30 November 2018

Zimbabwe: Turmoil Rocks Collective Bargaining

Finance minister Mthuli Ncube pronounced in the 2019 National Budget that the United States dollar remains at 1:1 to Real-Time Gross Settlement and bond notes despite government demanding that duty and taxes be paid in forex only.

This follows the pronouncement by the Reserve Bank of Zimbabwe (RBZ) governor John Mangudya in his monetary policy statement on October 1 separating RTGS and forex accounts. This has triggered the skyrocketing of prices and shortages of basic goods, as well as hiking the rate on the black market to as high as 600% at one time.

Presenting at the Employers' Confederation of Zimbabwe (Emcoz) Collective Bargaining Summit held in Nyanga last week, economist Brains Muchemwa said workers will bear the brunt of the currency volatility crisis which is severely eroding the purchasing power of consumers.

"With inflation expected to be around 25%, there will be a significant loss of purchasing power on the part of workers," Muchemwa said.

He said the country will be running a dual economy, whereby while goods will be sold in foreign currency, the majority of Zimbabweans will not have access to them as they will still be earning in RTGS and bond notes.

Economist Godfrey Kanyenze told delegates at the summit that the collective bargaining process cannot be conducted without tackling the national problems that have deepened the economic crisis through the social contract.

"The social contract is so critical because collective bargaining cannot resolve the wider macro-economic issues," Kanyenze said.

"We need to go back to the social contract to deal with country factors that impinge on the ability of collective bargaining to succeed. People in the collective bargaining realm will be very limited by the macro- economic environment."

Zimbabwe Congress of Trade Unions (ZCTU) president Peter Mutasa said it is critical to engage government to avoid the crisis worsening to 2008 levels.

"This is becoming a big crisis. Let us not entertain the idea that politicians are rational beings," Mutasa said.

"They have ignored the crisis and will continue to ignore it as we go back to the days of 2008 which will be detrimental to labour business and citizens in general."

He said it is imperative to bring government to the negotiating table if they effectively address the current economic crisis.

Mutasa said there is a need for a political settlement between President Emmerson Mnangagwa and MDC Alliance leader Nelson Chamisa to solve the deepening economic crisis.

Emcoz senior vice-president Israel Murefu said the country needs to ramp up production if there is to be sustainable collective bargaining agreements.

"The problem is that we want to share before we create," Murefu said. "If we do not produce, you cannot share what you do not have."

He added that there is need for an enabling environment for business to operate.

Among the recommendations made at the summit were the need for an analytical and pragmatic approach to collective bargaining in the knowledge that the problems in the economy are neither caused by employers nor workers, the need to increase production which will lead to an increase in wages and for employers and workers to push for a social contract.

Emcoz executive director John Mufukare said they will go through the recommendations and present them to Labour minister Sekai Nzenza "for her own information."

The summit was held under the theme: Fighting Inflation, Saving Jobs.

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