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Zimbabwe job losses to worsen, says UK think tank
07 Sep 2015 at 16:04hrs | Views
A leading United Kingdom think-tank, NKC African Economics (NKC), has said Zimbabwe's government could not legally stop job losses or hold the industry to ransom if companies were losing money.
This comes as over 30 000 workers have been fired after a landmark ruling by the Supreme Court since July in a case between Zuva Petroleum and its former managers.
The effect of the ruling is that employers are now retrenching workers and not providing them with benefits.
NKC, a unit of the world famous Oxford Economics, said even if the new amendments to the Labour Act are put in place, there are no prospects for job creation any time soon.
"What is different about the pressures building in Zimbabwe this time is that we are approaching the point where the moribund economy and regime excesses are putting more and more people on the street with no prospects of returning to employment any time soon, and then denying them even the opportunity to scrape out a meagre day-to-day subsistence existence.
"One of these straws, one of these days, and the camel's back will break," the UK think-tank warned.
It also warned of social and political upheaval in Zimbabwe because of the deepening economic crisis.
The report comes as local analysts have warned that the country has hit the depths of humanitarian and economic despair that were last experienced in 2008, when Harare's seemingly unending political crisis precipitated an economic meltdown of monumental proportions which culminated in the death of the Zimbabwe dollar.
"In our view, political conditions in the country will deteriorate further over the coming six months, while a continued positive performance under the International Monetary Fund's (IMF) Staff-Monitored Programme (SMP) - a key linchpin in securing external debt relief - is in jeopardy," the report says.
The UK think-tank said: "The stark fact of the matter is that even if the Mugabe regime stands by its word this time - and there is no guarantee that is even likely - the removal of all the obstacles and hindrances to economic growth by tomorrow would only help Zimbabwe to recover over the next two decades."
This comes as over 30 000 workers have been fired after a landmark ruling by the Supreme Court since July in a case between Zuva Petroleum and its former managers.
The effect of the ruling is that employers are now retrenching workers and not providing them with benefits.
NKC, a unit of the world famous Oxford Economics, said even if the new amendments to the Labour Act are put in place, there are no prospects for job creation any time soon.
"What is different about the pressures building in Zimbabwe this time is that we are approaching the point where the moribund economy and regime excesses are putting more and more people on the street with no prospects of returning to employment any time soon, and then denying them even the opportunity to scrape out a meagre day-to-day subsistence existence.
"One of these straws, one of these days, and the camel's back will break," the UK think-tank warned.
It also warned of social and political upheaval in Zimbabwe because of the deepening economic crisis.
The report comes as local analysts have warned that the country has hit the depths of humanitarian and economic despair that were last experienced in 2008, when Harare's seemingly unending political crisis precipitated an economic meltdown of monumental proportions which culminated in the death of the Zimbabwe dollar.
"In our view, political conditions in the country will deteriorate further over the coming six months, while a continued positive performance under the International Monetary Fund's (IMF) Staff-Monitored Programme (SMP) - a key linchpin in securing external debt relief - is in jeopardy," the report says.
The UK think-tank said: "The stark fact of the matter is that even if the Mugabe regime stands by its word this time - and there is no guarantee that is even likely - the removal of all the obstacles and hindrances to economic growth by tomorrow would only help Zimbabwe to recover over the next two decades."
Source - dailynews
