Govt excess staff to be retrenched

THE Government will shed excess civil servants who will not be redeployed under an ongoing exercise meant to make use of under-utilised staff while employment and salaries will remain frozen until 2019.
Finance Minister Patrick Chinamasa, in a letter of Intent addressed to International Monetary Fund managing director Ms Christine Lagarde, said this was part of implementing recommendations that came out of Government’s employment audit.

The letter, dated 14 April 2016, posted on the IMF website and co-signed by Reserve Bank of Zimbabwe Governor Dr John Mangudya, stated that the Government was working on a strategy that will lower the combined wage bill of the Central Government and grant-aided institutions to 50 percent of total expenditure by 2019.

“The service commissions of Government will implement the recommendations of their employment audits. We will conduct a review of allowances to identify savings and efficiency gains. We will enhance service delivery by redeploying under-utilised employees and we intend to retrench staff that cannot be redeployed,” read part of the letter.

According to the letter, the Government, based on the prevailing economic growth, will maintain its salary and employment freeze on most departments.
“To achieve this reduction, we will work on the size and remuneration of the public service. Based on current economic growth and expenditure forecasts, this will mean that the employment and salary freeze will have to remain in place for at least the next three years,” said Minister Chinamasa and Dr Mangudya.

The letter said additional audits were underway in the Police, Judicial Service Commission and Health Services Board and results will inform whether there is a need to reduce staff in these areas.

“We have already reduced employment cost obligations for grant-aided institutions. Further, to the audit by the Civil Service Commission, the Police and the Judicial Service Commissions and the Health Services Board will complete salary and employment audits for their own sectors in 2016. These audits will inform our decision on the reduction of employment costs across the Government and related institutions.”

However, both Minister Chinamasa and Dr Mangudya could not be reached to clarify on the matter as some Government officials have publicly said no civil servant will be retrenched.

The letter added that employment costs in some parastatals have already been reduced and two forensic audits have been finalised out of the 10 largest and most critical State Owned Enterprises.

“Furthermore, forensic audits were conducted for ZBC and Allied Timbers. We also reduced employment costs in a number of SOEs (for TelOne by 15 percent, and National Social Security Authority by 25 percent). In addition, the Radiation Protection Authority of Zimbabwe reduced its overall costs by 30 percent,” read the letter.

On the progress of the economic blue-print Zim Asset, the Government said it has resorted to non-concessional loans, especially in the area of infrastructure, development partners support and statutory funds.

“In 2015, a total of $431,9 million, three percent of GDP, was channelled towards priority infrastructure in the ZIMBABWE 50 INTERNATIONAL MONETARY FUND water, energy, transport, ICT, irrigation, housing, social services, and the agriculture sector, which falls short of our substantial need.”

Minister Chinamasa and Dr Mangudya further committed Government’s intent to clear arrears with international financial institutions.
“We are ready to clear the outstanding arrears with IFIs (International Financial Institutions), as outlined in the Lima meetings. With the reform agenda outlined, we believe that after clearing these arrears, we will be in a position to present a comprehensive and ambitious reform programme that could be supported by a Fund financial arrangement in close collaboration with other IFIs. As part of this process, we will seek a debt treatment by the Paris Club.

We aim at maintaining a sustainable debt burden after arrears clearance which will be instrumental in maintaining macro-economic stability,” read the letter.

In a statement co-authored by IMF executive director for Africa, Ms Chileshe Kapwepwe and IMF senior advisor on Zimbabwe Mr Ted Sitimawina said Zimbabwe’s employment costs continue to be the main source of fiscal pressure consuming about 82 percent of all revenue.

However, IMF commended efforts that are being undertaken by Zimbabwe and said the country has continued to meet its agreed $150 000 monthly payment to the organisation.

“The authorities have committed to increase payments to the IFIs as their payment capacity increases. In addition, Zimbabwe continues to benefit from targeted Fund TA to address policy challenges, strengthen institutional capacity, and support its ongoing reform efforts.”

This, added IMF, might lead to full re-engagement.