Government will next week announce a salary cushion for civil servants in line with rising inflation and the private sector must also do the same for its employees, Finance and Economic Development Minister, Mthuli Ncube said on Monday.
Salary reviews have become a major bone of contempt between employers and workers since the government abandoned a fixed 1:1 exchange rate early this year.
Use of a floating exchange rate, now as high as USD1 for ZWL$8.6, since liberalisation in February, saw prices of goods and services shoot up, while salaries largely remained unchanged.
This has prompted civil servants to threaten to strike on several occasions, only to hold back after promises for adjustments.
And with the recent re-instatement of the Zimbabwe dollar as the sole currency in the local market, replacing multi-currencies, Professor Ncube said the government will also announce a “cushioning allowance” for civil servants.
“We are going to deal with (salaries) that in the next week or so. We are going to make an announcement in terms of a cushioning allowance,” Prof Ncube told business leaders at a meeting to discuss implications of the Zim dollar return.
“Industry please can you follow suit and do the same for your employees. Because what we are noticing is that you are making these fantastic profits and you are looking after shareholders only, look after your employees as well. Increase their wages so that they are able to deal with inflation pressures.”
Zimbabwe’s annual inflation is expected to breach the 100 percent mark, having hit 97.85 percent at the last official count in May.
Prof Ncube lauded the recent launch of the Tripartite Negotiating Forum, a vehicle through which government, employers and employees discuss issues around the economy and remuneration.
Meanwhile, Prof Ncube said the local manufacturing industry must take up credit lines that government is working on to retool and boost productivity.
He said two separate facilities amounting to over US$750 million, with American and South African firms, were in the pipeline.