The Zimbabwean government said Monday it has suspended payment of annual bonuses to public workers for two years as it seeks to slash spending while battling to mend the moribund economy. "Government has decided to suspend bonus payments to the civil servants in 2015 and 2016, and the situation will be reviewed in 2017 in the event that we are able to build enough capacity," Finance Minister Patrick Chinamasa told a news conference in the capital.
ng an excellent working environment and conditions for our dedicated public sector staff. However, conditions are such that we need to be realistic about our situation and try to live within our means."
Chinamasa said Zimbabwe government has a monthly wage bill of about $260 million - a sum that amounts to over three quarters of the budget every month. "Almost 82 per cent of the budget is channelled towards salaries," he said.
He said the government has not paid last year's bonuses, which were due in November. "In 2014, the bonus obligation amounted to $172.6 million. We had to stagger the bonus payments into 2015 because of the limited capacity," he said.
Last week, workers under the aegis of the Zimbabwe Congress of Trade Unions (ZCTU) staged protests in the capital demanding that government fix the economy and to press long ruling President Robert Mugabe to fulfil an election promise to create two million jobs. The workers also protested against proposed salary and job cuts for civil servants.
Mugabe, 91, was re-elected in July 2013 on a promise to revive the moribund economy, hit by more than a decade of political instability.
The finance ministry in November projected economic growth of 3.2 per cent in 2015, up from 3.1 per cent last year.
The International Monetary Fund (IMF) has said Zimbabwe faces a "difficult" economic outlook this year as it battles to clear arrears with international lenders.
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