HomeLocalWanton salary hike sparks fresh GNU crisis

Wanton salary hike sparks fresh GNU crisis

While at the birth of the inclusive government, Zanu PF accused MDC-T of running a parallel government, analysts say the former liberation movement seems to be doing exactly that by running a parallel structure to rival the operations of the Finance ministry.

Many were surprised last week, including Finance minister Tendai Biti, by revelations that the money to increase civil servants’ salaries came directly from the Zimbabwe Mining Development Corporation (ZMDC) and not through the normal established channels of his ministry.

The Ministry of Finance reportedly deposited the usual US$120 million for normal remuneration of civil servants, with the ZMDC setting an unusual precedent by adding US$40 million to cover the promised salary increase.

Finance minister, Tendai Biti had previously stated that the government did not have money to fund a wage increase, but Zanu PF demanded that a salary review be effected.

This, analysts said, was highly irregular and questioned the motive of a parastatal paying salaries of the civil service.

“This is not standard procedure,” John Robertson, an economist said. “It is very irregular and it might not work.”

The renowned economist said in normal circumstances, the government should pay salaries through tax receipts, with the Finance ministry being accountable for these adding that the new arrangement created complications for the future.

Robertson said as it is, there was a wrangle over the sale of Marange diamonds and questioned what would happen in the event that Zimbabwe was barred from selling its diamonds by the Kimberly Process Certification Scheme (KPCS).

Robertson said, because of this contestation, it was highly unlikely that the ZMDC would be able to sustain subsidising civil servants’ salaries.
Former Finance minister, Simba  Makoni described the intervention of the ZMDC as a rather curious arrangement, also questioning whether this was sustainable.

“It’s an abnormal payment,” he remarked. “It raises more questions than answers.”

Makoni, who now leads Mavambo/Kusile/Dawn (MKD), narrated how money was supposed to be channelled through to government, saying it was unusual for money from a parastatal to be channelled for a specific purpose.

He said there was no evidence of the ZMDC board sitting to discuss paying a royalty of such magnitude to the government.

“This shows that someone is playing cheap high stakes politics with the citizens of Zimbabwe, particularly civil servants,” Makoni continued.

Zapu spokesman, Methuseli Moyo said this was a worrying development as it showed that one arm of the three-part coalition government had access to money that was not known by the others.

“This is in actual fact a parallel Finance ministry,” Moyo said. “This shows that there are a lot of funds which are outside Treasury and only Zanu PF people know about them.”

The Zapu spokesman said since no one knew how much was in the fund, it begged the question on what other activities Zanu PF was willing to use the money outside the confines of government.

“This alone should scare anyone, if there are some people with so much money outside Treasury and the Ministry of Finance,” he said.

Moyo said Zanu PF wanted a review of the salaries because it thought they were a critical constituency, but warned that this move could backfire, if they failed to sustain it.

With the instability in global commodity prices, questions were asked what would happen if diamond prices slumped and the country did not receive the money it had projected.

Civil servants’ salaries have of late been a highly emotive subject, with Mugabe all the while maintaining that their salaries be reviewed at a time when the Finance ministry had said it could not afford to.

It is believed that public workers’ salaries chew almost 70% of government revenue and Treasury could not afford a review.

The country is staring at a budget deficit of US$500 million and if Treasury were to bankroll civil servants salaries, the deficit would balloon.

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