Govt Moves To Protect Civil Servants, Orders Banks To Pay Bonuses In USD Without High Bank Charges
The government has moved to protect civil servants’ bonuses from the banks, with Finance Minister Mthuli Ncube directing all banks and financial institutions to pay the bonuses in USD. The Finance Minister also ordered the banks to waive the bank charges on the civil servants’ bonuses.
The government’s move comes after reports that some financial institutions liquidated the USD bonuses without permission and gave the workers local currency instead. Some banks were also accused of introducing high bank charges to chow the civil servants’ USD bonuses.
Below is the Finance Minister’s statement directing all banks and financial institutions to pay the bonuses in foreign currency.
PAYMENT OF CIVIL SERVANTS BONUS IN FOREIGN CURRENCY
1. For the better part of the year 2021, government has been seized with various initiatives to continue to stabilize the economy, contain inflationary pressures, and therefore restore the purchasing power of the local currency, with the primary goal being to increase the domestic and external competitiveness of the economy, save and preserve jobs and livelihoods and limit damage to the economy particularly in the face of the Covid-19 pandemic.
2. Macro fiscal stabilization has been achieved largely through fiscal consolidation and the resultant attainment of both fiscal balance and stabilization of the current account.
3. Government is grateful for. and fully recognises the sacrifice and co-operation of all Zimbabweans in the effort to stabilise the economy, which is now on a firm foundation for growth.
4. To further consolidate gains made in reducing inflation from a peak rate of 875% in July 2020 to less than 55% currently, recognising the cyclical nature of annual price hikes whenever we approach the payment dates for Civil servants’ bonuses, the Government of Zimbabwe decided to pay the 2021 bonuses for all civil servants in foreign currency.
5. As of 30 November 2021, bonus payments in foreign currency have been effected for all civil servants and pensioners through their banks.
6. However, it has come to the attention of the Treasury that some banks are compulsorily liquidating civil servants bonus payments and thereby forcibly paying them in domestic currency.
7. In addition, banks have resorted to making arbitrary charges against the bonus payments with some taking significant portions of the wages in the form of bank charges.
8. Both above practices take away the intended benefits of the Bonus payments and we, therefore, wish to advise as follows: –
a. All civil servants should be allowed to withdraw their bonus payments in full in United States Dollars, subject only to existing daily cash withdrawal limits set by the Reserve Bank of Zimbabwe.
b. Such bonus payment amounts are to be made in full without deduction or levy.
c. government and banks will agree a structure for bank charges for these specific amounts which charges must be kept to a minimum.
9. In this regard, government is appealing to the banks for their usual support and cooperation in ensuring that the payment of Civil Servants bonuses is implemented smoothly.
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