President Robert Mugabe has set a June deadline for the public workers to have their salaries increased, but many claim this is a populist statement and the country cannot afford a ballooning wage bill.
Critics argue that President Mugabe seeks to score political mileage and such measures would only serve to weaken an already ailing economy.
Finance minister, Tendai Biti on the other hand maintains that the government does not have the money to increase salaries.
Biti said 70% of the government’s revenue was already going to salaries and with the seemingly opaque way diamond revenues were feeding into government’s coffers, a salary review was impossible.
His assertions are finding currency with the International Monetary Fund (IMF), which just concluded an economic assessment of Zimbabwe.
“It would also be important to guard against wage increases in both private and public sectors in excess of productivity growth to prevent an erosion of competitiveness of labour-intensive industries that are critical for employment generation and poverty reduction,” IMF said.
But renowned economic commentator Eric Bloch said while he usually agreed with IMF’s views he begged to differ when it came to the issue of public workers salaries.
“A civil service salary increase is likely to generate economic benefits in excess of concomitant economic negatives,” he said last week.
Bloch said although the increases could be a slight catalyst for a rise in inflation, as there would be some increase in consumer spending power, thereby raising demand, the inflationary impact would not be of magnitude “and will probably be counterbalanced by the partial, albeit small, rise in capacity utilisation of industry and commerce”.
The economist said even Biti was likely to agree that public servants needed money because there was a growing likelihood of strikes and a salary review could pre-empt that.
He said there were growing numbers of civil servants who were quitting their jobs and the government had a responsibility to stem the tide.
Govt must trim the civil service — analysts
Economist Brains Muchemwa agreed with Bloch, saying the civil service had to be restructured for any meaningful salary increases to be effected.
“The most important thing that the inclusive government should do now is to reduce the size of the civil service so as to improve the conditions of service and free up fiscal space to enable efficient application of resources to competing needs of the economy,” he said.
An audit of the civil service has unearthed that over 75 000 ghost workers are milking US$20 million from Treasury every month.
Most of them are reportedly part of a Zanu PF militia who were put on the government payroll ahead of the controversial 2008 presidential election run-off.
Muchemwa said since Zimbabwe adopted the multi currency regime it had become difficult for the country to come up with policies that promoted expansion and job creation, hence the restructuring of the civil service was critical.
Civil servants are among the lowest paid professionals in the country, earning an average salary of US$225 per month. For the past two years they have been clamouring for a salary increase, but these pleas have so far fallen on deaf ears.