Businesses grinding to a halt as thousands of workers lose jobs

By Tichaona Sibanda
9 July 2007

There are reports that thousands of businesses, including manufacturing firms, countrywide are grinding to a halt despite threats by Robert Mugabe that government would seize firms that stop producing basic goods. Already a number of companies are laying off workers as a result.

Elton Mangoma, a businessman and acting treasurer-general of the MDC, said the majority of other companies were scaling down operations following a weeklong campaign to stop rampant inflation by physically forcing businesses to lower prices. This move sparked frenzied buying from shoppers leaving most shops with empty shelves.

Price controls have generally been short-lived and loosely enforced but in contrast, the latest crackdown appears to be gathering momentum as enforcers moved over the weekend to halt price increases by wholesalers and manufacturers as well as retailers.

‘This is history repeating itself. In 2000 Mugabe grabbed farms and distributed them to his cronies and we have no food in the country as a result. Now he wants to grab companies and who ever will take over to manage them will fail like what the new farm owners did,’ Mangoma said.

Mangoma believes the price controls being enforced by the regime are edging the nation close to total chaos, because ‘this will leave many Zimbabweans with lots of cash in their pockets but with nothing to buy.’

Mugabe on Friday told manufacturers to carry on with normal production despite an official price freeze, warning that his regime will take over firms that stopped producing basic goods. Addressing thousands of his rented Zanu PF party supporters in the capital, he warned; ‘This is no joke ... there are some people who think this (freeze) will not succeed because they say there are empty shelves. We are saying to all factory owners you must produce. If you don't produce we certainly will seize the factories.’

Amid the ongoing economic chaos the MDC’s secretary for Labour and Social Affairs Getrude Mtombeni said they were busy compiling figures of workers who have lost jobs in the last week. She said employers are being forced to lay off workers because they are not making any profits or extra money to pay them. She said most companies would cease to operate in the next six weeks.

Spiralling prices and soaring inflation are part of an eight-year economic crisis caused by government’s mismanagement. Economists believe the price freeze will finally destroy what remains of the country’s struggling industry, as manufacturers will not be able to produce goods at a loss.

‘Nobody wants to lose money deliberately and nobody wants to invest into a company that makes losses instead of profits. This is real economic madness,’ Mtombeni said.

She added that the price rollbacks were unsustainable and that shops and manufacturers would soon shut down and lay off their workers.