Biti told lawmakers a fortnight ago that revenue collection was lagging behind with the government struggling to raise extra cash to fund day-to-day operations as well as salary hikes for civil servants effected this month. The presentation is slated for 2pm.
In his policy advisory statement to government, Biti, who has pursued strict cost-cutting measures since taking over the finance portfolio at the formation of the unity government in 2009, also hinted that the country did not have funds to hold a referendum on a proposed new constitution expected to take place later this year.
Biti has already said the country’s economy will this year grow by 9.3 percent. The government recently launched a medium term plan which targets to grow the economy by an average 7.1 percent annually over the next five years.
The government increased the salaries of civil servants to an average US$253 per month for the lowest paid worker up from about $128.
The increment was made possible only after the government’s Zimbabwe Mining Development Corporation (ZMDC) paid released to the state cash raised from sales of diamonds from the controversial Marange mines in the east of the country.
Biti, who claims revenue from the diamond activities is not being remitted to Treasury, maintains that the government does not have the capacity to sustain the wage increase, leaving civil servants uncertain whether they will continue to receive the new salaries or it was just a once-off payment.
The issue of hiking civil servants' salaries has divided the coalition government with President Robert Mugabe insisting the state raise wages, while Biti and his party boss, Prime Minister Morgan Tsvangirai, have maintained that there is no money to fund an increase.
Tsvangirai and his MDC party have accused Mugabe of seeking to politicise and manipulate the public workers’ salary demands to tarnish the image of the former opposition party that controls both the finance and the public service ministries that between them must work to resolve the government workers’ pay grievances.
Post published in: News