Workers Fail to Withdraw Salaries

BANKS this week failed to implement a Reserve Bank directive to allow formally employed workers to withdraw their full monthly salaries, amid reports of bank notes shortages.

The Zimbabwe Independent observed that most banks set varying withdrawal limits following Monday’s decision by the central bank allowing workers to access their full January salaries upon presentation of a pay-slip.

 
Standard Chartered bank yesterday set $2 trillion and $1 trillion withdrawal limits for its branches in the city centres and those outside town.

FBC Commercial Bank’s limit was $10 trillion, NMB $5 trillion while Beverley and Barclays allowed individuals to withdraw only $500 billion.

Banks lodge treasury bills as security when they need cash from the Reserve Bank, but the current-liquid state of the money market stops them from lodging the instruments.

Pressured by the breakneck speed towards full dollarisation of the comatose economy, most companies responded to the worsening economic crisis by hiking salaries in an effort to cushion workers from the harsh environment.

The lifting of the cash withdrawal limits has resultantly weakened the local currency against major ones as workers hurriedly offload the depreciating local currency for foreign exchange.

Yesterday, the local unit crashed to an all-time low of $250 billion against the United States dollar, a development analysts have attributed to the pricing of virtually all goods and services in foreign currency.

The Bankers Association of Zimbabwe (BAZ) has, however, warned that money supply problems would continue to be “intermittent” unless the country resuscitates depressed capacity utilisation for industry.

“It is very difficult to project customers’ demands because of hyperinflation,” said BAZ president John Mangudya. “Salaries are often processed on the same days when customers come to withdraw cash.

This means that projections are based on the historical trend rather than the future, which makes it difficult to forecast. Currently consumption is higher than production meanings that there is bound to be a shortfall. An increase in production can only address these intermittent challenges.”

The Zimbabwe Congress of Trade Unions (ZCTU) yesterday accused the central bank of “denying workers the right to withdraw their salaries”.

Acting ZCTU secretary-general Gideon Shoko blamed the central bank for failing workers who are currently getting wages in local currency despite lifting withdrawal limits on formally employed workers from weekly amounts of $5 billion.

“It has come to our attention that workers have been denied their right to withdraw their salaries from banks,” said Shoko in a statement. “The reason was/is that they must produce their January 2009 pay slips. The banks have gone further and produced a circular to that effect dated 9 January 2009, and signed by your (Reserve Bank) director of financial intelligence.”

Banking sources said the central bank ordered banks and building societies to relax the monthly limits to workers who produced pay slips for this month.

This means that workers could not withdraw outstanding balances for their December salaries despite earlier promises by the central bank.

The ZCTU demanded that the central bank withdraw the circular because it was contrary to last month’s concessions made between the central bank and the labour union.

The Independent this week witnessed incensed customers at several banking halls expressing disgust over the central bank’s “betrayal”.

University of Zimbabwe graduate school of business professor Tony Hawkins described the new monetary measures authorising workers to withdraw their full salaries as unsustainable.

“This whole thing is a farce in some sense,” Hawkins said. “Almost 90% of all transactions are now being carried out in hard currency. Nobody now wants the Zimbabwe dollar. Dollarisation has taken over and the local currency is becoming less and less meaningful. I don’t think the central bank can manage the situation.”

BY BERNARD MPOFU