US$ COVID-19 allowance and 50% salary review for civil servants

Bond notes and USD 1

Farai Mabeza

Government has announced a 50 percent salary review for all civil servants and an interim US$75 allowance to cushion its employees against the economic effects of the COVID-19 pandemic with economists saying authorities were moving towards re-dollarisation of the economy.

This interim arrangement is for a period of three months starting from this month.

There has been an outcry that prices of basic commodities were constantly on the increase increasing while salaries remain stagnant.

Prices of basic commodities are largely pegged to the US$ parallel market rates against the local currency which stood at US$1: $85 via electronic transfers and US$1: $56 for cash transactions.

However, the Amalgamated Rural Teachers Union of Zimbabwe immediately responded to the government statement, demanding the return to the 2017 salary structure of US$520.

In a tweet, the ARTUZ said: “Our members have rejected this offer. We still demand our 2017 salaries; USD520. We are consulting other Teachers Unions for possible joint actions. The 22 June protest will go ahead as scheduled.”

Economist Nyasha Kaseke said the 50 percent was government’s acknowledgment that salaries were not meeting workers basic needs.

“I think the government has realised that it has to move towards redollarisation. The local currency has lost its value and the people’s earnings have lost purchasing power.

“They have realised they have to go back to the US$ even if they cannot afford it because that’s what the public is demanding and goods are cheaper in US dollars in most shops.

“The 50 percent adjustment is an indication that the existing salaries could not meet the needs of the civil servants,” he said.

According to a statement from the Ministry of Finance and Economic Development, the increase also applies to all government pensioners.

“With immediate effect all civil servants’ salaries will be adjusted upwards by 50%. This increase also applies to all government pensions.

“In addition, all civil servants will be paid a flat, non-taxable COVID-19 allowance of USD75 per month. Government pensioners will be paid a flat non-taxable COVID-19 allowance of USD30 per month,” Treasury said in the statement.

The announcement comes amid restlessness in the government workforce with nurses and doctors staging demonstrations at some government hospitals.

“Government is also widening the remuneration framework for civil servants to introduce significant non-monetary benefits and these will be announced in due course,” the Finance Ministry said.

Government also advised all civil servants to immediately open US dollar denominated Nostro accounts with their banks to smoothen the process of payment.

“The Reserve Bank of Zimbabwe is urgently addressing the domestic payments infrastructure in light of the increased need for transactability,” Treasury said.

“Government has taken due regard of the fact that addressing the wage challenges faced across the civil service any salary reviews will need to be done within a holistic framework in order to ensure that such a review does not impose a negative shock in the market,” it added.

The government sought to assure the nation that it was working out measures to ensure that the adjustments would not further jeopardise an already strained economy.

“Government would therefore wish to advise members of the civil service that the above interim adjustments have been put in place whilst a comprehensive impact assessment and a framework for mitigating against the downside macroeconomic risks of the wage proposals made to the government on the budget and the economy are being carefully worked out.”

Government workers’ salaries had been reduced to less than US$$20 a month due to inflation.

Sign up to receive awesome content in your inbox, every day.

We don’t spam! Read our privacy policy for more info.


Please enter your comment!
Please enter your name here