Robert Mugabe, Zimbabwe President Just two weeks after Zimbabwe’s finance minister revealed that employment costs were absorbing more than 60 per cent of total government revenue, the state-owned Reserve Bank of Zimbabwe has announced plans to cut at least 1,600 workers.
Giving evidence to the parliamentary portfolio committee on finance and the budget, Gideon Gono, central bank governor, said the retrenchment of three-quarters of the bank’s staff would be one of the largest to be carried out in the country by a single institution.
Mr Gono said the central bank was in debt to the tune of $1.2bn, mostly owed by the Zimbabwe government. Defending his seven-year tenure, he said his team was responsible for only 35 per cent of the debt – the balance having been incurred before his appointment to the post in December 2003.
The debt included repayments to the IMF to avoid Zimbabwe’s expulsion from the body, financing the 2008 elections and the Mugabe government’s ambitious farm mechanisation programme carried out before the national unity coalition administration took office in February last year.
The RBZ’s retrenchment programme is just the tip of the iceberg because the public sector as a whole, which includes more than 60 state-owned enterprises as well as the civil service, army and police, is substantially overmanned.
Over the next year or two virtually all Zimbabwe’s state enterprises will be forced to follow the RBZ’s example, though in some cases this may not happen until after their privatisation.
There are no accurate figures to indicate just how much private sector retrenchment there has been, but most publicly listed businesses have admitted that they have reduced their headcounts.
Source: FT
