By Daniel Chigudu
Finance and Economic Development Minister Patrick Chinamasa has raised concern over the government’s ballooning wage bill which he says is nolonger sustainable given the current economic situation.
Government allegedly employs about 550 000 workers in its various departments and institutions, and their monthly wages are said to have gobbled about US$ 1.638 billion (96.8 percent) from the US$ 1.692 billion that had been budgeted for the January to June 2016.
The development is said to have resulted in the cumulative budget deficit for the six months period shooting to about US$ 623.2 million, which is far above the full year target of US$ 150million.
Presenting the 2016 Mid-Year Fiscal Policy Review Statement in Parliament, Chinamasa said the wage bill was the major component of the high expenditures and that if solutions are not found government might find itself failing to pay its workers in future.
“The major component of high expenditures is the wage bill, which is at the centre of the fiscal deficits and hence overall macro-economic instability.
“The outlook, based on the status quo, points to a situation where projected revenues fall short of meeting employment costs, leaving no room for expenditure on operations and maintenance, as well as on capital projects,” he said.
Chinamasa said lack of fiscal space has forced government to shift pay dates for its workers as they sought to buy more time to gather resources.
The Finance Minister said the situation was actually made worse by the issue of 2015 bonuses that had to be staggered well into 2016.
“During the first six months of this year, pay dates of the public service, grant aided institutions and pensioners have had to be periodically rescheduled from normal program pay dates as a result of resource constraints.
“Similarly, the staggering of 2015 bonus payments that stretched into July 2016 resulted in difficulties in paying the June salaries on time, thereby forcing government to shift the pay dates into July.
“The public services pay dates cycles have since been modified by spreading payment of the monthly wage bill over six payment dates from the previous four payment dates.
“However, large expenditures on the wage bill have left 2016 budget struggling to honour both developmental expenditures as well as targeted external payment obligations,” he said.
Minister Chinamasa also told Parliament that Cabinet has already approved Civil Service wage bill rationalization, measures which will reduce the baseline public employment costs by around US$ 118 million by end of 2016.
He added that some key measures have already been implemented, and are already yielding monthly savings of around US$ 5million, effective 1 January 2016
By Daniel Chigudu