NRZ: Moving the nation to doom

Source: NRZ: Moving the nation to doom – The Zimbabwe Independent July 8, 2016

“OUR mission is to promote the transformation of the economy and the lives of the people of Zimbabwe through the provision of a seamless, efficient, reliable, cost-effective and safe bulk transportation service of goods and passengers in the country,” reads the National Railways of Zimbabwe’s (NRZ) mission statement.

By Hazel Ndebele

Formed in 1897, NRZ, then known as Rhodesia Railways, played a critical role in the Zimbabwean economy hence its motto: “We Move the Nation”.

The company moved a large variety of cargo, including minerals, agricultural produce, industrial products as well as fuels and oils for its clients, keeping the economy ticking in the process.

It also had a company liner service were some trains were dedicated to customers. The trains would run from the point of loading straight to the customers’ sidings.

In addition, NRZ was instrumental in promoting regional trade; linking up with other railways in the Sadc region to ensure the swift movement of cargo.

“The NRZ operates a rail network stretching 2 760 route kilometres of 1 067mm gauge track. It sits at the centre of the southern African region and interfaces with contiguous railways on export/import route entries at Mutare/Machipanda for Beira, Sango/Chicualacuala for Maputo, Beitbridge for South Africa, Plumtree for Botswana and Victoria Falls for Zambia. The NRZ’s central position in the southern African Region makes it the ‘hub and gateway’ of the region,” states the NRZ’s website, emphasising its importance in the region.

In its glory days, NRZ fulfilled and lived by every word mentioned on its mission statement and motto as it indeed was efficient, moving goods and people while facilitating industrial production and as well as local and regional trade.

In the 1990s it had more than 20 000 employees and was one of the most attractive companies to job seekers.

However, following extended years of mismanagement and corruption, the company has been reduced to a shell and is a pale shadow of its giant former self.

Poor policies put in place by government have also accelerated the company’s demise alongside many other companies which were vibrant at Independence in 1980.

From more than 20 000 employees in the 1990s, the company now employs just 5 700 people. It is now saddled with a US$144 million debt and owes workers more than US$68 million in outstanding salaries.

Last week the railway operator announced plans to retrench more than 1 000 workers, an indication that the company had irretrievably hit hard times while also reflecting the ever deteriorating economic situation in the country.

Hwange Colliery Company, another giant quasi-state enterprise, played a pivotal role in the country’s industrial development by among other things supplying the coal for electricity generation at Hwange Thermal Power Station and providing the energy needed to drive thermal turbines and curing tobacco among other things.

The company has announced plans to retrench 1 500 workers.

The new wave of retrenchments indicate a deepening economic crisis and is a major blow to the labour movement which has lost more 50 000 members since 2014.

The future looks bleaks given that the country is facing several challenges, including a debilitating liquidity crunch and cash shortages while capacity utilisation has fallen to less than 35%.

Zimbabwe National Chamber of Commerce chief executive Christopher Mugaga said the fact that NRZ can retrench such huge numbers despite its historical importance showed that the economy is in dire straits and the company is sinking.

“The issue of NRZ is a clear testimony that the economy needs urgent attention; retrenchment is going to be costly for government as there is no money for retrenchment packages,” said Mugaga.

“Our economy at the moment is in serious trouble, civil servants are on a US$100 (salary advancement) which is as good as a per diem; there are no functioning industries.

“The economy is reeling from a huge budget deficit, debt, liquidity crunch, consumption is high and unsustainable and the social crisis is worse than what meets the eye as poverty and unemployment levels are soaring.”

According to the Zimbabwe Congress of Trade Unions, 229 companies folded in the first half of the 2016.

The massive job losses have resulted in a decline in government revenue, hence the failure to pay salaries on time.

While established companies are crumbling as the economic conditions deteriorate, the country is also failing to attract meaningful new investment and lines of credit.

Concerns over Zimbabwe’s policies such as the indigenisation law and high levels of corruption, among other factors, have made Zimbabwe an unfriendly investor destination, accelerating the economic decline.

The Zimbabwe Stock Exchange’s (ZSE), a barometer of the economy’s health, shows the economy is in the intensive care. The ZSE’s industrial index is at its lowest since April 2009 after closing at 95,08 last month.

Interest in the ZSE’s blue-chips Delta, Econet, Innscor, Old Mutual and Seed Co has been on the wane due to structural issues besetting the economy.

Finance minister Patrick Chinamasa, who has been in France and United Kingdom this week to meet with lenders in a bid to revive the comatose economy, painted a gloomy picture of the economy.

“Right now we literally have nothing, so to speak,” Chinamasa said in an interview with Radio France International in France last week.

Chinamasa is trying to strike a deal on Zimbabwe’s debt repayment so that the country can start borrowing again.

The country owes US$10 billion to multilateral funders, US$8 billion of which is public sector debt.

Economist John Robertson said there is no sign of economic recovery as the country continues to collapse due to numerous critical issues that remain unaddressed by government.

“Civil service workers have always been protected, but the government cannot afford to do that anymore hence they are going to feel the pinch as what everyone else in the private sector has gone through,” Robertson said.

“Most companies are either retrenching or downsizing, workers are accepting salary cuts just so they can keep their jobs.

“It is really a broken chain because the farmer is not farming because they lack finance and the processors are not processing anything because there is nothing to process. Moreover cost of production is high.”