January 9, 2019 / 9:20 AM / 3 months ago

Zimbabwe public workers threaten to join pay strike

HARARE (Reuters) - Zimbabwe’s public sector workers will join a growing strike if the government does not agree to pay them in U.S. dollars, the main civil service union said on Wednesday.

FILE PHOTO: A woman walks past a "No Petrol" sign at a fuel station in Harare, Zimbabwe, October 9, 2018. REUTERS/Philimon Bulawayo/File Photo

Doctors and some teachers have already staged walk-outs, saying they need the hard cash payments to protect them against inflation and a currency crunch - piling pressure on Emmerson Mnangagwa less than five months into his contested presidency.

The Apex Council, which represents 16 public sector unions, said it gave the government the required two-week notice of industrial action on Tuesday.

“If they do not pay us in U.S. dollars or an equivalent, we are going on a fully fledged strike,” Apex deputy chairman Thomas Muzondo said.

Cash shortages have plunged Zimbabwe’s financial system into disarray, threatening social unrest and undermining Mnangagwa’s efforts to win back foreign investors sidelined under his predecessor Robert Mugabe.

With not enough hard currency to back up funds showing in bank accounts, the value of electronic money has plummeted, prompting businesses and civil servants to demand payment in U.S. dollars they can withdraw.

Vincent Hungwe, the chairman of the Public Service Commission that employs civil servants, said the government planned to meet unions and make an offer by Thursday. Late on Tuesday, he said the state would expand cost-of-living payments and propose a new pension scheme.

Any move to compensate workers by increasing wages would scupper government plans to cut the fiscal deficit by more than half to 5 percent of GDP this year and bring down the wage bill to 70 percent of the budget from more than 90 percent previously.

Reducing that wage bill is one of the main demands of the International Monetary Fund, which has urged the government to channel more money to infrastructure development and health.

The government employs more than 300,000 workers and spends $300 million on salaries every month.

Mnangagwa came to power in November 2017 after Mugabe was forced to resign following an army coup. He was declared president in August 2018 after a presidential vote that his main opponent says he won fraudulently.

Reporting by MacDonald Dzirutwe; Editing by Andrew Heavens

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