GOVERNMENT should cut the huge wage bill as part of broader efforts to improve public financial management and reinforce expenditure control, a local expert has said.
TARISAI MANDIZHA BUSINESS REPORTER
The public sector wage bill currently stands at about 70% of government’s total revenue collections resulting in the crowding out of areas such as capital expenditure.
Speaking at a Crisis in Zimbabwe Coalition state of the economy and international re-engagement meeting in Harare yesterday, Labour and Economic Development Research Institute of Zimbabwe director Godfrey Kanyenze said structural reforms in government were urgent.
“The government should reinforce expenditure control, and strengthen the human resources and payroll management system to help contain the wage bill,” he said.
“Other key reforms to restore fiscal sustainability include improving financial monitoring and oversight, strengthening the governance of public enterprises and developing a medium-term expenditure framework.”
Kanyenze said the regulation and supervision of the banking system to deal with financial sector vulnerabilities was necessary and finalisation of the Reserve Bank of Zimbabwe restructuring was critical as well as restoring the lender-of-last resort function as highlighted in the 2014 National Budget.
He, however, said there was need to strengthen fiscal management and improving the expenditure mix.
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“Better planning and control of spending and more transparency are needed on diamond revenues to avoid slippages that necessitate large mid-term budget reviews. The spending mix is unsustainable, with employment costs taking up a very large share of government resources,” Kanyenze said.
He added that over the medium term, containing wage bill growth would create fiscal space to improve public services, raise infrastructure investment, and build buffers.
Speaking at the same event, local economist Moses Chundu recommended that government should avoid the dual temptation of reintroduction and controls of the banished Zimbabwe dollar to avoid total collapse.
“The real game changer will be the attitude of government towards addressing corruption that is now endemic at all levels of society through bringing perpetrators to account without fear or favour and upholding the doctrine of restitution ahead of retribution, recovery ahead of imprisonment,” Chundu said.
He, however, said the role of civil society should be to lobby for reforms to back up good policy pronouncements and amendments of the various laws especially on rule of law and civil rights in compliance with the new Constitution. Chundu said civil society should lobby for accountability and prosecution of blatant corruption in the public domain, pursue more private prosecutions and also lobby for reform of electoral laws ahead of the 2018 polls.
