THE Confederation of Zimbabwe Industries (CZI), which has consistently voiced concern that the ongoing Covid-19 lockdown is throttling the economy and hindering 80% of companies from paying salaries, says the government should end the shutdown when it lapses on Sunday.
The lockdown, meant to contain the spread of the coronavirus, which has claimed four lives in Zimbabwe and rattled Zimbabwe’s already fragile economy, is set to end on Sunday with President Emmerson Mnangagwa expected to give direction on how the country will deal with the spread of the virus.
CZI president Henry Ruzvidzo said industry had recommended the lifting of the lockdown before it was extended almost a fortnight ago.
“We made our recommendation before the latest lockdown extension was effected. We expect the lockdown to end on Sunday to allow all companies to resume operations. Ideally, we expect the lockdown to end,” Ruzvidzo told the Zimbabwe Independent.
The country has 40 confirmed Covid-19 cases, which has ravaged the global economy. Mnangagwa first announced a 21-day lockdown in March after Zimbabwe suffered its first casualty, after announcing a two-week extension which runs its course until Sunday. The industrial sector is counting its losses.
As reported by the Independent this month, industry and market lobby groups, including the Zimbabwe National Chamber of Commerce, had already raised the red flag on the dire consequences of a prolonged lockdown, cautioning that an extension would wipe away 25% of jobs across all the productive sectors of the economy.
As is the trend across the world, Zimbabwe’s tourism and manufacturing sectors have suffered unprecedented damage, as the world grapples to contain the pandemic.
Apart from the job losses and drastic salary cuts, all the key economic indicators are already in the red. Capacity utilisation has tumbled to almost zero.
Atlas Mara projects that inflation, hovering around 600%, will gallop to 1 000% by year-end as a result of the pandemic while revenue collections targets are set to be missed.
Focusing on the bigger picture, the International Monetary Fund (IMF) projects the global economy to shrink by 3%. Ruzvidzo said before the first 21-day lockdown was decreed, a survey had indicated that a month-long lockdown would effectively halt industrial operations, pushing companies to the brink as they struggle to pay workers.
Many companies, including the moribund Air Zimbabwe, have slashed salaries and retrenched while those in the informal sector have been obliterated by the impact of the twin evils of the virus and lengthy lockdown.
Ruzvidzo said the CZI is conducting weekly surveys to assess the impact of Covid-19. “This is an evolving challenge as you saw with the extension and relaxation that happened. Engagement continues to explore how companies might be assisted; 80% of companies surveyed had indicated incapacity to pay wages and salaries beyond one month of lockdown,” Ruzvidzo said this week.
The CZI is already lobbying the cash-strapped government to introduce a stimulus package to cushion distressed companies.Mnangagwa’s government, which was already desperately hunting for a massive bailout package before Covid-19 struck, partially lifted terms of the lockdown to allow key sectors such as mining and manufacturing to continue operations.
In contrast, neighbouring South Africa, also on lockdown, has rolled out a massive US$26,2 billion package to safeguard its economy, which has also taken a heavy beating from the pandemic.
The informal sector, which employs more than 50% of the country’s workforce, has been the hardest hit, as the government is demolishing irregular vending stalls under the cover of the lockdown.
As Covid-19 turmoil rages on, market watchers have warned of a looming humanitarian disaster, compounded by the decimation of livelihoods and increases in prices of basic commodities.
— Zimbabwe Standard