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Zimbabwe Workers Protest Dollarization of the Economy

While the business community in Zimbabwe has welcomed the Reserve Bank's dollarization of the economy, many workers are feeling marginalized and disadvantaged. They complain accessing foreign exchange (forex) remains difficult – if not impossible – because they're still getting paid in the local currency.

Reserve Bank governor Gideon Gono initially allowed some retail shops and wholesalers to use the US dollar and the South African rand to price their goods, in order to boost trading and encourage economic activity. But some workers complain they've been left even more vulnerable than before.

A Red Star Wholesalers employee -- who requested anonymity – says while the wholesaler's been licensed to trade using foreign exchange he's still being paid in Zimbabwean dollars. The father of three explains what pains him most is he can't buy several items he sells, despite being told he's "the number one customer" when he was employed.

"Concerning salaries the bosses are now saying that the government has not yet authorized them yet to pay salaries in foreign currencies. The government is benefiting a 15% on every sales so by giving employees forex they have also to reduce the 15% to a reasonable percentage. So government is taking long to authorize companies to give employees forex so that they keep on getting that 15%", he says.

But the group's general manager, Samson Gurupira, says the country's labor laws don't allow them to pay their employees in a foreign currency. He explains they're waiting to be given the green light by government, to do so. He adds it's ironic the Reserve Bank of Zimbabwe demands its 15% share every morning, before they bank the previous day's takings. The central bank requires all licensed shops to bank their day's takings before 10am the following day. But Zimbabwe Congress of Trade Union Mashonaland West Chairperson Mike Makanya wants workers to be paid in forex arguing this the only way they'll be able to survive.

"We are saying here the employer is now selling his goods in forex and what it means is I have delivered my labour to gain things in forex then why should I be rewarded in Zim dollars. The employer should complete the circle by paying the worker also in forex , so that he can be able to also go and buy those goods that the employer is selling or the business person is selling because the same business person is the employer is that the employee is the consumer in actual fact. He is the one supporting the community which is remaining behind. So if he doesn't get the dollar in forex he will not be able to sustain the business," he says.

The trade unionist says nearly all outlets are charging in forex whether they're licensed or not. Makanya adds he blames both the Reserve Bank of Zimbabwe and police for not doing enough to protect the consumer.

"As we have got the licensed business and those who are not licensed but the reality on the ground is that those who are not licensed are getting forex still in the black market. They are selling their things in forex. We don't have very excellent monitoring system. The police aren't able to follow up. So you find that we will be in the same situation every business person whether licensed or not because he knows no one is policing the system," he says.

Some Chinhoyi residents feel they're being ripped off by business operators. All goods are priced from one US Dollar upwards as there's no silver. Most operators just round off prices to the nearest dollar to avoid dealing with change. Mobile phone operators have joined in the madness. They're pricing airtime in US Dollars with the smallest recharge card costing 5 Dollars, a sum that's way out of reach for many Zimbabweans.

Economics lecturer at the Chinhoyi University of Technology, Dr Peter Mazarure, suggests Harare should swallow its pride and formally "dollarize" the economy so American banks can assist by providing local institutions with smaller denominations. The academic says this will help operators reflect the true value of goods on sale.

Others say they suspect the new system is a way to fill the government's coffers. This Chinhoyi resident says, "The dollarization must be phased out because companies are making brisk business and they are making money and yet seems they are just getting more money for the government and RBZ yet the employees who are busy working that forex aren't getting it."

Another concern is that traders are refusing to accept the Zimbabwean dollar, rendering it useless. Meanwhile while most stores – be they licensed or unlicensed -- have stock, very few shoppers are buying their wares.