Civil Servant Salary Increase To Worsen Cash Shortages: Chinamasa

Finance Minister Patrick Chinamasa said the civil servants salary hikes will increase the wage bill to 120% from its current levels and increase the country’s fiscal deficit which he said is another problem causing cash shortages.

Speaking on Friday at the Women’s Conversation on Legislation with President Emmerson Mnangagwa in Harare last week, Chinamasa said the wage bill will likely increase from 90% to 120%. Said Chinamasa:

Another problem causing cash shortages is the fact that we have a huge fiscal deficit. If there are any civil servants here, I want them to hear this clearly. Of every $100 that we receive, 90% is going to wages. And this situation is going to be made worse by the recent salary or allowances adjustments with the nurses, doctors and teachers and the rest of the civil service. I may not be surprised to find out that will be not 90%, but 120%. Now, what that means is for everyone receiving wages from government. The expectation is that it should be physical cash. That is not the case. We cannot match what we used to pay every month, something like $300 million, which we pay wages. We cannot match that in physical cash. If we do, we run the risk of hyperinflation, going back to 2008 (situation) and government is not prepared to go that route

Government offered a 15% salary increment for civil servants amid calls for an upward review on salaries by labour unions.

More: NewsDay

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