Chinamasa warns on salary hikes

FINANCE minister Patrick Chinamasa says the tabled civil servants salary hikes will increase the wage bill to 120% from its current levels and widen the country’s fiscal deficit.

BY FIDELITY MHLANGA

Chinamasa, who was speaking on Friday at the Women’s Conversation on Legislation with HE President Emmerson Mnangagwa in Harare last week, said the increases could make the wage bill grow from 90% of government revenue to 120%.

“Another problem causing cash shortages is the fact that we have a huge fiscal deficit. If there are any civil servants here, I want them to hear this clearly. Of every $100 that we receive, 90% is going to wages. And this situation is going to be made worse by the recent salary or allowances adjustments with the nurses, doctors and teachers and the rest of the civil service. I may not be surprised to find out that will be not 90%, but 120%,” he said.

Already, the wage bill is on course to chew

$4,5 billion of the $5,07 billion in government revenue expected for the year.

At 120%, the government would need about $6,08 billion to cater for the wage bill alone before it can fund other projects, leaving it in a serious fiscal deficit.

This comes as a potential effect of government tabling a 15% salary increment for civil servants amid calls for an upward review on salaries by labour unions.

Faced with the possible huge fiscal deficit, Chinamasa said it would be impossible for the country to make physical cash available.

In the absence of cash, Chinamasa envisages to increase point-of-sale machines from 75 000, to between 120 000 and 150 000.

“Now, what that means is for everyone receiving wages from government. The expectation is that it should be physical cash. That is not the case. We cannot match what we used to pay every month, something like $300 million, which we pay wages. We cannot match that in physical cash. If we do, we run the risk of hyperinflation, going back to 2008 (situation) and government is not prepared to go that route,” he said.


In his 2018 National Budget last December, Chinamasa warned that the room for domestic financing of the large fiscal deficit had now been fully depleted and that additional monetary financing of the deficit can only lead to inflation and further economic deterioration.

The government is financing its activities mainly through the issuance of Treasury Bills and real time gross settlement balances, which are already aggravating the fiscal deficit.

According to the Treasury boss, this year will see a budget deficit of $672 million and with elections nearing, the country’s expenditure is expected to balloon further.

The country gets hard currency mainly from export earnings, Diaspora remittances and foreign direct investments, which are not sufficient for the market.

“We are not getting as much foreign investments as we should. Indications are that this is going to improve as we go into the future, but currently, that is not so. We are not getting lines of credit,” Chinamasa said.

He said the recent commitment of $100 million from the United Kingdom, through Standard Chartered Bank, was a welcome development, as the government had not received any credit from Europe for the past 20 years.

19 Comments

  1. so why campaign in such a way chinamasa. you want zanu win but dying economy. you government is no different to mugabes which printed money for war vets in 1997 an all hell broke lose from then. you still using the same system to win votes.

  2. ipaiii vanozvigonaa hanty mazvitadzaa

  3. BASOPO ARTWELLS

    HOOO NHAI !!! MOTOKA DZAWAIPA MA CHIEFS HADZIKONZERI HYPER INFLATION ASI 15% yema civil servants ndiyo inokonzeresa hyper inflation. ?? IWE KA IWE . AFTER ALL ITS ONLY 15 % OF NOTHING.

  4. If only there was a political will to introduce austerity measures to cab the fiscal deficit, its still very possible to give civil servants a decent salary increase. One measure will be to cut on international travel, there are exorbitant allowances paid out in cash. The next will be to reduce ‘executives’ salaries/perks Cabinet agreed (2014) that all government CEOs should be getting not more than $6000 this directive is yet to be enforced.

  5. zanu yaora full stop

  6. devaldo dee mauritius

    benzi Chinamasa, 34 million which you used to buy vehicles for chiefs to buy votes haina zvayakakonzera to the budget?to hell.to some its 15% of 250 to a maximum 15% of 500 maybe.sell all those jeeps, discovery vehicles etc dzamukushandisa and use cheaper models like fun cargos for permanent secretaries and honda fit for ministers. this government doesnt change unless we vote them out.used stuff useless junk,

  7. Comment…I support chinamasa bcz civil servant are many and this can cause inflation bcz they don’t generate money but they rely on tax payers money .they is few companies and civil servant must understand that many ppl are suffering and their incrz worsen cash crisis

  8. Comment…rubbish but we have to learn to refuse populist ideas like giving civil servants money while not investing in education i mean tech education we are not educated bcoz we cant make anything. so pliz zimbos think long term like investing in education and infrastructure (roads and trains dont mean buildings) sell NRZ privatize we dont process anything in africa zim can be the manufacturing capital of africa and financial capital but lets us do it soon bcoz ARTIFICIAL INTILLIGENCE IS COMIN

  9. imarii yacho iri kupiwa civil servant iwe moses shut up your mouth, motor dzakatengerwa machiefs haizvikonzeri inflation here. to hell with u chinamasa. ipa vanhu mari pple are suffering imi muchiguta

  10. The other issue is that Executive benefits are chewing a great chunk, e.g domestic worker allowances should be at least equal to the salary of the lowest paid civil servant. Remove youth officers from the pay roll even if we are approaching elections.
    One official vehicle for each Minster, Deputy Minister, permanent secretary and equivalent grades. All civil servants above 55 years of age must go including myself freeze their posts for the time being.

  11. Pasi nembavha chamisa hoyeee kana atadzavo tomubvisa

  12. IVHURATAKATORANDERIPIKO

    JUST INCREASE THE SIZE OF THE CAKE FULL STOP- STOP COMPLAINING ABOUT IT BEING SMALL

  13. Guys kutawura chokwadi itai hanya ne nyika vasharukwa to hell

  14. Cde Gabarinocheka

    Patrick tikwanirewo pliz iwe salary yako its over $6000 wotaura tsvina dzakadaro
    Mwana wako haana kutiza nemari here achienda joni tiitirewo zviro kwazvo your government will never win this coming erections even if you debhiriteti the rigging strategy enough is enough
    Tiri kukuonai zvedu

  15. Chinamasa is absolutely right. Lets not be like children who are there just to ask for freebies. Governments do not exist merely to pay civil servants salaries. What value are the Civil servants adding? Remember that Civil service salaries are paid out of taxpayers’ money. Our “Socialist” past has blinded us to objective reality and given us a false sense of entitlement. Even China & Russia have stopped believing this Marxist-Maoist ideological stupidity.

  16. Comment…y is it they know the consequences bt u still go ahead with yo plan Ed is preaching more cashflow saka unotoshaya kuziva kuti zvikufambasey

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