Government will introduce sweeping reforms to the civil service which will among other things include a new payroll system, businessdigest can reveal.
In an interview on the sidelines of a Parliament of Zimbabwe 2014 National Budget review seminar held in the capital this week, top labour economist Godfrey Kanyenze said consultations with labour groups and the World Bank were at an advanced stage.
Discussions for a sustainable framework that takes into account the huge employment costs against numerous budget demands are at an advanced stage, but were being hampered by populist statements by politicians for a civil service wage rise, Kanyenze, who is also Labour and Economic Development Research Institute of Zimbabwe (Ledriz) director, said.
He said he was involved in the ongoing negotiations for a sustainable solution to the country’s huge wage bill, which accounts for 75% of total expenditure compared to an IMF recommended average of 40%.
Critical areas in health and education remain understaffed despite the huge wage bill. During his presentation, Kanyenze said government should look at giving an inflation-based salary adjustment and leave room for development projects that are supposed to drive economic growth going forward, a proposal likely to spark protests from civil service lobby groups who are pushing for a poverty datum line (PDL) based minimum wage.
“There is likely to be an increase from the current 75% allocation given what the civil servants are asking for,” Kanyenze said.
“PDL based salaries would be met as we grow; I am coming from labour and I am saying we need to focus more on growth than distribution.”
Zimbabwe’s PDL for a family of five stands at US$540 per month and could see an average civil servant getting a 70% wage rise.
“We need to come together and negotiate our social contract where we put national interests ahead of personal interests,” said Kanyenze.
“The biggest challenge is politicians are making lofty promises and civil servants have great expectations because of what they have been promised.”
Kanyenze said employment costs, which account for about 75% of expenses, pose a threat to current economic growth projections as no money is left for allocation to development projects.
However salary negotiations between government and civil servants’ unions were yesterday reported deadlocked, with government said to be offering a 26% salary increment. Zimbabwe employs about 250 000 people in its civil service, representing 2% of the country’s population.
Employment costs have been at the centre of debate especially since dollarisation with accusations President Robert Mugabe’s government had put Zanu PF loyalists on the payroll.
In 2012, auditors from Ernest & Young of India said there were 70 000 ghost workers on the government payroll. Zimbabwe Economic Policy Analysis Research Unit executive director Gibson Chigumira said revenue projections for the year would be largely gobbled up by employment costs.
“The high employment cost is not to say Zimbabwe has the highest paid civil servants and the solution is to grow the cake,” he said.