The Ministry of Public Service, Labour and Social Welfare has called for an urgent indaba tomorrow with officials from the Reserve Bank of Zimbabwe, Ministry of Finance, Civil Service Commission (CSC) and representatives of civil servants to discuss the issue of pay dates for Government workers following a proposal released on Thursday to shift pay dates for this month.
The Permanent Secretary in the Ministry of Finance, Mr Willard Manungo on Thursday wrote to the Civil Service Commission proposing new staggered pay dates for civil servants for this month. According to the proposal, members of the Zimbabwe National Army will be paid on 27 June followed by police and prison officers on 30 June. The education sector will be paid on 7 July followed by health workers and the rest of the civil service on 14 July. Pensioners will get their dues on 19 July
In an interview last night, the Minister of Public Service, Labour and Social Welfare Prisca Mupfumira said she has called an urgent meeting with the view of charting a way forward on the proposal. “I have called for a consultative meeting with civil servants representatives, officials from the Civil Service Commission, RBZ Governor and officials from the Ministry of Finance to discuss this matter. It is just a proposal and we are going to discuss it together to chart the way forward. After the meeting I will then have a clearer position on the matter,” she said. Minister Mupfumira conceded that the Government was facing revenue challenges but reiterated its commitment to pay its workers. “Things are tough everywhere. In the private sector employees are going for several months without being paid, the same with some local authorities.
In our case we may delay but we pay our workers at the end of the day,” she said. Mr Manungo, in his circular to the CSC, cited cash flow challenges as having necessitated the proposed shift in pay dates. Reads part of the circular, “You are aware that, against the background of severe revenue underperformance and related cash flow challenges, Government has been honouring its monthly wage bill albeit through the continuous shift of pay dates. “It is on the account of the above cash challenges that has necessitated the Honourable Minister of Finance and Economic Development, in his communication copied to yourself to propose the following pay dates for the month of June 2016, which allow for the mobilisation of resources of the requisite resources.”
The Government normally pays its workforce midmonth consistently but has of late been forced to break tradition owing to revenue challenges. Meanwhile, in an interview RBZ Governor Dr John Mangudya said there was a deliberate policy to reduce overreliance on the US dollar and use other currencies to curb cash shortages. “The rand is a weaker currency but has a competitive edge in most industry in Zimbabwe, in particular in tourism. What is needed is to change our pricing system. It is not an overnight thing, you cannot convert overnight. This needs a holistic approach. So let us focus also on the use of other currencies in the multicurrency regime at our disposal.
That way we are going to saturate the prevailing shortage of the US dollar,” said Dr Mangudya. Banks will start issuing the South African rand and seven other currencies on 1 July, and will process Real Time Gross Settlements using that regime from tomorrow (Monday). Other currencies are the Chinese yuan, euro, British pound, Botswana pula, Australian dollar, Indian rupee and Japanese yen, whose use is being promoted to end US dollar cash shortages. The United States dollar remains in circulation, with US$10 million being imported weekly, while plastic money use is being advocated aggressively.
Financial institutions are preparing for the change following meetings with the Reserve Bank of Zimbabwe, and a 30 June ultimatum for all Government departments to embrace multiple currencies has been set. State departments handle the bulk of transactions in the economy, consuming up to 60 percent of money exchange. “Government departments and businesses must accept the rand. If the public feels hard done by business, they are allowed to approach the RBZ and do their transactions. The RBZ has the official exchange rate. As people we are failing to understand the situation
We are in this state because the country has been importing more than it exports. Since 2009, there has been a trade imbalance. In simpler terms it is a case of diminishing returns, the US dollar is used more for the exports. Remember that any economy is reliant on production of goods for exports. It is not a matter of what currency we use but that of production,” said Dr Mangudya. Asked about the prospects of the country joining the Rand Monetary Union Area (RMA) as proposed by some organisations, Dr Mangudya said: “That is a Government to Government negotiation and it takes time.
These are issues that should have been dealt with in 2009 when we adopted the multicurrency regime”. Bulawayobased economist Dr Bongani Ngwenya said the country stood to benefit by joining the RMA. “First and foremost the rand is not remote from us in Zimbabwe, it has always been an item in this multicurrency basket. All what could happen is that there could be just a charge in the volume of use with more volume of use now towards the rand, having shifted away from the US dollar.
For example, there could no longer be any need to worry about the exchange rate fluctuation or volatility between the rand and the US dollar for import purposes which are currently largely from South Africa,” said Dr Ngwenya. However, the Government will soon introduce the use of bond notes which will carry the same value as the US dollar to ease cash shortages and curb the transportation of US dollars across the country’s borders by unscrupulous businesses.