FIFTY-TWO year old Gift Mavondo woke up to the devastating news on February 24 that AfrAsia Bank, where he worked, had been shut down.
Not that there had not been any signs the bank was in trouble, but Mavondo had been confident that it was only a matter of time before the institution was on firm ground. How wrong he was!
Until that fateful day when his world fell apart, Mavondo, who had worked in the banking sector for more than 20 years, led a relatively comfortable life which many of his worse off friends and relatives envied.
After joining a local bank in 1994 as a bank teller he had gradually risen to a senior manager of the bank after pursuing further studies. He left in 2011 to join AfrAsia Bank, which had lured him with a better salary and perks.
But now Mavondo’s world is crumbling around him.
“They say everything happens for a reason but I regret ever leaving the bank I had worked at for 17 years for greener pastures. However, my decision appeared the best at that time,” said Mavondo adding: “Life has been tough as I am now unemployed. I have been searching for a job but with no luck.”
Mavondo has had to pull his three children out of private schools. “I can no longer afford the lifestyle I had when I was employed. I recently sold my cars to settle a number of debts.”
“I am also trying to raise money to start a small business where my wife and I would be importing clothing and electrical appliances from South Africa and China for resale.”
About 17 banks have been shut down over the last two decades in Zimbabwe and Nigel Chanakira’s Kingom Bank, which started off as a discount house in 1994 before growing into a merchant bank and later commercial bank, known as AfrAsia, was the latest financial institution to close after surrendering its operating licence.
This marked the end of an iconic institution previously known as Kingdom Financial Holdings (KFH) and a poster child of Zimbabwe’s liberalised financial services industry in the 1990s.
According to Zimbabwe Banks and Allied Workers Union, more than 1 000 workers have lost their jobs due to bank closures.
“Maybe one day I will be able to start a micro-finance business,”a visibly worried Mavondo said not so convincingly.
Mavondo is one of hundreds of thousands of Zimbabweans that have lost their jobs through retrenchments and company closures over the past two decades, as the country’s economic crisis is felt through shocking deindustrialisation.
He now joins millions of Zimbabweans trying to eke out a living in the informal sector, with the country’s unemployment rate estimated at over 85%.
The majority of the country’s adult population is now mainly vending as a source of living, while a great number relies on cross border trading.
Today, Zimbabweans join the rest of the world in celebrating International Workers’ Day. However May Day, as it is referred to, has now lost its lustre as the country’s workforce continues to dwindle and the economy becomes more informalised.
At least 7 000 employees were retrenched last year, with more than 50 companies letting go of their workers amid operational challenges epitomised by a swingeing liquidity crunch. The manufacturing sector is operating at 36,3% capacity down from 57,2% in 2011.
According to a report titled Harnessing Resources From the Informal Sector For Economic Development done by the Zimbabwe Economic Policy Analysis and Research Unit and Bankers Association of Zimbabwe, the economy has also undergone significant structural transformation in the past decade, which has seen the formal sector being replaced by a growing informal sector.
“An increasing number of the active labour force is being absorbed in the informal sector; a growing informal sector can act as an important shock absorber, especially for an economy where there is sluggish growth or a decline in formal sector jobs,” reads the report.
The reasons for informalisation include the need to support families through the provision of supplementary income.
The report also cites other reasons as low wages in the formal sector and also termination of previous employment, which push individuals to join the informal sector.
Findings were also based on a survey carried out in Mbare (a high density suburb of Harare) where poverty and the need to survive pushes the majority onto the streets.
The National Vendors Union of Zimbabwe states that Harare alone has more than 20 000 vendors on street pavements in the Central Business District areas selling different wares to make ends meet. The vendors have effectively taken over the city centre after token efforts to remove them failed, rendering many streets impassable and litter-strewn.
Economist John Robertson says Zimbabweans have no reason to celebrate Worker’s Day because the majority of the adult urban population are unemployed and the minority employed also risk losing their jobs if the economy continues on a downward spiral.
“At Independence the majority of the adult population had jobs and could celebrate Labour (May) Day. In the 1980s, one in every seven people had a job contrary to today where one in every 17 people is employed,” said Robertson.
He said the population of Zimbabwe has almost doubled since1980 when it was seven million as compared to the current 13 million, but the economy has been dwindling at a fast rate.
“Government’s policies do not serve people’s interests, which include providing employment. Government says employers are supposed to take care of their employees but that has changed,” Robertson said.
“Very lucky employees now have to look after their employers because chances that they will get another job if they lose the one they have are slim to none!”
During his 2015 national budget presentation Finance minister Patrick Chinamasa said 55 443 workers lost their jobs after the closure of 4 610 companies between 2011 and 2014.
According to statistics presented by Chinamasa, the tourism sector was the hardest hit with 2 142 companies closing during the three-year period with 18 413 jobs lost as a result. In the manufacturing sector, 458 companies closed with 9 978 rendered jobless during the same period.
Chinamasa attributed the company closures to a number of economic bottlenecks such as the liquidity crunch and obsolete equipment.
Indications are that the situation will continue to deteriorate as a number of companies have implemented survival strategies that include paying half of monthly salaries and forcing their workers to go on unpaid leave.
The nation’s trade unions will have various programmes around the country to mark Workers’ Day, keenly aware that workers’ ranks have been decimated by an economic meltdown of tragic proportions.