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Corporate Zim sneezes as Covid-19 takes toll

TINASHE MAKICHI


Zimbabwe’s corporate sector has been forced to adopt drastic measures such as down scaling operations and closing some outlets after cases of the Covid-19 pandemic hit the workplace.


New cases of the respiratory ailment have been on the increase over the past weeks with recorded fatalities related to the pandemic also surging. This has forced government to adopt strict measures to reduce the spread of the disease.


This comes as number of positive cases reached 1,820 on Tuesday driven by locally transmitted cases (956) and imported cases at 864.


The spike in positive cases has seen most corporates announcing measures to close operations.


As Covid-19 infections within Zimbabwean communities grow, two medical aid societies in Harare, and three companies including the biggest mobile
operator, Econet Wireless Zimbabwe have since recorded infections which resulted in some of the companies’ temporarily closing facilities for disinfection and extensive testing of staff.


Of late most affected companies have been forced to close their branches as steps aimed at putting up necessary structures to disinfect and testing all staff so that the units can re-open safely as soon as possible.

This has put pressure on corporates that are also battling economic headwinds such as dwindling volumes, forex shortages and rising inflation which has put pressure on firms to review salaries.


The situation has been compounded by revised lockdown measures announced by President Emmerson Mnangagwa effective yesterday which will see companies operating between 8am and 3pm.


Companies are now supposed to effectively carry out tests at a cost, closing facilities as well as being subjected to limited hours of operations due to the lockdown.


They are also expected to make employees work from home as part of the decongestion of the workplace.


CEO Roundtable chairman Oswell Binha told Business Times 2020 spells doom for most companies adding that while struggling to manage perennial crippling supply side constraints, the Covid 19 dynamics are catastrophic.


“The inevitable will take place mortality rate of companies is on the rise. Remember Covid-19 comes with its own unique character particularly the rise in mitigation costs against dwindling revenues,” Binha said.


“Remember, industry in Zimbabwe was already on its knees from the effects of fiscal and monetary policy duplicities, shortages of currency, low aggregate demand and general death of economic enablers.

Government has resisted foregoing some of its traditional tax revenues as a mechanism to cushion companies; the cost of Covid-19 mitigation has come as a final blow.”


He said the CEO Roundtable encourages the government to institute policies while also ensuring immediate stability for the few companies still in operations.


“Returning to the use of multicurrency is an immediate imperative. It will stabilise runaway inflation, save corporate value and stimulate some level of demand.


“The state must immediately stop systematic attacks on big business and invest energy in economic stabilisation efforts. Persistent threats to big business survival will deepen uncertainty and mistrust.


The net effect is capital flight,” Binha said.


By yesterday, TM Pick n Pay, the largest retail group in the country, announced that one of their staff members at Norton Branch tested positive while another big retail group OK Zimbabwe’s Bon Marche Mt Pleasant branch also recorded another positive case.


Recently, 22 CIMAS staff members tested positive to Covid-19 amid indications that all members were quarantined with the Rapid Response Team and the Harare City Health Department handling the cases.

Last week NMB Bank temporarily shut down its Southerton branch after some employees tested positive for Covid-19.


Zimbabwean companies have always bemoaned the impact of Covid-19 on their operations, against the backdrop of an already fragile economy. But the situation is likely going to have a severe impact on operations considering that most recorded cases now are now local.


In their periodic performance reports published recently most of the companies noted that business volumes had declined considerably due to low demand emanating from the ravaging Covid -19 pandemic.


The country’s leading hospitality groups, Meikles Limited and Holiday Inn at one time closed their operations following the outbreak of the virus. With another revised lockdown in their midst, the effects are expected to be severe.


Confederation of Zimbabwe Retailers president Denford Mutashu said the impact of Covid -19 is beginning to show severe impact on the economy as most companies are now being forced to close some of their outlets especially in the retail sector.


He said the retail wholesale sector should take a holistic approach in setting up effective mechanisms to fight the virus as this will only play a massive role in protecting their operations and productivity.


“It is unfortunate that the retail sector has been lagging behind in addressing this issue of safety citing that government is passing on the cost of fighting the disease to the private sector but putting effective measures on the part of retailers will actually do much in saving their operations,” Mutashu said.


“Most retailers of late have been forced to close or partially close their operations in cases where positive cases would have been detected.


Therefore this has posed a major challenge to the sector.”


The lockdown measures has seen the government ordering the suspension of face-to-face lectures on campus and directed all tertiary institutions to close and proceed with e-learning in a bid to curtail the spread of Covid-19.


The Ministry of Higher and Tertiary Education ordered students residing on campus to vacate halls of residence by Friday, the government further directed.


“It is now observed that Covid-19 cases are escalating daily and this may put the lives of students and members of staff in our institutions at high risk.

In view of the foregoing, the ministry is hereby directing that all tertiary institutions, with immediate effect, suspend faceto-face lectures on campus and continue with e-learning,” Higher and Tertiary education permanent
secretary Fanuel Tagwirei wrote to principals of technical colleges.

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