CZI warns of company closures, job losses 

The Confederation of Zimbabwe Industries (CZI) has warned of job losses and company closures after the government lifted a ban on the importation of basic commodities.

Source: CZI warns of company closures, job losses – The Standard October 28, 2018

The Confederation of Zimbabwe Industries (CZI) has warned of job losses and company closures after the government lifted a ban on the importation of basic commodities.


Sifelani Jabangwe

CZI president Sifelani Jabangwe said local producers that were protected by the repealed Statutory Instrument (SI) 122 of 2017 now had to compete with foreign suppliers and they might find the going tough.

“Manufacturing companies have suppliers and if the producers died, the manufacturer will also die,” he said. “These are indirect jobs that we create as manufacturers.

“There is also what are called induced jobs whereby our direct and indirect employees now go out and spend their money.

“If they do not have disposable incomes it means their jobs are killed…so that is what we believe could happen if you don’t support local industry.”

However, Jabangwe said the business lobby group was yet to assess the impact of the scrapping of the import ban.

“We are trying to put a study together on labour, but the total people employed are about maybe close to 800 000 to one million including those in informal employment,” he said.

“Unfortunately, they all depend on manufactured products because direct employment in the manufacturing sector would be about 15% or 20% of that.”

The government said it was indefinitely suspending the import ban to address shortages of basic commodities and price hikes that worsened in recent weeks.

Affected products are animal fats, baked beans, body creams, bottled water, cement, cereals, cheese, coffee creams, cooking oil, crude soya oil, fertiliser, finished steel roofing sheets, wheat flour, ice cream and jams.

They also include juice blends, margarine, mayonnaise, packaging materials, peanut butter, pizza base, potato crisps, salad creams, shoe polish, soap, sugar, synthetic hair products, wheelbarrows and wheelbarrow parts, yoghurt, agro-chemicals, and stockfeeds.

Jabangwe said scrapping the ban did not address the challenges faced by local producers.

“Foreign currency required by local companies to produce the same volumes is less than that which is required to bring in finished goods,” he said.

“So, if both require forex, how do you solve the problem by bringing in something that requires more forex?

“What you have is greater demand for forex and that will push the rate even higher, the prices even higher.”

Oil Expressers’ Association of Zimbabwe (OEAZ) president Busisa Moyo concurred, saying the gains made during the SI 122 of 2017 dispensation would be reversed.

“Government will be throwing its own success under the bus for a problem that they know is not SI 122 of 2017 not being successful, but the shortage of foreign currency,” he said.

“The impact is going to be felt by workers in the industry…that is the biggest and most negative impact.”

Moyo said the scrapping of the ban threatened the soya bean out grower programme being rolled out by OEAZ to address the shortage of raw materials.

OEAZ employs between 2 000 and 2 500 workers from its seven members, which are Pure Oil Industries, Olivine Industries, United Refinery, Surface Wilmer, Cangrove Pvt Limited, Willowton Zimbabwe and Chiseller.

Employers’ Confederation of Zimbabwe president Matthew Chimbghandah said they expected some manufacturers to have a relook at their cost structures and that could include reviewing employment costs.

“It is logical if your cost structure is high and you cannot garner the sales you want as a company, how are you going to foot the employment cost structure?

“It means people will have to look at their cost structure and rationalise accordingly,” he said.

However, Chimbghandah said retrenchment was always the last option for employers.


  • comment-avatar
    Trust Matanga 3 years ago

    While the CZI’s concerns are reasonable, a question to be posed is: Why did the same manufacturers fail to manage prices and supply of goods until the shops were empty. The statutory instrument was put in place by the government in good faith, but industry is letting the same government down. Yes forex is a challenge, and it is the same manufacturers who should assist government to create foreign exchange through exports. As we enjoy some of the fruits of globalisation, we can not allow our manufacturers to be non-competitive and then support them by way of import bans. Why should other countries produce and ship to our country and after charging all duties and taxes our manufacturers still fail to outcompete foreign goods. Something needs to be done sooner rather than later.