The Amalgamated Rural Teachers Union of Zimbabwe (ARTUZ) has urged the government to take on the debt burden of civil servants.
Prior to October 2018, civil servants earned US$540 per month. However, the government declared that USD bank accounts were no longer “real” USD, leading to the official introduction of RTGS dollars a few months later.
In his monetary policy statement on October 1, 2018, then Reserve Bank of Zimbabwe Governor John Mangudya directed banks to separate Nostro foreign currency accounts (FCAs) from local RTGS or Bond Notes.
This change meant that what depositors held in their bank accounts was effectively RTGS rather than USD.
Before this announcement, US dollars, RTGS, and Bond Notes were treated similarly by banks under a single account system established in 2009 when Zimbabwe dollarized.
As a result, from October 2018, civil servants’ US$540 salaries were no longer foreign currency but RTGS dollars.
Civil servants’ current earnings are roughly equivalent to what they received before October 2018, forcing many to incur significant debts to make ends meet.
In a statement on Tuesday, September 17, ARTUZ said that the average civil servant is losing over 50% of their income to debt servicing.
The union has called for the government to craft a “Civil Servants Debt Assumption Bill” while ensuring that state employees receive fair compensation. ARTUZ said:
We are calling upon the government of Zimbabwe to assume the debt burden of the Civil Servants of Zimbabwe.
Civil servants are trapped in debt with the average Civil Servant losing over 50% of income to servicing debt. This debt crisis has worsened the incapacitation among Civil servants compromising productivity.
The debt crisis was birthed from the violation of section 65(1) by the government of Zimbabwe. The government has failed to pay a fair wage since October 2018.
We are calling for the passing of a Civil Servants Debt Assumption bill to enhance productivity in the Civil Service.
To guard against reckless future borrowing by Civil Servants, a fair wage has to be paid and all Civil Servants have to have their loan proposals approved by designated government officials in different departments.
ARTUZ president Obert Masaraure said since civil servants have been contributing a mandatory Government Employees Mutual Savings (GEMS) monthly, the bank holding the funds can assume all civil servants’ debt and use GEMS to settle debts.
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