WASHINGTON DC— The Zimbabwe Congress of Trade Unions (ZCTU) says about 75 companies failed to open after the festive season, leaving at least 8,000 workers jobless.
ZCTU president George Nkiwane says preliminary survey findings indicate that the number of shut down companies and employees who lost their jobs is expected to go up.
“Figures submitted by our affiliates are shocking as we initially thought that most companies shutting down are in Bulawayo. Our results so far show that it is nationwide. There are companies closing down in Harare, Gweru and other parts of the country. The situation looks extremely bleak,” says Nkiwane.
He says the situation will worsen as long as there are no tangible policy changes encouraging foreign direct investment. “I don’t see any change in policies in the near future as the current government is spearheading an indigenization program which compels foreign-owned companies to transfer 51 percent equity stakes to local people. This is not workable in any country.”
Zimbabwe introduced a black economic empowerment program in 2011, which has been widely criticized by foreign investors who fear losing their firms to local people who do not have funds to buy the targeted majority shares.
The Zanu PF government insists that the program is designed to ensure that the economy, which it projects will grow by 6.1 percent this year, is controlled by locals.
Independent economists say the economy is likely to grow by almost 2.3 percent. The country’s poverty datum line is currently pegged at $540 per month for an urban family of six.
According to the Zimbabwe National Statistics Agency, the nation’s unemployment rate is 10.7 percent. But independent economic commentators say the unemployment rate is between 71 and 85 percent.