Zimbabwe’s second republic led by its Finance Minister Mthuli Ncube has a revolutionary solution to the ongoing economic meltdown. They have just decided to pretend it does not exist-according to the government all is well and there is no crisis. This has not stopped inflation from spiralling into three digits or the rate between the ZWL and the USD from continuing to gallop. In a bid to preempt impending job action from civil servants the government decided to award them a 100% salary hike starting 1 July 2022.
This tidbit was recently revealed by Public Service, Labour and Social Welfare Minister Paul Mavima. This means that civil servants’ RTGS (yes that is a currency despite what the Finance Minister would have you believe) will now be doubled. So if you earned $16 000 ZWL in June you will now earn $32 000 ZWL in July.
The Government team will consult to see if there can be any variation to what was initially offered, which is a 100 per cent increment.
This will all be done in consideration of the Treasury’s capacity.
However, what Government has offered, it is going to implement with effect from July 1, because we realise the importance of the need for us to cushion our workers.Minister Mavima speaking before Cabinet
It will not be enough
The thing is while the government cheerfully increases the price of fuel, electricity and other items whenever there is a spike in rates or when prices increase globally they drag their feet when it comes to adjusting the salaries of civil servants. This means that by the time they affect an adjustment the salaries of civil servants would be far behind the poverty datum line as published by ZIMSTAT and the CCZ.
It is also important to understand that only the ZWL salary component is getting an adjustment. The USD component is made up of:
- US$100 salary portion remains unchanged even though inflation in Zimbabwe has gone up in real terms and USD prices have gone up too. Cooking oil which used to sell for US$3.80 in tuckshops is now selling for US$5.50 per 2-litre bottle.
- The US$75 COVID-19 allowance. Why the government insists on calling this an allowance and separating it from the US$100 above is anyone’s guess. In reality, this money is not linked to COVID-19 in any way. Even if COVID-19 were to disappear from the face of the earth there is little chance they would be able to withdraw this. They have already tried and failed.
Anyway back to the not enough part. Civil servants know this will not be enough and apparently, they communicated this to the government during a meeting between the government and the National Joint Negotiating Committee (NJNC) last week.
The NJNC meeting failed to reach a consensus after the employer initially brought an offer of an 80 per cent increase in local currency, which would see the lowest paid civil servant move from $18 000 to $32 000.
They later upped the offer to 100 per cent, which the workers flatly rejected.
The employer requested time to consult their principals on the workers’ proposals and to properly interrogate the altered position brought by the workers.Cecilia Alexander president of Zimbabwe Confederation of Public Sector Trade Unions
There is an easy solution to this
Not only is the hike not enough, but it also will not solve the current inflation and economic meltdown and the effect it has had on the salaries of civil servants. A couple weeks from now the money they were awarded would be worth even less because the Zimbabwean government will continue to spend beyond its means and print more money despite the talk of the surplus we heard from the Finance Minister during the early years. The government is living beyond its means as it prints to build dams and pay contractors causing spikes in rates.
The solution to the civil servant’s’ problems would be easy. Their salaries should be pegged to the US dollar. Councils, ZIMSEC and the government itself have done this. They should just say that civil servants earn US$500 or whatever salary they agree on and pay this out in ZWL at the prevailing Willing Buyer Willing Seller rate of the day. Of course, there is nothing stopping the government from rigging the rate. They have done so before but it will solve much of the problems we are seeing.
Why wont the government just agree to this? Well two main reasons come to mind. First it will put to rest the resounding lie that de-dollarisation is on track. The government of Zimbabwe knows the importance of lying consistently even when the lie is nothing but a naked lie they like to continue to lie without tripping over themselves. To this day we continue to be told life is better in the second republic compared to prior to 2017. That is a lie. Secondly, it would actually mean them paying something that resembles a fair wage. That would actually hit the state coffers. They prefer printing zeroes and dishing them out.