In an effort to shield civil servants from the crippling effects of inflation and widespread poverty, Zimbabwe’s government has announced that it will begin paying its public sector employees in US dollars. This move comes as the country grapples with the devaluation of its Zimbabwean Gold (ZiG) currency, which has struggled to gain stability since its introduction earlier this year.
The announcement was made by the Minister of Public Service, Labour, and Social Welfare, July Moyo, who emphasized that the government is committed to improving the living standards of lower-income employees. Speaking to The Sunday Mail, Moyo confirmed that the Treasury had already allocated the necessary US dollars to cover the salaries of government workers, including a notable increase in the US dollar component of their pay.
“The government has allocated a substantial amount in US dollars to ensure that all civil servants benefit from these salary adjustments,” Moyo stated. He further explained that this decision is in line with directives from President Emmerson Mnangagwa, who is focused on narrowing the wage gap and addressing economic disparities within the country.
In addition to the salary adjustments, Moyo assured civil servants that they would receive their annual bonuses this year. The government is currently in consultation with Treasury regarding the timing of the 13th cheque, with an official announcement expected soon. “We will make an announcement after consultations with Treasury, but the bonus payment is guaranteed,” Moyo added.
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This policy shift comes on the heels of the ZiG’s devaluation, as the exchange rate against the US dollar was adjusted from 1:14 to 1:24. The Reserve Bank of Zimbabwe (RBZ) has made various attempts to stabilize the currency since its launch in April, including a crackdown on illegal foreign currency traders. However, the ZiG continues to struggle on the parallel market, raising concerns about its long-term viability.
Critics of the RBZ argue that its efforts have fallen short of establishing a smooth and functional foreign exchange market. They point to the need for more streamlined financial processes, a reduction in bureaucratic red tape, and measures to address the country’s persistent inflationary pressures. Additionally, they call for greater fiscal discipline, transparency, and clearer communication from the central bank to rebuild confidence in Zimbabwe’s currency market.
As Zimbabwe navigates these economic challenges, the government’s decision to pay civil servants in US dollars is seen as a crucial step in protecting its workforce from the volatility of the local currency. However, long-term solutions are still needed to address the underlying issues affecting the country’s financial system, including restoring stability to the ZiG and fostering sustainable economic growth.
