Zimbabwe public sector workers reject 97% pay increase

Cecilia Alexander (pictured), who heads the Apex Council

HARARE (Bloomberg) — Labor unions representing government workers in Zimbabwe on Monday rejected an offer of a 97% pay rise and demanded that increases be linked to the official U.S. dollar exchange rate to offset inflation and a devaluation of the Zimbabwean dollar.

“An interbank-related salary is the only way to restore the value of wages and any other intervention will not work given the hyper-inflationary environment which negates any Zimbabwe dollar increase,” said Cecilia Alexander, the chairwoman of the Apex Council, the biggest representative of workers.

The Zimbabwean dollar was trading at 17 per U.S. dollar on the interbank market on Monday.

Meanwhile, the Zimbabwe’s finance minister maintained on Monday that the country’s economy would grow 3% this year despite poor rains that have hurt some crops and persistent power cuts that have hit mines and industry.

The southern African nation is experiencing its worst economic crisis in a decade, compounded by shortages of foreign exchange, fuel and power as well as a drought last year that has left half the population in need of food aid.

Mthuli Ncube told reporters in the capital that he felt the government undervalued the contribution of the informal sector to the economy. Less than 20% of the working population hold formal jobs.

Ncube said in November the economy, which contracted by 6.5% in 2019, would this year rebound as from agriculture and mining output improved. But many economic analysts expect the economy to worsen.

“We have our own projection of 3%, so you can see that generally there is a feeling that this will be a better year. So we are sticking to our 3% rate of growth,” Ncube said in comments broadcast by a local radio station after a meeting with Chinese officials.

“There is always more activity in the economy than we think.”

The United Nations has warned that Zimbabwe faced another poor harvest this year because of patchy rains.

Ncube has said the government will spend $133 million this year on subsidies for maize meal to keep the price of the most consumed food affordable.