An economist at Lupane State University (LSU) has urged the Government to explore the feasibility of paying a portion of civil servants’ salaries in gold-backed digital tokens and gold coins.
Speaking to the Chronicle, LSU business clinic development manager and economist George Nhepera said paying civil servants in gold coins and gold-backed digital currency reduces the dominance of the black market as the instruments are an alternative store of value other than the US dollar. Said Nhepera:
“To this end, they should be promoted in terms of their use for both people-to-people (P2P) transactions, people-to-business (P2B), and business-to-business (B2B).
“Once this has been achieved with full market confidence, surely our Government can take a giant step to include a portion, say 50 percent of the civil servant salaries and benefits, be paid in these innovative instruments.
“This strategy will help to curtail the black-market dominance in our market which is not helpful for the economic growth and poverty alleviation of our country let alone the achievement of our Vision 2030.”
He said the future belongs to innovators he thanked the country’s monetary authorities for walking the talk in that space adding that they should be commended for supporting the Government in that respect.
However, economic analyst Morris Mpala argued that paying civil servants in the gold-backed currency will reduce the demand for the Zimbabwe dollar.
“This again defeats the purpose of encouraging the use of local currency by the populace. Noble as it might be in terms of liquidity management it shouldn’t be encouraged.
“Let’s pay civil servants the right remuneration and let them have a choice in how they save their money and we concentrate on making the fundamentals right for everyone.”
On Tuesday, 11 July, the Government announced it has increased civil servants’ forex and local currency salary components with immediate effect.
The government is locked in talks with civil servants on salaries.
Last week the two sides met in an indaba but could not come out with a conclusive agreement.
Government and the Zimbabwe Confederation of Public Sector Trade Unions (ZCPSTU), formerly Apex Council, met in the capital last Friday, where they failed to reach to an agreement.
ZCPSTU chairperson Cecilia Alexander told NewsDay recently that they were yet to reach a “conclusive” outcome.
She, however, refused to give more details with regards to what was discussed during the Friday meeting.
“We had negotiations with the government on July the 7th on Friday on the salary increment on both the US dollar and local currency components,” she said.
“The meeting was not conclusive as the government is in consultation with its principal. The government said they are going to consult further on the increment and we have since agreed to meet seven days from the day we met.”
She said the civil servants wanted to maintain the spirit of negotiations.
“Once the negotiations are over, we will issue a statement from when we started the negotiations,” Alexander said.