Employers meet amid depression

Sekai-Nzenza.jpg

EMPLOYERS are set to meet for their 37th annual congress in Bulawayo next month at a time the economic crisis in the country is deepening, characterised by widespread company closures.

By Kudzai Kuwaza

The congress, which runs from September 24 to 27, comes amid deep-seated challenges such as a debilitating liquidity crunch, foreign currency shortage, runaway inflation and prolonged power outages that have crippled industry.

Some of the issues that will be discussed at the congress include an update on state of industry, social dialogue, electricity supply and inconsistencies on the application of Statutory Instrument 142 of 2019 in various sectors of the economy.

Among the speakers will be Labour minister Sekai Nzenza, Reserve Bank of Zimbabwe governor John Mangudya, and Labour law expert George Makings.

The congress will be held under the theme, Managing Turbulence for Sustainable Business: Transition from Multiple Currency to a Single Currency Economy.

“In the last two decades, the Zimbabwean economy has gone through massive economic upheavals characterised by incessant company closures, unemployment, inflation, trade and fiscal imbalances as well as dwindling real incomes. These economic fundamentals are largely influenced by the global economy, fiscal and monetary policies and international prices, exchange rates, productivity levels, unemployment, trade performance and the political environment among other factors. Year-on-year inflation as at June 2019 stood at 175,66%,” Emcoz said in its concept note.

“The benchmark interest rate (using the Weighted Lending Rate) in Zimbabwe was last recorded at 9,23% in 2019.

Zimbabwe’s industrial capacity utilisation, which stood at 48% in 2018, is projected to drop to 34% in 2019 (according to the CZI). Zimbabwe’s Gross Domestic Product increased from US$22,8 billion in 2017 to US$31 billion in 2018 (According to World Bank data). In January 2019, the World Bank had projected Zimbabwe’s GDP to grow by 3,7% in 2019”.

The employers’ body pointed out that the ban on the multi-currency regime, subsequently leading to the return of the Zimbabwean dollar, has brought about uncertainty.

“On 24 June 2019, under the Statutory Instrument 142 of 2019, the Government abolished the 10 year old multicurrency regime in the country making the Zimbabwe dollar the sole legal tender,” Emcoz noted.

“These decisions have caused uncertainty in the market, furthermore the country has suffered acute shortages of fuel which has had a devastating impact on an already dangerously fragile economy .The Zimbabwean economy could grind to a halt if power outages gripping the nation persist as production plunges, exports decline and disposable incomes shrink.”

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