Zanu PF’s 2,2m jobs promise a pipe dream

via Zanu PF’s 2,2m jobs promise a pipe dream May 30, 2014 by Kudzai Kuwaza Zimbabwe Independent

ZANU PF’s promise to create 2,2 million jobs is increasingly looking like a pipe dream if the latest retrenchment statistics are anything to go by. The figures are an indication that it is no longer business as usual, analysts have noted.

More than 1300 workers have been retrenched across various sectors of the economy in the first quarter of 2014.

The continued decline in the economy, characterised by a severe liquidity crunch, has spawned massive retrenchments which threatens both the formal sector and the government’s tax base.

A graphic illustration of the 2014 first quarter retrenchments

Sources within the Retrenchment Board said the mining sector has shed off 400 workers during the quarter, recording the highest number of retrenched workers.
The furniture sector has also been heavily affected retrenching 349 workers. The security sector has offloaded 93 workers.

Agriculture considered one of the main pillars of the economy has let go of 61 employees with cement, motor, timber and engineering sectors retrenching 59, 56, 52 and 48 workers respectively.

The banking sector, which is gripped by the debilitating liquidity crunch and a high non performing loan ratio, has retrenched 32 workers during the period. Other sectors which have retrenched workers during the first quarter, the sources revealed, include communications (28), catering (25), energy (19), food and allied (13) and printing (13).

This is in addition to a July 2013 National Social Security Authority (Nssa) Harare Regional Employer Closures and Registrations Report for the period July 2011 to July 2013 which shows that 711 companies in Harare closed down, rendering 8 336 individuals jobless.

Major companies that have retrenched include platinum miners Zimplats and Unki, Bindura Nickel, Spar supermarkets, Dairibord, Cairns, Olivine Industries and PG Industries.

The Zimbabwe Congress of Trade Unions revealed that 75 companies failed to open for business this year.

Tax expert Tendai Mavima said the first quarter retrenchment figures would have a significant impact on the government’s tax base.

He said there would be a reduction in Pay As You Earn contributions with the shedding off more than 1 300 workers.

Mavima said this would have implications for the Value Added Tax base as the money spent buying various products was no longer available. This, he said, would lead to reduced profits for retailers. Mavima said this would also have an impact on the country’s Income Tax bracket.

He said that retrenchment was necessary if companies were to remain viable.

Labour expert and economist Godfrey Kanyenze said the retrenchment figures showed that “it is business unusual”

“ We have to acknowledge the gravity of the situation,” Kanyeze said. “This sends a huge signal to the powers that be that it is very much business unusual.”
He said there was need for a sobering analysis of the situation by government, labour and business.

“I am calling for a social contract because this situation is now beyond government, now beyond business and now beyond labour,” he said.

Kanyenze said the country was suffering from a period of economic regression and was moving from high productivity to low productivity.

He said the current retrenchments flew in the face of Zanu PF’s election promise to create 2,2 million jobs. This is particularly worsened by the government failure to pay civil servants on time.

“ We are in fact moving in the opposite direction on the promised jobs,” Kanyenze observed. “Employment is a basic human right but it does not look like a basic human right anymore.”

He added that there was need for the country to improve its Doing Business index and focus on the rehabilitation of infrastructure.

Kanyenze pointed out that there was an urgent need to improve the erratic supply of water and electricity. Economist Eric Bloch said there was need to adopt the right policies if the country was to enjoy economic growth and stop the haemorraging.