Economist Prosper Chitambara of the Labor and Economic Development Research Institute of Zimbabwe said the problems at Lobels have been the main factor in the bread shortage affecting Harare in recent days
Shortages of bread have developed in Harare, Zimbabwe, following the closure of Lobels Bakery, once the country's leading baker, due to heavy debts and equipment woes.
Sources said Lobels owes millions to creditors ranging from the Commercial Bank of Zimbabwe to the Zimbabwe Electricity Supply Authority.
They said some Lobels equipment has been attached by creditors.
Lobels Resident Director David Chiweza, a retired brigadier general, confirmed that the Lobels Harare plant has closed. But he declined to provide further information.
Sources said the parent company, Lobels Holdings, was taken over by a consortium of indigenous business men including retired army officers and has experienced serious problems amid allegations of misuse of funds by the previous management.
But other Zimbabwean bakeries are also facing problems, in particular flour shortages. Harare bread production is said to have fallen from 600,00 to 150,000 loaves a day.
National Bakers Association President Cydwell Chitewe told reporter Jonga Kandemiiri that bakeries need long-term recapitalization at affordable interest rates.
But economist Prosper Chitambara of the Labor and Economic Development Research Institute of Zimbabwe said the problems at Lobels have been the leading factor in the bread shortage affecting Harare residents in recent days.