…to pay US$ allowance to civil servants
TINASHE MAKICHI
Treasury will fork out nearly US$100m for the next three months to pay non-taxable Covid-19 allowances to civil servants and pensioners amid
rising prices and growing calls for the return of the multicurrency
regime.
The civil servants will also get a 50% salary increment across the board with immediate effect.
The payment of a non-taxable allowance in United States dollars comes at a time civil servants have been demanding a review of salaries with nurses
demonstrating at the Health Services Board against the deteriorating working conditions and the erosion of their salaries.
In a notice yesterday, Treasury said each civil servant will get US$75 per month for the next three months. Zimbabwe has 330 000 civil servants. In
total, Treasury will have to fork out US$72.2m. Treasury said pensioners will get US$30 per month for the next three months.
This means that Treasury has to fork out US$17.1m for the 190 000 pensioners in the next three months.
The latest reaction by government comes as a mitigating measure to address concerns continuously raised within the civil service culminating
from continued erosion of their salaries on the back of galloping inflation. The situation was further exacerbated by the staging of a demonstration by nurses in Harare yesterday.
“Pursuant to government’s commitment to continuously review and improve the remuneration framework for civil servants, taking into account the transitory economic challenges being currently experienced in the country which have been exacerbated by the Covid-19 pandemic,” Finance and Economic Development Ministry said in statement yesterday.
In addition government is also going to pay a flat, non-taxable, Covid-19
allowance of US$30 per month.
“Government has also taken due regard of the fact that addressing the wage challenges faced across the civil service, any salary reviews will need to be done within a holistic framework in order to ensure that such a review does not impose a negative shock in the market.”
The ministry said civil servants have to open US dollar denominated
Nostro Bank Accounts with their banks in order to smoothen the process of payment. It said the Reserve Bank of Zimbabwe was however urgently addressing the domestic payments infrastructure in light of the increased need for transactability.
The interim adjustments have been put in place while a comprehensive
impact assessment and a framework for mitigating against the downside
macro-economic risks of the wage proposals made to government on
the budget and the economy are being carefully worked out, it said.
“Government reiterates its commitment to payment of a living wage to its employees while ensuring sustainability of the budget.
Government is also widening the remuneration framework for civil
servants to introduce significant non-monetary benefits and these will be announced in due course,” it said.
Employees’ organisations in Zimbabwe recently gave government an ultimatum to come up with a clear economic reform strategy culminating in payment of United States Dollar salary as the local unit continues losing value.
The Zimbabwe Congress of Trade Union in a meeting with government
at the Tripartite Negotiating Forum last week threatened to launch a
systematic resistance on Zimdollar salaries citing worsening economic
situation and rising inflation.
Zimbabwe is ravaged by foreign currency shortages and rising inflation, an unprecedented situation in a country not at war.
According to the Consumer Council of Zimbabwe, a family of six requires
nearly ZWL$9,000 per month.
Inflation has eroded the purchasing power with annual inflation rising to
785.55% in May from 765.57% in April.
