BANK of Zambia (BOZ) Governor Michael Gondwe has urged trade union leaders in the country to be wary of the effects demands for unreasonably high wages have on the economic indicators like inflation.
Dr Gondwe said yesterday that abnormally high wage increments would result in high inflationary levels which would adversely affect the national economy.
He said recently the country had witnessed a number of work stoppages as workers pushed for increased salaries, saying that the union leadership should be cautious of sparking high wages which may cause a rise in inflation.
Speaking during the Zambia Union of Financial Institution and Allied Workers (ZUFLAW) professional negotiators’ forum in Lusaka yesterday, Dr Gondwe said it was important to keep an eye on economic developments with a view of striking a balance between wealth redistribution and sustaining the required investment and economic growth.
“In the recent past, we have witnessed a number of work stoppages as workers Press for increased remuneration. In this regard, I wish to urge the union leadership to be wary of sparking a wage price spiral because this may cause a rise in inflation,” he said.
Dr Gondwe said the high inflation was detrimental to the economy as it made planning by economic agents and companies difficult, while consumers would be unable to draw up effective investment and expenditure plans.
“Due to high inflation, Government is also unable to make good projections of revenue collection and thus unable to effectively plan its current and capital expenditures. Relative prices are distorted leading to inefficient allocation of resources as well as high cost of investment as interest rates skyrocket,” he said.
Dr Gondwe said in an inflationary economy, interest rates are high and borrowing for investment is inhibited.
Dr Gondwe said sustaining macro-economic stability remained a key challenge in the face of a weak global economic outlook and limited domestic resources.
He said the central bank attached great importance to building capacity programmes for employees in the financial sector.
Dr Gondwe said there could be no true bargaining without prudent and effective leadership on either side of the table.
Speaking at the same function ZUFIAW general secretary Joyce Nonde said the growth in the financial institutions was not matched by the number of jobs being created in the sector.
Financial institutions are now employing fewer people due to the heavy reliance on information and communication Technology (ICT) and outsourcing some operations to agencies.
She said the central bank had the responsibility to ensure that reforms in the banking sector translate into real financial inclusion for both formal and informal economy workers.
[Times of Zambia]
Bauze! Bauzeni Ngosi!
We are sure your salary at over K100m per month is a fair one. PF promised good salaries, do you think they lied or where just not intelligent enough to know that this was not possible in the event they had no solid plan to grow the economy like is the case now. PF is a non starter govt.
Yes the workers should be fair but look at the one saying this? how much is he paid? More than 30,000USD per month?? This life surely is not fair for the poor and poorly paid.
How much do u get Mr Governor? Let your salary be reduced for you to feel the pinch of low salaries.
Firstly, its about time we heard the BOZ chief say something. I was begin to wonder when he was going to surface. Well said about the wage demands but the PF promised this and more during the campaigns. Dr Gondwe can you now tell us more on the free falling kwacha and how you intend to arrest this?
More money in your pockets a complete myth then yeh? From thieves to kabovas for sure.. tsk..tsk..
As much as i agree with you,its easy to say that when your salary is over K120m per month minus allowances and bonuses.
I dont agree with you over Banks interest rates,The financial sector was given a Income tax reduction of 10% on profits which was hoped that they would translate that in lowering the interest rates but again its all rhetoric.
Ni donchi kubeba to civil servants. they were busy singing the songs not knowing that it was meant for them. Voters thought it was donchi to RB, not knowing it was for them. Banda told you ni mambala sata but you refused to listen. DONCHI KUDABWA
For sure this man talks sense everytime he talks…. no wonder Sata noticed him…… the wise men from the east…. BRAVO!!!!!!
these guys are bastards.they get more and dont consider economic indicators.we are out numbered by goods and services in this nation,there can never be inflation if salaries are increased even abnornomally
These is classroom economics- an ideal situation, the reality is that people are living from hand to mouth. Just because you are getting a fat salary you think everybody else is as comfortable as you. You need to ask your govt to create more jobs by investing in manufacturing industries, heavily tax foreign investors, invest in agriculture, restrict trade especially goods and services that local zambians produce, lower bank borrowing interest rates just to mention a few. You also need to help the govt look for low interest loans that it can borrow for investments. In the meantime let workers demand for their dues afterall they were promised more money in their pockets.
This fool must shut up his beak. He is entitled to ZMK84 million salary, ZMK20million entertainment and over US$30,000 school fees per term for his children. Not to mention the other allowances. I wish he could keep quiet. Its folly to fool others when you are too of a fool
My brother M. Gondwe, how much are you paid yourself? Reduce the salary from you as a way of showing an example. Tell us how money you pocket every month including allowances. Millions of kwachas. We need more money in pocket also
Gondwe dont take us for granted, how much is salary? I work more you at end i get 1m which is less than your talk time allowance. We are watching.
A GONDWA, THESE GRINGOS YOU JOINED PROMISED MORE MONEY IN PEOPLES POCKETS. WHAT ARE YOU SAYING. YOUR GRINGOS ESPECIALLY GIVEN, KAPATA, AND OTHERS CRITICIZED THE MMD FOR NOT PAYING WELL THE CIVIL SUFFERERS. i FEEL FOR ZAMBIANS. NO MONEY IN YOUR POCKETS. KE KE KE KE KE KE KE KE KE KE KE KE KE KE KE KE. NAMA POLO I MEAN MUSANA WABABA
Look at who is talking. Workers are just asking for what was promised to them, kwapwa!!!!!
Trade Unions must keep demanding for high salaries. The PF promised ‘more money in your pockets’. It will have to happen one way or another…
Another fake economist!
someone was rebuked and labelled FAKE ECONOMIST for stating the same message i remember quite well
#5 spot on.
for me i think unions should be banned.they are counter productive
#8 Joseph Daka- you are right I am one of those civil servants who danced to donchi kubeba and wore tshirts of pa bwato and all along I thought that this donchi was meant for Ala Bee and his cronies. Was I wrong or what? I am now contemplating leaving jackets on the chair and going in search of more money for my wallet. People expect that of us so why not. In the years I have worked for the civil service I was hands on and trying to make a difference. It is very hard. Yes, I am disillusioned and it will take a time for it to hit reality. People have to understand that MMD never promised us anything but PF did and that is the difference.
how much is gondwe paid? im imformed that his salary is equal to 72 nurses wages.
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