A total of 33 firms, or about a fifth of Zimbabwe’s export companies, have closed shop during the first six months of the year due to the economic crisis and land seizures, according to a government agency.
Of the 33, 12 agricultural firms stopped operating after their farms were acquired by the government under the land reform programme, the Export Processing Zone Authority of Zimbabwe (EPZ) said in a report obtained by Agence France Presse on Tuesday.
”A total of 33 companies have ceased operations… due to a humber of factors, among them, the impact of the land reform programme and the general macro-economic environment,” the EPZ report said.
”Twelve companies stopped operations after the farms they were operating on were taken for redistribution.
”An additional 12 companies have closed shop, citing inter-alia, unfavourable foreign exchange rate and loss of international markets as Zimbabwe is considered a risk country to do business with,” said the report.
Zimbabwe’s land reforms, launched in 2000, have seen about 4 000 white farmers lose their properties as part of a policy that President Robert Mugabe maintains will correct imbalances created under British colonial rule.
Fewer than 500 white farmers still own land in Zimbabwe although the government has vowed to take action against them.
Zimbabwe is also reeling from hyperinflation, high unemployment and fuel and food shortages that have brought living conditions down.
The company closures resulted in a loss of export revenue totalling about $17,6-million (€15-million) in the cash-strapped southern African country, according to the report.
Close to 7 000 jobs were lost due to the closures in the export sector, which employs 26 000 people.
There were 183 companies licenced for export in Zimbabwe at the start of the year. Earnings from these firms totalled $220-million in 2003.
EPZ chief Walter Chidakwa nevertheless expressed optimism that the relaxation of foreign exchange regulations last month would allow some firms that put their operations on hold to resume business.
”Our expectations are that following the introduction of the new interbank foreign exchange management system, companies that had closed or suspended operations will now resume as many had cited viability issues as the reasons for closures or suspension,” Chidakwa said in an interview.
EPZ said companies operating on farmlands still face uncertainities due to the land reforms and urged relevant authorities to ensure that the environment was conducive to long term planning.
”Companies still operating on farms continue to receive threats, which make their operation difficult and thus inhibiting expansion and reinvestment as they are faced with an uncertain future,” said EPZ.
Central bank chief Gideon Gono last month deplored the continued invasion of farms describing it as ”economic sabotage”.
He said ”tolerance of such retrogressive acts only go to condemn and limit our capacity to attract investment”. – Sapa-AFP