Forex allowances, salary hike for civil servants

18 Jun, 2020 - 00:06 0 Views
Forex allowances, salary hike for civil servants Prof Mthuli Ncube

The Chronicle

Mashudu Netsianda, Senior Reporter
GOVERNMENT has announced a flat non-taxable Covid-19 allowance of US$75 for civil servants and increased their salaries by 50 percent while pensioners who retired from the civil service will also get a flat non-taxable Covid-19 allowance of US$30 per month.

The lowest paid Government worker earns about $3 000 before deductions. However, nurses this month received their June salaries minus $2 000 from around $6 000 in May while other civil servants received salaries less $490 or more.

According to the Consumer Council of Zimbabwe (CCZ), the monthly low-income urban family budget for a family of six rose to $8 725 last month, up from $4 378 in January.

Government is also widening the remuneration framework for civil servants to introduce significant non-monetary benefits, which will be announced in due course.

The interim adjustments to cover three months starting this month, were put in place while 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 worked out.

The latest development comes at a time Government and civil servants were set for an urgent meeting to discuss grievances arising from the high cost of living characterised by constant increase in prices of basic commodities against stagnant salaries.

According to the CCZ, a family of six now requires $5 551 for groceries a month while a further $2 666 is required for other basics such as housing, transport, health and clothing.

Basic commodities, although priced in local currency, are largely pegged on the US$ equivalent on the black market.

The exchange rate at the parallel market yesterday was US$1: $70 via electronic transfers and US$1: $45 for cash transactions. The official rate is 1:25.

These price hikes are against the recent Government and industry moratorium that prices should revert to March 25 levels.

In a statement yesterday, the Ministry of Finance and Economic Development said the Government is committed to paying a living wage to its employees while at the same time ensuring sustainability of the budget.

“Pursuant to Government’s commitment to continuously review and improve the remuneration framework for civil servants, taking into account the transitory economic challenges being currently experienced in the country, which have been exacerbated by the Covid-19 pandemic, Government makes the following announcement: with immediate effect, all civil servants’ salaries will be adjusted upwards by 50 percent,” read the statement.

“In addition, all civil servants will be paid a flat, non-taxable Covid-19 allowance of US$75 per month. Government pensioners will be paid a flat, non-taxable Covid-19 allowance of US$30 per month.”

Government said in arriving at the decision to review salaries, it took due regard of the fact that addressing the wage challenges faced across the civil service requires a holistic framework to ensure that it does not impose a negative shock in the market.

Civil servants and Government pensioners were advised to immediately open United States dollar denominated Nostro bank accounts with their banks to facilitate the payments process.

The Reserve Bank of Zimbabwe is urgently addressing the domestic payments infrastructure in light of the increased need for transactability.

Zimbabwe Teachers’ Union (Zimta) chief-executive officer Dr Sifiso Ndlovu said although the amounts given to them will alleviate challenges faced by civil servants, it was insufficient.

“We would have wanted to put our negotiations and a position paper across to ministries so that we open a social dialogue to understand the depths of the problems that we have. The monetary issue is responding to what has already been eroded by inflation and what has been taken away by service providers like funeral insurers, banks and fuel among others,” he said.

“In terms of meeting the inflation, it is not adequate but in terms of taking the right step in the direction of taking care of workers, it is correct and we appreciate that. However, we shouldn’t be joyous about it, saying we have everything solved, it’s far from being joyful at all because it is short of the needs of civil servants.”

Apex Council secretary general, Mr David Dzatsunga welcomed Government’s decision to review salaries of civil servants. He however, implored Government to consider paying full salaries in US dollars

“This is what we have been demanding all along as you are aware Government has allowed businesses to charge in US dollars and yet civil servants continued to be paid in local currency. While we are going to receive Covid-19 allowances in forex, our tag is that salaries should ultimately be paid in proper US dollars,” he said.

Public Service Commission (PSC) Secretary Ambassador Jonathan Wutawunashe said PSC has 170 000 workers while the Health Services Board has about 30 000 employees. — @mashnets.

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