Seven firms shut shop in August

SEVEN companies from various sectors of the economy closed shop last month as the deepening economic crisis takes its toll on industry, businessdigest has learnt.

By Kudzai Kuwaza

The closure of the companies means that at least 236 companies have shut down since the beginning of the year. At least 81 companies folded in the first quarter with an additional 148 companies ceasing operations in the second quarter of the year. This comes at a time the economy is facing several challenges, including a debilitating liquidity crunch evidenced by the acute cash shortage, low capacity utilisation and a lack of cheap financing, among many others.

Zimbabwe Congress of Trade Unions secretary-general JaphetMoyo told businessdigest this week that seven companies from the food, tobacco and commercial retail sectors shut shop in August.

According to statistics by the trade union, two companies closed shop in the food sector including a bakery in Chitungwiza with three companies in the agricultural sector and two other companies in the commercial retail sector also ceasing operations.

The food sector continues to hemorrhage as shown by statistics which revealed that 71 of the 236 companies that have shut shop this year are from this sector.

Moyo revealed that the two commercial retail entities which closed last month sent its workers empty handed.

“Although we cannot ascertain the number of workers affected by the closures, we know that workers from the two commercial retail sector companies which closed did not give their employees any packages,|” Moyo said. “They left with nothing. This trend, however, is not new.”

Moyo expressed concern at the continued closure of companies.

“We are alarmed by the closure of companies especially when you consider that there are no new companies being registered,” Moyo said. “Most of the businesses are now informal.”

This development comes at a time when Ziscosteel has dismissed all its workers and Hwange Colliery has announced it will retrench 1 500 workers with the National Railways of Zimbabwe also revealing intentions to shed between 1 000 and 1 400 employees as viability constraints worsen.