* Government offered $21 million in extra pay for six months
* Unions set to meet Wednesday to decide next step
* Hopes economy will quickly recover under Mnangagwa fading (Adds detail, quotes)
By MacDonald Dzirutwe
HARARE, July 9 (Reuters) - Public sector workers in Zimbabwe on Tuesday rejected a government offer of 180 million Zimbabwe dollars ($21 million) in added pay for the July-December period as inadequate in the face of soaring inflation, a union official said.
Zimbabweans are angry as a year-on-year price jump of around 100% has eaten the value of their wages and savings, recalling the horrors of hyperinflation in 2008. Hopes that living standards would soon improve under President Emmerson Mnangagwa have not been realised.
Daily power cuts lasting up to 17 hours and severe shortages of U.S. dollars, fuel, bread, and medicines are bedevilling citizens who had hoped the end of Robert Mugabe’s rule after a 2017 coup would herald a new economic dawn.
Thomas Muzondo, deputy chairman of the Apex Council, a group of public sector unions, told Reuters the government’s offer would see each of the 309,000 civil servants receiving only an additional 97 Zimbabwe dollars ($11.28) a month.
That amount would buy less than 20 litres of petrol at a service station. The lowest paid government worker earns 430 Zimbabwe dollars a month, enough to buy a vehicle tyre.
“We totally rejected that offer so they (government negotiators) will go back to their principals for further consultations,” Muzondo told Reuters.
“It was a total waste of time.”
He said the full Apex Council would meet in the capital Harare on Wednesday to decide its next step.
Civil Service Commission chairman Vincent Hungwe was not immediately available for comment.
Finance Minister Mthuli Ncube told business leaders on Monday that Mnangagwa’s government was ready to raise civil servants’ pay for the second time in three months, citing inflation.
The Zimbabwe Congress of Trade Unions threatened “mass action” last month after the government made the RTGS dollar the sole legal tender and renamed it the Zimbabwe dollar.
Ncube has said the government is running monthly budget surpluses since January, the first time in years that state finances have not been in the red, and a sign that authorities have cut down borrowing.
Ncube previously promised to cut the budget deficit this year to 5% of GDP from 11% in 2018.
The finance minister told reporters after a cabinet meeting that the national treasury had on Tuesday carried out its first public auction of Treasury Bills since 2008 to test market appetite for the bills.
Five banks had participated in the auction and made bids totalling $20 million for 90-, 180- and 360-day Treasury Bills.
“The purpose of the auction was to test the market in terms of TB (Treasury Bill) appetite and to also enable us to work out a yield curve,” Ncube said. (Reporting by MacDonald Dzirutwe Editing by Mark Heinrich)