The Ministry of Labor said it authorized companies to lay off 2,913 workers between January and June, compared with 1,492 during the same period of last year, but economists said the real total of retrenchments is much higher
Zimbabwe's Ministry of Labor said about 3,000 workers were laid off by businesses in the first half of this year due to a lack of credit for enterprises as well as the implementation of a controversial indigenization program.
The Ministry of Labor and Social Services said it authorized companies to retrench 2,913 workers between January and June, compared with 1,492 during the same period of last year.
The ministry said banks accounted for 29 percent of those laid off followed by the clothing and transport sectors. Banks said profits are under pressure while the garment sector faces stiff competition from imports.
Economists said the real total of retrenchments is probably much higher as the Labor Ministry only counts the ones it has authorized. They said the true number of layoffs in the first half of 2010 could be 10 times higher.
Layoffs occurred at companies including Archer Clothing Limited, Barclays Bank, National Merchant Bank, CXF Bank, Zimbabwe United Passenger Company, Edgars Stores, Air Zimbabwe and ZimAlloys Private Ltd.
Economist Godfrey Kanyenze of the Research and Economic Development Institute of Zimbabwe told VOA Studio 7 reporter Gibbs Dube that most of retrenchments are the consequence of uncertainty about the indigenization or black empowerment program, the shaky political situation, and poor credit conditions.
“There are a lot of outstanding political issues among the three ruling parties and to make matters worse, Zimbabwe has not been in a position to attract meaningful foreign direct investment,” Kanyenze said.