Employees of parastatals in Zimbabwe, such as the Grain Marketing Board (GMB), the National Railways of Zimbabwe (NRZ), and the Zimbabwe Electricity Supply Authority (ZESA), have only been paid in Zimbabwean dollars (ZWL) until now. However, the government has announced a new salary payment policy that will see these employees receive part of their pay in US Dollars (USD).

This major policy change has naturally led to many questions from Zimbabweans. To help clarify, this comprehensive FAQ covers all you need to know about the new USD salary payments: when they start, who is eligible, how much will be paid in USD, where the USD will come from, how payments will be made, and the benefits. Whether you are an employee of GMB, NRZ, ZESA, or any other parastatal, this FAQ answers the key questions on salary changes so you can understand your new pay structure.

What is changing with parastatal salaries in Zimbabwe?

The government has announced that those employed by parastatals will now receive part of their salaries in US dollars (USD) in addition to the Zimbabwean dollar (ZWL) amounts they currently receive.

Who will receive part of their salary in USD?

All employees of parastatals such as State Universities, the NRZ, and GMB who are on the payroll of these entities will receive a portion of their salary in USD. This includes teachers, nurses, police officers, soldiers, and government office workers.

When will the USD salary payments start?

The circular which announced these changes states that USD payments will begin with the July 2022 pay cycle, so employees of state-owned enterprises should start receiving the USD portion with the July salary payment.

How much will employees of parastatals be paid in USD?

The USD payment will be 40% of each employee’s salary. For example, if a teacher’s salary is $1 million ZWL, they will now receive $600 000 ZWL plus the remaining amount in USD at the prevailing official rate.

Will the ZWL salary amount decrease?

No, the ZWL salary amount will remain the same. The USD payment will come in addition to the current ZWL amount.

Where is the government getting the USD to make the payments come from?

The government has been engaged in a tussle with its employees for a long time. The Zimbabwean government have always refused to pay USD salaries because they always said they did not have the USD to do this. The circular states the USD salaries will be paid from the surplus money generated by the 2% tax on all USD transactions introduced in May 2022.

How will the USD payments be made?

The USD salaries will be paid into each employee’s local USD bank accounts or mobile money wallets. If you are employed by a parastatal you will need to provide your USD bank or mobile money account details to your payroll departments.

What if you don’t have a USD account?

If you do not have a USD account are advised to open a USD account at your bank or sign up for a USD mobile money wallet. Most banks will allow you to quickly open a USD account if you already have a ZWL bank with them. Sometimes all you need to do is open your banking app and just click on a button and you instantly get a USD account. The government wants all employees of parastatals to receive their USD payments electronically.

Can I choose to still get paid fully in ZWL if they prefer?

Yes, you can opt to continue receiving their full salary in ZWL only if they want. If you want to continue to receive your salary in ZWL only you should inform your payroll departments. We really don’t think anyone will opt for this.

What are the benefits of receiving USD salary payments?

The USD payments will help employees of state owned entities to maintain purchasing power and protect them against inflation, as the USD holds its value better than the ZWL. This means these employees will be able to purchase more goods and services that are USD-priced.

Is this USD salary payment policy permanent?

The circular does not specify if this is a permanent policy. For now, the USD salary payments are set to begin in July 2022. The government may review the policy in the future.

Why is the government introducing USD salary payments for parastatals now?

There are a few factors driving the timing of this policy change: To boost the purchasing power of these employees as Zimbabwe battles rapid inflation. The USD payment will protect against ZWL devaluation. The government now has surplus USD funds from the 2% tax on USD transactions enacted in May 2022.To incentivize the employees of parastatals and improve morale amid strikes over low wages.Part of wider economic reforms to dollarize and stabilize the economy. Paying employees of parastatals in USD brings more USDs into formal circulation.

What is the 30% rule mentioned in the circular?

The circular states that the total allowances payable to employees of each given parastatal should not exceed 30% of the organization’s salary bill. This means allowances like housing, transport, clothing etc when added together should not surpass 30% of the total amount an organization spends on salaries each month. This 30% cap is meant to limit allowances and control salary expenditures by public sector organizations. So in summary, it is not an additional 30% payment, but rather a limit on total allowances equal to 30% of the monthly salary bill.

Why is the government doing this now?

There are many reasons: they now say they have the USD to do the payments, they want to improve morale and stop the mass staff exit being experienced by the civil service, it’s election season etc

Are civil servants not already being paid in USD?

Two things to note. This circular is for employees of state-owned entities which are also known as parastatals. The government of Zimbabwe published a circular almost a decade ago that distinguishes between employees of parastatals and civil servants e.g. the police. Also, those civil servants are technically getting paid USD COVID-19 allowances and not salaries.

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