Having grown up in Bulawayo, the countrys second largest city, and every day marvelling at the billowing smoke from factories dotted throughout the industrial area, Moses Ndlovu resolved to seek employment in one of the factories upon completion of his O level education. True to his dreams, when he completed his O levels in 1999, Ndlovu was employed by a local textile company as an assistant machine operator. After working for the company for only four years, the economic downturn marked a change in Zimbabwean industry. Instead of these industries recruiting, they were now winding down business, citing serious viability problems.
As a result, in 2003 Ndlovu was relegated to the dusty streets of Makokoba, the citys most populous high density suburb. He is among thousands of workers who have been forced out of employment in recent years due to company closures in Bulawayo.
According to economic commentator, Eric Bloch, at least 150 companies in the city have closed down during the past seven years. Textile giants, Cotton Printers and National Blankets Limited have become the latest victims of the harsh economic environment facing industry. Both companies have been placed under liquidation. Cotton Printers has already started to send home its 382-strong workforce and National Blankets is reported to be doing the same.
Another company which has sent distress calls is Cairns Foods Limited. The companys Marketing Director, Francis Dube, last week said that due to depressed business performance, the company had resolved to reduce working hours for its
Bulawayo workforce by 50 per cent with effect from October 1.
The prevailing harsh economic environment has resulted in continued depressed business performance. The viability of our operation has been severely threatened for some time. In addition to the critical examination of all internal and external factors, we are also engaging the authorities on the question of tariffs .While this is going on, employees at the factory have been put on 50 per cent salary until a solution is achieved, said Dube.
No alternatives
National Foods Limited last week also joined the seemingly endless list of firms which are either scaling down operations or closing down completely in the city, once regarded as the industrial hub of the country. The company will this month close its stock feed manufacturing plant following the closure of its flour milling division recently. In a statement issued last week, the agro-foods processing firm said the stock feeds plant would not continue operations due to the closure of the flour milling plant that supplied wheat bran, a major raw material needed in the production of stock feeds.
The company has been unable to secure a viable alternative source of raw materials including maize, cotton meal and wheat bran in Bulawayo and the surrounding areass read the company statement. The company said affected employees would be redeployed to other divisions within the group. We are going to see more of these company closures not only in Bulawayo but the whole country at large as long as there is no political change in the country. As a country we need to access international finances to address the issue of undercapitalization. For us to get international lines of credit facilities we need to work hard in enhancing our cordial relations with the rest of the international community and stop this business of saying to hell, to hell, said Block.
President Robert Mugabe has recently used the phrase to hell at state occasions and Zanu (PF) meetings when referring to the Americans and the British whom he accuses of imposing economic sanctions. Both the British and the Americans have vehemently denied Mugabes charges saying the sanctions were only targeted at few people within Zanu (PF) who were either directly or indirectly involved in political violence during the run up to the March 2008 harmonized elections and June 27 presidential run-off.
Bloch, who is also a director of a number of companies said the recently introduced indigenization law which compels white owned companies to handover 51 per cent shares to blacks was likely to worsen the situation. This indigenization law will certainly drive away the much needed international funding and potential international investors, especially from Europe. There is serious undercapitalization of the local money market and we need international funding to replace obsolete equipment in our industries, said Bloch.
A unique story
The president of the Matabeleland Chamber of Industries, Ruth Labode, said Bulawayo industries were facing unique viability problems which are different from those being faced by industries in other parts of the country. I am aware of the poor performance of industries in Zimbabwe due to a myriad of challenges that continue to haunt our economy, but Bulawayo industries have got their own unique story to tell. The story started in the early 1980s when decision making offices were relocated to Harare by government.
This move forced a lot of companies to relocate to Harare where water was available and all decisions were being made. Since then the people of Matabeleland feel marginalized, said Labode. Presenting a paper at a recent interactive business meeting organized by theConfederation of Zimbabwe Industries (CIZ) in the city, Dr Ela Mtetwa, an academic from the National University of Science and Technology (NUST) said the demise of Bulawayo industry had political inclinations dating back to five decades ago.
The roots of this decline actually began with the Unilateral Declaration of Independence. When it was announced the British government responded to the resurgent rebellion by imposing sanctions backed by the United Nations thereby
companies headquarted in Bulawayo moved their operations to Harare in order to work closely with the strategists of the Rhodesian government that were in charge of sanction busting, said Dr Mtetwa.
Dr Mtetwa said the Gukurahundi era also played a major role in the relocation of some companies and people not only in Bulawayo but also in Matabeleland and the Midlands regions. Further to these situations we have got the acceleration factor of water shortages in Bulawayo and industries that find themselves with water shortages some of them quickly closed shop and relocated while others have drastically downsized operations . The shortage of water is a major factor of under capacity utilization in Bulawayo by industry, he said.
Bulawayo city council Deputy Mayor, Amen Mpofu told The Zimbabwean that the city was currently in the midst of a serious water shortage which might worsen in the coming weeks.
Post published in: Opinions