Cabinet’s rejection of a raft of austerity measures announced by Finance minister Patrick Chinamasa this week, including closure of embassies, retrenchment, slashing of salaries and non-payment of 2016 and 2017 bonuses, is clear testimony of leadership failure, infighting as well as policy discord.
By Taurai Mangudhla
Slashing the civil service headcount and the quantum of salaries and benefits complies with the International Monetary Fund’s recommendations for Zimbabwe to reduce staff costs to about 40% of total expenditure. The move is meant to give room for capital expenditure and debt clearance while also unlocking new funding from the IMF and other multilateral funding institutions.
However, it has become clear that there is no consensus to implement reforms at a time the Zanu PF government is wary of elections in 2018. Government officials against Chinamasa’s austerity measures believe his recommendations fly in the face of Zanu PF’s empowerment agenda and serve to confirm that the ruling party had failed to deliver on its 2013 election promises where it made a number of ambitious promises, including the creation of 2,2 million jobs.
Spurred into action by fast-deteriorating economic conditions, Chinamasa had announced the cost-cutting measures, including the retrenchment of 25 000 civil servants and the scrapping of annual bonuses for 2016 and 2017 with a view to reducing recurrent expenditure and an unsustainable wage bill currently gobbling up to more than 96,8 % of revenue.
Chinamasa said government will issue one condition-of-service vehicle to deputy ministers and permanent secretaries, rationalise diplomatic presence worldwide by reducing the number of embassies and consulates and review the class of travel arrangements for all government officials, including ministers, parliamentarians, independent commissions and authorities and state enterprises’ officials. Per diem allowances for foreign travel will take into account global cost of living developments.
The austerity measures announced by Chinamasa, particularly the decision to retrench workers, dramatised government’s failure to deliver on its electoral promises.
Other than the creation of 2,2 million jobs, the party also said it would ensure there is an average of 7,3% annual economic growth rate between 2013 and 2018 as well as unlock US$1,8 trillion in idle mineral reserves.
Although he remained mum on the question of 25 000 civil service job cuts by end of 2017, Information minister Chris Mushohwe on Tuesday assured government employees there would be no salary and bonus cuts, raising questions over cabinet’s teamwork as well as the extent to which President Robert Mugabe has control over government operations.
Before such a fundamental policy is announced, cabinet first debates while Mugabe is shown such a policy statement ahead of delivery. Chinamasa indicated that cabinet had approved his recommendations while presenting his statement in cabinet, but Mushohwe and other ministers said Chinamasa had unilaterally made the statement.
“After extensive deliberations, cost-cutting measures relating to the civil service were rejected and the position of cabinet is that the Minister of Finance did not take into account the rejection by cabinet earlier on. Once again, at the last cabinet of 12 September 2016 the proposals were rejected,” Mushohwe said in a statement, which highlighted the discord in government. “The president and cabinet want to assure the civil servants, the farmers and the public at large that these proposed measures are not friendly operative. It is hoped that this clarification puts to rest anxieties that may have arisen within civil service, the farming community and the public at large.”
Chinamasa’s announcement has been largely seen as potentially disastrous to Zanu PF’s re-election bid in 2018, hence Mushohwe’s statement which is to the contrary.
Mushohwe’s counter statement is also ample testimony there is no political will to implement Chinamasa’s recommendations, given the political implications of large-scale austerity for Zanu PF.
Last year, for example, Chinamasa announced that government would not pay its workers bonuses, but he was publicly humiliated by Mugabe who said government had an obligation to pay civil servants’ bonuses. Chinamasa has been on a charm offensive ever since he was appointed to his current portfolio in order to attract fresh lines of credit from multilateral lenders that are currently owed billions by Zimbabwe.
Under the IMF’s Staff-Monitored Programme (SMP), Zimbabwe committed itself to a number of reforms, including reducing the civil service wage bill to 40% of total expenditure. This entails cleaning up the civil service to get rid of thousands of ghost workers as well as reducing the headcount of genuine workers and the quantum of salaries and benefits.
Chinamasa announced he would cut the wage bill by 20% and lower the salaries and allowances of ministers and senior bureaucrats by between 5% and 20%. Cabinet, according to him, has already approved the civil service wage bill rationalisation measures, which will result in savings of US$118 million by the end of 2016.
Higher Education minister Jonathan Moyo distanced cabinet from Chinamasa’s pronouncements, describing the Treasury chief as some kind of “lone wolf”. Moyo just fell short of saying Chinamasa was misrepresenting cabinet.
Responding to a question on his Twitter handle over how discord arises over pronouncements on policies that are debated in cabinet by members who sit in the same meetings, Moyo said: “One (Mushohwe) was speaking on behalf of cabinet.”
Moyo criticised Chinamasa’s approach, saying: “A lone wolf approach to policymaking is wrong. Busybodies in the diplomatic community must understand this truth”. He said cabinet decisions “must reflect collective decisions and not personal frolics”.
Economist Chris Mugaga said the government’s U-turn was hardly surprising, given that Zanu PF’s priority is to retain power in 2018. He said the party cannot risk fueling discontent through unpopular reforms, especially when trying to contain protests.
Political analyst Ibbo Mandaza said the confusion on the cabinet decision mirrors the extent to which the securocrats run the country’s affairs.
“There is no way Chinamasa could have made that statement without the blessing of Mugabe and his colleagues in cabinet. What I suspect is that the security chiefs warned of a possible increase in protests and civil servants joining in so they had to reverse it,” Mandaza said.