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ZIMBABWE-ECONOMY-BUDGET
Zimbabwe to cut govt salaries to curb spending: minister
HARARE, Nov 23, 2018 (BSS/AFP) – Zimbabwe’s new finance minister Mthuli
Ncube announced a five-percent cut to senior government officials’ salaries
on Thursday in a bid to mend the shattered economy.
Ncube’s budget also set out plans for the biometric registration of civil
servants to weed out “ghost” workers who appear on the payroll without
actually turning up to work.
Ncube said the government would from January cut basic salaries “for all
senior positions,… up to deputy ministers, ministers and the (presidency).
“The salary cuts are also extended to basic salaries of those in designated
posts in state-owned enterprises, including constitutional commissions and
grant-aided institutions.”
The public sector wage bill accounts for 90 percent of the country’s
revenues and the problem of phantom workers is another drag on the nation’s
finances.
This was the first budget since President Emmerson Mnangagwa’s disputed
election.
Chaos broke out in parliament after the speaker used police officers to
eject opposition members from the building for failing to stand up when
Mnangagwa walked into the house.
The theme of the $6.6 billion 2019 budget was “austerity will lead us to
prosperity”.
It also unveiled limited compensation of $53 million dollars for white
farmers evicted during the government’s controversial land reforms, nearly
two decades ago.
Without giving a figure, the government said it planned to reduce the
number of the country’s foreign missions from the current 46.
Ncube said the 2018 budget deficit would be 11.7 percent of GDP, while
growth was forecast to be four percent this year and 3.1 percent next year.
Zimbabwe’s monthly inflation in October rose to 20 percent from five
percent, due to a rise in transport and food costs.
MORE/HR/0938
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ZIMBABWE-ECONOMY-BUDGET 2 LAST HARARE
Mnangagwa took over from veteran autocrat Robert Mugabe last year and won
disputed elections in July after campaigning on a pledge to revive the
economy, attract foreign investment and create jobs.
But less than three months after the vote, the dire financial problems of
the Mugabe era — shortages of fuel and basic foodstuffs including bread,
sugar cooking oil and essential medicines — have returned to haunt the new
leader.
The latest crisis erupted last month when Ncube announced a two-percent tax
on electronic transactions to increase revenue.
Many Zimbabweans rely on electronic payments as US dollars, which function
as the main currency, are scarce, and the local “bond note” currency is
little trusted.
Bond notes were introduced in 2016. Although in theory equal to the US
dollar, they were soon trading at a far weaker rate, and the gap has widened
in recent weeks.
Public anger at the state of the economy was a contributing factor to
November’s military intervention that finally toppled Mugabe, then 93, after
37 years in office.
Mugabe’s reign as the head of the ruling ZANU-PF party was marked by
corruption and mismanagement that led to an exodus of investors, mass
emigration and collapse of many public services.
Unemployment is generally put at over 90 percent, while the size of the
economy has halved since 2000 when many white-owned farms were seized.
BSS/AFP/HR/0940