$120 million a month, excluding benefits, to pay its 540 000 civil servants, with the lowest getting US$380. This means government will require at least US$240 million, excluding allowances and other benefits, for the month it decides to pay the bonuses. It is absurd for Mugabe to expect a miracle from Chinamasa when monthly revenue inflows are lower than what government needs to pay the bonuses.
Chinamasa is well aware of this, which is why he had proposed that the payment of bonuses be suspended in 2015 and 2016 and reconsidered in 2017.
However, Mugabe, never one to miss an opportunity for grandstanding, told the nation during Independence Day celebrations last year that the presidium had not been consulted and bonuses would be paid as usual.
The declaration by Mugabe has come back to haunt him in spectacular fashion as come December, the civil servants did not only go for the Christmas holidays without bonuses but also without salaries for that month for the first time since Independence. The promise to pay bonuses by Mugabe has spawned threats of demonstrations by some members of the civil service who were looking forward to the 13th cheque.
It remains a mystery where Mugabe thinks Chinamasa can get the money to pay bonuses at a time the Finance minister has to pay for maize imports to mitigate food shortages.
Zimbabwe is facing one of its worst humanitarian crises in two decades and Treasury is grappling with raising nearly US$500 million to mitigate the effects of an El Niño-induced drought that has seen millions facing hunger while thousands of livestock have already perished.
In addition, Chinamasa has to find money to repay the US$1,8 billion in arrears to three preferred international creditors — the International Monetary Fund (IMF), World Bank and the African Development Bank by June as he promised at the Lima meeting in Peru in October last year. He also needs to pay civil servants their January salaries among other critical operations.
Given the onerous responsibilities Chinamasa faces, it is nothing short of madness for Mugabe to expect bonuses to be paid anytime in the near future. If anything, it is cruel for him to raise the hopes of underpaid and long suffering civil servants.