Debt and development pressure group, the Zimbabwe Coalition on Debt and Development (ZIMCODD) has called on the government to offer civil servants 50% salaries in United States dollars and local currency as a way of cushioning them from the volatile exchange rate.
In a weekly review, ZIMCODD urged the government to spend within its means and also address corruption issues.
“Noting the effort to alleviate the challenges that citizens are facing, it is our position that government take deliberate effort to correct the problems of the day and consider pegging Civil servants’ salaries in USD: GoZ should pay 50% of civil servants salaries in USD and another 50% in ZWL at the interbank rate. The idea here is to cushion workers from perpetual ZWL exchange rate depreciation. This will also help stabilize the local currency as it reduces both government ZWL spending and USD demand from individuals.
“Government should spend within its means/budgets. This entails abolishment of all quasi-fiscal operations (QFOs) by RBZ. It also means adhering to the contract of a budget that has been approved after consultation with citizens. Graft and resource leakages continues to exert a weight on state resources while prejudicing citizens,” said ZIMCODD
The coalition added “Furthermore, it erodes the necessary trust between government and the people. Market driven exchange rate (free float): The Willing Buyer Willing Seller (WBWS) system through banks will help discover the true price of ZWL as long as RBZ does not interfere. As such, there is need to remove trading caps on this WBWS system,”
Zimcodd also urged the Government to address public debt as current statistics are showing growing figures which are leading the nation into debt distress.
“Latest statistics are showing burgeoning debt figures from US$10.7B as of Dec 2020 to US$17.15B as of Dec 2021. Of the total PPG, arrears alone constitute more than US$14B. This show that the nation is in debt distress. This burden will continue to exert pressure on citizen’s livelihoods when repayment demands are made.
“Furthermore, unsustainable debt constrains the countercyclical effects of fiscal policies and affect economic growth through heightened interest rates, taxes and inflation. With low levels of debt, Zimbabwe will be able to provide social safety nets to the vulnerable,” said Zimcodd