Conditions of service for civil servants will soon be adjusted by the Government following the 42,55 percent adjustment of the ZiG exchange rate against the United States dollar by the Reserve Bank of Zimbabwe (RBZ) recently, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said yesterday.
In an interview on the sidelines of President Mnangagwa's State of the Nation Address, Prof Ncube said negotiations were already underway under the umbrella of the Tripartite Negotiating Forum (TNF).
"Yes, we have to, I think we have to. We are looking into it and we are already negotiating through the Tripartite Negotiating Forum to adjust the wages of civil servants. Hopefully we will reach an agreement soon and then we can move forward and assist the civil servants," he said.
Prof Ncube said the adjustments would be made before the end of the year.
"It is a matter that we are already looking into. That is why I mentioned that it will require some adjustment in wages. Wages have to be adjusted both in the public sector and private sector to improve the buying power of wages for workers, so that has to happen.
"But that is what happens when a currency is adjusted. It causes those other negative impacts. But also there are other positive impacts on the business front. We are determined to save jobs in our formal economy," he said.
On corrective measures to deal with the resurgence of the black market, Prof Ncube said measures would be put in place soon, as was said by President Mnangagwa during his address.
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He said he could not go into detail as that would give away Government's plans to deal with the black market.
"Yes we are looking at measures, additional measures to deal with the parallel market. I cannot pronounce what form these will take. I also don't want to pronounce when action will be taken.
"That should be some of the strategy for dealing with something as opaque as a parallel market," said Prof Ncube.
Turning to the issue of whether the ZiG is backed by gold, the Finance Minister said it was indeed backed by gold, but the exchange rate was not fixed to gold.
"There is a difference in fixing an exchange rate and there is a difference in backing an exchange rate.
"Gold backs the exchange rate. So as I speak, our reserves are about US$370 million. And the central bank has been intervening in the market, and has been able to sell the gold which is backing the ZiG to supply the market with much-needed US dollars for importation purposes," he said.
Prof Ncube said enough reserves are backing the money in circulation. "But the issue is about the exchange rate. The rate itself as opposed to the backing, but adequate reserves are backing the ZiG," he said.
