2 000 lose jobs

via 2 000 lose jobs in six months – NewsDay Zimbabwe. 19 June 2014 by Victoria Mtomba , Tarisai Tahungai

June 19, 2014 in Business, Companies

A TOTAL of 2 065 people lost jobs from January to date, the Zimbabwe Congress of Trade Unions (ZCTU) has said, as the economic slowdown threatens the existence of local companies.

VICTORIA MTOMBA/TARISAI TAHUNGAI

ZCTU national co-ordinator Elijah Mutemeri yesterday said the retrenchments mirror the state of the economy.

“Our economy is so bad and industry is operating at around 30% of its capacity which makes it difficult for companies to be competitive. Since January to mid-June this year, a total of 2 065 people were retrenched by various companies in the economy,” he said.

Mutemeri said 9 000 people did not return to work in January from the annual shutdown as employers failed to reopen.

He said some of the workers had gone for more than five months without being paid.

Last year, the country recorded 9 617 job losses and 75 company closures.

Companies have lined up retrenchment programmes as they try to align their operations in the wake of depressed demand for products.

First Mutual Holdings Limited said on Tuesday it would shed 50 jobs, more than a 10th, of its 400 staff complement.

“We have 50 retrenchment posts out of the current 400 posts and the exercise will be concluded by the end of this month,” group chief executive officer Douglas Hoto said.

Hospitality concern Rainbow Tourism Group and Hwange Colliery Company Limited have also said they would shed some jobs.

Mutemeri said discord especially on the indigenisation policy was scaring away investors. In May Information minister Jonathan Moyo and Indigenisation minister Francis Nhema were quoted in the media expressing conflicting views on how the policy would be implemented.

Moyo said the law would be amended with Nhema insisting that there would be no changes.

Labour and Economic Development Research Institute of Zimbabwe economist Prosper Chitambara said the retrenchments were caused by the high cost of doing business in the country and liquidity constraints which makes local companies uncompetitive.

“We need to address issues of lines of credit and also to invest in enablers such as infrastructure. There is a long lag period and it is not something that can be achieved in a short period of time,” he said.

Chitambara said there was need to reduce taxes as the country had a high taxation regime.

The World Bank recently gave a gloomy outlook revising growth projections to 2% from the 3% it had earlier projected.

Other than liquidity constraints, local companies have to grapple with erratic power supplies which have seen a number of companies resorting to alternatives such as generators. This pushes up the cost of production making local products uncompetitive.

The influx of cheap imported products has decimated chances of local industry’s revival.

Companies also have to grapple with depressed demand.

Despite the escalating retrenchments, the country has not revised its unemployment rate which stand at 11%, according to the Zimbabwe National Statistics Agency.