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Pressure mounts on Mnangagwa

by Staff reporter
09 Jul 2020 at 20:53hrs | Views
Pressure is mounting on President Emmerson Mnangagwa's administration to resolve the economic crisis as the cost of living skyrockets.

This comes as the local currency continues to lose value against the greenback with runaway prices which have eroded disposable income.

The cost of living skyrocketed 49.29 % to ZWL$13 026.17 by the end of June 2020 from ZWL$8725.50 at the end of May.

This has seen disgruntled civil servants besieging the government to be paid in foreign currency as the local currency depreciates against the greenback with nurses having been on strike for the past three weeks. Disgruntled citizens are planning to roll out massive strikes with one slated for July 31.

Government ordered schools to open on July 28 for all examination classes but teachers have indicated that they will boycott the reopening of schools
unless their salaries are pegged at US$475 per month, according to Progressive Teachers Union of Zimbabwe president Takavafira Zhou.

Government last month hiked civil servants' and pensioners' salaries by 50% and also cushioned them with US$75 and US$30 respectively in allowances from effects of inflation and the Covid-19 pandemic in order to ensure that civil servants get value for money, however, the allowance has not been paid as per agreement.

A number of civil servants are yet to receive their allowances and the very few that have received are said to have received the allowance in local currency at the prevailing rate not the United States dollar as promised by the government.

Public Servants Association president Cecilia Alexander told Business Times that workers have returned to the October 2018 United States dollars salary following government flip-flopping techniques on the negotiating table.

"We have told the government to pay us US$475 per month as per pre-October 2018 salary. We concretised that we can't accept the Zimbabwean dollar which is rejected by the market, we need a currency that can hold value and the local currency can't do that," Alexander said.

"The authorities gave themselves a two week breather and promised to come back to us on Monday, July 13 to give us the answers."

She said the US$75 was not part of the workers negotiating package but the failure to pay out the allowance clearly is a cause for concern for workers.

Alexander said all is set for Monday where the government will battle out with civil service representatives to come up with a final position.

According to the Consumer Council of Zimbabwe (CCZ), the low income urban earner monthly basket for a family of six increased 49.29% to ZWL$13,026 in June from ZWL$8,725.50 end of May due to rampant inflation, foreign currency shortages, influence of the parallel market on exchange rates, increase in fuel prices, limited supply of some basic products and panic buying by consumers because of restrictions.

The development comes at a time when the country is experiencing the worst inflationary situation since dollarisation in 2009 as the local currency continues to plunge against the United States dollar.

The parallel market exchange rate currently stands at 1:93 against the official rate at 1:65.87.

The country is currently experiencing subdued production across all economic sectors including Zimbabwe's major economic drivers which are gold and tobacco, leaving a situation whereby the country is using elusive forex to import most goods. Despite the ravaging high cost of living, most local companies have failed to keep up with high inflation standing at 765.67%.

The attenuation purchasing power has caused government and restive employees to be on toes, leaving the country on the edge of total economic implosion.

CCZ said there has been a decline in productivity by firms in the market due to the negative impact of the coronavirus but consumers have increased their demand of certain products in fear of future shortages.

"The food basket increased by $3870.99 or 69.72% from $5551.90 by end of May 2020 to $9422.89 by end-June2020.The price of detergents increased by $429.68 or 84.73% from $507.10 to $936.78.

"As CCZ we assume that the increase in the total figure of the basket can be attributed to the influence of the parallel market on exchange rates, increase in fuel prices and limited supply of some basic products.

"The corona virus lockdown and its related restrictions on movement of consumers and suppliers contributed to a further deterioration of the country's production and to deepen the already severe food shortage, negative impact on increased food imports and transportation costs," CCZ said.

The CCZ continues to encourage consumers to shop conscientiously and to always buy certified products.

CCZ is urging consumers to always seek a fair deal on the marketplace by ensuring that their rights are observed, as well as reporting any anomalies on the marketplace.

Generally, it shows that nearly all basic commodity prices have increased due to rampant inflation, forex currency challenges and challenges in procuring goods outside the country's borders.

Zimbabwe Congress of Trade Union president Peter Mutasa said that figure is actually an understatement, however, it simply shows that almost all workers are now classified as working poor.

"Workers are earning less than 25% of the consumer basket meaning that most of us cannot secure basics. There is no doubt that we are now a failed state, it would do well if the government would accept and seek cooperation on getting out of this mess. Unfortunately, those failing us are too pompous to accept their shortcomings," Mutasa said.

"Some are deliberately causing the crisis in order for them to accumulate personal wealth. While the majority is suffering the few elites are ripping us off, a situation which we think should stop forthwith."

Mutasa said the only way is for all workers to unite and fight back against these evil policies and there is nothing to work for and workers will withdraw their labour soon.

Despite the efforts by the Reserve Bank of Zimbabwe injecting new notes in circulation, low money supply by most financial institutions still remains one of the major constraints that consumers are facing in terms of accessing basic products.

However, this has moved prices of basic commodities in shops.

Zhou said the association has engaged with its employers to address the concerns of the teachers.

He said among some of the demands of the teachers was provision of land for teachers to build houses and have to be exempted to pay school fees for their children as part of their benefits.

Source - businesstimes