Government will soon embark on a massive restructuring of the civil service that will include downsizing ministries and departments, as well as sending people on forced unpaid leave as it seeks to reduce its astronomically high wage bill.
President Robert Mugabe’s administration will first act on a recently completed staff audit that unearthed thousands of ghost workers, before instituting other stringent measures such as retiring over-aged workers and not filling up vacant positions to ease fiscal pressures.
While hinting at government’s intentions to trim its wage bill by 40 percent, government has been evasive as to how this would be achieved.
Its deafening silence as to what form its wage bill cuts would take has sent shivers across the entire civil service, already being rattled by job cuts in State enterprises where more than 500 people have been laid off in the past week.
The Financial Gazette has it on good authority, however, that civil servants would soon be asked to present their employment qualifications to enable their employer to weed out unqualified staff.
This has already been piloted in the Ministry of Primary and Secondary Education where 3 000 teachers could not access their July salaries because they were absent from work during a head count conducted in January.
With the Ministry of Education having set the ball rolling by abolishing certain positions such as secretaries to education directors and removing office orderlies from their posts, government is expected to use this template for all other ministries.
Government is reportedly even drawing up new contracts for its employees that would see civil servants getting either short-term, medium-term or long-term contracts, depending on the nature of their jobs.
Public Service, Labour and Social Welfare Minister, Prisca Mupfumira, has previously scoffed at suggestion that government would unilaterally retrench about 200 000 of its over 500 000 workforce, which is currently chewing up more than 80 percent of total revenue.
Mupfumira was quoted by State media as having said: “When we are talking about reducing the wage bill, we are not talking about retrenchment or firing people. We are looking at cost-cutting. There is a distinction. The process that is underway, therefore, is not to fire people, but cutting on expenditure.”
But information gathered by the Financial Gazette, indicates that, eager to rebuild confidence among foreign investors in order to attract the much-needed international capital, government is acting on recommendations made by institutions such as the International Monetary Fund (IMF) and the World Bank (WB).
In its April First Review of the Staff-Monitored Programme-Staff Report on Zimbabwe, the IMF noted that during 2015, “the (Zimbabwe) authorities’ policy reform agenda will continue to focus on: (a) reducing the primary fiscal deficit to raise Zimbabwe’s capacity to repay; (b) restoring confidence in the financial system; (c) improving the business climate; and (d) garnering support for an arrears clearance strategy,” in clear indication that the Breton Woods institution was maintaining pressure on President Mugabe’s government to meet its obligations.
The IMF further indicated that, with particular reference to controlling the State’s oversize wage bill: “In addition to the hiring freeze already in place, they are currently elaborating near-term measures to contain employment costs in 2015, including freezing promotions and eliminating redundancies. The savings from these measures would be channeled to finance capital investment and social outlays. The authorities have no plans of raising wages and salaries in 2015. The Cabinet has mandated the Ministry of Finance and Economic Development and the Ministry of Labour and Social Welfare to explore options to reduce the wage bill and rationalise the public service over the medium term. The authorities plan to submit a strategy paper to Cabinet by the second review (structural benchmark).”
Further prodding by this newspaper revealed that the IMF’s sister organisation, the WB has many options for Zimbabwe to reduce its wage bill without necessarily unilaterally firing anyone.
“Instead of formal lay-offs (permanent reduction in force), some countries have used forced leave-without-pay for a few days or weeks to reduce wage expenditure in the current year. This is a one-off measure but may need to be repeated in future years if spending pressures remain a problem,” says the WB in one of its many recommendations.
The WB also recommends retionalisation of allowances, which the global money lender believes is a source for many of the “de facto and potentially unwarranted salary increases” that have resulted in the government wage bill mysteriously ballooning since the beginning of 2013.
While there has been much talk of ghost civil servants and possibly double dippers, the WB recommends that in order for these shadowy employees to be flushed out government needed to establish control and payroll management to eliminate collusion from payroll staff.
The institution also urges that lower grade and support staff in large employing sectors such as health, education, and the civilian defense establishments, be rationalised in order to control costs.
In line with the Reserve Bank of Zimbabwe recommendations for the country to adjust downwards prices of goods and services in order to promote competitiveness to stimulate economic recovery, government is also said to be planning to out-source much of its services, a move that will see many r either being forced to go on voluntary retirement or having their contracts altered.
The United States-based National Bureau of Economic Research says there is a strong relation between worsening public finances and increases in public wage bills.
“…in the absence of institutional reform, the fiscal stance might deteriorate even further in upcoming economic booms because of public employment,” it says.
It is therefore no surprise that government has decided to act with haste to save the country from further economic decline.
The United Nations has also since advised Zimbabwe to address the root causes of poverty, under-employment and inequalities to be able to attract aid and foreign investment.
The UN has since 2012 been assisting Zimbabwe’s development agenda through the Zimbabwe United Nations Development Assistance Framework, a programme that will exist until 2020.
The programme, which is assisting government modernise its functions, will help introduce efficiency in the public sector, reducing wage-related expenditure in the process.
The Financial Gazette