Big Companies Set to Collapse as Zimbabwe Economy Falters
Scores of companies are each month applying for judicial management, liquidation and voluntary closure as provided for by the Companies Act
WASHINGTON DC — Economists, industrialists and labour experts are warning of a troubled 2014 for Zimbabwe as many companies are slipping into liquidation or judicial management, throwing thousands of workers out of the job market and invariably pushing the unemployment rate close to 90 percent. Finance Minister Patrick Chinamasa, who projected an optimistic 6.1 percent growth rate next year, has also admitted that the economy is "saddled with severe socio-economic problems including a fragile treasury, erratic power supplies and lack of clarity over the country’s black empowerment law.” According to the Master of the High Court’s roll, scores of companies are each month applying for judicial management, liquidation and voluntary closure as provided for by the Companies Act. The act provides that a company may be placed under judicial management if it is unable to clear its debts or when it is likely to collapse. The Master of the High Court’s roll shows that some of the affected companies from across all economic sectors include Zimbao Mining Ventures, Infinity Asset Management, Rusape Service Station, Central African Shipping Agencies and United Methodist Publications and Stationers Foundations. Others are ambulance service provider Mars Zimbabwe (Pvt) Ltd, Road Construction company Gulliver Consolidated, multi-industrial concern Phoenix Consolidated Industries, KM Financial Holdings and several holding firms such as Apex holdings and Shaefur investments. Big companies that have retrenched staff include Zimplats, Unki, Bindura Nickel, Mimosa, Spar Supermarkets, Dairibord, Cairns Foods, Olivine Industries and PG Industries. Zimbabwe has been hit by a severe liquidity crunch that has forced industries to operate far below capacity. A partner at Deloitte & Touche, Tapiwa Chizana who is involved in business rescue and judicial management, said many companies are struggling to survive.