More Woes for Zim Govt as Civil Servants’ Salaries Delayed

By Shingirai Vambe

Zimbabwe’s government is facing a major crisis, having failed to pay its employees, including teachers, their salaries on time for the second consecutive month. This has led to widespread suffering among the working class, with many civil servants struggling to make ends meet. The situation is dire, with most civil servants expecting their salaries to be reflected in their accounts this week, only to be left empty-handed as the Christmas holiday approaches.

To make matters worse, the government has been borrowing from banks to advance payments to its employees, but some banks have refused to lend after the government failed to honor its obligations. This has resulted in a cash crisis, with the government struggling to pay its employees.

Both local and international, Zimbabwe’s borrowing power has depleted.

The Amalgamated Rural Teachers Union of Zimbabwe (ARTUZ) has condemned the government’s actions, stating that civil servants are wallowing in abject poverty amid continued neglect by their employer. The union alleges that top bureaucrats are enjoying lavish lifestyles, having received their “big perks in United States dollars,” while civil servants are left to suffer.

ARTUZ has warned that civil servants’ patience is wearing thin, and that protests are looming to demand improved pay and working conditions. Teachers are demanding a minimum salary of US$1,260 per month, up from the current average of US$300.

The government’s failure to pay its employees on time is a symptom of a larger problem – a culture of extravagance and corruption among top officials. While civil servants are struggling to survive, government officials are living large, buying luxury cars and enjoying lavish holidays.

Some banks are now offering salary-based loans to government employees, which can be repaid directly from their salaries. However, this has not solved the problem, as the government’s failure to pay its employees has resulted in a lack of trust from the banks.

The World Bank has also highlighted the importance of good public debt management practices, which are essential for maintaining macroeconomic stability and ensuring that public borrowing is used effectively to support development.

Meanwhile, the Southern African country is swimming in huge debt, Zimbabwe’s struggles with managing its public debt efficiently have led to a debt default in the early 2000s, making it challenging for the country to access concessionary borrowing from international financial institutions like the World Bank and the African Development Bank.

Despite relying heavily on borrowing to meet developmental goals, Zimbabwe’s constrained fiscal space, coupled with issues like financial repression, corruption, and illicit financial flows, has limited its access to cheap loans. As a result, the country is now forced to resort to collateralized loans with punitive interest rates, often lacking transparency in contracting and reporting.

A shocking revelation came in August 2022 when the Treasury exposed the extent of poor management of natural resources and disregard for Parliament’s oversight on public debt contraction. Minister of Finance and Economic Development Professor Mthuli Ncube disclosed that Zimbabwe had borrowed approximately US$200 million from China in 2006 for farm mechanization equipment.

Zimbabwe’s debt management is governed by various legislations, including the Constitution of Zimbabwe, the Public Debt Management Act, and the Reserve Bank Act. However, the country’s debt burden remains a significant challenge, with domestic and external debt obligations placing a heavy burden on the economy. Addressing this issue will require a comprehensive approach, including fiscal sustainability, expenditure management, and wage management