Zimbabwe defers paying soldiers amid cash shortages

The Zimbabwean government has deferred June salaries for its army and security services by two weeks while the rest of the civil servants, including teachers and nurses will be paid next month, amid a biting cash crunch in the economy.

This comes as the government has been struggling over the past months to raise money for wages due to severe revenue underperformance and a liquidity crisis that has spawned cash shortages since March.

Permanent Secretary in the Ministry of Finance Willard Manungo confirmed the postponement of the June salaries in a circular dated June 16, 2016.

The cash flow challenges has necessitated the Minister of Finance and Economic Development to propose pay dates for the month of June 2016, which "allows for the mobilization of the requisite resources," Manungo said in the circular seen by Xinhua Saturday.

Soldiers, who are paid on the 12th of each month, will now be paid on June 27, the same for air force workers. Police will get their salaries on June 30 while teachers, doctors and nurses who are paid on the 20th will now get their salaries on July 7 and 14, respectively.

Zimbabwe spends more than 80 percent of its budget on salaries but the government has now targeted to reduce the wage bill to 40 percent.

Due to cash flow challenges, the government has previously deferred salaries for its workers by days but this is the first time in recent history that it has shifted pay dates for soldiers and the air force.

Following the cash shortages, the government has since announced plans to introduce bond notes which will be backed by a 200 million U.S. dollar Africa-Export-Import Bank facility in October. Enditem