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Zimbabwe FM Biti, Civil Servants on Collision Course Over Freezing of Salaries

Zimbabwean Finance Minister Tendai Biti said Zimbabwe’s US$913 million salary bill is consuming 70 percent of the 2010 budget while the World Bank says 30 percent of public expenditures should be the norm

The government and civil servants are on a collision course following word from Finance Minister Tendai Biti that the salaries of state employees have been frozen indefinitely. Biti told reporters that the government lacks the money to increase pay for state workers.

He said Zimbabwe’s US$913 million salary bill for 2010 is consuming 70 percent of the budget while the World Bank says 30 percent is the norm.

Biti said his ministry is expected to rescue the Reserve Bank of Zimbabwe, which is under siege by creditors, as part of the process of implementing central bank reform legislation instituting a strong board of directors.

News reports quoted Biti as saying the Reserve Bank urgently needs protection from action by creditors who have obtained court orders for bank assets to be auctioned off to pay debts.

Simba Makoni, a former finance minister and chairman of the opposition Mavambo-Kusile party, said Biti is moving to rein in RBZ Governor Gideon Gono who financed operations of the former government in violation of the principles of central banking.

Makoni told VOA Studio 7 reporter Gibbs Dube that even if reform legislation has trimmed Gono’s powers, abuses by the executive branch remain a risk.

But political analyst George Mkhwanazi said that Gono must be removed if the reputation and the capacities of the RBZ are to be restored.

“Governor Gono who has previously presided over the pilfering of private company funds cannot be allowed to become the chairperson of the proposed RBZ board,” Mkhwanazi told VOA.