Sunday, 26 April 2020

LOCKDOWN : WE WILL BAIL OUT STRUGGLING FIRMS, SAYS GOVT


GOVERNMENT will soon unveil a stimulus package to support companies that have been badly affected by the Covid-19 lockdown as part of measures to avert mass job losses and save livelihoods, Finance and Economic Development Minister Professor Mthuli Ncube has said.

In interviews on the sidelines of his tours of Ekusileni Medical Centre in Bulawayo and Midlands State University (MSU) in Gweru last Friday, Prof Ncube said the package is set to provide the much-needed economic relief to companies and industries reeling under the effects of the global pandemic.

The disease has so far claimed more than 200 000 lives and infected nearly three million people globally. Locally, 31 had been infected by late yesterday, with four deaths.

“What you will see during this Covid-19 response generally is a stronger shift towards supporting our social action programmes and that is very critical. 

Another leg of saving livelihoods is to support companies so that we can retain jobs as we don’t want our people to lose jobs,” said Prof Ncube.

“We want to create more jobs, which is precisely why we want to support companies to retain, expand and access working capital. You will see us in the next few weeks announcing the recovery package to deal with those issues and watch this space for that.”

Distressed firms require liquidity support to preserve jobs and prevent debts from decimating them while exporters will need special assistance.

Workers in various sectors of the economy, particularly the hospitality and tourism industry, are bearing the brunt of Covid-19, and there are growing fears of job losses as the global economy continues to plummet. The International Labour Organisation (ILO) estimates that globally over 25 million jobs will be lost due to the coronavirus.
  
During his tour of MSU’s incubation hub, Prof Ncube said Government is working on a bigger recovery stimulus package, post Covid- 19 lockdown to support industry so that people don’t lose jobs.

He said a $500 million national venture fund was already available and would provide affordable loans to young entrepreneurs and institutions such as the MSU.

“Now coming to the $500 million, this pertains to the venture fund resources we launched as a Government. The reason behind is that we are looking for ideas for viable projects that we will invest in that will turn ideas into goods and services,” he said.

Prof Ncube said the idea revolves around creating an entrepreneurial culture among Zimbabweans.

“It is pleasing to note that most of our universities are doing similar things in the sense of trying to be practical, coming up with innovations and ideas, that is very encouraging indeed in terms of our education system,” he said.

“The fund will go a long way in supporting growth of innovation and commercialising these institutions.”
  
Furthermore, Government recently came up with a $600 million package to support the informal sector and vulnerable households.

Prof Ncube said Government is supporting about one million people who lost their incomes through cash transfers, including providing food hampers to the vulnerable groups.

“Saving livelihoods means the economic part and again we have two core approaches and the first one is to support those who have lost their incomes through cash transfers. So far, we have identified one million people and they will be paid $200 per month for the next few months so that they can keep going,” he said.

“We already have another cash transfer of $180 a month to cover the roller meal subsidy because if you can’t find roller meal the option is that you then get cash in lieu of roller meal, especially those who are in urban areas because in the rural areas we are already giving out free food and this is part of our support for the vulnerable.”

Prof Ncube said Government is working together with the private sector in the fight against Covid-19.

“Businesses right across the country have been working with Government and helping Zimbabweans so this is just part of the package of working together. We want to save lives and livelihoods and when it comes to saving lives, it is about prevention, testing, tracing and treating,” he said.

“Those from outside the country will be quarantined and some of you need to self-quarantine at home and all of this is designed to deal with our Covid-19 strategy including social distancing and lockdown is all part of that.

“We are working on massive testing targeting at least 40 000 people by next week so that we are able to get a better sampling to know if the curve is flattening or not.” 

Public Service, Labour and Social Welfare Minister Professor Paul Mavima recently issued a statement urging companies to avoid retrenchments, unpaid leave and unfair job terminations during the lockdown period.

The local tourism industry — which is at a standstill — employs more than 40 000 workers. According to the Hospitality Association of Zimbabwe (HAZ), the industry contributes 1,4 percent to national employment.

Most companies are considering cost-cutting measures to stay afloat as revenues decline.

According to the Employers Confederation of Zimbabwe (EMCOZ), tourism, hospitality and airlines industries were the worst affected by the pandemic.

The tourism sector, 61 percent of whose workers are female, is bleeding as hotels, restaurants and bars remained closed.

The country’s five-week national lockdown is set to end on May 3.  Chronicle

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