Em­ploy­ers speak on forex salaries

EM­PLOY­ERS sell­ing their prod­ucts in for­eign currency have no jus­ti­fi­ca­tion for pay­ing their em­ploy­ees in bond notes or RTGS, rep­re­sen­ta­tives have said.

The Sunday Mail (Zimbabwe) - - BUSINESS - Africa Moyo Se­nior Busi­ness Re­porter

THE call comes at a time when some traders, par­tic­u­larly phar­ma­cies and pri­vate clin­ics, are charg­ing their ser­vices in for­eign cur­ren­cies, mainly the US dol­lar. Fol­low­ing a re­cent strongly worded state­ment from Pres­i­dent Em­mer­son Mnan­gagwa, phar­ma­cies such as Word Phar­macy and Booties Phar­ma­cies, among oth­ers, are now ac­cept­ing swipe, bond notes and mo­bile money pay­ments.

How­ever, their prices are an­chored on the US dol­lar at a rate of 400 per­cent such that a drug sell­ing for US$7 is sold for $28 when us­ing other forms of pay­ment.

Top med­i­cal in­sti­tu­tions such as Baines Clinic in Harare de­mands US$50 for pa­tients on med­i­cal aid. Most pri­vate doc­tors are de­mand­ing some pay­ment in for­eign currency of no less than US$20, while the rest is paid in swipe or mo­bile money.

How­ever, de­spite de­mand­ing pay­ment in US dol­lars, em­ploy­ees for such firms are paid in bond notes, RTGS and/or mo­bile money.

Pres­i­dent Mnan­gagwa said phar­ma­cies charg­ing in US dol­lars risk los­ing their op­er­at­ing licenses if the prac­tice con­tin­ues.

“These phar­ma­cies are charg­ing in US dol­lars but their em­ploy­ees are not paid in US dol­lars . . . the ma­jor­ity of you who were sell­ing med­i­cal pro­vi­sions, ask­ing for US dol­lars, it’s not proper be­cause you go and queue at the RBZ (Re­serve Bank of Zim­babwe) ask­ing for for­eign currency to im­port these drugs.

“There is no rea­son why you should, there­fore, ask the pub­lic to pur­chase these drugs in for­eign currency when you your­selves get it from the Re­serve Bank. Those of you who do not heed this cau­tion, dan­ger is com­ing, we will with­draw your licenses.”

Em­ploy­ers Con­fed­er­a­tion of Zim­babwe (Em­coz) di­rec­tor Mr John Mu­fukari told The Sun­day Mail Busi­ness on the side­lines of the re­cently held 6th an­nual col­lec­tive bar­gain­ing con­fer­ence in Nyanga that it was only fair for firms charg­ing their prod­ucts and ser­vices in for­eign currency to pay salaries us­ing the same currency.

“It’s dif­fi­cult to ar­gue against that from a con­cep­tual point of view be­cause if you are trad­ing in forex, it means your busi­ness is now en­tirely des­ig­nated in forex; that is not only your pro­cure­ment costs but your lo­cal costs as well.

“The call for busi­nesses charg­ing in for­eign currency to pay wages and salaries in for­eign currency is a log­i­cal ar­gu­ment; it is dif­fi­cult to ar­gue against that.

“Those who are op­er­at­ing in a com­pletely forex en­vi­ron­ment should be able to cover all their ex­penses in forex, that we will not ar­gue,” said Mr Mu­fukari.

How­ever, he said this can only ap­ply to com­pa­nies get­ting all their in­come in for­eign currency. Mr Mu­fukari said such firms were a “tiny lit­tle bit”.

He said most com­pa­nies that ex­port don’t re­tain 100 per­cent of their ex­port re­ceipts, thereby mak­ing it dif­fi­cult for the firms to pay salaries ex­clu­sively in for­eign currency. Gov­ern­ment re­cently re­viewed the for­eign currency re­ten­tion lev­els for gold min­ers from 35 per­cent to 55 per­cent, which Mr Mu­fukari said is barely enough to war­rant pay­ment of salaries and wages in the ex­otic currency. He said 55 per­cent for­eign currency re­ten­tion is only ad­e­quate to im­port raw ma­te­ri­als for op­er­a­tions.

“In the min­ing sec­tor, there are chem­i­cals that you can­not do with­out, prod­ucts like cyanide. The equip­ment that you use for min­ing, when it breaks down, the parts can only be ac­quired us­ing for­eign currency.

“That’s where the 55 per­cent goes, and the 45 per­cent cov­ers all your lo­cal ex­penses, in­clud­ing wages.” the dif­fi­cul­ties the mo­tor­ing pub­lic con­tinue to face on the route due to its poor state.

“In this re­gard, Gov­ern­ment has since re­viewed the de­liv­ery model, with lo­cal re­sources also tar­geted to be used to un­der­take high­way up­grade works, lever­ag­ing on Zi­nara (Zim­babwe Na­tional Road Ad­min­is­tra­tion) cash flows. Do­ing so will al­low for timeous im­ple­men­ta­tion of the pro­ject in a cost-ef­fec­tive man­ner, and in con­sis­tent with the ob­jec­tive of max­imis­ing the use of lo­cal con­tent,” reads part of the 2019 In­fra­struc­ture Plan.

Ac­cord­ing to the 2019 In­fra­struc­ture Plan, an amount of $300 mil­lion will be dis­bursed to the pro­ject next year, com­pris­ing of $50 mil­lion in fis­cal re­sources and $250 mil­lion pro­ceeds raised through a Zi­nara In­fra­struc­ture Bond.

Newspapers in English

Newspapers from Zimbabwe

© PressReader. All rights reserved.