1 November 2008
The Zimbabwe Congress of Trade Unions (ZCTU) says National Employment Councils should start negotiating for foreign currency denominated salaries in response to the prevailing environment.
In September, the central bank allowed some retailers and wholesalers to sell their goods under the Foreign Currency Licensed Wholesalers and Retailers dispensation, a move the labour body says pushes workers into abject poverty as they do not have the foreign currency to buy goods.
Lovemore Matombo, the president of the ZCTU says the issue of foreign currency denominated shops had been distorted by the central bank as they had left out the workers from the equation.
Workers who cashed in foreign currency at the end of the day are paid in local currency that is depreciating.
"We are saying every NEC (National Employment Council) should start negotiating salaries in foreign currency," Matombo said, adding that if employers failed to comply the labour body would be left with no option but to call for protests "which will be successful this time around".
A survey by Standardbusiness showed that some retailers had taken advantage of the foreign currency craze to price their goods in foreign currency even without obtaining a licence from the central bank.
"This is survival. We are living in an abnormal environment and we should charge in foreign currency if we are to continue in business," said one manager at a retail shop.
Standardbusiness also witnessed a worrying trend in which products priced in foreign currency increased in what economic analysts say reflects the devastating effects of hyperinflation that is eroding the purchasing power of money, foreign currency included.
Employers interviewed said last week that inasmuch as they would have wanted to pay in foreign currency, they cannot implement on an ad hoc basis without clearance from the central bank.
"We have not been told to pay workers in foreign currency. If we cross the path of the central bank we risk losing our forex trading licence," one executive at a retail chain said.
John Mufukare, Employers' Confederation of Zimbabwe (EMCOZ) executive director, said the remuneration policy would be discussed at the organisation's annual convention next month. He says the remuneration policy currently obtaining is neither national nor sensible and Zimbabwe needed a new policy if companies are to survive in the New Year.
"We are a stakeholder-driven organisation. . .let solutions come from our members and we will fine-tune them," he said.
Pressed whether EMCOZ members were prepared to pay salaries in foreign currency, Mufukare referred all questions to David Govere, newly elected president. Govere said he was going out of town and would be back in the office tomorrow (Monday).
Zimbabweans' woes have been compounded by unrealistic cash withdrawal limits overshadowed by rising inflation which official statistics show is at 231 million percent, as of July. But independent economists believe the government figures are being massaged. Professor Steve Hanke, a director at Cato Institute, a Canadian based economic think-tank says Zimbabwe's wayward inflation had reached 10.2 trillion percent as at 24 October.
For ordinary Zimbabweans, who have no access to foreign currency it costs an arm and a leg to put food on the tables as the $50 000 maximum cash withdrawal limit hardly buys anything.
A 2-litre cooking oil costs $450 000 while a 10kg bag of maize meal sells at $600 000. A bar of laundry soap costs $110 000. For a 2kg packet of sugar one has to part ways with $300 000. A loaf of bread has zoomed past $100 000. This means an ordinary household needs an average of $2 million to buy a few basic items. At the rate of $50 000 a day withdrawal limit, one has to go the bank for 40 days: a feat that is begging an entry into the Guinness Books of Records.
Since December last year, the country has faced a cash crisis which is showing no signs of abating due to runaway inflation that requires large sums of cash to buy basic commodities.
The crisis was exacerbated by the withdrawal of the German firm, Giesecke & Devrient, from supplying banknote paper to Zimbabwe as Berlin tightened its screws over Harare's deteriorating political environment.
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