News / Local
Govt earmarks US$120m for bonuses
12 Dec 2021 at 14:54hrs | Views
GOVERNMENT released US$120 million to pay civil servants' bonuses in foreign currency in a bid to cushion them against the inflationary environment that has been experienced in the past few months.
Civil servants started withdrawing their bonuses last week with the highest paid Government employee getting US$700.
Those on pay scales requiring more than US$700 were getting the balance in local currency.
Government last week warned banks against abusing the civil servants bonus facility as it emerged that some financial institutions were forcing employees to convert their bonuses to local currency.
It said civil servants should be allowed to withdraw their United States dollar bonus payments in full subject only to daily cash withdrawal limits set by the Reserve Bank of Zimbabwe.
Treasury said it was paying civil servants' bonuses in foreign currency after observing the cyclical nature of annual price hikes whenever payment dates for civil servants' bonuses approached.
The country uses a multi-currency system.
In an interview last Friday, Finance and Economic Development Minister Professor Mthuli Ncube said while bonus was paid in foreign currency, Government will continue to pay salaries in local currency.
"In terms of the civil servants bonuses for this year we basically released about US$120 million. We hope this will go a long way in dealing with inflationary pressures they are facing.
This is the decision of the President to deal with those inflationary pressures. Inflation has been ticking up so we just want to make sure that they are protected from this inflation.
"So, we thought that it would be a good idea to certainly pay them in US dollars. This also covers pensioners, as well as war veterans," said Prof Ncube.
Civil servants' unions have been lobbying for salaries to be paid in foreign currency.
However, Prof Ncube said the payments of bonuses in foreign currency is just a one-off gesture from President Mnangagwa to protect them from rising costs.
While prices of commodities have been rising in local currency, they remain stable in foreign currency.
"No (We are not going to pay salaries in US dollar.) This is a once off gesture from His Excellency, just to deal with inflationary pressures that we saw emerging in this last quarter.
We will continue to pay our normal salaries in Zimbabwe dollars," said Prof Ncube.
By October, the country had recorded US$7,2 billion in foreign currency receipts, resulting in a positive current account of about US$1,7 billion, that is more foreign currency had come in than had been spent
Civil servants started withdrawing their bonuses last week with the highest paid Government employee getting US$700.
Those on pay scales requiring more than US$700 were getting the balance in local currency.
Government last week warned banks against abusing the civil servants bonus facility as it emerged that some financial institutions were forcing employees to convert their bonuses to local currency.
It said civil servants should be allowed to withdraw their United States dollar bonus payments in full subject only to daily cash withdrawal limits set by the Reserve Bank of Zimbabwe.
Treasury said it was paying civil servants' bonuses in foreign currency after observing the cyclical nature of annual price hikes whenever payment dates for civil servants' bonuses approached.
The country uses a multi-currency system.
In an interview last Friday, Finance and Economic Development Minister Professor Mthuli Ncube said while bonus was paid in foreign currency, Government will continue to pay salaries in local currency.
This is the decision of the President to deal with those inflationary pressures. Inflation has been ticking up so we just want to make sure that they are protected from this inflation.
"So, we thought that it would be a good idea to certainly pay them in US dollars. This also covers pensioners, as well as war veterans," said Prof Ncube.
Civil servants' unions have been lobbying for salaries to be paid in foreign currency.
However, Prof Ncube said the payments of bonuses in foreign currency is just a one-off gesture from President Mnangagwa to protect them from rising costs.
While prices of commodities have been rising in local currency, they remain stable in foreign currency.
"No (We are not going to pay salaries in US dollar.) This is a once off gesture from His Excellency, just to deal with inflationary pressures that we saw emerging in this last quarter.
We will continue to pay our normal salaries in Zimbabwe dollars," said Prof Ncube.
By October, the country had recorded US$7,2 billion in foreign currency receipts, resulting in a positive current account of about US$1,7 billion, that is more foreign currency had come in than had been spent
Source - The Chronicle
