Online Reporter
Business Reporter
GOVERNMENT plans to rationalise the public service wage bill to create more “room for priority spending,” according to the International Monetary Fund (IMF)’s 2025 Article IV Consultation with Zimbabwe press release.
The international lender said the Government’s focus on the wage bill comes as the “public compensation” bill now accounts for about 55 percent of Government revenue, a proportion described by IMF staff as “well above regional averages.”
This fiscal situation might become more skewed with additional expenditure obligations from the Government’s Health Workforce Compact.
The planned rationalisation strategy is rooted in the Public Service Commission’s “Job Evaluation Report,” which, according to the IMF, “finds scope for rationalising staffing and systems automation.”
The global lender said the Zimbabwe authorities had “agreed with the medium-term reform agenda,” which includes the “implementation of findings from the ‘Job Evaluation Report’.”
The IMF believes that these reforms will be “implemented next year,” with the expectation of achieving a quarter of gross domestic product in net savings starting in 2026.
The authorities broadly “agreed with (IMF) staff on the need to address fiscal pressures” and concurred with the importance of strengthening the Public Financial Management (PFM) system, which will be “supported by IMF technical assistance.”
This effort to rationalise compensation forms a crucial part of broader fiscal structural policies needed to “strengthen public financial management (PFM)” and ensure any adjustment is “sustainable.”
The IMF stated that while the Zimbabwean authorities acknowledged that “fiscal financing gaps would persist under current policies,” they preferred a “more gradual adjustment scenario,” considering their existing policies as “broadly adequate.”
According to the IMF, the Government’s preferred approach involves “curtailing spending in case of revenue shortfalls,” with the global lender calling for caution to avoid unplanned disruptions to public services and project implementation.
