Zimbabwean Government Struggling to Pay Salaries as Revenue Crisis Continues

The financially constrained Zimbabwean government has announced its plan to delay June salaries for public servants including teachers, health workers, pensioners, and state security agents.

In a circular released by Zimbabwe’s Cabinet Secretary for Treasury Mr. Willard Manungo on Friday, the government announced its plans to shift pay dates for June’s salary due to the ongoing “revenue under-performance.”

According to Radio VOP, teachers in public schools and health workers will receive their June salaries in mid-July; pensioners will have to wait for their June pensions a while longer.

“Against the background of severe revenue under-performance and related cash flow challenges the government has been honoring its wage bill obligations, albeit, through the continuous shifting of pay dates,” the circular read.

Bloated Wage Bill

According to the International Monetary Fund, Zimbabwe spends 80 percent of its total revenue on salaries. At least 554,000 people in Zimbabwe are on the government’s payroll, according to the current Minister for Finance Mr. Patrick Chinamasa.

Some members of the ruling party ZANU-PF and empowerment activists have consistently asked the finance minister to reduce the country’s public wage bill by streamlining ministries, formalizing the private sector, and creating a favorable environment for investors.  

Members of Zimbabwe’s labor industry have also pleaded with the government to introduce a biometric payroll registration of all civil servants in a bid to weed out possible ghost workers.

Financial Crisis

In April this year, the Zimbabwean government implemented the controversial black empowerment law, which requires all foreign-owned companies in the country to relinquish 50 percent of their shares to Zimbabweans.

Lack of foreign direct investment, bloated debt, and mass factory closures have drastically reduced government revenue, putting the already constrained economy in an even more precarious position.

Last month, the government of Zimbabwe announced its plan to introduce bond notes in an attempt to ease the current shortage of cash in the country, a move that many economists argue would cause the already battered economy more problems in the future.