By Nomalanga Moyo
SW Radio Africa
03 January 2014
The International Monetary Fund (IMF) has queried Zimbabwe’s commitment to a debt reduction plan after the government hired an extra 10,000 members of staff, contrary to what had been agreed on with the global lender.
The government signed up to the IMF plan last year June, the terms of which include implementing economic reforms such as freezing public service recruitment, and increasing diamond sector transparency.
If adhered to, the plan – known as the Staff Monitored Programme – is expected to help the country deal with its crippling external debt, estimated at $10 billion.
However, a progress review visit by the IMF team in November suggests that the ZANU PF government has violated the terms of this agreement, according to the NewsDay newspaper.
Quoting an IMF report, the newspaper said: “The Fund noted that the number of civil servants had increased by 10,000 between March 2013 and September 2013 and questioned the government’s commitment to the policy of a hiring freeze.”
Didymus Mutasa, ZANU PF’s national secretary for administration denied that his party had defied the agreement with the multi-lateral lender by hiring more staff.
“If the IMF could give us just two people they allege were employed during that period, then we can have a starting point,” NewsDay quoted Mutasa as saying on Friday.
Harare-based economist Godfrey Kanyenze said it was highly likely that ZANU PF was refuting the IMF report not just because they had breached the debt plan.
“It’s not just the violation of the recruitment freeze but also that the extra staff were neither hired procedurally nor earmarked for critical sectors such as health. The IMF is obviously basing its report on evidence gathered during its various consultations with relevant officials and bodies in Harare,” Kanyenze said.
“In any case, this will not be the first time that the government has violated a recruitment freeze. They breached one in 2008-2011 and hired an extra 75,000 security sector personnel,” Kanyenze added.
Last year, former Finance Minister Tendai Biti complained that public sector wages were chewing up $190 million of the $200 million of the government’s monthly revenue, as a result of extra security personnel that ZANU PF was clandestinely hiring.
The opposition MDC parties insist that ZANU PF used the extra security personnel to rig the July 31st election.
The country’s 236,000 public servants’ wage bill consumes 75% of the country’s budget. In his December budget speech, new Finance Minister Patrick Chinamasa said he was looking at reducing this to 55-65% by 2015 and to 30% by 2018.
Kanyenze said this was impossible unless the government disciplined itself and strictly followed sound economic policies.
He cited recent public service wage increases against a dwindling Treasury revenue base as some of the challenges that the government will have to confront.
The IMF scheme was expected to run until December 2013 but has now been extended taking into account the recently announced budget and to give ZANU PF time to implement its Zim Asset economic programme.