HARARE — April 14, 2015: The Zimbabwean government said yesterday it had suspended payment of annual bonuses to public workers for two years as it seeks to slash spending while battling to mend the moribund economy.
“The government has decided to suspend bonus payments to civil servants in 2015 and 2016, and the situation will be reviewed in 2017 in the event that we are able to build enough capacity,” Finance Minister Patrick Chinamasa told a news conference here.
“Conditions are such that we need to be realistic about our situation and try to live within our means.”
Chinamasa said the Zimbabwe government has a monthly wage bill of about $260 million — a sum that amounts to over three quarters of the budget every month.
“Almost 82 per cent of the budget is channelled towards salaries,” he said.
The government has not paid last year’s bonuses, which were due in November.
“In 2014, the bonus obligation amounted to $172.6 million. We had to stagger the bonus payments into 2015 because of the limited capacity,” he said.
Last week, workers under the aegis of the Zimbabwe Congress of Trade Unions staged protests in this city demanding that the government fix the economy and to press long ruling President Robert Mugabe to fulfil an election promise to create two million jobs.
The workers also protested against proposed salary and job cuts for civil servants.
Mugabe, 91, was re-elected in July 2013 on a promise to revive the moribund economy, hit by more than a decade of political instability.
The finance ministry in November projected economic growth of 3.2 per cent in 2015, up from 3.1 per cent last year.
The International Monetary Fund has said Zimbabwe faces a difficult economic outlook this year as it battles to clear arrears with international lenders.
Thousands of companies have shut down over or migrated to neighbouring countries as they faced viability problems due to a perennial cash crunch.
Frozen out of foreign debt markets and plagued by years of political crises and international sanctions, Zimbabwe is facing a severe and persistent liquidity crunch, the country’s central bank said last year. — AFP