The visiting International Monetary Fund (IMF) delegation is alarmed at the ballooning government wage bill, which Finance minister Tendai Biti has blamed on the illegal recruitment by the Public Service Commission (PSC).
The IMF delegation is in Zimbabwe for the routine Article IV consultations.
Sources said the wage bill now tops 74% of all government expenditure.
“IMF is worried with the direction the country’s wage bill is taking, that is the reason why they have been trying to meet all government stakeholders,” the sources said.
The delegation successfully met officials from Home Affairs and Public Service but failed to meet Ministry of Defence officials. Early this month, Biti accused the PSC of recruiting 10 000 staffers, among them 4 600 soldiers, between January and May this year without approval from Treasury.
The Home Affairs ministry is said to have employed an additional 1 200.
In addition Treasury granted the employment of 24 000 temporary teachers up to May 2012 Official figures from Treasury for the period ending March 31 show that the average monthly employment costs outlay of around $191 million for the period January to March this year exceeded targeted monthly expenditures of $178,4 million.
Employment costs for March 2012 were $200,1 million, accounting for 70% of overall expenditures, official figures show.
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Efforts to get a comment from Biti were unsuccessful as he was in a meeting. Industry and Commerce minister Welshman Ncube yesterday told delegates attending the Zimbabwe National Chamber of Commerce congress that “government has huge constraints as there are diminishing revenues that are going into its coffers and there is an ever-increasing demand on Treasury”.
Biti told Parliament a fortnight ago: “There is recurrent expenditure on issues such as salaries, where government spends over 70%.
“The pressure emanating from the civil servants salary bill coupled with the depressed performance of revenues is having a crowding-out effect on capital expenditure.
“We have been unable to meet salaries and we owe hotel bills in excess of $700 000 and this is because of non-performance of the budget arising from the unlawful recruitment.”
In its official statement at the conclusion of the 2011 Article IV consultation last year, the IMF warned that the budget was heavily tilted towards increasing the government wage bill with insufficient resources being allocated to social programmes and high-priority infrastructure.
It said as a result, growth benefits did not fully trickle down to many ordinary citizens outside the public sector and the growing segments of the formal private sector; and poverty remained widespread.
