(Bloomberg) -- Zimbabwe won't fire civil servants to cut costs and reduce the budget deficit even though the government's wage bill is by far the biggest expense, Finance Minister Mthuli Ncube said.
The government can't afford the retrenchment packages that would accompany job cuts, Ncube told reporters Wednesday in the capital, Harare. Instead, it will cut “excessive demand” for spending by ministries and government workers and replace an automobile allocation program with a loan facility, he said.
Ncube promised to slash the government's wage bill, which swallows 95 percent to 98 percent of revenue, when he presented the 2019 budget to parliament on Nov. 22.
A budget deficit of 11.1 percent is unsustainable, Ncube said, noting that in September and October “we achieved a surplus of $29 million and this demonstrates that we're walking the talk.”
The southern African nation won't consider currency reform until its “macro-economic fundamentals” have been restored, Ncube said. Zimbabwe abandoned its currency in February 2009 and has mainly used the dollar since then.
To contact the reporters on this story: Brian Latham in Harare at blatham@bloomberg.net;Desmond Kumbuka in Johannesburg at dkumbuka@bloomberg.net
To contact the editors responsible for this story: Karl Maier at kmaier2@bloomberg.net, Hilton Shone, Alastair Reed
©2018 Bloomberg L.P.
Essential Business Intelligence, Continuous LIVE TV, Sharp Market Insights, Practical Personal Finance Advice and Latest Stories — On NDTV Profit.
