Zim's harsh economic climate steals festive mood

December 1, 2015, 4:31am

By Mthandazo Nyoni, the Standard. Photo: the Standard

Barely a month before the onset of the festive season, the general mood in the country appears completely devoid of any signs of merriment.

The usual banter around the joyful issue of bonus is now a thing of the past, reserved only for the civil service.

A recent study by the Industrial Psychology Consultants (IPC) has shown that two out of five companies will pay an annual bonus this year. Last year 49,46% of the respondents in the IPC survey paid annual bonuses.

Normally, during this time of the year, retail and clothing shops would be a hive of activity as families do Christmas shopping. But this time, despite extending working hours and a few retailers adorning their shopfronts with colourful Christmas decorations, the tills are still not ringing.

Business people who spoke to The Standard said the general mood in the country was down due to economic difficulties evidenced by subdued consumer spending.

“Business activity is depressed and it’s an indication of the state of the economic environment,” said Association for Business in Zimbabwe (ABZ) chief executive, Lucky Mlilo.

“In the yesteryears, a lot of people used to celebrate the festive season as disposable incomes were high. But now most companies have downsized their operations by retrenching and embarking on other cost-cutting measures because of the tough economic environment.”

Mlilo said employees had adopted prudent ways of spending their hard-earned money. They were now only spending money on very essential needs that allowed them to survive. He said under normal circumstances, money to celebrate the festive season would come from savings made over the year but because of the national economic crisis, people in Zimbabwe were no longer able to save any money and therefore there just was no money for festivities.

He said festive season celebrations were no longer big money spending occasions as they used to be.

Zimbabwe Congress of Trade Unions president George Nkiwane said this year there was nothing to celebrate as was evidenced by the prevailing subdued mood in the country.

“The future for workers looks so bleak and hopeless. Workers are no longer certain about their future,” Nkiwane said.

“Those still working are not sure whether they will get paid or not. Workers are no longer planning about their future. Things will remain like this unless and until the economy starts kicking.”

However, the Confederation of Zimbabwe Industries president Busisa Moyo said business activity ahead of the festive season had marginally increased on the back of the promises of bonuses by government and some in the private sector.

“We are seeing customers buying large pack sizes of oil from the traditional 2-litre to 5-litre and 25-litre. The mood is one of subdued caution as bonuses have been promised but not yet paid,” he said.

“The festive cheer is, however, still a far cry from what we saw in 2011 and 2012 when capacity utilisation in industry was as high as 57% and 44% respectively.”

Moyo said 2015 was not going to be as festive as it would be in normal years. “Not really, but we hope it will pick up after bonuses have been paid,” he said.

The Consumer Council of Zimbabwe (CCZ) director Rosemary Siyachitema said consumers should exercise caution when spending during the festive season.

“As CCZ, we are encouraging consumers to spend very wisely because if they spend recklessly they will find it difficult to cope at the end of the year,” she said.

Siyachitema said that expenditure was lower than in previous years and their consumer basket for a family of six had been going down gradually over the years.

“The demand has also been going down not because people don’t want to eat, but because of money challenges,” she said.

Companies such as Econet, Delta and OK, among others, have recorded a decline in volumes, attributed to low disposable income among consumers.

The country is still smarting from job losses after the July 17 ruling that allowed employers to terminate contracts on three months’ notice. Over 20 000 people lost their jobs.