Zimbabwe's Unity Government has started to pay civil servants with foreign currency, new financial minister Tendai Biti said on Wednesday.
Biti said on Tuesday the government had paid all members of the Zimbabwe Defence Forces and by the end of the Wednesday it expected to have paid all teachers, who constituted the bulk of the civil service, according to reports by local media New Ziana.
He said the government was working with the Bankers Association of Zimbabwe for its members to open parallel Foreign Currency Accounts to the already existing savings accounts for all civil servants.
He said the government expected the FCAs to be operational by March to enable direct payment of March allowances and subsequent cessation of the VPS.
The government expected banks to comply with the directive to avoid promulgation of relevant Statutory Instrument to compel compliance.
Biti dismissed fears that the government did not have the capacity to redeem the vouchers.
"As for the source we cannot reveal, we have scrounged around," he said, adding the rest of the civil servants would receive their allowances on Friday thereby completing the payment process.
He also said the government has reviewed the Voucher Payment Scheme to allow civil servants to encash them at designated banks.
Biti told a press conference that following concerns raised over inflexibility of the proposed VPS, particularly in limiting choices available to the recipients, it had become necessary to review and modify the scheme.
"With immediate effect, all vouchers issued to civil servants as payment will be redeemable into cash at designated banks," he said.