HomeLocal NewsGovt sweats over retrenchment

Govt sweats over retrenchment

GOVERNMENT, which has been hard hit by a shrinking revenue base as the economy continues to nosedive, is struggling to effect civil service reforms, particularly rationalisation of the size of its bloated professional bureaucracy and wage bill.

Hazel Ndebele

Since last year, the Civil Service Commission (CSC) has been undertaking a restructuring exercise expected to inform the 2015 budget process.

During his 2015 national budget presentation last November, Finance minister Patrick Chinamasa indicated government would start retrenching civil servants this year to contain the wage bill.

Senior officials in the Public Service ministry said this week the restructuring exercise aims to align ministries’ staffing with their mandates, and also identify any duplications and redundancies.

“The CSC is also modernising and decentralising the Salary Service Bureau (SSB), an exercise that will involve placing a payroll assistant in every district, and this will be completed by end of 2015. This will improve the SSB’s grip on the wage bill and put it in a better position to flush out any irregularities,” said an official in the ministry.

The officials also said government, over the medium-term, intends to pursue comprehensive civil service reforms.

They told the Zimbabwe Independent government is in a dilemma as the retrenchment is in sharp contrast with the ZimAsset economic blueprint, which promises Zimbabweans 2,2 million jobs by 2018.

“The retrenchment process will reinforce a bad political reputation for the Zanu PF government, which is why they are in a dilemma on whether or not to go ahead with the process. It could also have serious political consequences. Moreover, government has no funds for compensating the retrenched,” said a top official in the ministry.

“For government to retrench, it first needs to carry out an audit to establish the exact number of workers, the number of people who are on retirement age as well as ghost workers.,”

Sources said government is looking to retrench more than 50 000 workers who will increase the unemployment rate which currently stands at over 80%, with the majority of Zimbabweans now eking out a living in the informal sector owing to quickening retrenchments and company closures.

Reserve Bank of Zimbabwe governor John Mangudya said on Wednesday during his monetary policy presentation that the struggling local economy can no longer sustain wage and salary increases.

“The Reserve Bank is of the considered view that the national economy is not able to sustain any further increases in wages and salaries and that the welfare of consumers and employees should be addressed through the reduction of prices, disinflation, so that the current wages buy more — enhancement of the purchasing power of the current wages and salaries,” he said.

“We need to move away from the psychology or concept of money illusion, which states that people think in terms of the amount of money they have, rather than in terms of its value. We now need to think in terms of value. This way even those not working would have their welfare increased as they would be able to buy more from a US$.”

Mangudya said Zimbabwe’s average minimum wage for commercial and industrial sectors is much higher than that of the other countries in the region even though the high cost of living in Zimbabwe negates the comparative advantage.

“This shows that the solution to increase the welfare of workers does not depend on increasing wages and salaries as all the increments would be absorbed by commensurate price increases,” he said.

“Further it is imperative to note that Zimbabwe’s wage bill as a percentage of revenue is higher than all the regional countries despite the country having the lowest population with the exception of Botswana.”

Efforts to get a comment from Chinamasa on the proposed retrenchment were fruitless as he was said to be away in Abuja, Nigeria.
A fortnight ago President Robert Mugabe pleaded with restive civil servants to be patient with his government which is struggling to pay salaries on time.

“To our workers, civil servants, we are truly sorry and when we say we are experiencing difficulties in paying you, please bear with us because these are difficult times which call for sacrifice from all of us,” Mugabe said.

Government is currently in a deep fiscal crisis, with Chinamasa last year revealing that it spends 92% of revenues on recurrent expenditure, leaving a negligible 8% for capital projects and service delivery.

He told parliament during his 2015 budget presentation of the total expenditures of US$4,1 billion, US$3,7 billion is spent on recurrent expenditures such as labour, meaning an insignificant amount would remain for crucial development projects and service delivery in a country reeling from collapsed infrastructure and poor service delivery.

The 2015 budget has already been slashed from US$4,1 billion to US$3,5 billion.

Even if it is likely to be a complex process, ministry officials said authorities must urgently address the impact of streamlining the public service, and downsizing should be carefully assessed before implementation to avoid unintended consequences.

“Downscaling must be designed to reduce the size of the workforce to improve the efficiency and quality of the public sector, not just to save money. This will be part of an overall effort to increase economic growth and cut fiscal deficits,” said a ministry official.

“Overstaffing, ghost workers, a burgeoning payroll and systemic bureaucratic inefficiency are rampant in the public sector. So government needs to deal with this through measured cuts to reduce the wage bill and make savings to fund capital projects, while ensuring reliable, quality and efficient public service delivery.”

The International Monetary Fund has advised government to reduce the size of its civil service, a tough policy choice for Chinamasa and government.

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