WAGES SAID TO BE ECONOMICALLY INSENSITIVE

Early this year, the Employers’ Confederation of Zimbabwe blasted arbitrators for awarding unsustainable wage increases that were not economically sensitive.

It said arbitrators seem to focus on social justice even at the expense of enterprise viability. The employers’ body urged arbitrators to realise that driving enterprises out of business was not going to benefit either the worker or the State.

It argued that Zimbabwe’s unique economic situation could not be resolved by applying standard arbitration techniques applicable in a normal environment.

Since the liberalisation of the economy in February 2009, economic recovery has been among other fundamentals hampered by liquidity challenges.

The introduction of a multi-currency system in 2009 meant that companies were starting from zero base in terms of their capitalisation levels.

Efforts to secure credit lines from local financiers or through offshore facilities by some individual companies have been futile, further worsening revival of operations.

Mr Moyo said ZCTU had expected that Government would expand frameworks such as the Distressed Industries and Marginalised Areas Fund (Dimaf) so that more companies qualify for resources under the facility.

“All the companies under judicial management did not qualify for Dimaf because of the strict conditions required to access the money.

“We expect the Ministry of Finance to set up a revolving fund with relaxed conditions so that the companies are bailed out or else the Ministry of Industry and Commerce sources funds locally or internationally so that firms would borrow at concessionary rates to reignite operations,” he said.

The manufacturing sector requires an estimated $2 billion to restore productivity at competitive levels.

Due to low capacity utilisation in the manufacturing sector, Zimbabwe is relying heavily on imported products to meet national demand.

Last year, the Confederation of Zimbabwe Industries in its manufacturing survey report said capacity utilisation was at 44,2 percent.

Following the liberalisation of the economy, Government targeted to increase capacity utilisation from an average of 10 percent to 60 percent.