COMMENT: Civil service forex allowance a source of relief

08 Jan, 2022 - 00:01 0 Views
COMMENT: Civil service forex allowance a source of relief

The Chronicle

The Government is continuing to show its commitment towards improving its workers’ welfare by starting to pay them the Covid-19 allowance in foreign currency.

Since the pandemic broke out, the Government has been paying the US$75 allowance for every civil servant but the money was only available in local currency at the auction rate.

Government pensioners were benefiting as well. With effect from this month, workers will be paid in hard currency while pensioners will receive a US$30 allowance on the same conditions.

Coming as it does a month after the Government paid civil servants their 2021 annual bonus in hard currency, the allowance must help assuage the trouble that the public workers have been grappling with in recent months of rising inflation and declining purchasing power of their salaries. Pensioners have been struggling too.

Therefore, the new package must be really good news for all Government employees as well as pensioners or their widows and widowers.

They must have had a great Christmas last year after they were paid bonuses in US$. They must have been able to buy a few more items, more flexibly over the festive break with the US$ in hand than they did when they were paid salaries in local currency throughout last year.

Now, given the improved Covid-19 allowance, it would be much easier for them to plan their spending with the assurance that every pay day, they will get US$75 more in cash. As they did over the Christmas period, they would, going forward, have the luxury of spending on a number of items for which the market is demanding foreign currency.

For example, some grocery items are cheaper when bought in US$ than in local currency. Civil servants who own vehicles will now be able to buy fuel which is now being sold largely in foreign currency. In addition, the allowance will spare civil servants and pensioners the monthly agony of having to buy foreign currency on the black market at astronomical exchange rates to be able to buy the essentials that the market is offering solely in forex.

Thus, the allowance will be a source of relief indeed. Civil servants and pensioners should be gladder particularly given that this is paid in addition to their normal salaries and pension payouts that are accessed in local currency.

It is noteworthy that the Government has announced the introduction of the US$ Covid-19 allowance a few days before scheduled salary talks with its employees resume, likely next week.

It has been reported that some unions will, when the National Joint Negotiating Committee resumes sitting, demand foreign currency salaries. We are unsure if the Government will accede to that demand given the wider implications that forex salaries for the civil service could have on the public purse, organised labour and the economy at large.

However, the US$ Covid-19 allowance will assist in answering some of the questions that unions have had. This is only an allowance, not a salary, we agree, but this is a bird in the hand.

In addition, most civil servants enjoy free housing, free transport, zero duty when importing vehicles for own use and other non-monetary benefits. The foregoing and the US$ Covid-19 allowance show the Government is working very hard to make its workers more comfortable. We urge the employer to keep it up.

Having noted that, we ask the private sector to work just as hard to make its workers just as comfortable.

Yes, some companies are already paying a portion of their workers’ salaries in hard currency, but the larger chunk continues to pay in local currency yet almost all of them are offering their goods and services in foreign and local currency.

We suggest that they begin where the Government has begun, just paying small portions of their employees’ salaries or allowances in foreign currency and the rest in Z$.

The packages can be improved or reviewed in tune with the economic situation. Doing that will go a long way in easing the burden that private sector workers are having to bear using their depleting local currency packages.

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