IDZ calls for Govt bailout to save firms

Business Reporter

THE Institute of Directors Zimbabwe (IDZ) has called for Government intervention through bailouts to support upcoming and established businesses that face collapse due to the effects of Covid-19-induced lockdowns.

The call comes at a time business representatives requested for ‘softening’ of the lockdown regulations for them to remain afloat.

However, Government extended the lockdown period by 14 days.

Zimbabwe’s economic activities ground to a halt from March 30 when the country instituted a 21-day lockdown.

The Zimbabwe National Chamber of Commerce (ZNCC) has hinted of economic dislocation with circa 25 and 75 percent of formal and informal workforce anticipated to lose jobs respectively.

Locally, there are growing fears that a significant number of enterprises could fall out of business owing to economic inactivity stemming from the lockdowns.

Undoubtedly, the lockdown will negatively exacerbate the country’s 2020 economic growth, with merchandise exports expected to drop to US$3,5 billion this year from US$4,5 billion in 2019 according to ZNCC.

In a statement, the institute’s chairman Mike Juru, said that a considerable number of firms will require support to stay afloat.

“Our hope is for Government to bailout some corporates which are unable to keep operating after this period, firms continue to be burdened with increasing fixed overheads. If this is not addressed, there is a danger of having a number of companies closing down,” said Mr Juru.

He added; “. . . there is an urgent need for safety nets since the lockdown has incapacitated operations of some sections of the community and Small to Medium Enterprises.”

The world over, economies have ordered lockdowns to curb the menacing spread of Covid-19, which was first detected in China last December before spreading to other countries.

To date the disease has claimed over 165 000 lives throughout the world, while 2,4 million positive cases have been confirmed.

Mr Juru, however, lauded Government’s stance on the lockdown saying it was a reasonable step in containing this novel pandemic, which has brought world’s social and economic activity to a standstill.

“The Institute of Directors Zimbabwe wishes to commend the Government for the Covid-19 lockdown as a positive move to contain and hopefully eliminate the spread of the virus in Zimbabwe.

“To contain this, it is apparently everyone’s responsibility and we are in full support of the initiative and hereby encourage the corporate world particularly directors as corporate stewards, to embrace the spirit and purpose of the lockdown,” he said.