Treasury moves to slash civil service wage bill
LIVINGSTONE MARUFU
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube has revealed a bold plan to cap civil service expenditure at 50% of the national budget, aiming to rein in ballooning wage costs amid a shrinking tax base and worsening economic conditions.
The plan comes alongside the cutting of 3,000 government jobs between September last year and June this year, and the purging of ghost workers through biometric audits across ministries and agencies.
“We agree that this is high. Clearly, this is of concern to us as Treasury, and we will make every effort to manage this. They (civil servants) work very hard, and they want to put pressure on us as Treasury, as government, to keep improving their working conditions. This will push up the wage, and therefore we have to do balance this kind of situation,” Professor Ncube said.
“It used to be 80%, and we’ve come a long way, but really we don’t want to go below 50%. In fact, in our target list, it should be maximum 50%, no more than 50%. So it’s an issue which I agree with the observers on this.”
Professor Ncube said wage bill containment measures include rationalising some public service posts, right-sizing employment, cutting budget travel, and streamlining foreign missions. Certain obligations, such as pensions, remain unavoidable.
The government is also planning physical audits to ensure all beneficiaries are legitimate and properly documented.
Cabinet approved the initiative last year, following a Public Service Commission appraisal across 21 line ministries evaluating job composition and value.
Findings revealed grade advancements in violation of job evaluation principles, functional duplications, overlapping roles, identical duties for chief directors and directors, managerial jobs outnumbering non-managerial ones, and dead-end specialist positions.
This prompted a review of manning levels nationwide, rationalisation of staff, upskilling and re-skilling programs, adoption of a new compensation framework, and a salary structure aligned with equal pay principles.
The rationalisation also aims to align government structures with Vision 2030 and the mantra of leaving no one and no place behind.
Economists said the government had no choice but to cut civil service expenditure.
“This is an unsustainable civil service expenditure at 56.4% of the budget. It’s just too high for our economy, something needs to be done to correct that,” economist Eddie Cross said.
With informalisation reaching 76% and fueling a cash economy, Professor Gift Mugano noted:
“It’s a deepening economic crisis which we are witnessing in the economy as illustrated by the decline in the contribution of intermediated money transfer tax [IMTT] which used to contribute to about 16% of the total revenue going to ZIMRA, but has gone down to 7%, according to the Treasury during the Mid-Term Review.”
He added that the government is also losing VAT revenue due to high informalisation.
