Harare (New Ziana)-The government will adjust the salaries of civil servants to cushion them from the effects of the recent devaluation of the local currency, the Zimbabwe Gold (ZiG), a cabinet Minister has said.
Finance, Economic Development and Investment Promotion Minister Mthuli Ncube said this during an interview with journalists soon after President Emmerson Mnangagwa had delivered the State of the Nation address to the joint sitting of the National Assembly and Senate at the new Parliament Building in Mt Hampden on Wednesday.
Zimbabwe introduced the ZiG) in April this year as the government maintained that no country in the world can develop without its own currency.
Last week, the Reserve Bank of Zimbabwe announced sweeping monetary policy changes after the economy experienced a resurgence in exchange rate pressures since mid-September.
Ncube said the government was aware that public workers and citizens in general were feeling the impact of the devaluation of the ZiG, hence the need to cushion them.
“Putting in place a flexible exchange rate or devaluation does have an impact immediately on incomes, on prices,” he said.
“And for us as a government, we will make some adjustments, naturally, to civil service salaries to make sure that the purchasing power of the salaries is somewhat restored. Maybe not in full, but because someone wants to get in there. So, there is bound to be pain, there’s bound to be impact, and that’s what happens with any policy.
“Any policy does have negative impacts and that’s what will happen. But we will make some adjustments to make sure that those who are losers can be compensated somewhat. It won’t be everybody who will be looked after, but we’ll do our best. But the idea really is to make sure that we deal with the issue of macroeconomic stability, and that’s what the Zimbabwe government has been working on.”
Commenting on the measures announced by the RBZ last week, Ncube said it shows that the government remains determined to stabilise the macroeconomic environment.
“So what the Reserve Bank put in place was a package of measures to really deal with the issue of currency stability. Now, when it comes to the issue of allowing the exchange rates to move to ZiG 25, the intention there was to make sure that the gap between the parallel
market and the official market is somewhat narrowed.
“The idea is that you want to discourage speculative demand for credit, for speculation in the parallel market. The other measure that the central bank put in place was to increase the reserve requirement for loans, for both domestic loans as well as foreign loans,” he said.
New Ziana