Civil servants bonus doubtful
HARARE – Civil servants could this year fail to get their annual bonuses, unless government miraculously improves its under-performing revenue collections in the next four months, Finance minister Tendai Biti has said.
In his state of the economy address for the period July to August, Biti yesterday said government’s three-year tradition of setting aside cash to fund the 13th cheque was not viable so far given the persistent revenue under-performance.
The Harare administration’s plan was to set aside $7,5 million weekly — starting August — to meet its $150 million bonus bill, but this could be affected by poor revenue collections.
Biti said government employees, whose salary tab constituted more than 70 percent of expenditure as at end-August, could have a gloomy festive season unless his department is able to mobilise $400 million by year-end to meet other pressing financial demands, including the referendum and preparations for the 2012/12013 agricultural season.
“We have to find $400 million at a time our revenue (collection) is under-performing at a deficit of $30 million per month,” he said.
The 13th cheque, Biti said, required $150 million, while the referendum could gobble up to $40 million.
Zimbabwe’s government workers are among the lowest paid in the region, earning a little over $300 a month.
Repeated strikes to push for a salary increase have yielded no results because government is broke.
Biti said competing interests made the situation difficult to manoeuvre.
“The referendum is an election on its own, which… we hope will not cost more than the census and we do not have to pay more than $40 million. But the Zimbabwe Electoral Commission begs to differ and says the cost will be around $80 million,” he said.
“The third issue of financing the 2012/2013 agricultural season, which together with what we already owe to farmers, will be at a cost of $130 million. This includes what we owe to farmers and input providers,” said Biti.
In order to raise funds, Treasury has enlisted the Zimbabwe Revenue Authority’s support and address import leakages, particularly at the country’s borders or ports of entry.
“Furthermore, the ministry has engaged the ministry of Mines with a view of accessing both outstanding and future diamond-revenue remittances to the fiscus,” he said.
According to Biti’s report, revenues for July and August stood at $257,5 million, and $263 million, respectively, against initial projections of $271,2 million and $280,7 million.
Despite exporting $456 million worth of diamonds between January and August this year, mining firms have only remitted $41 million to July and nothing in August. “From January to July, our actual collection was $41,7 million against a target of $347 million. In August, we targeted $14 million and got zero.”
As a result, Biti said, there was need to ensure Obert Mpofu’s Mines ministry “gave Caesar what belongs to Caesar.”
It was critical that the country focuses on resource mobilisation, including re-engagement with the international community and implementation of its Zimbabwe Accelerated Arrears Clearance and Debt Strategy, in order to access offshore funding, he added.
In his report, the Finance minister also said Harare could revise upwards some sectorial contributions to the country’s gross domestic product on account of “over performance”.
In particular, tobacco output for the year ended at 144 million kg compared to a target of 131,9 million kilogrammes.
On the other hand, cotton deliveries exceeded targets by nine percent to reach an estimated 304 000 tonnes.
In the mining sector, cumulative gold output to July amounted to 799,5 kilogrammes and Zimbabwe is well on track to meeting its benchmark 15 000 kg by year end.
Biti also said inflation had slowed down in August due to the South African rand’s depreciation to the American dollar, and steady international oil prices.
Annual inflation consequently decelerated to just under four percent in July.
Exports and imports maintained an upward trend, cumulatively reaching $2,6 billion and $5,1 billion, respectively, to keep the trade deficit or gap at almost $3 billion.