The International Monetary Fund (IMF) has promised that state workers’ salaries will be raised but the process must be done sustainably.
IMF’s resident representative to Zimbabwe, Patrick Imam said that the government’s wage bill had significantly increased between 2010 and 2016.
Imam said Zimbabwe was not in the public employment level but the public sector wage premium, which was above peers.
He added that going forward the civil servants’ salaries should increase but the process was not supposed to be done through printing money.
“Civil servant wages will have to increase, as the Government already announced in its supplementary budget,” said Imam.
“However, it must be financed sustainably. In the past years, wage increases were financed by printing money, which in the end was self-defeating as it eroded the purchasing power of the wage increase.”
Imam emphasised that the wage increase must be aligned with growth in tax revenues in order to sustain from creating a strain on the budget.
While it was recently reported that the government will soon issue new notes and coins to replace the bond note that was introduced in 2016.
Minister of Finance, Mthuli Ncube said Zimbabwe dollar notes will be trading at equivalence to bond notes.