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Mthuli Ncube has not ruled out US$ salaries

by Staff reporter
22 Jun 2022 at 06:21hrs | Views
GOVERNMENT yesterday said it had not yet ruled out the possibility of paying civil servants salaries in United States dollars citing the current US$175 incentive as evidence of its willingness to meet workers' demands.

Finance minister Mthuli Ncube told journalists after a post-Cabinet briefing that discussions between government and civil servants were still ongoing.

"I cannot comment on ongoing negotiations and details between civil servants and government as yet … As government, we are sensitive to the plight of all the civil servants and we will do whatever we can to make sure we can accommodate the demands, obviously within the budgetary constraints we face," he said.

"As you know, the government is offering US$175. So on that part, we have already shown we are willing to make sure that part of the salaries is in United States dollars, but as to the recent request from civil servants, all those things are under consideration, under discussion."

Ncube made the remarks as nurses and teachers yesterday continued with their protests demanding United States dollar salaries and improved working conditions.

Civil servants have rejected a 100% government wage increase with effect from July 1.

At Parirenyatwa Group of Hospitals in Harare, nurses and doctors gathered outside, with police observing them from a distance.

Reports said health workers and educators in other cities also did not report for duty.

Zimbabwe Nurses Association president Enock Dongo said other civil servants had now joined them in solidarity.

"We held a meeting with the Health Service Board yesterday (Monday), and they only told us that government will support us with buses to transport us to work, and also provide us with canteen incentives. They said nothing about our salary grievances. Therefore, we will continue with the strike until government listens to our concerns," he said.

Zimbabwe Confederation of Public Sector Trade Unions secretary-general David Dzatsunga said they would not accept the 100% salary increment.

"We want US$840. All civil servants are with you in this struggle," Dzatsunga said.

In a statement, the Community Working Group on Health (CWGH) urged government and the striking health workers to find common ground.

"CWGH calls for a speedy, fair, and impartial procedure in resolving this dispute. Long Standing grievances simply should not be allowed to build up. Let us value and respect our health workers and restore back their dignity of previous years," the it said.

When NewsDay visited major hospitals in the capital, patients were queuing at the out-patients department without being attended to.

Meanwhile, economists have said it would be unwise for workers across all sectors to accept salary increments in the local currency given its continued devaluation due to inflation.

Said economist Gift Mugano: "Naturally when salaries are increased in this manner by 100% because we are now in chronic inflation, what will happen is that prices will spiral.

"There will be more activity on the parallel market as people will be rushing to buy United States dollars to preserve the value of the money they are getting in local currency. The net effect of the increases in RTGS salaries will be zero."

Economist Vince Musewe said: "As long as we have a weak and a strong currency, people will migrate to the stronger US dollar currency. So people will buy US dollars with any extra local currency that they may get, and this further strengthens the US dollar."

Zimbabwe Congress of Trade Unions secretary-general Japhet Moyo said the economy had self-dollarised despite government's insistence on its dedollarisation strategy.

"Therefore, for wages and salaries to have value, they should be pegged in foreign currency. The exchange rate that is volatile and inflation make wages and salaries for those earning local currency to be worthless," Moyo said.

Academic Anthony Hawkins said the 100% salary hike offered to civil servants was not in the 2022 budget, and would increase government borrowing in the domestic market.

"The salary crisis is now making it impossible for government to achieve zero money supply growth. It will also be highly inflationary and will result in rejection of the local currency," he said.

Source - NewsDay Zimbabwe