Zimbabwe suffers steep 30% job losses

BUILDING layer upon layer of tradition, pre-Christmas television and billboard advertisements and glittering decorations are now some kind of cultural event. Or so the advertising industry would have us believe.

There is no doubt that such advertising is an important signal to get us into the festive mood. This year, however, is a tough one due to the negative effects of Covid-19,
which has ravaged economies worldwide and left nearly two million people dead.

Planning for these events began long before the pandemic arrived.

It is tricky to celebrate the bringing together of families when that is what they probably cannot do this year because of both travel and social gathering restrictions. So is it fantasy, a child's point of view, or humour?

In an economic crisis, is this any time to be pushing luxury purchases?

And with an estimated 30% of Zimbabwe formal workers having been left jobless during the course of 2020 as companies reeled from the effects of the global pandemic and deteriorating economic environment, who can afford these luxury purchases that make Christmas what it has always been?

Zimbabwe was already a nation battling a severe economic lapse punctuated by inflation eroding earnings, a cash crisis, forex shortages and dampened investor confidence by the time the pandemic hit.

When it did, it simply pushed the country over the very brink it has been staggering on for some time.

During the course of the year, workers endured tough times as salaries were eroded by inflation which reached a postdollarisation high of 838% in July 2020.

Although it has since reduced to just  above 400%, it still remains the second highest in the world after Venezuela.

Employers' Confederation of Zimbabwe president Israel Murefu said that as much 30% of the country's formal sector lost their jobs as the pandemic ravaged the country's battered economy.

The country's National Employment Council estimates that 1,2 million workers were thrown onto the streets over a period of 18 months as a result of the Covid-19 pandemic and other economic ills.

At the height of national lockdown in April this year several companies terminated contracts for short-term workers while some reduced working hours and cut salaries for permanent workers.

Zimbabwe Congress of Trade Union (ZCTU) Secretary General Japhet Moyo told this publication that most small companies wound up their operations in 2020.

"There were massive disruptions in production in 2020 resulting in small business completely folding up. The plight of many workers was dire in 2020. Those workers who survived had to endure long periods without salaries or on half pay," Moyo said.

"Wages were already affected by the SI 142 of 2019 and the majority of workers never recovered.The majority are going for the festive season with salaries that would not last them until January."

Employers' Confederation of Zimbabwe executive director Nester Mukwewa said the tourism sector was the hardest hit.

"The Retrenchment Board has the information on names of companies that retrenched in 2020," she said. "As you may be aware the tourism sector was the worst affected by the pandemic and had to shed off some employees."

After the economy declined by 4,1% this year, Treasury expects it to grow by 7,4% in 2021, while creating 151 000 formal jobs in the process. But experts say without substantive reforms such targets remain a pipedream.

The Zimbabwe National Chamber of Commerce estimates that 25% of jobs were lost in the tourism sector alone as a result of the scourge. Government, which is looking to domestic tourism to drive the revival of the sector, previously announced it was setting aside ZW$500 million (about US$6,1 million) for the revival of the sector, which money in the end never came. This is part of a fictitious ZW$18 billion (about US$220 million) stimulus package promised by the government to resuscitate businesses that were hit hard by Covid-19-induced lockdowns.

Tourism minister Mangaliso Ndhlovu said the government wanted to resuscitate the industry by increasing its capacity utilisation from the current 40% to 60% by the first quarter of next year.

"Realistically, we are looking at the capacity utilisation for the sector to go up to 60% by the end of the first quarter of next year," Ndhlovu said.

"The fortnightly reports we get from the hotels show that their performances have been erratic. One fortnight the performance is good and another fortnight, the performance is not so good," he said.

Traditionally, no other sector benefits from the festive season more than tourism and hospitality.