The announcement in a budget speech by acting Finance Minister Patrick Chinamasa acknowledged the black market practices that have been a reality for months now because of Zimbabwe’s economic meltdown.
Zimbabwe has the world’s highest official inflation with its currency now printed in the trillions of dollars.
City workers, teachers, doctors and even bus drivers have gone on strike demanding to be paid in US dollars or South African rand.
Chinamasa said civil servants will continue to be paid in local currency but that their salaries will be brought in line with inflation. They also will be paid a monthly allowance in a foreign currency.
Chinamasa said price controls also would be removed as of Sunday.
Shelves emptied of basic goods such as bread, sugar and milk after the government forced shop owners to sell stock at ridiculously low prices.
State control of foreign currency has allowed a ruling clique to enrich themselves by buying US dollars at lower government rates and selling them at the much higher black market rate.
Zimbabwe has been nearly paralyzed by the crisis precipitated by disputed presidential elections last year. Politicians agreed to a coalition government in September but for months have been unable to agree how to share Cabinet posts.
The impasse has stranded Zimbabweans in a prolonged economic crisis, with hospitals, schools and sanitation infrastructure left to collapse.
The UN food program said Thursday that 7 million Zimbabweans — 80 percent of the population by some estimates — need food aid.
The UN also said that the toll from a cholera outbreak has reached 3,095 deaths since August. Health workers had earlier estimated the number of cases would start to drop at 60,000, but that figure is likely to be reached this week with no sign the epidemic is slowing.
Also today, the US ambassador to Zimbabwe James McGee visited a clinic in a crowded Harare neighborhood that has been at the epicenter of the cholera outbreak.
"This cholera is a crisis which needed not to have happened if the government is taking care of its people," said McGee, an outspoken critic of President Robert Mugabe. "It is a shame that this disease is killing people while government folds its hands."