FORMER Finance minister Tendai Biti yesterday warned that the government would soon fail to pay civil servants on time as revenue inflows continue to dwindle. VENERANDA LANGA STAFF REPORTER
Biti told journalists in Harare that the country was running on auto cruise because the Zanu PF government has no solutions to the economic problems that appear to have worsened after the July 31 elections.
The MDC-T secretary-general spoke a day after riots erupted in Harare and Bulawayo following failure by some indigenously-owned banks to pay depositors their money.
It also came at a time when the government has been struggling to pay civil servants their bonuses and uncertainty over salary reviews for next year.
Biti said indicators showed that all sectors of the economy were shrinking with agriculture expected to contract by 23% and mining by 32%.
He said the economy would grow by between 1,5% and 1,8% next year, a far cry of the giant leaps recorded during the era of the inclusive government.
Biti said the government had been spending 80 to 90% of its revenues on civil servants salaries in amounts of $300 million a month.
“The government is in de facto shutdown because its income is not sufficient to pay the wage bill and line ministries used to get $4 000, but now even that $4 000 is gone and monthly accumulations of domestic arrears, electricity bills and drugs are not being paid and domestic debt will be around $1 billion,” the former minister said.
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“The danger line is a situation whereby for the first time in the history of this country the government is going to fail to pay public servants’ wages. They are supposed to pay early next year, and we are going to have a new lexicon in Zimbabwe of stagnation of salaries in 2014.
“The day is not so far and it is coming when this government is going to fail to pay the wage bill.”
Biti also claimed the Zanu PF government could soon have no option, but to reintroduce the Zimbabwe dollar that was abandoned in 2009 due to hyperinflation.
“Zanu PF managed to rig the elections, but they are not going to be able to rig the economy and the only way out for them is to bring back the Zimbabwean dollar by reopening the printing press,” Biti added.
“The return of the Zimbabwean dollar is not a question of when but a question of if, because that is the only avenue open to them as they are not going to get money from China or anywhere.”
Last week the Reserve Bank of Zimbabwe was forced to issue statements dismissing reports that the return of the Zimbabwe dollar was imminent.
Finance minister Patrick Chinamasa has also stated that the government would maintain the multiple currency regime for the foreseeable future.
Biti said the 2014 budget expected to be presented by Chinamasa tomorrow would be a non-event because there was no revenue to back it up.
“We can see the logic of minister Chinamasa refusing to present the budget because it is hot air – it is mascara,” he said.
“You can put lipstick on an ugly person like me, but I can never change to a Madonna.
“We are going to spend four hours in a hot room where hot air is going to come out because there are no resources.
“Let us resolve the crisis of legitimacy, skewed expenditure patterns; let us go back to the principles of eat what you kill, go back to supply side economics and engage the international community – not only Beijing and Hong Kong, but they must also engage the European Union and South Africa.
“Unfortunately, all these countries want economic stability and political hygiene.”
Zanu PF wants Chinamasa to increase civil servants salaries to $540 for the lowest paid worker, which is the poverty datum line.
Mugabe told the Zanu PF conference that the Finance minister should not give any excuses for failing to give civil servants a decent salary increase.
