President Robert Mugabe and his Zanu PF government should be condemned in the strongest terms for inflicting unprecedented pain and suffering on civil servants.
The nation, I would want to believe, has never imagined a situation where the civil service pay becomes a challenge to government especially in a dollarised economy.
Delays in salary payments for civil servants by more than two weeks for some departments, with new dates being gazzetted one after the other, has many social implications to civil servants. For instance, parents will not be able to pay January school fees for their children and dependents. More so, many civil servants are threatened by death because they cannot afford to buy drugs. A number of civil servants are already getting eviction orders from their residences and could end up homeless. Civil servants have no food on the table. They have had a bleak Christmas and their New Year will forlorn.
Service providers who are already owed millions by civil servants are in trouble because of default payments. Failure to pay civil servants will have a contagion on the rest of the economy. Predictably, this was coming. The 2016 national budget was a static budget with revenue estimates of US$3,8 billion and employment costs of US$3,6bn. The budget deficit now stands at US$500 million, excluding the US$250 million expenditure overrun for 2015.
Zimbabweans must know the reasons for this state of affairs. The cash-strapped government is broke. Part of the money that was supposed to pay civil servants was ring fenced towards the first instalment of the US$1,8bn arrears to the World Bank(US$1bn), International Monetary Fund (IMF) (US$200m) and African Development Bank (AfDB) (US$600m).
Finance minister Patrick Chinamasa made a written commitment in Lima, Peru in August 2015 at the World Bank summer gathering to clear the arrears by April 2016. This was a gamble considering the precarious state of public finances. So civil servants are now being sacrificed for the sake of IMF, World Bank and AfDB debts. But this development is hardly surprising as it comes hard on the heels of previous pronouncements by the minister for reforms. For example, Chinamasa in the 2014 budget statement stated that government was going to usher in labour market flexibility. According to this philosophy, salaries and employment are a privilege, not a right. Government is pursuing an approach on flexible labour markets. This approach is inspired by the Washington consensus which believes in the sanctity of unbridled markets given an argument that government regulation distorts the efficient allocation of resources by markets.
On the labour market, the Washington consensus advocates for flexible wages, flexible working hours and the right to dismiss workers willy nilly. The short-lived Supreme Court ruling fortified the government position on flexible labour markets. More than 50 000 employees lost their jobs on the basis of three months notice. Government could not cope with the unintended consequences of the Supreme Court ruling. Consequently, the Attorney-General, Prince Machaya, was hurriedly instructed to draft amendments in order to deal with the legal lacuna.
Labour market flexibility clearly in this form clearly violates International Labour Organisation (ILO) conventions and standards on labour rights. Chinamasa’s actions border on naivity. He hopes that the payment of arrears will unlock new money from these multilateral institutions.
He does not realise that the Zimbabwean crisis is larger than arrears. It is a political problem. It is about governance and legitimacy. In reality, Chinamasa has introduced a second Economic Structural Adjustment Programme (“Esap 2”).
Zimbabwe is already under an IMF Staff-Monitored Programme (SMP) whereby the target has been set to reduce the public service wage bill by 50%. The IMF carries out quarterly assessments and so far Chinamasa has scored very well and has become a protégée of the IMF because of his neo-liberal policies. He has introduced “Esap 2” through the back door. Chinamasa has been battling the fiscal crisis in Zimbabwe since the disputed elections of July 2013 which saw the collapse of international confidence. After the Zanu PF contested victory, the stock market crashed and lost US$1bn in value. The economy went into deflation.
GDP growth dropped from 7% in 2013 to 1,5 % in December 2015. The government is battling fiscal space. But the greatest headache for Chinamasa is the problem of party-state conflation. This is a situation where there is a thin dividing line between party and government expenditure. In 2015, the First Lady Grace Mugabe went on a countrywide tour using a State helicopter clearly at the expence of the taxpayer.
To worsen the matter, the Zanu PF conference held last month in Victoria Falls was an untimely event largely believed to have been funded by treasury and so was the lavish party thrown for the aristocracy at the “Blue Roof” residence of the first family. Zimbabwe’s chairmanship of the African Union took a toll on the budget because the President’s AU foreign trips were largely funded by the Zimbabwean tax payer since the AU is literally broke because of the collapse of Libya, its greatest benefactor.
All these shenanigans have caused the plight of civil servants and left an egg on the face of Mugabe who has been openly defied by Chinamasa on the bonus issue. Going forward, civil servants should expect more suffering and tightening of belts as we go through “Esap 2”. The priority is to clear debt arrears and not the welfare of civil servants. At this rate, I predict that government will not be able at all to pay January 2016 salaries unless there is some special intervention outside the normal tax collection.
Government is clearly stubborn, but one thing for sure is that the civil service will be the eye of the 2016 storm in Zimbabwe. As the famous adage says, “You can rig elections but not the economy.”
Mashakada is an economist and MDC-T MP for Hatfield.