In a move that has left the whole nation holding its breath, the Zimbabwean Cabinet has resolved to drastically cut its workforce, a decision driven by the deepening economic crisis and the shrinking tax base.
The decision, made during a time of immense pressure on government finances, reflects the stark reality of a nation grappling with a shrinking economy and dwindling revenue streams. The government, heavily reliant on tax revenue due to a lack of donor support, is struggling to manage its recurrent expenditure.
The Zimbabwe Revenue Authority (ZIMRA), tasked with collecting taxes, is facing a daunting challenge in meeting its revenue targets. The decline in the revenue base, exacerbated by a contracting economy, company closures, and rising job losses, has placed immense strain on ZIMRA’s ability to fulfil its mandate.
Confirmation of this drastic measure came from the Minister of Information, Publicity and Broadcasting Services, Dr Jenfan Muswere. He stated that the Cabinet approved the move, which follows a comprehensive job appraisal exercise conducted by the Public Service Commission across 21 government ministries.
The job evaluation exercise, designed to assess the composition and value of roles within the government, revealed a number of concerning trends. Dr Muswere highlighted key findings, including:
- Violation of job evaluation principles: The advancement via grade system, where a job maintains its grade despite changes in duties, was found to be in violation of established job evaluation principles.
- Functional Duplication: The exercise uncovered instances of overlapping roles and responsibilities within and across various ministries, indicating unnecessary duplication of effort.
- Imbalance in Managerial Roles: The evaluation highlighted a disproportionate number of managerial positions compared to non-managerial roles, suggesting potential inefficiencies.
- Prevalence of Dead-End Jobs: The existence of a significant number of dead-end jobs for specialists was identified, indicating a lack of career progression opportunities.
These findings will lead to a comprehensive review of staffing levels across all government ministries at both national and local levels. The government plans to rationalise its workforce, implement upskilling and reskilling programs for employees, and introduce a new compensation framework and salary structure based on the principle of equal pay for equal work.
Dr Muswere emphasized that consultations are underway to ensure that the optimisation and rationalisation of the workforce align with the national Vision 2030 and the government’s commitment to leaving no one behind.
Economists, recognizing the gravity of the situation, have voiced their support for the government’s decision. Professor Gift Mugano, a respected economist, told Business Times: “It’s a deepening economic crisis which we are witnessing. The rate of informalisation and the rate of increase in the cash economy, which has been explained by the sudden decline in the contribution of intermediated money transfer tax [IMTT], has gone down to 3.4%, according to the Treasury during the Mid-Term Review.”
He further explained: “That was a very practical dipstick to show you the extent to which the informal sector has grown and how the cash economy is dominating the market. This means that the government is losing Value Added Tax in the process. Also, corporate tax has gone down to 10% on average from 15%.”
Persistence Gwanyanya, another prominent economist and member of the Reserve Bank of Zimbabwe Monetary Policy Committee, echoed these concerns. “Given the high levels of informalisation of the economy, revenue performance is heavily affected. More worrying is the fact that as informalisation increases, the tax burden is carried by a few formalised business entities, which is not a good sign. Those that are formalised will continue to carry an increased burden due to the fact that they are being overtaxed and carrying the cross of everyone in the economy. Following a high informalisation rate, our economy is proving to be more vulnerable to external shocks.”
Dr. Prosper Chitambara, a renowned economist, agreed that the worsening economic crisis made job losses inevitable. “The rationalisation of the staff is the way to go as there are a lot of opportunities to eliminate wastage or duplication within the civil service. It helps the government to enhance the efficiency of spending to improve fiscal sustainability and creates savings for the government to redeploy to other productive sectors of our economy,” he said.
The Cabinet’s decision to cut jobs, while undoubtedly a difficult one, is seen by many as a necessary step to address the pressing economic challenges facing Zimbabwe.
