Ncube abandons TSP

Ever since Zimbabwe attain her independence in 1980 the country’s public sector has grown in leaps and bounds. President Robert Mugabe needed a bloated public sector to soak up his political appointees the building blocks of his power base. 

The size of the army, for example, expanded from Smith’s two brigades to five. Smith needed two brigades to fight the civil war, Mugabe had no war and so why did he need five brigades, the fifth being the now infamous Fifth Brigade that committed the Gukurahundi massacres!

The bloated public sector has been a curse to the nation because it crowded out the wealth-generating private sector, at best otherwise it was wasteful of resources. And even parastatals like ZESA and NRZ, which should produce wealth, have to become a heavy burden and the byword for mismanagement and corruption. 

Finance Minister Mthuli Ncube has promised to retrench the bloated public sector in his 2018 to 2020 Transitional Stabilisation Programme (TSP) economic blueprint. This is not the first time the government has promised to do this. Zanu PF acknowledged the need to reduce the bloated public sector as far back as 1990 when the party adopted the country’s first of two five-year Economic Structural Adjustment Programme (ESAP). 

The ESAP programmes failed to reduce the bloated public sector because the government lacked the political will. Now the regime tells it is not going to retrench any public sector workers because of it now too expensive to do so.

“For example, an employee of 20 years earning $1 500 per month at an average service under the Statutory Redundancy Package of two times monthly salary for every year served will need $60 000 as package, $30 000 as one third commutation of the pension and $10 000 for other benefits,” explained Permanent secretary in the ministry Finance, George Guvamatanga.

“It means finding $100 000 tomorrow for that person. Even if you are to say it should be payable in a normal pay-back period, for any retrenchment to be viable, it should be paid back in two years.

“This kind of structure does not payback in two years, it is therefore not viable and sustainable for government to consider a redundancy programme at this particular moment in time, it is misplaced.”

Finance Minister, Professor Mthuli Ncube, concurred “We are only dealing with fundamentals; retrenchments are costly at this time,” he said.

Zimbabwe’s private sector has all but collapse sending unemployment into the stratosphere of 90% and, in turn, forcing government revenue to shrink water in a shallow pool. So more and more of the little-collected revenue has gone to pay the bloated public sector wage bill; it is now guzzling up 84% plus - way above the norm of 30 to 40% max. 

In 2016 President Mugabe admitted to the government being “swindled” out of $15 billion diamond revenue. The nation expects President Mnangagwa to deal with such problem after he took over in November 2017. It has been over a year now since and still not even one diamond swindler has ever been arrested and not one dollar recovered. 

Minister Ncube promised to attract investors in pursuance of President Mnangagwa’s “Zimbabwe is open for business!” clarion call. The flood of investors has never materialised. The country’s failure to hold free, fair and credible elections has left no investor in any doubt that Zimbabwe was still a pariah state, investors do not do business in pariah states. 

Minister Ncube is set to visit IMF and the WB next month to ask them to renew their budgetary support of Zimbabwe. He has promised to pay the two Zimbabwe’s $2 billion outstanding debt service changes bill in two years and, no doubt, would have made a very good impression if he went there a fat cheque, first down payment on the bill with money saved from retrenched workers and/or recovered from the diamond swindlers. Instead, he is going to IMF and WB officials his TSP plan is dead in the water complete the usual string of feeble excuses.

“We are only dealing with fundamentals; retrenchments are costly at this time,” Minister Ncube will repeat. He will crown his presentation with a request for funding. 

The IMF and WB will tell him to come back when the fundamentals a right. When Zimbabwe is ready to grasp the nettle; retrench the bloated public service; hold free, fair and credible elections; arrest swindlers; etc. Until that happens, Zimbabwe will not get another dollar from the IMF and WB over and above the billions of dollars the country got in the 1980s and 1990s.

Zimbabwe’s bloated public sector is a burden to the national economy and it can be resolved but in the context of meaningful economic recovery when all the other problems of corruption, democratic accountability, etc. are dealt with holistically and honestly. It is impossible to have all those ducks lined up without first making sure all the leaders are accountable to the people, that is why we must have free, fair and credible elections, it is the pre-requisite for economic recovery.

By Jeff Kurai Chakanyuka