GOVERNMENT will cut the civil service wage bill from 90 percent to 55 percent by 2018, a Cabinet Minister has said.
Finance and Economic Development Minister Patrick Chinamasa said staff rationalisation was already underway and bearing fruit.
“We are targeting to reduce the proportion of expenditure from over 90 percent to less than 55 percent by 2018-9. I am confident that we will achieve it.
“Government has two avenues to address the wage bill which are staff rationalisation and improving production. We have already started staff rationalisation and the other method is to grow the cake – production, production and more production. We are also dealing with the issue to do with the current account deficit,” said Minister Chinamasa.
The minister added that Government was undertaking fiscal and economic reforms to reduce the cost of doing business and to attract FDI.
“I’m very pleased with the progress made in addressing fiscal reforms and ease of doing business. As we speak Cabinet has already adopted a raft of measures to rationalise the civil service; these raft measures are now implemented.
“We already made some savings in 2016 (due to the rationalisation measures we have taken). Progress may not be fast as we want but it’s being made.”
Government has already abolished 22 000 posts which were deemed excess and saved close to US$100 million.
In line with IMF recommendations, Government is streamlining its 188 070-strong workforce.
In the first half of 2015, Treasury spent US$1,54 billion on labour, against revenue of US$1,718 billion. On a monthly basis, US$120 million is spent on salaries.
According to the 2015 Civil Service Audit Report, dominant labour cost drivers are abuse of overtime allowance facilities and leave days, salary fraud, idle manpower, role duplication and unco-ordinated recruitment.
Reserve Bank of Zimbabwe Governor Dr John Mangudya said, “We need to deal with the current practice of using 90 percent of the national budget on civil service salaries.
“That cannot be sustained. It puts too much pressure on the system.”
He said this had resulted in the current cash crunch as Zimbabwe was spending more on salaries than on production that generates foreign currency.