Former Finance minister Tendai Biti says government's decision to award civil servants bonuses at a time the country is hard pressed will further strain the deteriorating economy.
He said with government's wage bill totalling close to $300 million, civil servants' salaries for the months of November and December meant a cash injection of almost $900 million.
"The bonus is a right of the public worker and therefore should be honoured. But the bonus goes beyond a mere fiscal obligation. It is the source of huge aggregate demand that has sustained industries in the last few years," said Biti.
He added that while the bonuses could be "a stimulus package in its own right with a massive impact on the economy", borrowing to settle the obligation will balloon the country's domestic debt.
"I predict that our domestic debt will hit $1 billion before end of the year," he said.
This comes as civil servants are yet to receive their "token" salary increments promised by President Robert Mugabe in the run up to the July 31 elections.
The cash strapped government has failed to pay its employees the 13th cheque before Christmas.
David Dzatsunga, chairman of College Lecturers Association, who is also part of the Apex council leadership said while they expected their employer to live up to their promise, they had no power to corner government on the promised token increment since it was never officially communicated to them.
"Really, we have no authority to say government promised us a token salary to appreciate our service.
"We only read it in the press and the minister has not mentioned it in the numerous meetings we have had with him so far, we just regard it as a mere statement," he said.
Teachers' Union of Zimbabwe chief executive Manuel Nyawo is however on record saying on top of bonuses, they were also expecting the "token increment".
Last week, Mugabe again emphasised the need to remunerate government employees in line with the poverty datum line currently pegged at $540 — which is the consumer basket for a family of six — the threshold civil servants set in their position paper.
"We must make sure that our employees, the teachers and other civil servants must be paid well although this is not to say they will be paid exaggerated amounts," said Mugabe addressing his Zanu PF party's annual conference in Chinhoyi.
The lowest-paid government worker takes home $297. The civil servants salary bill by end of 2012 was close to $2,6 billion translating to 70 percent of the government's total revenue collections.
Official salary increment negations between government and civil servants have been stalled by disagreements among civil service groups.
Public Service minister Nicholas Goche in October said government will effect "a token increment" and bonuses for civil servants before year-end.
Goche said he was still consulting with other ministries on the "token" salary hike.
Civil servants unions are demanding a 100 percent salary hike for their members which if effected, will take the annual salary bill to $5,2 billion for the 230 000 civil servants.
- dailynews
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