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Non-monetary incentives the way to go

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By Petros Manyuchwa


The face-off between government and its workers over salaries has protracted to a magnitude that it’s now threatening the realisation of the national vision.

The new political dispensation committed itself to transforming Zimbabwe into an upper middle income economy. That vision is only realisable if all hands are put on the deck and there is unity of purpose within all government structures. The national vision entails and provides an opportunity for reconstruction and transformation of the economy to one which is capable of creating maximum opportunities for citizens to live a full and dignified life. This informs the incessant demands for salary adjustments by civil servants whose current wages have admittedly dishonoured their dignity.

If the current salary regime is maintained, as it now seems, this sector of the populace will be left out in the envisioned upper middle income economy. With disgruntled civil servants, the journey to Vision 2030 will be bumpy and might even deflate the bus. It is a fact that civil servants are critical enablers of economic transformation; as such their genuine grievances must be listened to.

The step taken by President Mnangagwa recently when he met one of the teachers’ unions, the Zimbabwe Teachers’ Association (ZIMTA), is very positive and one hopes that such an engagement will find a lasting solution to the salary logjam.

The salary standoff has been largely caused by lack of sincerity by both players, the employer and the employee. The workers and the employer are respectively demanding and offering unworkable salaries.

The two should come up with a practical salary structure that enables workers to live a dignified life while leaving a room for realisation of budget savings, supportive of re-orienting expenditures away from consumption towards development.

Understandably, government has a lot in its hands apart from meeting the salary obligation. The situation is exacerbated by lack of productivity within the economy, a condition that requires indulgence of the workers. However, there are a lot of other avenues that government can exploit as non-monetary incentives for its workers. When workers demand those astronomical salaries, they will be bench marking with market prices of basic needs like shelter.

It will remain a pipe dream for an honest civil servant to buy a house in an urban area with the current salary regime. As a result, most of the government workers are tenants and some of them are lodging in pathetic apartments. They have no choice. An apartment commensurate with their professions can consume the whole salary.

But government owns vast stretches of state land in and around several towns. It’s not a bad idea to give its workers residential stands for free. Government set for itself a target to build houses. That should start in Jerusalem. No sane father can donate food to neighbours when his own family is hungry.

The civil servants can be organised to pull together their resources for servicing their stands. With a roof above their heads, the salary that government is offering will be enough. There will be no need to pay rent which is currently chewing the largest chunk of the civil servants’ salaries. This does need workshops or a clever minister to do this, just a will power is needed.

It’s unfortunate that instead of striving to provide a roof over the civil servants’ heads, there is actually a deliberate effort to remove those roofs. This is not an allegation but a founded veracity established when this writer visited the local government ministry this week.

A civil servant with melancholy visible on his face told this writer that they received a directive from the Ministry of Finance and Economic Development to convert all the outstanding lease rentals to US dollars at 1:1 rate. To avoid receipting in USD, as that would cause an outcry, they were also directed to convert it to Zim dollars at the RBZ auction rate.

Unfortunately the majority of the lessees are civil servants who had hoped that they would be house owners through a rent to buy facility. One civil servant revealed that he had an outstanding balance of ZWL$7123 for a stand in one of the medium density suburbs which was effectively converted to US$7123.

This then means he is expected by his employer to pay ZWL$576 963 within a period of four years towards a stand to build his house.

Simple arithmetic shows that the land hungry civil servant is to pay ZWL$12 020 every month. On average, a civil servant earns a gross of ZWL$12 591. This means that for the next four years, the whole salary will go towards the purchase of a stand from his employer. What he will do with other financial obligations is none of the employer’s business. Does this arrangement reflect a government that is willing to provide houses to its citizens?

Last week, deputy minister of Local Government, Marrian Chombo warned local authorities against demanding payment of bills in foreign currency at 1:1 exchange rate. She told Parliament that if one volunteered to pay in foreign currency, the auction rate should be used and she stressed that the 1:1 rate was since abolished. Going by what she prescribed to the local authorities, the aforesaid civil servant’s outstanding lease rental is supposed to be US$88. It might sound economically ridiculous to Mthuli Ncube but that’s government’s policy which should be implemented for the greater good.

Therefore, what is happening at the Local Government ministry borders on double standard and inconsistency. Policy inconsistency was one of the evils that eroded investor confidence in the old dispensation. It is most unlikely that the President is in the know of this thoughtless endeavour to reverse the advances government had gone in addressing housing challenges within the civil service.

By converting its charges to USD, government is admitting something. This gives credence to civil servants’ demand for their previous salaries to be converted on a 1:1 rate and then indexed to the existing auction rate.

As much as there is need for budget surplus and need to harness revenues from all sources, there is also need to have a human face in doing so. President Mnangagwa committed himself to servant leadership, one who listens with empathy. Here is a situation that will test his sincerity to that leadership style.