… ZCTU, civil servants denounce World Bank-inspired austerity
Phillimon Mhlanga
Zimbabwe’s economic crisis has worsened, with the spiral now inflicting pain on the country’s restless citizens who are likely to find this year’s Christmas and the New Year subdued as they struggle to make ends meet.
Normally, Christmas, which is the most popular holiday celebrated locally and internationally, is known as the jolly season. But with three weeks to go, the harsh economic downturn is not making things easier for Zimbabweans. Rather the cost of living is rising.
Both government and private sector workers’ unions who spoke to Business Times this week revealed that they have been hit hard by the worsening economic conditions. Businesses are also feeling the hardship, with almost everything seeming to get worse.
Peter Mutasa, the president of the Zimbabwe Congress of Trade Unions (ZCTU), this week blamed the government’s “anti-poor” policies, saying workers have been reduced to “paupers” and now planning street protests.
“The government has once again stolen our happiness,” Mutasa said. “Workers have been reduced to paupers and have nothing in their pockets or bank accounts to finance any festivities. This is going to be a sad Christmas, only
second to 2008.”
Speaking to Business Times, Mutasa said: “Workers are working tirelessly only to be paid in useless electronic currency [RTGS] or useless bond paper [bond notes]. With the three-tier pricing and the astronomical increase of prices, the majority of workers and their families are struggling and depressed. The majority does not have school fees for January [2019] or money for uniforms and other necessities for their children.
“So instead of preparing for Christmas’ happy moments, the ZCTU is
preparing workers to protest against the anti-workers and anti-poor policies of the government. We will be demanding that the government immediately involve workers in addressing the economic crisis, reverse the extortionate 2% [on electronic money transfers], and reverse the IMF and World Bank-dictated austerity agenda. We are also demanding that workers be paid in US dollars.”
Cecilia Alexander, the president of the Civil Servants Apex Council, an umbrella body for civil servants’ organisations, said more than 500,000 civil servants were enduring a hard time as the economic situation worsens.
“Workers in the public service will not enjoy Christmas this year at all because the cost of living now is very high,” Alexander told Business Times.
“Their incomes have been eroded by the price madness happening in the country. The wages and salaries increases we negotiated in June this year have been eroded four to five times. We also had a bonus cut. The tradition over the years has been that we get bonuses on allowances, but this is not going to be the case this year, meaning we are going to suffer more this year.”
Alexander said government workers were not consulted in the 2019 Budget process, a breach of Section 65 of the Constitution. She warned that the government would shut down if the issues affecting workers were not addressed.
“The budget proposals were made without due consultation with the workers,” she explained. “None of the proposals were ever tabled at our bipartite negotiating forums. The decision to pay bonus based on basic salary is unacceptable to us and amounts to a withdrawal of our benefit, much against the law,” Alexander said.
“The same applies to the 5% cut in the salaries of senior civil servants. While we don’t query the government’s right to retire certain categories of civil servants, the implementation deadline of 31 December 2018 is an unfair labour practice or insufficient notice as it is against existing statutes on retrenchments.
“This is bound to set a wrong precedent and we are very much concerned as a union. If workers are going to pay duty in foreign currency, it follows that salaries should be paid in forex,” Alexander thundered, adding:
“It is common cause that the relentless spiraling of prices is increasingly making it impossible for workers to continue coming to work to the extent that any time soon workers will be completely incapacitated. If the government shuts the door on us, it means the government is shutting down.”
Echoing the same feelings, Sifiso Ndlovu, the CEO of the Zimbabwe Teachers Association, told the Business Times: “Our festive mood has been dampened because of resource constraints and I see the educators not enjoying this festive season. If you are to compare with last year, this year’s educators are poorer.
“The purchasing power parity for educators is now lower compared to last year. The dollar has lost value compared to last year. I would say educators have lost $190 compared to last year.
“This year’s situation has been made worse by the rise in fuel prices, which triggers the rise in the price of basic commodities. Last year’s bonus had a component of allowances, which is not the case this year. This means, educators have been impoverished, making it difficult to make ends meet. So we will have nothing this festive season, and it is most likely that next year will be worse.”
A survey conducted by Business Times this week revealed that prices for most basic consumer goods have gone up by between 300 and 400%, just over the last two months.
Rosemary Siyachitema, the executive director of the Consumer Council of Zimbabwe, underlined the fragility of the consumer, saying they were bracing for a miserable Christmas.
“We have noticed that there is a continuous increase of prices of commodities. Quite frankly, we are saying compared to August and September last year, prices of basic goods have gone up three or four times,” Siyachitema told the Business Times.
“We have always said that the consumer is fragile, but the economic situation has worsened now because no consumer or worker has been given an increase in his or her wage or salary three or four times.”
She continued: “Yes, there are products in the shops, but the question is who is going to afford it. It’s going to be difficult for the consumer and we are all going to be just looking through the window because we can’t afford the products.
“It’s going to be a difficult Christmas and the year ahead doesn’t look good for the consumer. My advice to the consumers and workers is that if you are lucky to get a bonus, you need to be clever about it because in January you need to pay school fees for your children.”
With incomes squeezed, retailers are also feeling the pinch over the subdued purchasing power.
“As retailers, we want to have a good and bumper Christmas but we don’t know what is going to happen because of other factors such as the price increases in the market,” said Themba Ndebele, the chairman of the Retailers Association of Zimbabwe. “But maybe the fact that the government, which is the largest employer, paid bonuses last week might be a positive for us.”
Denford Mutashu, the president of the Confederation of Zimbabwe Retailers, agreed: “Judging by the current consumer purchasing trends, characterised by low disposable incomes, the festive season may not be as hyped as retailers and wholesalers may have anticipated,” he said.
“The price increases arising from the cost of money, the cost of imports, depreciation of RTGS balances and bond note values against the US dollar are all pointers to a bleak festive period ahead,” Mutashu added.
Inflation has been outpacing wage growth and the squeeze appears to be continuing. To make matters worse, inflation made a hefty jump in October to 20.85% from about 5% in September.
Nyasha Chirikure, an economist explained that “speculative tendencies fueled price hikes, which pushed inflation up from 5% in September to 20.85% in October, at a time when the country was facing acute shortage of foreign currency.”
Another economist, Sheunesu Chikomo, said: “Price hikes are closely connected with the loss of value, evidenced by the emergency of a three-tier pricing system, which is a product of blossoming foreign exchange premiums on the black market. The trend is also linked to the growing mismatch between electronic or RTGS bank balances and real cash in the economy.”
All in all, Alfonce Mombeshora, a Harare-based informal trader, spoke for most people when he told the Business Times: “I am dreading Christmas because of the situation I am in. I will not be able to enjoy it, not knowing where the next money is coming from.”
