Zimbabwe raises salaries by 50% as inflation spikes

Zimbabwe’s government says it will increase civil servants' wages in the light of economic challenges worsened by Covid-19.

The finance minister said that with immediate effect, salaries and pensions would be increased by 50%. These are paid using the local currency introduced last year.

In addition, all civil servants will be paid a non-taxable “Covid-19 allowance” of $75 (£60) a month - to be paid in US dollars.

Pensioners will also get an extra $30 allowance a month - in US dollars.

These Covid-19 relief payments will be for a period of three months starting from June.

The cash-strapped finance ministry did not say how it would fund the increases.

The news comes as it was announced that Zimbabwe’s inflation rate had soared to 785%.

The government said in April it would give cash payments to one million households most affected by the coronavirus lockdown.

But some families expecting to receive the funds have yet to do so.

As part of measures to help deal with the economic crisis, in March the central bank also unbanned the use of US dollars, which was outlawed last year.

For 10 years, Zimbabwe used foreign currencies after scrapping its own in 2009 because of hyperinflation.