adminTHE Government will deploy a payroll assistant in every district of the country as part of the decentralisation of the Civil Service Bureau aimed at strengthening control over its wage bill, addressing workers’ problems and minimising irregularities associated with ghost workers.
The Civil Service Commission conducted a countrywide audit on Government employees in March as part of measures to come up with proposals on how to reduce the civil service wage bill which was gobbling 73 percent of fiscal resources. The centralisation of the Civil Service Bureau was also a major headache for civil servants who were complaining that it was taking time to process their grievances which were all being handled in Harare.
After the audit, some teachers failed to get their salaries after they were found absent from their stations, and were complaining that their issues were taking long to be addressed because of the centralisation of the commission.
In a Letter of Intent addressed to International Monetary Fund managing director Ms Christine Lagarde which was co-signed by Finance Minister Patrick Chinamasa and Reserve Bank of Zimbabwe Governor Dr John Mangudya, Government indicated that deploying a payroll assistant in all the districts of the country was part of decentralising and modernising the Salary Service Bureau which among other things is also aimed at keeping employment costs below budget projections.
“Cabinet is currently considering the report by the Civil Service Commission (CSC), containing proposals to streamline public sector employment. In line with the recently completed audit of the civil service, we have started to eliminate duplications and redundancies. We have set up a Wage Bill Management Committee to make proposals to reduce the wage bill to the accepted level of 40 percent of expenditure over the next few years,” read part of the letter dated 30 September 2015.
The Government said in line with a Cabinet resolution, it was rationalising the country’s public service establishment in order to generate savings on employment costs.
“We are seeking cuts in lower priority current and capital spending, and postponing the implementation of new projects while safeguarding priority social spending.”
It added that it has also started work on restructuring parastatals to reduce dependency on fiscal support. Most of the country’s parastatals are performing way below expectations and are always begging for funding.
“To this end, Cabinet has considered turnaround strategies for the Zimbabwe Broadcasting Corporation, Cold Storage Company, Air Zimbabwe, the National Railways of Zimbabwe and TelOne. The Cabinet has already approved the strategies for Air Zimbabwe and TelOne. The financial situation of the Agricultural and Rural Development Authority has improved following the establishment of joint venture partnerships.”
It added that turnaround strategies for Zimbabwe National Water Authority, Industrial Development Corporation and NetOne have been submitted for consideration.
“We will publish the audited financial statements of the Zimbabwe Mining Development Corporation. In addition, we are working on a Corporate Governance Bill which will establish a Corporate Governance Agency and performance principles for state owned enterprises (SOEs).”
The Government is also strengthening its revenue collection and according to the letter, it has started enforcing tax payments by agreeing with clients on repayment schedules to eliminate their overdue tax obligations. In addition Cabinet has also agreed on the principles of the fiscal regime for the mining sector aimed at generating additional revenue without undermining investors’ incentives.
The Government added that it has made progress in amending the Public Finance Management Act which seeks to strengthen treasury oversight of public enterprises and local authorities.
“The Draft Amendment Bill is currently being drafted and will be submitted to Cabinet before the end of 2015.”
On the banking sector, Government said policy measures put in place by the Reserve Bank of Zimbabwe to enhance financial stability were beginning to yield fruits. By June, according to the letter, the central bank had cleaned the financial sector of all distressed bank and all operating financial institutions had complied with the minimum capital requirements.
“The ratio of banking sector non-performing loans (NPLs) to total loans has declined from 20,5 percent in September 2014 to 14,5 percent in June 2015.”
The Zimbabwe Asset Management Corporation (Zamco) which was formed to acquire NPLS, had by end of August acquired loans amounting to US$157 million, financed by long-term Government securities. The Government is also keen to attract investments and servicing its debt with international financial institutions.
It said as part of enhancing the business environment, it will publish guidelines on the Indigenisation and Economic Empowerment Law on the website of the Zimbabwe Investment Authority to avoid mixed sentiments that have come up from different quarters of Government over the law.
In its staff report following the completion of the second review of the Staff Monitored Programme, IMF commended Zimbabwe for implementing the various measures adding that continued commitment by the Government would set the stage for advancing the reengagement process with the international financial institutions and bilateral creditors.
“Zimbabwe has stayed the course of its economic reform agenda, despite major economic and financial difficulties. Fiscal discipline has been maintained. Structural reforms have moved forward, with major highlights in the financial sector, labour market liberalisation, and public financial management. Overall, signs of increased commitment and broader consensus augur well for the authorities’ reform agenda,” said IMF in its report.
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