The civil service salary increment may have been effected in an irregular and even scandalous manner as it has emerged the money used to fund the increase is coming directly from diamond sales and not from the Treasury, NewsDay has learnt.
The increment has resulted in the government wage bill shooting from $120 million to $160 million a month.
NewsDay yesterday established the Ministry of Finance provided only $120 million while the Zimbabwe Mining Development Corporation (ZMDC) chipped in with the balance of $40 million.
The ZMDC is believed to have deposited the money directly into the government’s imprest account (salaries account), from where the Salaries Services Bureau distributed it to the civil servants.
Finance minister Tendai Biti confirmed the development yesterday and maintained that Treasury was unable to sustain the salary hike.
“Yes, the difference came from diamonds, so diamonds will have to perform to sustain the salary hike,” said Biti.
The development means that for civil servants to continue earning their new salaries until the end of the year, the ZMDC would have to raise $240 million which it should deposit into the government salaries account for the next six months.
Biti last week ruled out the possibility of presenting a supplementary Budget arguing there was no capacity or scope to increase revenue, resulting in fears that the civil servants’ salary hike would become a nullity.
“Unfortunately, there is no capacity at the present moment to actually increase our revenue as the 2011 Budget of $2,7 billion was money that was supposed to be accumulated up to December 2011. The country was supposed to amass revenue of up to $230 million in March, but failed to do so,” Biti told parliamentarians last week.
“There were only two months that we achieved the $230 million margin and these were March and June, where we received quarterly payments for corporate taxes, otherwise in the first six months of the year we were $100 million below acceptable revenue.”
The issue of civil servants’ salaries have become highly contentious with Zanu PF and service chiefs accusing Biti of defying an order from President Robert Mugabe to award the increments.
Biti insisted there was no money to do this as diamond money was not being deposited into Treasury.
The ZMDC has now released the diamond money but not into Treasury as should be procedure in order to allow for a proper government budget factoring in issues such as civil service salary increments.