Harare – Business activity and confidence levels in Zimbabwe has taken a knock as protests over import restrictions and unrest in the public transport sector takes a toll on an already struggling economy, executives and economists said.
Zimbabwe is bracing for civil service protests after unions gave notice to strike over delayed pay on Tuesday. The government said salaries for the month of June would be delayed and instead offered a $100 advance allowance.
But this has not gone down well with the government workers and the situation has worsened by violent protests that erupted at the Beitbridge border with Zimbabwe over the weekend. As many as 70 people had been arrested over the protests, which resulted in service delivery disruption at the port of entry.
Business leaders told Fin24 on Tuesday that the economy was taking a further pounding from the civil unrest and protests by workers. They said “escalation of the situation might force businesses to close down operations” as infrastructure and equipment could be destroyed.
“Businesses in the affected areas such as service stations, shops and other companies had to partially close down yesterday because of the protests by the public transport operators. For the transport industry this has been a major disruption because there was no business on Monday,” said a business and industry leader, declining to be named.
Zimbabwe is facing constraining cash shortages that have affected business operations. With the economy now mostly informal, business has also been affected by import restrictions imposed by the government.
Zimbabwe Industry Minister Mike Bimha has however insisted that the restrictions will remain in place despite the protests at Beitbridge over the weekend. The Zimbabwe Republic Police (ZRP) on Monday said it would deal with the protesters.
Zimbabwe’s economy is expected to decline further this year amid slowing productivity in industry, manufacturing and mining – where companies are in distress. The United States issued a caution over the protests in Zimbabwe while tourism industry players say the resort towns have not yet been affected.
“The Zimbabwe Republic Police would like to warn all those who are inciting and engaging in violence that such misconduct will be severely dealt with,” said Charity Charamba, police spokesperson and a senior assistant commissioner.
Civil servants had given notice that they would strike on Tuesday, but most offices were open. However, some teachers and nurses were reported to be on a go-slow, according to Fin24 witnesses.
Acting Public Service, Labour and Social Welfare Minister Supa Mandiwanzira was quoted by state media on Tuesday saying the government was facing a “desperate situation” regarding payment of the civil servants.
Social media platforms have also been spreading word that all workers in Zimbabwe will down tools on Wednesday in protest over corruption by government officials, delayed salaries and the current cash shortages. The police force however says it is aware of those behind the civil unrest and that these would be arrested.
Another business leader said the import restrictions had been cut by more than half the revenues that the government was getting from import duties. He said “the government will run out of money and this situation of delayed salaries for public workers will worsen”.
The introduction of local bond notes in October is also fuelling a decline in business confidence in Zimbabwe, according to economists. The bond notes will be paid out as incentives to exporters, Finance Minister Patrick Chinamasa said on BBC’s Hard Talk on Tuesday.
“Exporters are not complaining (about the local currency bond notes) because this is to benefit exporters and we want to incentivise bond notes,” Chinamasa told the BBC.