55000 work­ers lose jobs in three years

Chronicle (Zimbabwe) - - Business Chronicle - Bianca Mlilo

A TO­TAL of 55 000 work­ers lost their jobs in the past three years due to var­i­ous rea­sons that in­clude lack of fi­nan­cial re­sources to keep the com­pa­nies afloat, Par­lia­ment has heard.

In a re­port on the op­er­a­tional en­vi­ron­ment and con­tri­bu­tion of the in­for­mal sec­tor to the econ­omy, the Par­lia­men­tary Port­fo­lio Com­mit­tee on Small to Medium En­ter­prises and Co­op­er­a­tive Devel­op­ment (SMECD) said thou­sands of peo­ple have joined the in­for­mal econ­omy in the past few years.

Com­mit­tee chair­per­son, Dorothy Mangami, said a ma­jor­ity of work­ers who lost jobs were sur­viv­ing on the in­for­mal econ­omy.

“In the last three years 55 000 peo­ple have been re­trenched fol­low­ing the clo­sure of about 4 000 com­pa­nies due to a num­ber of fac­tors, which in­clude the lack of fi­nan­cial re­sources for re-tool­ing or re­cap­i­tal­i­sa­tion,” she told Par­lia­ment.

The SMEs sec­tor has be­come a crit­i­cal pil­lar in the econ­omy em­ploy­ing close to six mil­lion peo­ple. How­ever, for­mal­is­ing the sec­tor has be­come a chal­lenge with play­ers cit­ing ex­or­bi­tant reg­u­la­tory costs and cum­ber­some for­mal­i­sa­tion pro­cesses.

The fi­nan­cial ser­vices sec­tor has also not been keen to fi­nance small busi­nesses although some banks have started giv­ing some loans to vi­able en­ti­ties.

Ev­i­dence of the dis­tress­ing im­pact of com­pany clo­sures and job losses was ini­tially re­vealed by Fi­nance and Eco­nomic Devel­op­ment Min­is­ter Pa­trick Chi­na­masa dur­ing the pre­sen­ta­tion of the 2015 na­tional bud­get. Min­is­ter Chi­na­masa said hun­dreds of com­pa­nies closed shop re­sult­ing in mas­sive job losses.

The for­mal job mar­ket is down due to com­pany clo­sures and mas­sive job cuts caused by a dev­as­tat­ing cash crunch, lack of af­ford­able fund­ing and low ca­pac­ity util­i­sa­tion, said the com­mit­tee.

Fol­low­ing the land­mark ruling by the Supreme Court last year, which al­lowed em­ploy­ers to dis­miss work­ers on three months’, the situation wors­ened as more work­ers lost their jobs.

The job losses con­tin­ued into 2016 with the Zim­babwe Congress of Trade Unions (ZCTU) re­port­ing that about 400 work­ers in the tex­tile and food in­dus­tries lost their jobs in

Jan­uary a lone after sev­eral com­pa­nies failed to op en in the n ew year.

Min­is­ter Pa­trick Chi­na­masa

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