HomeNewsGovt to cut wage bill in compliance with IMF

Govt to cut wage bill in compliance with IMF

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GOVERNMENT has promised to cut its wage bill among a host of other reforms to be undertaken during the successor plan of the International Monetary Fund (IMF) supervised economic reform programme.

NDAMU SANDU

The plan will be a successor to the Staff-Monitored Programme (SMP) which ended in June.

IMF head of mission to Zimbabwe Domenico Fanizza said the mission reached a staff level agreement and would brief IMF management for approval on the successor SMP. If approved, the successor SMP would run from October up to December 2015.

Finance minister Patrick Chinamasa yesterday said government had committed itself to rebalance the expenditure mix towards infrastructure and social outlays.

Currently, over 70% of the revenue generated is chewed by salaries.

Chinamasa would not be drawn on the measures to be instituted to cut the wage, saying he was still consulting Cabinet colleagues and other stakeholders.

“It is necessary that we don’t make unreasonable demands especially on the issue of wages. We are working to reduce the level of the wage bill looking at various options as Cabinet to bring it down. I have started discussions with colleagues [Cabinet] informally,” Chinamasa said.

“We must have political buy-in into whatever we anticipate to do.”
Government also promised to eliminate fiscal deficits to send a strong signal that Harare was committed to living within its means, IMF head of mission Fanizza said.

Fanizza said there should be clarity on the indigenisation law to allay the fears of investors and restore stability in the financial sector.

Zimbabwe also promised IMF that it would address the country’s debt challenges by stepping up re-engagement with all the creditors.

Chinamasa said he would present a roadmap strategy to Cabinet on how the country’s $10 billion debt would be resolved.

He said the country wished for debt cancellation. If the move does not succeed, Chinamasa said, it would lobby for debt rescheduling.

Last year, the IMF approved an SMP — an informal agreement between country authorities and the fund staff to monitor the implementation of the authorities’ economic programmes — following intensive lobbying by the inclusive government as part of its re-engagement with the global lender.

Zimbabwe met the all benchmarks, prompting calls for a successor programme.

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