Some civil servants – most of them soldiers and nurses – failed to access their salaries on Friday after a Mauritian company switched off its electronic payments processing system.
Most Zimbabwean banks use Paynet, which is owned by Mauritian financial services provider Payserv Africa, to process interbank transactions. As part of the arrangement, the local banks pay the service provider in American dollars. But a standoff between banks and Paynet has resulted in service disruption.
“We regret to inform our valued clients that Payserv Africa have suspended Paynet services to all banks due to non-payment of service fees,” a statement by Paynet reads.
The banks argue that they can’t pay in foreign currency because the facility is used to service mostly RTGS money. The International Monetary Fund (IMF) in its Staff-Monitored Program (SMP) for Zimbabwe said the value of banking sector assets had declined in real terms by 40% as of the end of last year. As such, paying for Paynet services in foreign currency will worsen the situation.
Some civil servants who did not get bank notifications on pay day approached their financial institutions only to be told there was a system error being rectified.
“I kept checking my balance and there was nothing and when I got to the bank I was told to check on Monday,” said a nurse.
The civil servants are worried that their salaries will most likely have lost value by the time they get paid.
“As soon as I get paid I buy forex on the streets because the RTGS dollar loses value almost weekly. If my pay could get me R1,000 on the streets by Monday it can only get me at most R900,” added the nurse.
By midday on Friday R100 was worth RTGS$60 while US$100 was in the range of RTGS$900.
“The rates go up faster when the demand is high. Civil servants pay days spike the demand,” said an illegal forex dealer.