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NewsDay

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‘Policies to curb retrenchments needed’

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POLICIES that support job creation and prevent job losses are now needed to curb the retrenchments that have besieged the economy and are threatening economic growth.

POLICIES that support job creation and prevent job losses are now needed to curb the retrenchments that have besieged the economy and are threatening economic growth, a local research firm has said. Business Reporter

The Zimbabwe Congress of Trade Union reported that 9 617 jobs were lost in 2013 which resulted in more people without an income.

Official statistics place Zimbabwe’s unemployment rate at 11% while the country is churning out over 10 000 graduates each year who are not absorbed into industries.

“Employment supports aggregate demand by increasing incomes in an economy which in turn supports continued output growth. The employment situation has been worsened by the absence of long-term capital and low capital expenditures in the economy that have choked gross fixed capital formation,” MMC Capital reported in its monthly review for February.

Capacity utilisation stands just below 40% due to antiquated machinery, lack of working capital and shortage of raw materials. MMC Capital said the introduction of new currencies into the economy would not improve the liquidity situation as people did not trust the new currencies. The central bank introduced the Australian dollar, Japanese yen, Chinese yuan and the Indian rupee to its basket of currencies.

“The problem is, without trust, these new currencies will have no value. Because the dollar is much more trusted as a stable currency, Zimbabweans would likely resist these currencies and continue to make their transactions in US dollars,” the research firm reported.