President Robert Mugabe’s government announced a deal this afternoon to hand its employees $180 million in 2016 bonuses, only just managing to head off a planned strike.
With an election due next year, the Mugabe government is keen to keep a lid on passions, at whatever cost.
As news of the bonus deal broke, statutory pension fund National Social Security Authority (NSSA) announced the government had given it treasury bills worth $181 million, primarily to clear arrears for the three years when the state could not remit its contributions to the fund as an employer.
It is no secret that government has been struggling to meet payroll and, equally, not surprising that it has defaulted on its employees’ pension contributions and medical insurance.
Last year, it took government six months to eventually pay off all 2015 government bonuses.
Even so, this came at a price as government defaulted on the June payroll, triggering a civil servants’ strike that was seized upon by some anti-government activists to create the biggest protest against Mugabe in recent years.
The situation is similar this year, with payments staggered over five months to August.
There are compelling arguments against the payment of automatic bonuses to a bloated workforce of a government whose fiscal position is, at best, fragile. But that’s not an argument a wasteful government which splurges on luxury cars and avoidable foreign travel can make.
Finance Minister Patrick Chinamasa, who has fought a losing battle to at least suspend the bonuses over the past two years, put on a brave face on Monday as he told reporters “government will certainly mobilise the resources”.
Recent history points to one obvious source of funding: paper. Government paper.
Money on trees. Literally.
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