Labour

Shock currency devaluation leave workers in red, ZCTU

MARTIN MAWAYA

HARARE–The Zimbabwe Congress of Trade Unions (ZCTU) has raised serious concerns over the Reserve Bank of Zimbabwe’s (RBZ) decision to devalue the Zimbabwean Gold (ZIG) currency by over 44%.

In a statement, ZCTU Acting Secretary General Kudakwashe Munengiwa said the devaluation has had devastating consequences for workers, who have seen half of their earnings “vanish” due to the move.

“The over 44 percent devaluation of the ZIG has left workers clutching in the air without room to breathe as half of their earnings have vanished,”  Munengiwa explained.

The union leader slammed the RBZ and the government for unilaterally making such a “huge decision” without proper dialogue and consultation with social partners through the Tripartite Negotiating Forum (TNF).

“Such a critical issue like devaluation of the currency should have been subjected to intense dialogue at the Tripartite Negotiating Forum (TNF), and it smacks of hypocrisy and is patronizing for RBZ and Government to unilaterally make such a huge decision at a time when social partners have been calling for consultations whenever such important decisions are made,” he said.

The ZCTU has condemned the “flagrant disregard for social dialogue and respect for social partners,” noting that it violates the constitutional requirement for the government to involve the people in the formulation and implementation of development plans and programs that affect them.

Munengiwa also criticized the RBZ’s past claims that the local currency is very competitive compared to other foreign currencies, stating that these claims have “proven to be false guarantees, as the local currency could not hold against the USD and other foreign currencies.”

The union is now calling for employers to pay a significant portion of wages and salaries in US dollars to cushion workers, and for the government to consider fixing a minimum wage in US dollars to protect the most vulnerable workers.

“Clearly the working people of Zimbabwe have lost substantial value in their earnings, pensions and insurance products and are essentially incapacitated to work as they earn in the fast depreciating Zig,” remarked  Munengiwa.

Last Friday, the RBZ devalued the ZIG, to ZiG24,39 per U.S dollar from ZiG13,99, as the local currency continues to slide against the united states dollars.

The RBZ’s Monetary Policy Committee also resolved to reduce the amount of foreign currency an individual can take out of the country to US$2,000 from US$10,000.

Additionally, the committee increased the bank policy rate to 35% from 25%, and raised the statutory reserve requirements for savings and time deposits, both in local and foreign currency, from 5% to 15% with immediate effect.

However, economic analysts say devaluing the Zimbabwean dollar will not stabilize the exchange rate as long as the central bank does not have sufficient foreign currency reserves.

The latest cocktail measures are part of the RBZ’s efforts to prop up the struggling Zimbabwean economy, which has been plagued by high inflation and a shortage of foreign currency.

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