Retrenchments quicken by 40pct in 2014 – RBZ

Retrenchments quicken by 40pct in 2014 – RBZ

HARARE, March 19 (The Source) – Retrenchments quickened by nearly 40 percent in 2014, with nearly 4,000 workers retrenched across all sectors of Zimbabwe’s economy as company closures accelerated, the Reserve Bank of Zimbabwe has said.

The International Monetary Fund early this month said Zimbabwe’s economy is expected to weaken further this year after growing by 3.1 percent in 2014, with key sectors underperforming.

Analysts say weak commodity prices, poor rainfall this season and company closures as a result of cheap imports and high interest rates will curtail the economy’s growth.

Quoting quarterly retrenchment statistics obtained from the Retrenchment Board, the central bank said 3,881 workers lost their jobs compared to the 2,376 who were retrenched in 2013.

“Owing to viability challenges, a significant number of companies resorted to downsizing and restructuring, while some were placed under judicial management and yet others even closing down completely. This action resulted in extensive job losses in the formal sector,” said RBZ in the Inflation report for 2014 released this month.

Finance minister, Patrick Chinamasa in the 2015 budget statement said 4,600 companies closed shop between 2011 and October last year, with nearly 64,000 workers losing their jobs.

“The continued decline in economic activities that manifested in the closure of companies resulted in the reduction of purchasing power in the economy, effectively worsening the already low aggregate demand situation,’” said the central bank.

Meanwhile, the RBZ said on the outlook, the country’s inflation is expected to remain subdued throughout the year, hovering between -1,5 percent and -0,1 percent.