President Robert Mugabe
THE Zimbabwe Congress of Trade Unions (ZCTU) has warned of a turning point in relations between government and its workers should the former fail to honour a pledge to pay bonuses starting this month.
Despite its precarious financial position, government has pledged to pay the 13th cheque to its employees, numbering over 250 000.
All in all, Treasury will part with an estimated US$140 million in bonuses.
Signs of financial strain are already showing as government has staggered the bonus payments over three months.
The uniformed forces would get first preference, with the rest of the civil servants set to receive their bonus payments between next month and January next year.
Observers doubt if government would be able to stick to the planned schedule.
To ratchet up pressure on Treasury to pay, the country’s largest labour union, ZCTU, has warned that failure to pay the bonuses would result in a nasty fallout between government and its employees.
“If government fails to pay bonuses it will be the first time in the history of this country that it would have failed to do so. It is going to mark a turning point in terms of allegiance that civil servants have with the government,” Japhet Moyo, the secretary-general of ZCTU said.
“They are trying to divide us, the uniformed forces are going to be given bonuses first, but there are equally other sectors, which are also important arms of government. If they fail to pay, it is going to affect the functions of government in many ways,” he added.
Government is the largest employer in the country.
Its wage bill chews more than 80 percent of the State’s monthly revenue collections.
Economist, Kipson Gundani, said it was not wise for government to continue paying bonuses considering that the bulk of its budget was going towards recurrent expenditure.
“One thing which is very clear is that the bonuses which the government is going to pay are not revenue-related and that is not economically rational,” he said.
Independent economist, John Robertson, concurred saying it will always be a problem even if the payments were to be completed within three months.
“When Patrick Chinamasa, the Finance Minister said about eight months ago that he couldn’t afford to pay bonuses that was the truth. Ever since then what we have heard have been lies. Even if the government goes ahead and pays bonuses it will have to be at expense of something else,” said Robertson.
Robertson warned that companies that are doing business with government should be worried by the planned civil servants bonus payments because that would consequently mean that they would be kept waiting for much longer before receiving money for payment of services given to government.
“The private sector will be lenders to government without even knowing it and will be kept waiting by the government, which will just keep on issuing promises to pay,” noted Robertson.
But the ZCTU is warning that government would have to put up with low worker morale, increased corruption and moonlighting should it fail to pay the bonuses.
“If government does not honour its promise that is going to affect government performance and we might not be able to meet targets…,” said Moyo.
Western financial institutions, such as the International Monetary Fund and the World Bank have persistently raised concern over the country’s bloated wage bill.
The Breton Woods institutions would like government to trim its workforce although their suggestions have so far fallen on deaf ears.
The payment of the annual 13th cheque is likely to elude most workers in the private sector.
The country’s grim economic outlook has been brought to the fore by the latest Confederation of Zimbabwe Industries manufacturing sector survey, which showed that factory capacity utilisation had fallen to 34,3 percent from 36,5 percent last year.
A confirmation of the crisis has been failure by the Zimbabwe Revenue Authority to meet its revenue collection targets.
The Employers’ Confederation of Zimbabwe (EMCOZ) this week said the private sector must not be compared to government on the issue of the 13th cheque as the latter was just paying people for coming to work without necessarily looking at productivity.
“While the government could borrow to pay bonuses, the country cannot be sold in the event of a default, unlike for companies. In fact, government must borrow to pay companies it owes,” said EMCOZ president, Josphat Kahwema.
“Our position on bonuses has always been based on productivity, such that when companies make money and profits, they pay bonuses,” he added.
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