Gold-Backed Currency & Gold Coins for Civil Servants
"This again defeats the purpose of encouraging the use of local currency by the populace" - Morris Mpala
An economist at Lupane State University (LSU) has urged the Government to explore the feasibility of paying a portion of civil servants’ salaries in gold-backed digital tokens and gold coins.
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Speaking to the Chronicle, LSU business clinic development manager and economist George Nhepera said paying civil servants in gold coins and gold-backed digital currency reduces the dominance of the black market as the instruments are an alternative store of value other than the US dollar. Said Nhepera:
To this end, they should be promoted in terms of their use for both people-to-people (P2P) transactions, people-to-business (P2B), and business-to-business (B2B).
Once this has been achieved with full market confidence, surely our Government can take a giant step to include a portion, say 50% of the civil servant salaries and benefits, be paid in these innovative instruments.
This strategy will help to curtail the black-market dominance in our market which is not helpful for the economic growth and poverty alleviation of our country let alone the achievement of our Vision 2030.
The future therefore belongs to innovators hence our monetary authorities are walking the talk in that space and they should be commended for supporting the Government in that respect.
However, economic analyst Morris Mpala argued that paying civil servants in the gold-backed currency will reduce the demand for the Zimbabwe dollar. He said:
This again defeats the purpose of encouraging the use of local currency by the populace. Noble as it might be in terms of liquidity management it shouldn’t be encouraged.
Let’s pay civil servants the right remuneration and let them have a choice in how they save their money and we concentrate on making the fundamentals right for everyone.
On Tuesday, 11 July, the Government announced it has increased civil servants’ forex and local currency salary components with immediate effect.
