Government reported a surplus of nearly ZWL$500 million in the first quarter of 2019 prompting mixed reactions at a time national debt is in excess of US$18 billion and civil servants are demanding massive salary hikes to swim out of the poverty line in which they now find themselves in after May inflation sat at close to 100 percent.
Business Times reporters Taurai Mangudhla and Blessing Madziwanzira (BT) interviewed accountant –general Daniel Muchemwa (DM) on the sidelines of an ICAZ IPSAS launch yesterday around the factors driving revenues such as the 2 percent intermediary tax and what the money is being used for as well as the impact of Paynet’s decision to pull out of Zimbabwe on efficient payment of civil service salaries.
Below are excerpts:
BT: Government has never missed an opportunity to brag about the budget surplus this year. Can you speak about what this means given that, like you said, some government offices have no light bulbs and even stationery in some instance. And also can you also add what the driving factors for this surplus are?
DM: You know when we introduced the 2 percent tax people were angry that it was a killer tax. But it’s not the only avenue which is giving us a surplus. We budgeted the 2 percent at $50 million per month. Off the top of my head, in January where we collected $96 million, as a government we agreed that $50 million should go to infrastructure not to the salaries and as a result $50 million every month collected from the 2 percent tax should go to infrastructure; we have also agreed to put on banners along the Gokwe-Nembudziya road showing that it is funded by the 2 percent tax.
BT: What other projects should we expect under the same facility?
DM: Among our targets is the Amalinda Bridge on the road which goes to Boka from Glen View. That road has a bridge which only passes one car at a time at Mukuvisi. One night I stopped there and I asked what was happening… I was told by my brother that only one car could pass at a time. I honestly didn’t know because I used to pass through during the day and would hardly notice.
I came to the Finance Ministry to ask if we could upgrade the bridge so that when the roundabout is closed people are able to cross and go through Glen Norah Police Station.
If we build that tarred road we will have achieved three things, first we have put an alternative route because the population is growing towards that side so people going west will not have difficulties in passing through the roundabout.
The second thing is the roads we constructed so far; many are in suburbs. If we construct a tarred road from there to Glen Norah Police Station, we will have a visible road in the locations. Third we will make sure that (Ian) Smith’s bridge is now upgraded to (President Emmerson) Mnangagwa’s standard.
BT: Are there other initiatives?
DM: My IT is behind a bit, but I always tell them a website means modern communication. Our website should show what we have collected as general revenue, money spent as general expenditure, money collected as 2 percent and a breakdown for 2 percent
expenditure every month. I said $50 million of that we commit it to infrastructure. Anything above that we commit it to finance health, education and social welfare and nothing else unless the Minister has approved it.
BT: Being the office responsible for payments, can you speak a bit around your experiences paying civil servants’ salaries since Paynet pulled out in June?
DM: Paynet caught us flatfooted. They announced on a Sunday we needed to pay our fees to them in US dollars. I was at home when I saw that message and I said to myself that I wasn’t going to pay the US dollars. We have now used the manual payment system successfully. It was a heavy load, some of my deputies said, are we coming to work to sign
things and I told them to sign because that’s what the job demands.
BT: Is there scope for Zimbabwe to resolve issues with Paynet?
DM: When a major service provider doesn’t respect you and announces changes without telling you, my view is don’t talk to them. Let them just discover you are no longer their client. I am not talking to them, I haven’t talked to them and I am not going to.
BT: What is your long term solution to the issues of salary payments in the absence of Paynet?
DM: We have set up a special team made of people from my office, a
person from public finance management system and people from the RBZ. Today is a Wednesday, as of Monday we had a meeting and I am confident we don’t need Paynet ever.
We are over Paynet.
I must say that we saw newspapers saying they are going to fail, there was expectation we were going to struggle, but the reality is we didn’t struggle to pay salaries for June, and now we are even under less pressure to pay July salaries.
We agreed all Paynet provided was technology and we have people with the computer skills for the technology so we agreed for them to make an interface between the payment system and the RBZ. It is working like a clock at the moment. What remains is for the guys who designed the system to review and give me reports to look at and also review
from a controls perspective which we will do next week.