The key lies in increasing capacity utilisation in the manufacturing sector, they said. This will, in turn, lower the cost of living. The PDL measures the cost of living and currently stands at US$514. The least paid Government worker takes home US$296 following the recently effected salary increase. While civil servants continue to complain of poor salaries, arguing that they are below the PDL, research has shown they are earning more than most of their counterparts in the region. In Mozambique, workers in the health, defence and security sectors earn 2 699 meticais, which is slightly more than US$150. In East Africa’s strongest economy, Kenya, the highest paid civil servants in job group V take home a mean gross salary of Sh1.6 million, about US$18 920, while the lowest paid is in job group B and earns a mean gross salary of Sh24 906, which is equivalent to US$294.
In Zambia, the lowest paid public employee takes home KR2 900 which is around US$400 against that country’s PDL of KR3 000 which is commonly referred to as the Basic Needs Basket (BNB).
Economists who spoke to The Sunday Mail said the continued increase of civil service salaries without a corresponding increase in revenue inflows will see Government struggle to meet salary schedules. This month, Government postponed the pay date of its labour force for the second time in two months.
University of Zimbabwe economics lecturer Mr Innocent Makwiramiti said it was important for the country to produce and export more goods than it imports.
“If we produce more and import less it means our cost of living will automatically go down and there will be no need for our labour force to continue asking for salary increments,” he said.
Mr Makwiramiti noted that the other challenge was the country’s pricing system, which sees everything being pegged at a dollar.
“It is of paramount importance to look at our pricing system. Our labour force is paid salaries that are higher than those of most of their regional counterparts, but those people can afford a decent living because their prices are lower than ours,” he said.
“Civil servants will continue to ask for the salary increments, but that’s not the solution; the solution is for industry to produce because at the end of the day those salary demands will not be met,” he said.
Another economist, Mr Chris Mugaga, told The Sunday Mail that the US dollar is undervalued in Zimbabwe. This has resulted in the high cost of living as compared to most countries in the region, he added.
“From an economics point of view, it was not necessary to increase the salaries of civil servants. The salary increments are not a priority at the moment,” he said.
“The increase in salaries without the increase in production suffocates room for economic growth. As a country we now have a propensity to import. So this means those salary increases are going to be shipped out of the country to support other people’s economies,” he said.
Finance and Economic Development Minister Patrick Chinamasa reiterated that production is key to solving the country’s challenges.
“We must produce as a country so that we can reduce our import bill. Every week I take time to go to my constituency and the message to the villagers is: ‘please let’s produce’. Some of the challenges we are facing can be solved if as a country we can increase our production levels,” he said.
Zimbabwe Teachers’ Association chief executive officer Mr Sifiso Ndlovu said the overall focus must not be on the salary adjustments but on fixing the whole economy.
“If we grow our economy and if the labour force is empowered, it means less pressure on Government in terms of salaries,” he said.
Economists have long been urging policymakers to craft strategies that attract Foreign Direct Investment (FDI), increase productivity, promote value addition and boost the manufacturing sector which is reeling from a myriad of challenges.
Over 700 companies have closed, according to the National Social Security Authority 2013 report.
Analysts have also argued that the mining sector, which has been touted as the economic centrepiece, needs to be managed in a transparent manner so as to increase revenue generation.
Budgetary support from friendly countries can also help ease the biting economic challenges, it has also been noted. The ever-ballooning Government wage bill has seen pressure mounting on the Zimbabwe Revenue Authority. Analysts argue that Government will not be able to meet its dues on time without an increase in revenue collection and a reduction in the huge and unsustainable import bill. Recently, it was reported that Government is working on a cocktail of measures to formalise small and medium enterprises so that they pay taxes and directly contribute to economic growth.
Experts from South Korea will assist the Government in formalising a sector that is said to hold a questionable US$7,4 billion, most of which never — or only fleetingly — enters formal channels.
Addressing delegates at a symposium organised by the National Business Council of Zimbabwe in Harare last month, Zimra Commissioner-General Gershem Pasi said the informal sector would soon be formalised.
“At the moment we are finalising programmes to bring order to various informal sectors and they should be launched by the end of the year so that we move and they start playing a meaningful role,” he said.
Comm-Gen Pasi said Zimra could not merely wait to tax businesses, but should assist in properly structuring them.
He added that Zimra, the Local Government, Public Works and National Housing Ministry; the Small and Medium Enterprises and Co-operatives Development Ministry and other Government arms were engaged on the matter. Zimra’s net revenue collections for this year’s first quarter amounted to US$834,6 million against a target of US$817,9 million, resulting in a positive variance of 2 percent. Most of the revenue was realised from Value Added Tax (Vat), individual tax and excise duty.
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