Biti to rationalise salaries

Biti was quick to say government workers should not expect astronomical increases in their salaries as this would spell doom for the countrys economic recovery prospects.
We will decompress our wage structure, Biti said, That decompression will focus on the skills and different grades that are in government. That is inevitable.

He was speaking to journalists in Harare Friday afternoon ahead of his mid-term monetary policy review statement in two weeks time. Biti added, The wage structure is an allowance at the present moment and that has got disastrous consequences.
It is sending wrong signals to industry which is thinking that allowances are the legitimate and acceptable form of reward.

Since the beginning of this year, all civil servants are earning a flat US$100 allowance across the board. There would be some change and that change is that not everyone is going to earn US$100. This will ensure Zimbabwe retains competent staff, he said.
He said the salary increases would not seek to contradict the countrys current economic growth rate.

We have got little fiscal space to operate in, he said.
We are also now dealing with hard currencies. Salary increases and economic increases in any part of the world, the economy normally moves 3 to 4 percent.If we do well, our economy is going to grow by 4 percent. So the growth of everything else means we are going to growth of our own GDP.

So it would be foolish to resort to the 200 percent, 400 percent salary increases. Its not possible. There have to be modest increases that recognise that we are now running a real economy and not a siyaso (rudimentary) economy.”
Biti further defended governments harsh tax regime saying government was hard pressed to raise enough revenue to pay its workers whose wage bill was consuming a massive 70 percent of governments gross revenue every month.

This, he said, left government with only 30 percent to deal with other pressing obligations. What we have is that the wage bill alone is going to be over 40 percent of GDP (Gross Domestic Product), he said.

What this means is that there is no economic activity. We are living from hand to mouth. In other words, we are actually being generous in terms of paying people because sound fundamental economics says we cant do what we are doing.

Meanwhile, the finance minister has dismissed this weeks news reports his ministry had secured US$950 million loan facility and US$5 billion in the form of the disposal of platinum resources from the Chinese government.

Biti said the reports were unfounded saying Zimbabwe was still in the process of reactivating a loan of US$950 which Zimbabwe had negotiated in 2005 with Beijing.

He said reports of a US$5 billion platinum deal with China were unfounded.

That is a story without any foundation, without any credibility, without any legitimacy, Biti said, It is sad journalism.”