Late pay in Zim
Army and air force personnel in Zimbabwe will be paid two weeks after their usual payday because the cash-strapped finance ministry can’t meet its wage obligation on time.
The southern African nation spends about 83% of the revenue it collects paying government workers, according to Finance Minister Patrick Chinamasa.
A shortage of dollar notes in recent months has worsened Zimbabwe’s economic crisis. The country, which abandoned its own currency in 2009 to end hyperinflation, uses mainly US dollars, though South African rand, euros, British pounds and several other currencies are legal tender.
“Against the background of severe revenue under-performance and the related cash-flow challenges, government has been honouring its monthly wage obligations, albeit through shifting pay dates,” Willard Manungo, Secretary for Finance, said in a circular sent to the military and civil service and obtained by Bloomberg and dated 16 June. Treasury confirmed the authenticity of the document.
Government has been postponing paydays for regular civil servants since 2014, though until now it hasn’t been clear if the military has been affected. Some soldiers looted shops in the capital, Harare, in 2008 when their pay was delayed at the height of Zimbabwe’s hyper-inflation crisis, triggered by a failed land reform programme that slashed agricultural exports. At that time inflation accelerated to about 500 billion percent, according to the International Monetary Fund. The economy has halved in size since 2000.
Zimbabwe’s military and air force will be paid on 27 June instead of the regular 12th of the month while police and prison staff will be paid 30 June, Manungo said. Teachers and medical staff will be paid between 7 and 14 July because government can’t meet the 20 June payday, Manungo said in the circular.
The Zimbabwe Revenue Authority, known as Zimra, said first quarter revenues was US$724.9 million, below a target of US$861.8 million. The southern African nation will introduce so-called ‘bond notes’ in October. The currency, pegged to the US dollar, will be printed in Germany and will hold no value outside Zimbabwe.
Cairo-based African Export Import Bank will underwrite as much as US$200 million worth of bond notes.
Cash withdrawals from ATMs have been limited by some banks.
BLOOMBERG
The southern African nation spends about 83% of the revenue it collects paying government workers, according to Finance Minister Patrick Chinamasa.
A shortage of dollar notes in recent months has worsened Zimbabwe’s economic crisis. The country, which abandoned its own currency in 2009 to end hyperinflation, uses mainly US dollars, though South African rand, euros, British pounds and several other currencies are legal tender.
“Against the background of severe revenue under-performance and the related cash-flow challenges, government has been honouring its monthly wage obligations, albeit through shifting pay dates,” Willard Manungo, Secretary for Finance, said in a circular sent to the military and civil service and obtained by Bloomberg and dated 16 June. Treasury confirmed the authenticity of the document.
Government has been postponing paydays for regular civil servants since 2014, though until now it hasn’t been clear if the military has been affected. Some soldiers looted shops in the capital, Harare, in 2008 when their pay was delayed at the height of Zimbabwe’s hyper-inflation crisis, triggered by a failed land reform programme that slashed agricultural exports. At that time inflation accelerated to about 500 billion percent, according to the International Monetary Fund. The economy has halved in size since 2000.
Zimbabwe’s military and air force will be paid on 27 June instead of the regular 12th of the month while police and prison staff will be paid 30 June, Manungo said. Teachers and medical staff will be paid between 7 and 14 July because government can’t meet the 20 June payday, Manungo said in the circular.
The Zimbabwe Revenue Authority, known as Zimra, said first quarter revenues was US$724.9 million, below a target of US$861.8 million. The southern African nation will introduce so-called ‘bond notes’ in October. The currency, pegged to the US dollar, will be printed in Germany and will hold no value outside Zimbabwe.
Cairo-based African Export Import Bank will underwrite as much as US$200 million worth of bond notes.
Cash withdrawals from ATMs have been limited by some banks.
BLOOMBERG
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