HomeBusinessGovt could fail to pay salaries: Analysts

Govt could fail to pay salaries: Analysts

-

THE government will hardly sustain the ballooning civil servants wage bill after agreeing with the unions on a minimum wage of $375 per month considering the continued decline in revenues, economic analysts have warned.

OWN CORRESPONDENT

On Monday the government increased salaries for its 235 000 employees to a minimum of $375 and a maximum of $623 as pressure continued to mount on the Zanu PF administration to deliver on its elections promises.

Unions have been pushing for a monthly minimum wage of $543 in line with the poverty datum line.

But economic analysts fear that the wage bill has grown too big, pointing out that in the short to medium term, the government would not be able finance it.

There are fears the cash-strapped government would be forced to divert money allocated for capital projects in the budget to fund the salary bill which they said was not sustainable for the country’s weakening economy.

“The government is promising money it does not have and it will be embarrassing to see them failing to pay the civil servants salaries in the near future,” economic analyst John Robertson said.

“The available option will be to divert money allocated for capital projects in the budget and finance the wage bill and this will not be sustainable for the economy.”

The government announced a budget of $4,1 billion in December last year and close to 75% of the expenditure was towards civil servants salaries.

The recent increases in salaries were not included in the 2014 national budget and the government has not yet said where it will get the extra money to finance the ballooning salary bill.

Renowned economic commentator Erich Bloch said despite the fact that the salary review for civil servants was long overdue the government should have first reduced the number of civil servants adding that it was too big and unsustainable to finance considering the state of the economy.

“The government should have reduced the size of civil servants and without that it will struggle to finance the wage bill,” he said.

“There are a lot of ghost workers on the payroll which should be removed and this will reduce the salary bill.”

Bloch said the government should also cut on foreign travel expenditure for it to be sustain the new wage bill while able to finance other capital projects.

Recent Posts

Stories you will enjoy

Recommended reading