‘New forex measures could trigger civil unrest’ 

Source: ‘New forex measures could trigger civil unrest’ – NewsDay Zimbabwe

BY MIRIAM MANGWAYA

WORKERS’ representatives yesterday said the new foreign currency measures could trigger civil unrest as workers demand salary hikes to match the rising cost of living.

Government last week promulgated Statutory Instrument (SI) 127 of 2021, which prohibits business operators from charging above the official exchange rate and will punish those that refuse to take the Zimbabwe dollar in local transactions.

Business organisations at the weekend confirmed price hikes as companies sought to cover potential losses because the official exchange rate is 60% below the black market rate.

Zimbabwe Congress of Trade Union secretary-general Japhet Moyo said the move was eroding the value of salaries at a time when most workers were earning below the poverty datum line pegged at more than $32 000.

“SI 127 of 2021 has negative impacts on the workers. Once the business is affected, the workers are not spared. Business does not want to incur losses. Businesspeople have been always profiteering from using the parallel market rate,” Moyo told NewsDay yesterday.

“Now that government has promulgated new measures which demand businesses to adhere to the official exchange rate which business operators are not prepared to comply with, this will burden the consumer and the workers will be forced to cover up for the losses. When they increase the cost of their products, it means the consumer will spend more for less.”

He said with the buying power reduced, productivity would also suffer in the manufacturing sector.

“On other products where the businesspeople cannot randomly raise prices, they may deliberately remove products from the shelves which will result in artificial shortages and the rise of the black markets. History has shown us the impacts of the black market on workers. Goods and services won’t be affordable, and that alone will demoralise the employees, forcing them to strike,” Moyo said.

Chairperson of the Federation of Education, an umbrella body for teachers unions, Obert Masaraure, said a rise in commodity prices would demand constant salary increments.

“It is important to note that goods and services are still being sold in forex, but salaries for the civil servants continue to be paid in local currency. The bulk of business is going to be pushed to the black market as businesses try to evade the controlled formal economy,” he said.

“Workers who earn in local currency would not be able to access goods and services sold in forex on the black market. Businesses which used to access cheap forex and later transact on black market rate will never run out of options of benefiting from the chaos. There is always a window for arbitrage.”

Masaraure said with inflation expected to rise, government should consider paying workers in US dollars as business was inflating prices in foreign and local currency.

Zimbabwe Nurses Association president Enock Dongo said: “Business would not suffer from the so-called measures. It’s the workers who will shoulder the burden of such negative policies.

“SI 127 is a justification by government to refuse to pay its workers in United States dollars. As a result, the impasse between the employer and its workers will continue, which will result in poor service delivery, not only in the health sector, but across the civil service.”

Zimbabwe Confederation of Public Sector Trade Unions spokesperson David Dzatsunga said: “It is premature for us to comment on the effects of the statutory instrument on workers. But an inflationary economic environment will have adverse effects on the employees. Inflation will eat up the workers’ salaries especially in a situation where the price of the family basket has shot up from $28 000 to $32 000.”

COMMENTS

WORDPRESS: 2
  • comment-avatar

    zimbabwe always plays around with the currency and it is so destructive .. just leave it alone and it will find its own levels … just like all our neighbors do.

  • comment-avatar
    Dr Ace Mukadota PhD 2 weeks ago

    Zimbabwe and before that Rhodesia “played” around with the currency – this has been ongoing since imposition of exchange control in 1961. This draconian law says you are not allowed to spend your own money as you please. The PhD’s in the RBOZ will decide for you how and where you can spend your own money.
    Today in ZW we have an official rate of about 85 ZWL to one USD while the black market is at about 125 to the USD.
    ZW always has a shortage of USD’s – why – because the rate quoted by the RBOZ is wrong. Simple. You never hear of a shortage of USD in Botswana or South Africa.
    ZANUPF (via RBOZ) continues with this silly system as they are able to abuse the allocation of USD’s to friends and family at the lower rate & get very rich in the process.
    Until ZW abolishes exchange control and lets the ZWL float freely the ZW economy is doomed.