'Banks push workers onto fragile contracts'

Workers in Zimbabwe's banking sector are increasingly being pushed into insecure, fixed-term contracts without benefits such as medical aid, pensions and social security, amid what unions describe as the ongoing effects of tight monetary policy.

The Zimbabwe Banks and Allied Workers' Union (ZIBAWU) says the trend has worsened alongside technology-driven restructuring, which has already resulted in the loss of about 500 jobs since 2025.

The developments come as the Reserve Bank of Zimbabwe (RBZ)
 maintains a strict monetary stance, with a policy rate of 35 percent and lending rates ranging between 40 and 49 percent in an effort to sustain currency and price stability.

ZIBAWU secretary-general Shepherd Ngandu said banks were increasingly avoiding long-term hiring commitments due to constrained lending conditions.

"Banks rely on lending as their main source of income, but because most loans are short-term — typically 12 to 24 months — many new employees are being hired on precarious, fixed-term contracts," he said.

"These contracts often come with no social security, medical aid, pension, or favourable working conditions."

However, the Bankers' Association of Zimbabwe (BAZ) disputes claims that the sector is under stress. Chief executive officer Fanwell Mutogo said the current environment has actually improved financial stability and credit confidence.

"Far from a ‘wait-and-see' approach, this stability significantly enhances lending appetite," Mutogo said.

He argued that a predictable macroeconomic environment allows banks to better assess risk and extend credit, adding that fixed-term contracts are a normal feature of a modern financial system.

"The nature of an employment contract is typically determined by the specific requirements of the role," he said.

Mutogo added that restructuring in the sector should be seen as part of broader digital transformation rather than job destruction, with banks investing heavily in automation and new technologies.

The union, however, maintains that more than 500 jobs have been lost since January 2025 as banks adopt artificial intelligence, digital systems and organisational restructuring.

Mutogo countered that while specific job loss figures cannot be independently verified, the sector is instead undergoing "strategic reassignment of roles" rather than outright contraction.

"As banking becomes more automated, the industry is shifting focus toward high-value human interactions and technical oversight," he said.

He added that displaced workers are often being retrained and moved into new technology-driven roles.

The debate comes as President Emmerson Mnangagwa recently called for an end to labour casualisation in Zimbabwe, warning against the use of perpetual short-term contracts for permanent roles.

"The challenge of casualisation must be confronted and addressed. Where work is continuous, employment must be secure," the President said in his Workers' Day address.

Labour and economic analysts say Zimbabwe's situation reflects a wider regional trend, where banks in countries such as South Africa and Zambia are also restructuring under tight monetary conditions and rapid digital transformation.

Across the region, financial institutions are increasingly relying on automation, cost-cutting and flexible labour arrangements, even as they report stronger balance sheets — a shift that is intensifying tensions between financial stability policies and job security.