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IMF Urges Zimbabwe Government to Stand Fast on Public Sector Salaries

Economist Tony Hawkins of the University of Zimbabwe said that although the International Monetary Fund has been recommending such a course of action for some time, Zimbabwe must keep spending in check

The International Monetary fund says Harare is right to keep a lid on salaries for state employees and maintain a balanced budget, offering encouragement as to future assistance to Zimbabwe in debt restructuring and other challenges.

IMF Deputy Director for Africa Sharmini Coorey told reporters this week that dollarization since 2009 has stabilized prices following the country’s period of hyperinflation, noting that adopting the current hard-currency regime has imposed fiscal discipline.

The challenge now, said Coorey, is to contain spending, especially state salaries. The official noted that these were already equal to around 70% of state revenues.

Coorey offered some encouragement as to the level of support the international financial institution might be able to provide in future.

"If the authorities can strengthen their economic policies, particularly on the wage side and if there is support among the donor community to restructure Zimbabwe's debts ... the Fund is looking forward to further relations with Zimbabwe," she said.

The IMF policy prescription comes as Zimbabwean civil servants are demanding that their base salaries be nearly tripled. The lowest-paid public workers receive $186 a month. Worker representatives want that to be hiked to US$502.

A strike has been threatened if Harare does not meet demands.

Economist Tony Hawkins, a professor at the University of Zimbabwe, told VOA Studio 7 reporter Jonga Kandemiiri that though while the IMF has been recommending such a course of action for some time, Zimbabwe must keep spending in check.

Economist Godfrey Kanyenze, director of the Labor and Economic Research Institute of Zimbabwe, an arm of the Zimbabwe Congress of Trade Unions, said a national consensus must be achieved on income levels for public workers.