TNF talks collapse amid standoff over ZiG salaries

LIVINGSTONE MARUFU

A high-stakes Tripartite Negotiating Forum (TNF) meeting ended in a dramatic stand-off last Friday after the government proposed paying workers entirely in Zimbabwe Gold (ZiG), it has been established.

Business Times can report that labour representatives outrightly rejected the proposal, citing the currency’s instability in Zimbabwe’s dollarised economy.

With no compromise reached, both government and labour left the negotiations empty-handed, deepening tensions over wage policies and economic stability.

The TNF, which is meant to facilitate dialogue among government, business, and labour to build consensus on socio-economic policies, ultimately failed to produce an agreement, leaving critical issues unresolved.

The government argued that paying workers in ZiG would bolster local industry and economic growth. Authorities believe that moving away from US dollar salaries would strengthen the local currency and reduce reliance on foreign currency. However, labour representatives countered that the local currency has failed to retain value due to recurrent devaluations since 2008. Zimbabweans remain wary of using ZiG, citing its volatility and lack of store-of-value properties.

Zimbabwe Congress of Trade Unions (ZCTU) Secretary-General Kudakwashe Munengiwa stated that discussions at the TNF were largely unproductive.

“It is difficult to summarise the TNF discussions because most of the proposals were outrightly rejected. The two clusters under discussion have been referred back to committees for refinement. We hope this process will yield results,” Munengiwa said.

He added that while the labour cluster agreed that wages were out of sync with economic realities, several adjustments were recommended, including aligning the minimum wage with economic trends. Labour also pushed for the implementation of Justice Smith’s recommendations on pension reforms and protection for informal sector workers.

Currently, most workers in both the public and private sectors earn around US$300 per month, far below the poverty datum line (PDL), which exceeds US$500. Labour representatives argued that an adjustment was necessary to meet the PDL.

However, the government insists that it lacks the fiscal space to meet such wage demands. Similarly, private sector employers cite harsh economic conditions, high regulatory costs, and exchange rate volatility as barriers to increasing wages.

“The minimum wage stands at US$150 per month, but we want it aligned with the PDL, which is at US$548 per month,” Munengiwa emphasized.

A public sector representative, speaking on condition of anonymity, said the government’s insistence on ZiG salaries led to heated debates.

“The ZiG proposal was unrealistic. Government wants to dedollarise, but we reminded them that if they push this agenda, our response will be felt in the streets. We lost our savings in 2008, 2019, and 2022 due to local currency depreciation—now they want us to lose again in 2025. We told Deputy Finance Minister Kudakwashe Mnangagwa that if authorities mishandle this issue, the consequences will be dire,” the representative warned.

The TNF proposed a workshop where government officials would outline the benefits of de-dollarisation. However, workers dismissed the idea, arguing that as long as essential goods and services—such as passports and fuel—are priced in US dollars, the discussion is meaningless.

“Money reflects an economy. If I buy bread from Lobels or clothes from Paramount using ZiG, it might not seem like a big issue. But as long as fuel is priced in US dollars, de-dollarisation is not feasible. Zimbabwe is heavily reliant on imports, and businesses need foreign currency to restock, making local currency impractical,” the source explained.

Workers demanded increased production and economic stability as prerequisites for a functional local currency. They also called for tax reductions to ease production costs and reduce dependence on imports.

“It was agreed that the government should refine its proposals and return with a serious and meaningful offer,” workers stated.

Economists have warned that imposing ZiG salaries without first stabilising the economy could backfire.

With the TNF failing to reach an agreement, tensions between government and labour are expected to escalate.

Workers’ unions have hinted at potential protests if the government pushes forward with the ZiG-only salary proposal.

“We have made it clear that we reject this proposal. If they continue down this path, we will take action. Workers cannot be expected to survive on a currency that does not hold value,” said a union representative.

The government, on the other hand, remains adamant that de-dollarisation is the only way to achieve long-term economic stability.

The TNF meeting, attended by worker federations and government representatives from Labour, Environment, Justice, and Treasury, ended without consensus.

With the stand-off unresolved, the dispute over currency policy and wage adjustments is likely to continue, heightening tensions between the government and workers. As Zimbabwe grapples with economic instability, the battle over ZiG salaries could be a defining moment in the country’s economic trajectory.