Zimbabwe Finance Minister proposes to shelve bonuses and close some embassies

Finance Minister Patrick Chinamasa has proposed to cut 25 000 state jobs, defer the 2016 and 2017 civil service bonuses and close some embassies in a move that could save the cash-strapped government at least $335 million annually over the next two years.

Zimbabwe is battling an excessive public sector wage bill which gobbles 97 cents of every dollar the government collects. The southern African nation finances its budget entirely through taxes as international money lenders stay away over its failure to service debts. It owes foreign debtors $7.5 billion; 80 percent of that in arrears.

The government also ran up a $623.2 million budget deficit in the first six months of 2016, which Chinamasa warned could widen to $1 billion by the end of the year.

Presenting a mid-term fiscal policy review yesterday, Chinamasa said the proposal which includes the trimming of diplomatic missions would lower employment costs to $232 million per month by June 2017 and $219 million by December 2017.

“This reduction is proposed to be achieved largely through downsizing the civil service from the current level of 298 000, hence, it is important for the Ministry of Public Service and Social Welfare as well as the Service Commissions to initiate the rationalisation process to enable me to reflect this in the 2017 Budget,” Chinamasa said.

“In consultation with the Ministry of Foreign Affairs, (we will) review benefits for diplomatic staff, including support for educational expenses, rental ceilings and travel support for children of diplomats”.

The proposed rationalisation of the civil service will bring down the size of the work force to 273 000 from the current 298 000, yielding annual savings of $155 million, while the bonus suspension will save an additional $180 million.- The Source

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