Govt warns banks over civil servants bonuses

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HARARE –  Government has warned Banks against implementing arbitrary charges and liquidating civil servants’ bonuses saying the payments are to be made in foreign currency without deductions.

In a statement dated 3 December 2021, the Minister of Finance and Economic Development Professor Mthuli Ncube said banks should desist from the unscrupulous deeds of giving civil servants bonuses in domestic currency.

“All civil servants should be allowed to withdraw their bonus payments in full in United States Dollars; subject only to existing daily cash withdrawal limits set by the Reserve Banks of Zimbabwe.

“Such bonus payments amounts are to be made in full without deduction of levy,” said the Minister.

He said the government and banks will agree on the charges for these specific amounts which charges must be kept minimum.

The treasury boss said it had come to the attention of the Central Bank that some banks were compulsorily liquidating civil servants’ bonuses payment and thereby forcibly paying them in domestic currency.

“Banks have resorted to making arbitrary charges against the payment with some taking significant portions of the wages in the form of bank charges,” he said

The Minister appealed to banks to cooperate with government in ensuring that the payments of bonuses were implemented smoothly.

Government committed to pay civil servants and pensioners their bonuses in foreign currency as a way of cushioning them from inflation induced price hikes.

Monitory authorities have in the past few months been implementing  various initiatives aimed at stabilising  the economy in a bid to contain inflationary pressures.

For the better part of 2021, the government has managed to restore the purchasing power of the local currency, with the primary goal being to increase the domestic and external competitiveness of the economy.

“Macro fiscal stabilization has been achieved largely through fiscal consolidation and the resultant attainment of both fiscal balance and stabilization of the current account” Mthuli said.

Furthermore he said the government was very grateful and fully recognised the sacrifice and cooperation of all Zimbabweans in the effort to stabilise the economy which he said  now on a firm foundation and on a  growth trajectory.

“The consolidated gains made in inflation reduction sail through from a peak of 875 % which was recorded in July 2020 to less than 55% as of November 2021, while recognising the cyclical nature of annual price hikes whenever bonus days approaches however the government took another switch this year and decided to pay civil servants bonuses in foreign currency,” he said.

As at mid October 2021, commodity prices rose in the supermarkets while on the other hand fuel prices increased on the market followed by a huge growth of the gap between the parallel rate and the official rate with the parallel rate now standing at $200 in exchange of a US$.

The country continues to suffer from foreign currency supply although auctions are being held each and every week, with the auction accumulating a backlog every week.

Over the past few years, teachers, who form the biggest chunk of government workers, were demanding that their salaries be restored to the pre- October 2018 period, where they were paid  USD 540 per month before de-dollarisation.

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