The International Monetary Fund (IMF) says the Zimbabwean government cannot afford to award restive civil servants salary increments because such a move would have serious implications on the economy.
The IMF said the inclusive government would even fail to pay the increased salaries.
In a report compiled by a team from the IMF, which was in Zimbabwe since last week, the Bretton-Woods institution said any increments could only be considered in 2012 after a wider consultative process.
The IMF report, addressed to Finance minister Tendai Biti, comes at a time when civil servants are agitating for a pay rise. Civil servants have threatened nation-wide strikes to push for salary increments.
The IMF team said despite the fiscal stresses in 2011, the government was facing significant pressure for further wage rises but such increases were not affordable.
“Such increases are not affordable, could lead to wage arrears and could be destabilising for competitiveness of manufacturing, the banking system and external accounts, putting at risk recent improvements in growth performance and living standards,” reads part of the report.
However, the IMF said the government should intensify efforts to improve living conditions of low-income civil servants and other low-income households through affordable measures with a high social impact.
It said the government should ensure a stable, low inflation macroeconomic environment that would be essential in guaranteeing timely wage payments – one of the key achievements of the government.
“Elimination of ghost workers and other irregularities in the government payroll will liberate fiscal space for better remuneration of civil servants,” the report said.