By A Correspondent| The Labour Economists and Afrikan Democrats (LEAD) President, Linda Masarira, has issued a strong statement following the recent 100% devaluation of Zimbabwe’s gold-backed currency, the ZiG, from a rate of 1:14 to 1:25. Masarira has warned that this devaluation is a clear indication of deeper systemic economic challenges, which will have serious repercussions for all Zimbabweans, especially the most vulnerable members of society.

Masarira emphasized that urgent intervention is needed to address the far-reaching consequences of the currency devaluation. The steep decline in the ZiG’s value will inevitably lead to increased inflation, driving up the cost of basic goods and services. She pointed out that Zimbabweans, particularly low-income families, are already struggling to meet their daily needs, and this devaluation threatens to further deepen poverty levels across the country.

“As LEAD, we believe that immediate and decisive action must be taken to mitigate the impacts of this devaluation and set our nation on a path toward sustainable recovery,” Masarira said.

Call for Social Protection and Wage Adjustments

Masarira urged the government to implement robust social protection measures to cushion vulnerable citizens from the harsh economic realities they face. She called for the expansion of social safety nets, such as scaling up food aid, subsidizing essential goods like fuel, and initiating cash transfers to help citizens cope with rising living costs.

The LEAD president also criticized the delayed salaries for civil servants, highlighting the ongoing struggles of government employees. “Teachers and other civil servants who were supposed to receive their salaries earlier this week haven’t been paid, and today we understand why,” she said. “The insensitivity to the plight of already struggling civil servants is appalling and a cause of concern to every progressive citizen of this country.”

Masarira demanded salary adjustments for civil servants, alongside pensions for senior citizens, to ensure that their earnings align with the inflationary environment. She also called for both public and private sector wages to be reviewed to prevent the further erosion of workers’ purchasing power.

Transparency in the Gold-Backing Mechanism

One of the key concerns raised by Masarira is the lack of transparency surrounding the gold-backing mechanism of the ZiG currency. Despite the global increase in gold prices, the 43% devaluation of the ZiG raises questions about the effectiveness of this mechanism. “What is the current state of the purported gold-backing of the ZiG currency?” Masarira asked. “Gold prices are increasing globally, yet the ZiG has devalued by 43%. This raises serious concerns about the effectiveness of the gold-backing mechanism.”

Masarira’s statement highlights the urgent need for the government to address the economic crisis and take steps to protect the welfare of its citizens. She called on policymakers to ensure transparency in the country’s economic management and take decisive action to avoid further deterioration of the living standards in Zimbabwe.

The recent currency devaluation underscores the pressing need for reforms, as the country navigates its way through complex economic challenges.