Zimbabwe: Job Losses Loom As Company Sale Volumes Decline

Harare.
26 November 2019

Workers across the country's different employment sectors are likely to lose jobs in the coming year owing to a critical decline in sale volumes as reported by Zimbabwe Stock Exchange listed companies.

Various financial reports on the first half of 2019 reveal that consumer purchasing power has declined on the back of a weakening Zimbabwe dollar being used for salary payments

This is against the background of ever rising prices of goods and services indexed against the US$ parallel exchange rates.

Presenting the financial performance for the first half of 2019, Dairibord Holdings said price adjustments made were below the depreciation in exchange rates.

The company said the environment is envisaged to remain fragile and uncertain, making it difficult for businesses to implement their growth plans as the supply of electricity, water and foreign currency is expected to remain constrained.

"Under such circumstances, the company will focus on the survival and hold strategy.

"Given the aforesaid challenges in the operating environment, sales volumes for the second half are expected to be lower than what was achieved in the first half of the year," said the company in a statement.

National Foods Limited group chief executive, Michael Lashbrook said his company suffered a huge decline when compared to yesteryear.

"Volumes were very subdued, closing 36% below the same period last year as sustained inflation further restrained consumer spending power, impacting volumes across all categories.

"Flour volumes were most heavily impacted, closing 50% below last year, on the back of intermittent supply and increased cost of wheat," he said.

Lashbrook said volume performance in the remaining categories was largely reflective of consumers down-trading in favour of more affordable commodities, with groceries, mainly rice and salt, closing 47% down.

He added, "Snacks and treats were 37 % down and stock feed 25% down. The Maize category was the least impacted, with volumes for the quarter closing 5% below the prior period, as subsidies on raw maize assisted with maize meal affordability, driving consumption."

Market watchers believe that if the trend persists, companies will be left with no choice but to cut down on jobs to try and maintain a sizeable workforces in tandem with cash flows.

The situation has been the same for beverages manufacturer, Delta Corporation Limited which recorded a 48 % lager beer volume decline in the first half of 2019 owing to the erosion of disposable incomes.

A Chamber of Mines report released early this month established that key minerals were expected to record declines in output growth.

"Mineral output prospects survey findings show that key minerals are expected to record declines for selected key minerals ranging as follows; gold between -5% to -35%, platinum 0% to -7%, diamond -30% to -40%, chrome -10% to -20%, nickel -2% to -10%) and coal -10% to -40% ," read the document.

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