ARTUZ Calls for debt relief for civil servants.

18 September 2024
 
The Amalgamated Rural Teachers Union of Zimbabwe, ARTUZ is seriously concerned with the debt levels among teachers. A survey conducted by the Union has revealed that around 30% of teachers are earning incomes below USD 80 monthly, around 70% lose over 50% of their income towards debt servicing. Less than 5% of teachers are not in unsustainable debt.
 
In some sad stories some teachers no longer receive any income monthly. One teacher says she borrows monthly to service the interests of a debt accrued in the past. The teacher is not paying back the debt but just borrowing to offset interests.
 
The Genesis of the debt Crisis.
 
The debt Crisis was necessitated by a huge gap between incomes and Cost of living. In October 2018 government robbed all Civil Servants of their incomes through currency debauchery. Civil Servants who used to earn USD 540 were reduced to incomes as low as USD 30 equivalent at some point.
 
Teachers were then forced to borrow to cater for living expenses particularly financing the education of their children. Zimbabwe mandates the State to fund education a responsibility the government has failed to shoulder. The government has pledged to fund the education of Teachers’ children, the pledge has never really materialized. The violation of both s 65(1) (right to fair wage) and s 75 of the constitution, (state funded education) has been the major driver of borrowing. It is therefore morally and legally correct to call upon government to intervene.
 
History of debt forgiveness and assisted clearance.
 
Government has in the past assumed debts when households got trapped in debt of unsustainable proportions. In July 2013, then Minister of Local governance, Ignatius Chombo, canceled a debt amounting to USD 2 billion for the residence in both rural and urban councils to enable residents to start on new slate. The debts had been accrued from February 2009 to June 2013.
 
On 27 July 2015 the RBZ Debt Assumption Act was signed into law with government taking over liability of USD 1.35 billion of money that was loaned to the beneficiaries of the elite farm mechanization program.
 
Government intervention in handling Civil Servants debt is not a new proposal but has been done elsewhere in the region. In 2021 the Zambian government signed a debt swap deal with Public Sector Unions. All Civil servants received 100% of their salaries for 3 months. The third parties owed by Civil Servants would engage the employer, government. Civil servants swapped some leave days and other resources they were owed by government to settle debts.
 
Options for debt clearance.
 
In February 2021, the Government of Zimbabwe introduced a mandatory Government Employees Mutual Savings Fund. GEMS, for Civil Servants to pool monetary Savings together and create a revolving fund from which members can access affordable loans for projects at a minimum rate of 10% per annum. At the inception of GEMS, deductions were effected for all Civil Servants. Civil Servants were only allowed to opt out after months of deductions. The National Building Society, NBS handles the GEMS fund. It is logical to mandate the NBS to lead the process of assuming Civil Servants Debt and lead a process of negotiating repayment with the owed entities. NBS will leverage the GEMS fund and other sources for debt clearance.
 
In January 2016 the government announced a freeze on vacation leave for teachers as government claimed that they could not afford paying relief teachers. Resultantly teachers have accumulated vacation leave days, some up to 200 days. These days can be swapped for cash by the employer and such resources should be channeled towards debt clearance.
 
The government may if it chooses to atone for the violations of the constitution which led to the debt crisis, completely assume debt for all Civil Servants as was the case in 2013 for rate payers and 2015 for farm mechanization. It is in the best interest of the employer to ease debt burden on the shoulders of employees.
 
Rationale of a Comprehensive Debt relief plan.
 
Relieving Civil Servants of the debt burden is beneficial to their individual households to the employer and to macroeconomic fundamentals of the nation.
Addressing debt Crisis will improve disposable income in the hands of the Civil Servants and help them cater for the basics. This will boost their morale and partly resolve the incapacitation crisis enhancing productivity at the workplace. The job actions which have become more frequent in the recent past can easily be resolved.
Research findings have shown that increases in household debt are associated with lower output growth, higher unemployment and greater probability of future banking crisis. If households are free of debt they have more disposal income leading to a higher aggregate demand positively contributing to the growth of the Gross Domestic Product.
 
Way forward.
 
The ARTUZ proposes the following;
 
1.      Public Sector Unions to come together and collectively tackle the debt question for all Civil Servants or alternatively Teacher Unions for teachers only.
2.      Debt audit to determine the quantum of debt on the shoulders of Civil servants.
3.      Community dialogues on the debt question to enhance agency.
4.      A debt resolution Research with evidence and more nuanced solutions
5.      Debt bargaining meetings between employer and Unions.
6.      Civil servants advocacy for debt resolution.
 
ARTUZ will engage with all prospective partners with the hope of building a united front for debt resolution. The Union will further commission a Research and use findings to rally workers to demand debt relief.
 
The debt relief campaign will continue until teachers and all Civil Servants are free from debt.