HomeBusiness‘Liquidations, foreclosures confirm economic crisis’

‘Liquidations, foreclosures confirm economic crisis’

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THE increasing number of company liquidations and foreclosures countrywide confirms the Zimbabwe economy is in the intensive care unit, analysts said yesterday.

GAMMA MUDARIKIRI
OWN CORRESPONDENT

There are fears the economy — in a serious tailspin as the new Zanu PF administration grapples to prop it up — is likely to crumble any time unless the government conjures up tangible measures to salvage it.

Several firms are reportedly downsizing while hardly a week passes without notices of firms being placed on liquidation.

Financial institutions and retailers have also been attaching properties to defaulting clients in a clear sign the economy is contracting largely due to a liquidity crunch which has seen the bulk of private firms failing to pay their workers annual bonuses.

In Bulawayo alone, there were over 10 notices this week of company liquidations including National Blanket, Geozing (Pvt) Ltd, Archer Clothing (Pvt) Ltd among many others.

“The continued liquidation of companies and foreclosures is a very sad development for industries particularly in Bulawayo when it is happening at a time when we all had hoped that things would be better,” George Mukamba an administrator of local business lobby group Bulawayo Business Arise, said.

Mukamba said Bulawayo needed an urgent short-term relief fund. “We have to look beyond the Distressed and Marginalised Areas Fund Dimaf,” he added.

Bulawayo has been the most hit by deindustrialisation and in the run-up to the July 31 polls President Robert Mugabe had promised to turn around the fortunes of the city known during the colonial era as the Manchester of Rhodesia, largely due to its then striving clothing and textile sector.

With the new government having gone past 100 days in office, there are concerns it has failed to inspire confidence in the economy with potential investors still sitting on the fence.

John Robertson said on Wednesday the economy was in a renewed tailspin likely to be reminiscent of the 2006-2007 precoalition government unless the new government moves to salvage it.

He cited huge jobcuts, the liquidity crunch and dwindling exports as signs of an ill economy.

Banks have also been hit with a number running out of cash and most firms in the manufacturing sector listed in critical condition.

Economists are adamant the country urgently needs outside financial assistance to save the comatose economy, but are quick to add the assistance would be dependent on the government changing policies to create an investor- friendly environment.

The indigenisation law, for example, according to analysts, should be removed from the statute books as it has been slowing down investment.

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