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Central Bank Freezes Salary Increases for Zimbabwe Workers

  • Irwin  Chifera

Reserve Bank of Zimbabwe Governor John Mangudya on Wednesday effected a salary increase freeze saying the country's economic outlook remains gloomy to support wage hikes raising the ire of trade unions that are complaining that most workers in the country are earning peanuts.

In his Monetary Policy Statement for 2015 released, central bank governor John Mangudya, announced that the country’s economy remains too depressed to the point that it won't make sense for employees, the government included, to effect any salary adjustments for hard-pressed workers.

He said given the lack of competiveness and its negative effects on the economy, there was no room for wage and salary increases within the national economy.

Instead, Mangudya said the prevailing circumstances call for a downward adjustment in the prices of goods and services in order to promote competitiveness and ultimately for the recovery of the economy.

The RBZ chief said further wage and salary increases would only serve to choke the economy.

But the central bank governor’s announcement has provoked the ire of trade unionists who want an upward review of their salaries.

Japhet Moyo, general secretary of the Zimbabwe Congress of Trade Unions, told VOA Studio 7 that his organization is unhappy that government makes critical decisions without consulting its key stakeholders.

Moyo said workers would soon be engaging government for an upward review of workers’ salaries under the auspices of the Tripartite Negotiating Forum although he did not rule out protests.

The move by the central bank to freeze salary increases comes at a time when the Tripartite Negotiating Forum comprising government, business and labor is set to begin consultations on salaries.

Studio 7 failed to get a comment from labor minister Prisca Mupfumira.

The central bank chief said Zimbabwe’s economy is projected to further grow by 3.2% in 2015, driven mainly by services, mining and manufacturing sectors.

Investments in various infrastructural projects already being implemented in electricity, transport and housing, under the country’s economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation, are expected to provide additional growth impetus.