The thrust of the 2018 Budget, consistent with the ‘New Economic Order’, calls for the implementation of a phased but Comprehensive and Coherent Expenditure Management Strategy that allows for re-orientation of resources towards development programmes that benefit the generality of our population.
Central is the implementation of decisions Cabinet has already taken, realising the unsustainability of our public finances, but on which Government prevaricated when the political will to implement was called for.
Accordingly, and taking account of some of the critical measures which were approved but were not implemented, the following specific expenditure management measures are being proposed in line with the Fiscal Anchors highlighted above.
Measures towards reduction of the wage bill centre on the following:
Freeze on Recruitment
The policy on the freezing of vacant posts in the public service has greatly assisted in containing the wage bill, thus assisting towards efforts to re-orient Budget expenditures.
Notwithstanding this Government policy stance, Treasury continues to receive requests to fill vacant posts across the board, which would impose unbudgeted additional requirements to the wage bill.
In this regard, the freeze on recruitment is maintained across the board, save for critical posts, as determined by Treasury in conjunction with Service Commissions.
A number of public officials continue to be engaged in the public service well beyond their retirement age.
In this regard, from January 2018 Government will, through the Service Commissions, retire staff above the age of 65.
Staff that retire will be assisted with access to capital, to facilitate their meaningful contribution towards economic development, including taking advantage of allocated land, for those who are beneficiaries of the land reform programme.
Furthermore, Government will also introduce a voluntary retirement scheme that serves to rationalise the public service wage bill, whilst providing financial incentives to beneficiaries to engage in economic activities in such areas as farming, and start-up of small business enterprises.
Duplication of Functions
The Cabinet decision to abolish the Youth Officer posts under the Ministry of Youth, Indigenisation & Empowerment and transfer the roles and function to the Ward Development Coordinators in the Ministry of Women, Gender and Community Development is being implemented with immediate effect.
This will rationalise the total Youth Officers and Ward Development Coordinators establishment down by 3 739 from 7 269 to 3 530, translating to savings of US$1.6 million per month and US$19.3 million per annum.
Furthermore, 528 members of the Public Service without the requisite qualifications in terms of Section 18(4) e (ii) of the Public Service Regulations are being retired.
The retirement of the above members will entail payment of a severance package estimated at US$8.7 million.
Size of Executive
Already, His Excellency, the President has taken the first steps towards a lean Government structure by beginning to reduce the size of Government by trimming down the number of Ministries from 27 to 21.
In this regard, savings will be realised progressively through identification of redundant staff, as Ministries are combined and rationalised.
Fuel Benefit Levels
Pursuant to observations by the Auditor General which highlighted inconsistencies in the setting of fuel allocation levels in Ministries, the Office of the President and Cabinet and Treasury reviewed and standardised fuel benefit levels as communicated through Cabinet Circular, Number 12 of 2017 and Treasury Circular, Number 5 of 2016 respectively.
Within the context of rationalising public expenditures, Treasury will strengthen its monitoring over adherence to the stipulated limits.
Personal Issue Vehicles
Currently, too many grades in the Public Services are provided with vehicles as a Condition of Service every five years, with the vehicles being licenced, insured, serviced and repaired at Government expense.
The total outstanding request for Condition of Service vehicles is now close to US$140 million, which the economy in its state cannot afford.
Government, therefore, has reviewed the vehicle Scheme as follows:
– Permanent Secretaries and equivalent grades, one personal issue vehicle;
– Commissioners and equivalent grades, one vehicle; and
– Principal Directors, Directors and Deputy Directors and their equivalents, vehicle loan scheme.
Foreign Business Travel
Measures to contain Budget expenditures, and conserve scarce foreign currency, will extend to review of foreign business travel practices.
Size of Delegations
Experience has shown that Zimbabwe delegations to regional and international fora being among the largest from the region at such gatherings.
In this regard, the following requirements now apply:
– Strict reduction in the size of delegations to levels that are absolutely necessary; and
– Where there is Diplomatic presence, taking advantage of this to realise representation in outside meetings.
Therefore, as part of approval of Cabinet Authorities for external travel, the Office of the President and Cabinet, and Treasury will be enforcing rationalisation of the size of delegations, in compliance with this new requirement, without exception.
Class of Travel
As directed by His Excellency, the President, Government will also be enforcing restrictions on the Class of travel on the basis of grade, as communicated through periodic Treasury Circulars to Heads of Ministries.
In this regard, Business class travel will, with immediate effect, be restricted to the following categories:
– Heads of Ministries and equivalent grades;
– Parastatals’ Chief Executive Officers;
– Local Authorities’ Mayors, Town Clerks, Chief Executive Officers; and
– Constitutional Commissioners.
All those below the above stipulated grades will be restricted to Economy class travel regardless of flight duration, with immediate effect.
Accordingly, all the respective Heads of Ministries, Government Agencies, Local Authorities, State enterprises, and all institutions that have potential to make a charge on the Exchequer are being directed to abide by this policy directive with immediate effect.
This policy directive should be communicated to all staff.
It should also be noted that the above directive does not do away with other expenditure reduction initiatives which could have been adopted by some entities, but complements them.
For the avoidance of doubt, the entities that are covered under this policy position are tabulated in Annexure 10.
Disciplinary measures will be instituted against anyone in violation of this directive and the cost incurred on such travel will be recovered directly from the individual involved.
Foreign Service Missions
Currently, Zimbabwe has Diplomatic presence at 46 Embassies and Consulates, manned by both home based and locally recruited staff.
The above Diplomatic presence is imposing annual Budget support levels of around US$65 million, which is far above available capacity.
Pursuant to this, His Excellency, the President has approved the downsizing of our Diplomatic Missions, taking account of our current economic environment and affordability principles.
Rationalisation of Diplomatic Missions will balance the cost of maintaining Missions, and the business value being realised.
Rentals at Foreign Missions
With regards to residential rentals at Foreign Missions, the Ministry of Foreign Affairs is in the process of determining rental ceilings for officials at various Missions.
The rental ceilings will be based on the officials’ grade, as well as the expected Diplomatic zones that they are expected to reside, and will be country specific.
Conditions of Service for Locally Recruited Staff
The Ministry of Foreign Affairs, in consultation with the Public Service Commission, has initiated the process to rationalise establishments for locally recruited staff, as well as adjusting their pay structure.
The monthly wage bill for Locally Recruited Staff currently stands at US$355 000, which translates into an annual bill of US$4.3 million.
It is important that this process be expedited in order to realise savings in 2018.
Cost of Governance
Provincial and Metropolitan Structures
Funding of the Provincial and Metropolitan structures, as set out in Chapter 14, Section 264 of the Constitution, is not sustainable and Political Parties represented in Parliament should in the future give consideration to amending the Constitution to lessen the burden on the fiscus.
The good intentions over improving Governance, deriving from our Constitution impose some fiscal over-heads through establishment of various Constitutional Commissions.
Currently, the majority of Commissions are set up on an executive basis, and hence, imposing an annual wage bill of around US$11.6 million, inclusive of US$3.8 million for Commissioners.
In this regard, Government will, with effect from 2018, be reviewing this provision to allow for only the Chairperson to be engaged on a permanent basis, leaving the rest of the Commissioners being part time, and remunerated with modest allowances, that way devolving responsibility for day to day operations to Secretariat staff.
This should be complemented by rationalisation and restructuring of organisational structures, with a view of containing costs.
Vehicles for Commissioners
Currently, Commissions are also required to provide condition of service vehicles, to Commissioners, which the National Budget has been struggling to finance.
Condition of service vehicle requests for Commissioners alone would require an amount of close to US$10 million, which the 2018 Budget has no capacity to provide for.
In line with the need to reduce the cost of our governance, Government is, therefore, reviewing this position to allow the provision of one vehicle to those that are full time, as deemed necessary.
Sub-Contracted Security Services
The current arrangement where Government buildings and facilities countrywide are secured through sub-contracted security services is expensive, resulting in an annual bill of US$15.3 million.
Government is, therefore, migrating away from labour-intensive to ICT based security systems that entail, among other interventions, installation of biometric access systems, use of cameras and sensors in securing premises and facilities and solar security lighting.