There is a looming labour unrest in Zimbabwe as workers across various sectors are prepared to down tools demanding better remuneration, a leading labour union warned and if not addressed, consequences will be dire for businesses as they stand to lose thousands of labour hours.
This comes as the strong civil service has already signaled the intention to strike, citing poor salaries, which continue to be eroded by inflation. Inflation has severely eroded incomes with workers demanding foreign currency-benchmarked salaries or fully paid in hard currency. Month on the month inflation rate for June 2022 raced to 30,7 percent from 21 percent a month earlier.
Since dollarisation in 2009, the highest ever month-on-month inflation to be recorded in Zimbabwe was in July 2020, when it was 35,5 percent, which also corresponds to the highest ever annual inflation rate since dollarisation of 837,5 percent.
This means that month on month inflation is only about 5 percentage points away from breaching this record level, underlining that all the gains that were made in 2021 have already been wiped out.
“Things are not right,” Zimbabwe Congress of Trade Union secretary Japhet Moyo told Business Weekly in an interview.
“There are threats from almost every sector to down tools and we must look at how best can we save the situation.”
The ability by consumers to spend is eroding at a faster pace amid growing worries from the businesses over subdued demand. With businesses pricing the goods and services in the US dollars or pegging them in local currency using black market foreign currency exchange rates, consumers can no longer afford basic commodities enough to take the through until the next pay day.
The Consumer Council of Zimbabwe said it failed to calculate the price of the family food basket for the month of June due to regular price increases of basic goods and services.
In May, the consumer watchdog said a family of five required $120 000 a month to survive, but annual inflation shot to 191,7 percent in June from 131,7 percent in May.
While the Government raised civil servants salaries by 100 percent in May, state workers have rejected the pay hike and are demanding a minimum wage of US$540.
The public sector workers, who include teachers and nurses have since served the Government with a notice to down tools, demanding to be paid decent salaries.
“The Tripartite Negotiating Forum technical taskforce is holding a workshop in Mutare this week with the main agenda being to formulate a social contract (that feed into the main TNF) so that we deal with the turmoil in the economy,” said Moyo.
A union representing mine workers said the economic situation, characterised by high inflation, shortage of some basic commodities, skyrocketing parallel market exchange rates including the interbank exchange rates, rising prices of basic commodities and services among others has left mine industry workers “enduring the unbearable crisis and living in poverty while working.” We are in a crisis,” Zimbabwe Diamond and Mining Allied Workers Union general secretary Justice Chinhema said.
In its June inflation analysis report, industry lobby group, the Confederation of Zimbabwe Industries (CZI), said basic goods were getting out of reach for ordinary consumers.
“A look at inflation by products shows that oil and fats in June 2022 increased by 308 percent compared to June 2021 and it increased by 46 percent in comparison to last month,” said CZI.
“While the average annual inflation is 191,6 percent and the average month on month inflation is 30,7 percent, oil and fats have increased by far much more,” it added.
On the same trend are bread and cereals, which on a month on month basis increased by 36 percent, well above the national average. The price of cooking oil and bread is thus now out of reach for many people, especially those earning in local currency, despite them considered basic products by many consumers, said CZI.
The highest increase on a month on month basis was electricity which increased by 218 percent from May 2022 to June 2022 and this has a direct bearing on the cost of production, which in turn result in increases in the prices for goods and services.
Some goods and services such as para-medical services, hospital services, pharmaceutical products and transport services whose demand are inelastic are also among those whose price increases were well above the national average, said CZI.