CIVIL servants’ demands for salaries and wages linked to the Poverty Datum Line (PDL) which they have pegged at US$540 are unsustainable and not practical within the 2014 national budget unless government drastically reduces its workforce, slashes executive expenditure and the economy grows by double digits.
While civil service demands are understandable as their salaries mostly fall below the PDL, economic reality does not allow anything more substantial than the modest 26% salary increment offered by government.
The country’s economy continues to limp along and is yet to recover substantially from a decade-long socio-economic crisis, with company closures and retrenchments increasing and the liquidity crunch showing no signs of easing.
Government has over the last five years spent an unsustainable 70% of its budget on salaries and wages thereby crowding out capital projects and severely curtailing operational funding. To continue along the same trajectory would be suicidal.
Unsurprisingly, in the face of such sobering reality civil servants demands for poverty-datum linked salaries were always going to be futile despite Zanu PF’s promises to that effect, hence protracted negotiations with government yielded little and workers capitulated.
However, analysts say government can create sufficient fiscal space to reward civil servants above the PDL by weeding out ghost employees and restructuring the civil service.
Local economist Maxwell Saungweme said: “Civil servants’ salaries are pathetic and have to be increased, while at the same time we have too huge a civil service with many redundant posts and ghost workers, and this must be urgently addressed.”
The civil service wage bill is unsustainable and government should retrench to remain with a lean and efficient workforce, he added.
“What should be done is to trim the civil service and remain with a leaner and talented civil service team paid living wages. Government should target a civil service salary bill of not more than 50% of the budget in line with international standards,” said Saungweme.
Government currently has over 230 000 employees on its payroll with an estimated more than 70 000 improperly recruited in 2008, according to an Ernest and Young India skills and staff audit report.
“I believe Zimbabwe has the resources to pay living wages to civil servants if government carries out an audit of the civil service, remains with relevant posts, removes ghost workers from the payroll, deals with corruption and leakages in government coffers and reduces perks of the bosses in government,” Saungweme argued.
However, it seems the current administration of President Robert Mugabe and even the just-ended inclusive government did not have the political will to carry out Ernest and Young recommendations to remove the ghost workers from the service.
Another analyst Trevor Maisiri concurs with Saungweme, adding civil servants demands were unsustainable.
“If government had awarded that (PDL-linked) increment it would not have been able to sustain it,” Maisiri said.
However Rashweat Mukundu argues government could improve the life of civil servants by looking at alternative methods of rewarding them.
“The government may have to look at retrenchment and other ways of rewarding civil servants outside monetary payments as there is simply no money,” Mukundu said. “Ultimately the solution to the crisis is economic as government needs to assist businesses grow hence expand the tax base. Without this the salary negotiations will soon become a merry-go-round with no lasting solution.”
The deteriorating economic outlook and continued company closures cast a gloomy shadow over the economy which may result in a long winter season of strikes.
If the strikes, threatened by labour, materialise they will further affect the fragile projected economic growth pegged at 4,2% by the World Bank this year.
Saungweme says a drastic curtailment of luxury perks of executive and senior civil servants will reduce animosity among lowly paid employees.
“The other option is also to deal with huge disparities in salaries and packages between the ordinary civil servants and the bosses and ministers who have huge perks that include houses, several cars, several secretaries, assistants, security personnel and foreign trips yet ordinary civil servants are paid about US$300 per month,” he said.
For now the civil service strike threat has been withdrawn but any further economic deterioration might spark new calls for salary negotiations. Much will depend on government’s ability to shepherd the economy out of its doldrums to recovery and growth.