Editor — The subject of civil service remuneration, just like any other person’s remuneration, is important.
Zimbabwe’s civil servants offer vital services to the nation and they deserve decent pay. Unfortunately, the government’s purse has not recovered from the crisis of the last decade.
Recent media reports indicate that the Zimbabwean government has only managed to raise revenues of about US$168 million every month since the beginning of the year. About 70 percent of this is gobbled-up by the monthly civil service wage bill of US$117 million. Clearly, this does not leave much for other government recurrent and capital expenditures. These statistics also show that the government cannot increase the civil service wage bill without running an undesirable budget deficit. This situation points towards the need for the country to improve its recurrent revenue generation.
Our current situation is a result of our recent history. At the peak of the economic crisis, Zimbabwe literally had no tax revenue. The multi-currency regime has allowed the country to rediscover taxation. Certainly our tax revenues are far below those in the country’s heydays, and their future trajectory depends on the speed of the country’s economic recovery. With future growth the country can also try to broaden the tax base and increase the efficiency of tax collection. Introducing full-cost recovery for some of government services could also contribute to sustainable revenue generation, though one needs to be sure that this does not stifle the recovery of sectors that still need “rejuvenation” through cheap government services.
Some people have suggested that civil service pay can come from government’s US$174 million diamond revenues. In government, as in business, one does not sell one’s capital to pay a wage bill. It is as imprudent for a nation to sell off natural capital to finance recurrent expenditure as it would be for a farmer to sell his land to buy bread.
A well- established economic recommendation, the Hart-wick rule, advises that incomes from non-renewable resources such as diamonds should be invested in productive assets such as machinery, roads, schools and even clinics. This keeps income and welfare levels from falling in the future when the mineral reserves are exhausted. In fact, we need to scrutinise the proceeds from sales of all minerals meticulously.
After years of neglect Zimbabwe’s infrastructure needs work. The revenues from diamond sales should be earmarked for this purpose, especially since this will speed up the country’s economic recovery. It is that recovery which will enable us to increase pay levels in the civil service.
Edwin Muchapondwa
Waterfalls
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written by xixo, April 11, 2011
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written by choga, April 09, 2011
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Tax revenues & review of government services costing are always tricky given the generally low level of disposable incomes among the average Zimbabweans,among whom are the civil servants.
Civil servants incomes have to be increased inevitably,possibly using sliding scale with the lowest paid getting the highest percentage.A source for revenues to increase civil service salaries is privatisation or partial divestiture in parastatals.My first target for partial divestiture is the national airline.It needs an alliance which comes with say 50% investment.However the longer government takes without embarking on this route the m*re the likelihood of these entities declining immensely in value.