15 August 2014

Zimbabwe: 5 000 Lose Jobs in 2014 - 1 000 More Face the Axe

MORE than 4 600 workers have been retrenched since the beginning of the year with a possible 1 000 more to be laid off by the end of next month as the economy continues to deteriorate at an alarming rate.

Sources at the Retrenchment Board told businessdigest this week that 4 668 have been laid off since January to date, with indications more workers stand to lose their jobs in the second half of the year as industry succumbs to a myriad of challenges with no solutions in sight.

"Since the beginning of the year 4 668 have been retrenched," the source said "If applications made to the board are approved another 1 000 or so could be retrenched by the end of September. There is a very high probability that these applications will be approved"

The continued economic decline, characterised by a severe liquidity crunch, downsizings and company closures, has spawned massive retrenchments which threaten both the formal sector and the government's tax base which has translated into failure to pay the 236 000 civil service on the scheduled dates.

Zimbabwe Revenue Authority commissioner-general Gershem Pasi said recently government's tax revenue collections were shrinking as the economy contracts.

Sources said the most affected sectors are mining, clothing and cement as well as companies that provide agricultural equipment and inputs.

"Given that the country is an agro- based economy, the massive retrenchments in that sector are alarming and does not reflect this." an insider said.

The board, which meets every Thursday, has had to deal with at least 100 and a maximum of 400 retrenchments weekly, sources pointed out. About 10 companies are closing monthly adding to those unemployed due to retrenchments.

This is in addition to a July 2013 National Social Security Authority (Nssa) Harare Regional Employer Closures and Registrations Report for the period July 2011 to July 2013 which shows that 711 companies in Harare closed down, rendering 8 336 individuals jobless.

Major companies that have retrenched include platinum miners Zimplats and Unki, Bindura Nickel, Spar supermarkets, Dairibord, Cairns, Olivine Industries and PG Industries.

Economist Godfrey Kanyenze said the wave of retrenchments was "the tragedy of the times" and indication of the continued economic malaise.

"Structural economic regression continues unabated," Kanyenze noted.

"Due to continued deindustrialisation and informalisation of the economy, the formal sector is barely recognisable. The longer we delay as a country to address the problems, the steeper the decline will be."

This comes at a time when business, labour and government recently agreed under the Tripartite Negotiating Forum that the minimum retrenchment packages would determined on a sector by sector basis.

In its election manifesto last year Zanu PF promised 2,2 million jobs but as the figures show thousands of jobs are being lost instead.

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