Empty factories highlight Zimbabwe’s economic decay

Ray Matikinye


THE loneliness of security guards protecting factory premises used to be confined to weekends when most firms closed.


Now there appears to be little or no difference what day of the

week it is.


Cynics say nothing is as boring as protecting an empty factory except guarding an old grave.


A guard along Craig Allen Road in the Ardbennie industrial sites who was twiddling his thumbs to avoid dozing off summed up the serious presence that Zimbabwe industry used to exude and the pervasive economic decay that has replaced it over the past half decade.


Economic analysts have attributed the resilience of Zimbabwe’s economy to a legacy of a robust industrial base bequeathed to President Robert Mugabe’s government by Ian Smith’s Rhodesian regime.


They blame President Mugabe for failing to keep the family silverware intact.


Five years ago economic analysts predicted the Zimbabwean government faced a deepening economic crisis and expressed apprehension that it was a matter of time before the economy slid down the tubes.


And the International Monetary Fund predicted a further hurtle towards collapse unless harsher fiscal measures were urgently adopted.


Overly optimistic politicians dismissed the predictions as imperialist distractions.


But if any one doubted the predictions, the current derelict state of industrial premises and factories in Zimbabwe’s capital provides ample proof.


Industrial premises that have been left to fray at the seams now show signs that the rot has finally settled in.


The country’s economic performance is summed up in commonplace factory closures due to a hostile economic climate in which firms have been forced to operate.


Walk along some of the railway networks that branched into factories delivering raw materials or finished goods and see normal glint of metal grinding on metal replaced by accumulating freckles of rust for lack of anything to roll in or out.


A grinding shortage of foreign currency has assumed such desperate proportions that foreign firms are very reluctant to trade with the country.


“We used to export tractors and agricultural implements to Zimbabwe and bought tobacco in return,” said Australian ambassador to Zimbabwe, Jon Sheppard, in response to government accusations that the country’s economic problems emanated from sanctions imposed by Western governments.


“Zimbabwe no longer has the foreign currency to buy equipment nor sufficient tobacco to export to generate hard currency,” he said.


Many businesses have been compelled to trade on the parallel market at almost double the official exchange rate in order to obtain the foreign currency they need to replenish raw materials and continue operating at full strength.


Some have been forced to reduce working hours either due to lack of raw materials or thrown in the towel and shut shop altogether.


Contrast this with desperate retrenchees who clutter the counters at the Registrar of Companies offices daily in a heroic bid to register companies but invariably turn subsistence traders and one begins to appreciate the economic rut that Zimbabwe’s skewed economic policies have firmly stuck the country in.


More significant is the impact the economy has made on the lives of ordinary Zimbabweans given the dependence ratio of each worker.


“We still expect employers to contribute to the social security fund as long as the workers have a contract with the employer,” says Philemon Shereni, spokesman for the National Social Security Authority (NSSA).


Shereni admits retrenchments affect NSSA’s revenue base but added that this would be counterbalanced by revenue from new farmers.


However, the new farmers play hard ball when it comes to meeting their obligations.


Studies have concluded that for every worker formally employed, he or she supports seven to eight people on average.


Wellington Chibhebhe, secretary-general of the Zimbabwe Congress of Trade Unions (ZCTU), agreed that retrenchments adversely affected the labour body’s operations due to a shrinking membership base.


He says at its peak the ZCTU membership stood at 500 000 but has shrunk to 143 000 due to factory and farm invasions.


Production of gold — one of the main foreign currency earners — dropped drastically, forcing mining companies to suspend mining explorations because of the harsh economic conditions. Several of the country’s gold mines are facing closure.


The tourism sector, which produces 6% of gross domestic product and used to generate an estimated US$400 million a year is gradually falling to pieces.


Analysts say 100 tour operators have shut shop, disgorging at least 5 000 workers onto the streets.


Thousands of Zimbabwean nationals have fled from economic hardships to live abroad.


Still the Zimbabwean economy limps on.


Leader of the splintered MDC faction, Morgan Tsvangirai, says Mugabe’s intransigent defiance of local and international opinion has become the primary cause of Zimbabwe’s economic collapse. Other critics point to disregard for the rule of law, ministerial outbursts directed at the business sector and macroeconomic distortions which show no sign of improvement.


One way or another it spells ruin.

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