Finance minister Patrick Chinamasa says government will not cut jobs to reduce its wage bill, which has so far gobbled 82 percent of its revenue, but will instead try to grow the economy.
In his 2015 budget statement, Chinamasa warned that recurrent expenditure will to go up to 92 percent in 2015, the bulk of which going to pay wages of the government’s 235 000 strong workforce.
On Friday he told delegates at a post budget briefing that growing the economy was the only way to address the situation.
“The wage bill is complex and cannot be addressed overnight. There will not be any miracle solutions but we will have to implement policies step by step. The bulk of the workforce are teachers and health professionals. I will not want to scale down fiscal support to education and health,” he said.
“The option is to grow the economy and as we grow the economy this wage bill will find proper proportion within a bigger economy.”
Reacting to the 2015 budget BancABC group economist James Wadi said government needs to reform the public sector to grow the economic base.
“We need to move with speed to reform parastatals and public sector enterprises to unlock growth potential,” Wadi told delegates at the seminar.
“These are critical growth enablers that contribute immensely to the GDP so we need to have them operating efficiently.”
Chinamasa told the seminar that Arab investors are keen to explore business opportunities in the country and have committed a $10 million loan facility for the horticulture industry through the Arab Bank for Economic Development in Africa (BADEA).
BADEA is a financial institution owned by 18 Arab countries that are members of the League of Arab States (LAS).
“Badea is coming to do due diligence on some of the financial institutions to see which institutions they can channel funds through,” he said.
“Some of my requests to them need syndicated financing through the Kuwait fund, Opec (Organisation of Petroleum Exporting Countries) fund and Saudi fund. So it is important for us to put structures in place.”- The Source