By Business Reporter – Monday 27 January 2020
HARARE (Mining Index) – THE move by Freda Rebecca Gold Mine to pay workers in foreign currency has been viewed as flouting government policy which stipulates the Zimbabwean dollar as the sole legal tender.
Last year, government through the Ministry of Finance and Economic Development banned trade in foreign currencies including the United States (US) Dollar.
Freda Rebecca Gold Mine last week announced to its employees, through an internal memo, it had finalised negotiations to pay salaries in US Dollars for the twelve months beginning January to December 2020.
“Kindly be advised that negotiations for USD salary approval have been concluded and we have received the requisite approval from January 2020 to December 2020,”
“Henceforth payroll is being readjusted and let us expect our salaries early next week. Management wishes to advise that this offer is a privilege and any form of abuse will lead to its withdrawal,” read a management brief signed by Freda Rebecca mine general manager Eliakem Hove, date 23 January 2020.
Contacted for comment, economic analyst Eddie Cross said the move to pay salaries in USD was against government regulations where the local Zimbabwean dollar is the sole legal tender as specified by government last year.
“No they are a contravention and should be reversed. All salaries should be paid in local currency,” said Cross.
The mining sector is the country’s major foreign currency earner, with the gold sector retaining 55 percent of its foreign currency earnings while government pockets 45 percent.
The sector is privy to foreign currency earnings paid by Fidelity Printers and Refiners (FPR) for their gold sales, with the gold sector retaining 55 percent of its forex revenue while government pockets the remaining 45 percent.
However, some sections of the business are in support of Freda Rebecca’s move saying all companies generating foreign currency must pay workers in forex.
Despite the return of the Zimbabwean dollar on the local trading market, most businesses still gazette their prices in USD, with the informal sector and Small-to-Medium Enterprises (SMEs) which make up approximately 60 percent of Zimbabwean business openly trading using the greenback. ENDS// www.miningindex.co.zw
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