ZIMBABWE
Zimbabwe’s Minister of Finance, Mthuli Ncube (pictured) says he wants to cut the Public Service wage bill by A$281 million in the next two years as the Government battles to rescue the economy from collapse.
Mr Ncube said the move was part of broader measures to bring down expenditure, which has ballooned to unsustainable levels in the past few months.
The economist and former banker launched the Transitional Stabilisation Program (TSP) that will inform Budgets for the next two years, emphasising the need to drastically reduce Government expenditure.
A report by the Parliamentary Budget Office said that 90 per cent of Government revenue was spent on employment costs and the figure could rise to 120 per cent by the end of the year following a 17.5 per cent salary increase for PS employees.
Mr Ncube said the Government would be moving away from the unfunded pay-as-you-go pension arrangement to adopt a defined benefit pension scheme or defined contribution scheme arrangement in line with best practices.
He also proposed strengthening wage bill management, reducing travel expenditure, reviewing fuel benefits expenditure from January 2019 and curtailing the acquisition and provision of vehicles by the state, including replacement of condition-of-service vehicles.
Mr Ncube also wants Zimbabwe to reduce its foreign missions.
He admitted that “right-sizing” the wage bill would not be an easy task.
“By right-sizing, I mean putting people off, retiring those who have reached the retirement age and also bringing in new skills by making sure that those who need to be retained are retained and incentivised to stay,” Mr Ncube said.
Mr Ncube’s predecessor, Patrick Chinamasa twice tried to implement the same austerity measures, but each time was thwarted by former President, Robert Mugabe.
Harare, 8 October 2018
