WASHINGTON DC —
The cash-strapped government will begin pre-budget preparations in Victoria Falls next week but a clash with civil servants over salary increases is casting a dark shadow over the discussions.
Civil servants’ salaries gobble nearly 70 percent of the government’s monthly budget.
President Robert Mugabe promised during elections to increase civil servants’ salaries. The lowest-paid public worker receives $296 a month.
Worker representatives want that to be hiked to about $500.
But finance ministry sources have warned government not to rush to raise the salaries without the resources to fund the increased wage bill.
According to the latest consolidated statement of financial performance published by the Ministry of Finance, the government had a budget deficit of $74 million in July.
Government has to also contend with liquidity constraints facing industry, agriculture and other sectors as foreign direct investment has slowed to a trickle upsetting - government predictions of growing the economy by 7.3 percent by next year.
The International Monetary Fund which has put Zimbabwe under a Staff Monitored Programme has urged Harare to keep a lid on salaries for state employees and maintain a balanced budget.
Government sources say Harare is now taking advantage of the divisions within the civil servants leadership to delay salary negotiations. Public Service Minister Nicholas Goche is quoted in the Newsday newspaper as promising to give civil servants a token increase as their leadership has no sent anyone to negotiate.
But chairman of the Apex Council, the chief negotiating arm for civil servants, David Dzatsunga said they have now agreed on a team of negotiators.