Zimbabwean President Emmerson Mnangagwa has ruled out use of U.S. dollars for salaries, which teachers on strike are demanding. Teachers and economists are condemning Mnangagwa for being out of touch with reality.
Addressing thousands members of the country’s ruling ZANU-PF party Saturday, President Emmerson Mnangagwa said Zimbabwe will continue to pay salaries in the local currency.
“We know that there is no country that prospers without their own currency. We are on that path. We are supporting our own currency which will help to grow our economy. We cannot grow our economy on the basis of a currency which we have no control upon. So that’s where we are going,” he said.
Zimbabwe’s teachers have been striking since last week, asking for a minimum salary of $540 a month. They currently earn about $100 a month in local currency.
Reacting to Mnangagwa’s speech, Robson Chere of the Amalgamated Rural Teachers Union of Zimbabwe said: “It is clear that Mr. Mnangagwa is carefree and indifferent on the plight of teachers and the demand for a living wage is a struggle that no one can stop at this moment. And no one can exclude teachers from being actively participate in our economy by paying them slave wage in the form of bond [local currency].”
“We will resist any attempts by any means necessary, even by the highest office, from stopping us to demand a living wage. We will continue mobilizing teachers get the USD so that teachers can actively participate in this economy,” he added.
“The president is not being honest and sincere,” said Raymond Majongwe of the Progressive Teachers Union of Zimbabwe. “The tragedy of that analogy is he is being selective with the truth. Every service they are provide they are charging in U.S. dollar. We have seen him buy chicken and he took U.S. dollars to pay. We didn’t see him produce RTGS dollars.”
The teachers’ pay dispute goes back to October 2018, when the government stopped paying them in U.S. dollars, switching to the reintroduced Zimbabwean dollar, also called the Real Time Gross Settlement dollar. The new currency has steadily lost value, effectively reducing their wages.
Prosper Chitambara, a senior researcher and economist at the Labor and Economic Development Research Institute of Zimbabwe says high inflation is the reason why teachers are not interested in the local currency.
“When there is high inflation, money cannot effectively serve as currency,” he said. “The two major functions of currency are, number one, to serve as a medium of exchange and, number two, to serve as a store of value. So chronic high inflation affects the function of money, and it causes the market to lose confidence and to prefer to transact in more stable currency which in this case the U.S. [dollar]. So once we address the chronic inflation, then people will begin to trust, love and have greater confidence in the local currency.”
Last week Zimbabwe’s government offered teachers a 20% pay increase and other incentives, such as free school fees for their children and loans for housing. The teachers have rejected that offer as insufficient.
The government later announced that the striking teachers have been suspended for three months without salary.