Govt ranks highest payer — Prof Mthuli Ncube

Prof. Mthuli Ncube

THE Government is currently the highest paying employer in the country and pay scales for public servants far outstrip what private sector players are giving their employees, Finance and Economic Development Minister Mthuli Ncube says.

The Treasury chief said he had information for remuneration levels across all sectors of the economy and challenged anyone who disputes his assertion to come forward.

Minister Ncube’s comments come after civil servants this week accepted a 41 percent salary increase by Government, including allowances, with teachers getting an additional 10 percent risk allowance, breaking an impasse that had seen the tutors refusing to return to work for several weeks, crippling efforts to resume learning and examinations following Covid-19 disruptions.

National Joint Negotiating Council (NJNC), Apex Council chairperson Mrs Cecilia Alexander, confirmed the deal saying the Government had increased the basic salary only, but they finally settled for increments that include allowances. Further, the public servants annual bonuses will be based on basic salary, transport and housing allowances.

The Treasury chief stressed the point that the latest increase will see the least — paid civil servant earning about $14 500, while the lowest-paid teacher will earn nearly $19 000.

“The lowest paid civil servant right now is on $14 500. A teacher right now will be earning close to $19 000. And the lowest paid civil servant is actually an office orderly. We are way ahead of the private sector in general,” Minister Ncube said, adding that the hard working public servants were well looked after.

Minister Ncube said this in an interview with Zimpapers Television Network (ZTN) on Tuesday evening, on the Government’s new five-year economic development blueprint, the National Development Strategy (NDS1), which runs over the period January 2021 to December 2025 and was launched by President Mnangagwa on Monday.

The Treasury chief was responding to a question on whether the Government will adopt a different approach in its remuneration of civil servants, to ensure that it gives its workers a  sustainable and living wage, during the period of the new economic framework, given that under the TSP, priority appeared to be inclined towards sustaining budget surpluses.

He said Treasury was not in any way fixated on achieving surpluses when funding Government programmes through the national budget, but avoiding unsustainable budget deficits that negatively impact the country and citizens in future while making sure expenditure was keeping within distance of revenue capacity.

The Treasury chief has previously said that he expects the proportion of public employment costs to fall to about 42 percent of budget by year end and to keep trending towards deemed sustainable levels of around 30 percent of total revenues, to create provision for investment in developmental projects.

Essentially, what this means is that the proportion of public employment costs in particular and any other recurrent expenditure in general, in order to be sustainable, should tally or only have slight  mismatch with the Government’s revenue inflow threshold to leave some space for other key programmes.

Notably, the Finance minister is on record saying, and more recently in his 2021 pre-budget strategy paper, that he announced last month, that the Government wage bill had risen from 48 percent of total revenues in 2009, to a peak of about 78,3 percent in 2017, before receding to around 61 percent in 2018.

Clarifying the issue of public servants’ wages this week, Minister Ncube said the Government was currently the best payer among employers in the country, doing better than the majority of private sector players with its lowest paid workers, among them the office orderly, now on a monthly salary of about $14 000.

But importantly, Minister Ncube said the national budget surpluses were not the priority, but only a positive consequence of its significant efforts aimed at ensuring that the Government lives within its means and that it does not run unsustainable budget deficits that create problems in the future.

“We will not maintain budget surpluses; in fact it was never our target. Our target is to eliminate huge budget deficits or running small budget deficits. So, we will be running small budget deficits.

“And besides… if you run large budget deficits because of wages or whatever the reason is, how are you going to finance it? Where are you going to borrow from if you have got arrears clearance?

“In terms of local borrowings, in the presence of high inflation, which is what we have now, of course it will drop, which will be excellent, but you do not want to over borrow domestically either because you have to pay very high interest rates, that citizens have to pay up in future in the form of higher taxes,” he said.

The Treasury chief stressed that
when you are going through this kind of transition for now, it was more prudent for the Government to maintain small budget deficits and this results in a surplus, the better.

During the period of the short term transitional stabilisation plan, the Government has managed to keep the budget almost balanced while current account deficits turned into surpluses.

Zimbabwe’s fiscal deficit, as a percentage of Gross Domestic Product (GDP), declined from minus 10,5 percent in 2017 to a surplus in 2019 and with an almost balanced budget in 2020.

The budget surplus resources, the finance minister said, have been used to cover obligations arising from emergencies such as natural disasters and unforeseen pandemics such as Covid-19, social protection and development of key infrastructure like roads, bridges and dams.