THE government, which spends three quarters of its $4,1 billion annual budget on salaries, this week assured civil servants of a pay rise this year despite earlier indications there would be no increase this year.
Labour minister, Prisca Mupfumira dismissed media reports that government had ruled out paying increases for 2015.
“Civil servants should be assured that it is not government policy not to increase salaries in 2015. Once revenue inflows improve, salaries can always be reviewed,” Mupfumira said on Monday.
The state-controlled Herald newspaper last Thursday reported that the government, in a policy paper circulated to civil servant worker representatives, admitted it could not afford further increases to its wage bill, which rose from $381 million in 2009 to $2,2 billion this year.
Zimbabwe’s burgeoning wage bill is one of its biggest fiscal challenges and government has struggled to come up with a clear policy position to tackle it.
Recently, government announced that it had suspended bonus payments to civil servants until 2017 in a bid to reduce its massive wage-bill which gobbles about 80 percent of its income but President Robert Mugabe rescinded the move, saying cabinet had not approved the suspension.
Last year, the bonus bill stood at $172,6 million with the major chunk of it being paid in the first quarter of 2015.
The government, battling with a $10 billion debt has to reduce its wage bill to meet targets set under the International Monetary Fund’s Staff Monitored Programme.
The deal is an informal agreement between the Harare administration and IMF staff to monitor the implementation of a particular country’s economic reforms, whose key benchmarks include reducing the government’s wage bill.
Mupfumira said Tripartite Negotiating Forum, a social dialogue made up of government, labour and business had been revitalised and that the partners were committed to engaging in ways to improve the socio-economic situation of the country.
She said government was also working on availing land for residential stands for its 235,000 employees and housing loans through the proposed National Social Security Authority building society.
“A $50 million investment has already been set aside. Cabinet approved the matter and NSSA is now waiting for the launch,” she said.