Opposition Member of Parliament, Zivai Mhetu (CCC), has demanded that Finance Minister Mthuli Ncube explain the reasons behind the closure of branches by several formal retail chains across the country, and what measures are being taken to address this issue.
Speaking during a recent Parliamentary session, the Epworth North MP warned that the closure of retail outlets’ branches is detrimental to the country’s economy. He said (via NewZimbabwe.com):
Our economy is becoming increasingly hostile for businesses and we could soon witness an exodus of companies if this trend continues.
This is evidenced by the closure of Unilever, and Truworths and recent reports that Choppies, a leading supermarket chain based in Botswana is considering pulling out of Zimbabwe.
Choppies’ experience is worrisome because it is doing well in other SADC countries. It is only in Zimbabwe that it is facing operational challenges. It is a clear indication of our business environment that is problematic.
Last month, Choppies announced it was considering withdrawing from Zimbabwe due to challenges faced by its local subsidiary, which have adversely affected the group’s financial performance.
These challenges are largely attributed to the instability of the Zimbabwe Gold (ZiG) currency, which was introduced in April to replace the Zimbabwe dollar as the official domestic currency.
Mhetu further argued that the closure of formal retailers will exacerbate the unemployment rate in the country. He said:
Closure of big companies triggers unemployment, something we cannot afford as our unemployment rate is already incredibly high.
Only 46.3% of Zimbabweans of working age are employed according to statistics released by ZIMSTAT earlier this year.
Without urgent efforts to address currency instability and inflation. More businesses are likely to follow the Choppies route.
It is imperative that Zimbabwe stabilises its currency and creates an environment where businesses can thrive. The National Development Strategy 1, speaks on creating 760 000 formal jobs by 2025.
The local currency has undergone six name changes but has yet to achieve stability, confidence, trust, or sustainability due to inflation fueled by excessive money creation by the Government.
Its previous iterations include the original currency post-independence, that is, the Zimbabwe dollar, then later bearers’ cheques, traveller’s cheques, bond notes, RTGS dollars, and now ZiG.
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