ZCTU warns of more job cuts

THE decline in capacity utilisation levels is a sad development for companies as it is likely to result in more job cuts, Zimbabwe Congress of Trade Unions president George Nkiwane has said.

By Business Reporter

Nkiwane said the 39,6% decline in capacity utilisation recorded by the manufacturing sector this year from 44% in 2012 showed that poverty levels would increase as more people would not have incomes.

“There is need for government, business and labour to come together to formulate policies. There is a lot of policy inconsistencies in this country, but if the stakeholders sit down, then the policies would be clear to everyone,” Nkiwane said.

“For instance, the indigenisation policy is not clear on whether the assets will be paid for or they will just be taken. We are always as a country coming up with new blueprints which scare away investors as they do not have the confidence whether the policies in place will stay.”

Local economist Daniel Ndlela said the financial services sector should play a positive role to enable companies to access funding that would assist them in purchasing raw materials.

“Working capital is the key issue for the manufacturing sector,” he said.

Ndlela said government should invest taxes collected from companies into industries than channelling them elsewhere.

He added that there was a lot of interest for investment in the economy as the expected returns on investments were generally high compared to other markets.

In 2009, capacity utilisation rose to 30% from 10% in 2008 before rising to 43,7% in 2010 and 57,2% in 2011.

The manufacturing sector is faced with lack of working capital, high utility bills and old antiquated equipment.

Confederatio of Zimbabwe Industries chief economist Lorraine Chikanya on Wednesday said from the 250 respondents surveyed, only 35,7% recorded capacity utilisation of above 50%.

The manufacturing sector, since 2009, has been growing, but it is expected to decline this year by 1,5% from 2,3% last year.

The growth projections of the economy were revised downwards to 3,4% due to reduced revenues to the fiscus.

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8 Comments

  1. ZCTU’s prophets of doom who always start off with negative criticism instead they should acknowledge the positives first. l know the thrust is to get attention and milleage that will spring him into politics. The next thing you hear is the formation of a new party. Mr Ndlela government cannot invest all taxes collected from companies into industries, remember there are priorities within a priority. We want our industries running yes, we also want our hospitals to serve the sick and the list is endless.

    1. Saka muri kuti kudii nhai samusha? Hazvisi nane here kubvira kutanga muntu watsetsa zviro usati watanga kubhuya zvenhando nyamusi? Mungodaro ngenyi samusha???

  2. Ilizwe lama refugees afundileyo kkkkk awe Halale.

  3. I still do not understand why Government is going for 51% shareholding in Mines instead of just increasing the mineral royalties paid out to the State? I think increasing royalties is a less risky than taking shareholding . Companies do not always pay shareholder dividend, whereas royalties can be arranged to pay for every ounce of mineral sold. Suppose the Mine plans expansion work requiring capital investment from shareholders, will the government be in a position to chip in with capital investment or that will mean government gets to dilute their shareholding? If the Mines are guilty of environmental pollution, is government’s position not compromised being indirectly the accused and the regulator? I think government should just increase the royalties and let MMCZ monitor the tonnes/ounces of minerals that are sold out.

    1. I agree. For example a royalty of 10% on gross proceeds for the sale of gold will likely translate into more than you would get as profit share which is declared on net profit ie. after all the expenses of running the mine have been deducted.

      1. Not to mention after deducting tax as well which once again goes to the government.

  4. Pleas be factual. If there is a 39.6 % decline in capacity utilisation from 44%, then it means we have 4.4% capacity utilisation. Your editors should work-up to this huge mistakes. Otherwise we dont want to be misinformed.

  5. Job cuts,more job cuts. Shame on you Z.C.T.U. president,George Nkiwane and you Japhet Moyo the Secretary General. You are hypocrits. You must first tell the nation that Z.C.T.U. has already started retrenching workers. Not companies alone.Z.C.T.U. has so far laid off close to 23 employess since from last year,2012. Employees are being forced to take ”voluntary” packages. They have failed dismally. The worst leadership ever since. Tribalists. Workers are not happy at this biggest labour body.Chinhoyi yakatovhara,Mutare kwasara vaviri etc

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