HARARE (Bloomberg) – Zimbabwe’s Treasury said the country’s lenders are limiting civil servants’ access to an allowance which it pays in foreign currency.
The so-called “coronavirus allowance” of $75, which is non-taxable, was announced in June by Finance Minister Mthuli Ncube and is paid in addition to the Zimbabwe dollar salaries.
Inflation of 737% in June has wiped out the earnings of most public workers, amid increasing demands by teachers, nurses and bankers to be paid in U.S dollars following the collapse of the local currency. The country has faced crippling shortages of everything from hard currency to fuel and food.
In an emailed statement on Thursday, Treasury said the refusal by banks to pay in foreign currency has “resulted in reputational damage to the government and unnecessary ill-feelings among civil servants.”
Ralph Watungwa, president of the Bankers Association of Zimbabwe, didn’t immediately respond to calls to his mobile phone seeking comment.