Credit - Bloomberg
Zimbabwe won’t fire civil servants to cut costs and reduce the budget deficit even though the government’s wage bill is by far the biggest expense.
Wednesday 28, November 2018
(Bloomberg)--The government can’t afford the retrenchment packages that would accompany job cuts, Finance Minister Mthuli Ncube told reporters Wednesday in the capital, Harare. Instead, it will cut “excessive demand” for spending by ministries and government workers and replace an automobile allocation program with a loan facility, he said.
Ncube promised to slash the government’s wage bill, which swallows 95 per cent to 98 per cent of revenue, when he presented the 2019 budget to parliament on 22 November.
A budget deficit of 11.1 per cent is unsustainable, Ncube said, noting that in September and October “we achieved a surplus of $29 million and this demonstrates that we’re walking the talk.”
The southern African nation won’t consider currency reform until its “macro-economic fundamentals” have been restored, Ncube said. Zimbabwe abandoned its currency in February 2009 and has mainly used the dollar since then.