IMF tells Mugabe: Lay off 'inessential' workers - African Business Magazine
IMF tells Mugabe: Lay off ‘inessential’ workers

IMF tells Mugabe: Lay off ‘inessential’ workers

Zimbabwe should consider laying off ‘inessential’ civil service jobs in a bid to reduce government spending, according to a review by the International Monetary Fund.

The Washington-based lender said that action to reduce the country’s wage bill could relieve the strain on public finances caused by severe regional drought and a slowdown of government reform efforts.

“Excessive government spending, if continued, could exacerbate the cash scarcity, further jeopardize the health of the external and financial sectors, and, ultimately, fuel inflation.….Reducing the wage bill could involve reviewing allowances and benefits and evaluating the size of the civil service with a view to eliminating non-essential posts,” said IMF team leader Ana Lucía Coronel.

Zimbabwe is estimated to spend at least 80% of its national annual budget on public sector wages, a figure long considered unsustainable by the country’s multilateral lenders, which have urged reform in return for renewed support. The country is again in need of fresh funds following a severe currency crunch exacerbated by the controversial 2016 introduction of bond notes. 

Yet action to eliminate jobs or further reduce wages is unlikely to prove popular with Zimbabwe’s beleaguered civil servants. Many of the country’s essential workers, including teachers and medical staff, have long had to live with the threat of deferred payments and unpredictable working hours as the country lurches from one economic crisis to the next under the continued rule of President Robert Mugabe.

In March, junior doctors called off a three-week strike after the government met their demands over annual bonuses and allowances. Other public sector workers went ahead with a one-day walkout. 

Although thousands struggle to get by on reduced salaries, the country’s political class have long used the civil service as a source of patronage, doling out highly-paid posts of dubious public benefit to well-connected insiders. A 2010 audit by private consultants found up to 70,000 ghost-workers in the civil service. 

In 2016, the government vowed to get to grips with the problem by abolishing 8000 jobs in the agriculture ministry and placing a nationwide freeze on new hires. The government says it is mulling the introduction of a support fund to compensate retrenched workers.

As well as further action to reduce wages, the IMF advised Zimbabwe to better tailor its support for the troubled agricultural sector, which continues to suffer the effects of drought.

“Government interventions to support agriculture, while understandable, could be redesigned with the aim of maximizing the benefits on production while minimizing the risks to the public-sector balance sheet. Reinforcing the government’s efforts to curtail non-priority spending is also pressing,” said Coronel. 


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Written by David Thomas

David Thomas is chief features writer at African Business Magazine. He has also been published at the Financial Times, the Wall Street Journal and South Africa's Cape Times.

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