Zimbabwe

Zim 'won't retrench to solve debt crisis'

2014-03-27 12:21
Finance Minister Patrick Chinamasa. (File, AFP)

Finance Minister Patrick Chinamasa. (File, AFP)

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Zim not a basket case, minister tells SA investors
Zim not a basket case, minister tells SA investors

Zimbabwe’s economy is on the mend as the worst is over, the country’s finance minister says, in a bid to assure investors in SA that its neighbour is "not a basket case".

HARARE - Zimbabwe's finance minister on Wednesday ruled out cuts in the number of civil servants as the country struggles to bring its mounting debts under control.

A prolonged economic crisis under veteran President Robert Mugabe has left Zimbabwe with a bloated public wage bill that eats up 70% of government revenues, leaving the country unable to service its $10bnin external debt.

Finance Minister Patrick Chinamasa told journalists after a meeting with an International Monetary Fund delegation that "addressing the issue overnight would mean very drastic measures... that would mean retrenching civil servants".

He told the delegation this was a route that he was "not prepared to take".

Zimbabwe had promised to slash its public sector wage bill under a new agreement with the IMF in January, designed to help it clear its debts.

But the government is reluctant to cut public sector jobs, which are a key source of patronage for Mugabe and one of the few large-scale sources of employment in the country.

Western sanctions

Chinamasa admitted on Wednesday that the country had no way of meeting its debt obligations, but blamed Western sanctions.

"We have no capacity to service [the debt] in a meaningful way," he said. "We are a debtor, yes, but this debt has accumulated because of sanctions."

The meeting with the IMF was the first since the 90-year-old Mugabe won re-election in July.

The organisation has unconfirmed plans to re-open its office in Harare in the near future, having left the country in 2004 at the height of a political and economic crisis.

The EU and the United States imposed sanctions on Zimbabwe after the 2002 presidential election, which Western observers said was rigged by Mugabe.

- AFP

Read more on:    robert mugabe  |  patrick chinamasa  |  zimbabwe  |  southern africa
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