Zimbabwean companies will shed more jobs as they scale back on output due to the coronavirus, which has already disrupted stock supplies for close to half of the country’s businesses.
Border closures and lockdowns in Zimbabwe’s main source markets for raw materials, as well as depressed manufacturing in the country’s major export destinations, will cause factory closures in Zimbabwe and job losses, according to a new survey by the Confederation of Zimbabwe Industries (CZI).
“A mini survey by CZI on the impact of the pandemic on local industry has shown that 46% of local firms have already suffered disruptions in supply chains,” CZI says.
There will be more job losses, the CZI warns. “Unemployment likely to increase as employers scale down operations due to shortage of raw materials and access to export markets.”
CZI says the COVID-19 pandemic will slow down local demand, while the lockdown in other markets and the local market will shake an already fragile economy. Zimbabwe’s growth forecast of around 3%, which was already unlikely, “may not be achievable”.
There would be reduced export revenue as market are currently dormant due to lockdown. Already perishable horticulture products have been affected, together with gold, chrome and platinum, says CZI.
“The local economy may suffer food deficiencies since most cereal commodities are imported,” CZI warns.
China, where the first cases of COVID-19 were detected in 2019, saw a 13% fall in industrial output between January and February, which will see its intake of raw materials falling, and its output for goods needed in Zimbabwe curtailed. South Africa, which accounts for a large portion of Zimbabwe’s exports and raw material imports, goes into lockdown for 21-days, starting Thursday.
“The local manufacturing sector will obviously suffer the effects of the pandemic since China is the largest source of raw materials and equipment for local firms,” says CZI.
“Zimbabwe will experience major dislocations in exports and imports as the virus spreads and countries adopt restrictive responses that curb manufacturing activities.”