HomePoliticsZimbabwe firms folding, state export body says

Zimbabwe firms folding, state export body says

HARARE – Thirty-three Zimbabwean export companies folded in the first six months of 2005, the state body representing exporters said, blaming the harsh economic climate and the impact of controversial government land reforms.

President Robert Mugabe’s government establis

hed the Export Processing Zone Authority (EPZA) eight years ago to support local exporters and boost foreign currency earnings.

“A total of 33 (EPZA) companies have ceased operations (between January and June 2005) due to a number of factors, among them the impact of the land reform programme and the general macroeconomic environment,” the agency said in a report made available to Reuters on Wednesday.

EPZA said 12 of the collapsed companies had closed after the white-owned commercial farms on which they were operating were seized for redistribution to poor blacks. Mugabe’s programme of land redistribution, begun in 2000, has been criticised at home and abroad for destroying agriculture, the backbone of the southern African country’s economy.

“Companies still operating on farms continue to receive threats, which make their operation very difficult and thus inhibiting expansion and reinvestment as they are faced with an uncertain future,” the report said.

“We urge the relevant authorities to deal with the situation on the EPZA-designated farms so that investors can plan their operations with certainty and on a long-term basis.”

EPZA said 12 failed firms had cited an unfavourable exchange rate and loss of international markets. It said eight potential investors had put their plans on hold “as Zimbabwe is considered a risky country to do business with”.

Zimbabwe is mired in its worst recession since independence from Britain in 1980. Industry officials say about 400 companies have closed since 2000, leaving four in five people unemployed. Critics blame policies implemented by Mugabe’s government but the veteran leader denies responsibility. He says the economy has been undermined by domestic and foreign opponents of his land reforms, which he argues were needed to restore land stolen from blacks during colonialism. — Reuter

Recent Posts

Stories you will enjoy

Recommended reading