The Sunday Mail
Lincoln Towindo and Debra Matabvu
Most private sector workers are unlikely to receive annual bonuses due to a depressed industry that is already struggling to pay salaries, business leaders have said.
Only the food and beverages sector, which has grown tremendously this year, has shown the clearest indication that its employees will receive the 13th cheque.
Many companies are struggling because of working capital constraints, vicious competition from imports and a general high cost of doing business, with capacity utilisation at its lowest in five years.
The Confederation of Zimbabwe Industries 2014 Manufacturing Sector Survey Report shows that industry capacity utilisation declined from 39,6 percent to 36,3 percent.
The report also states that 64 percent of industries are lying idle, forcing companies to shed jobs and adjust business models.
In addition, figures from the Retrenchment Board show that 4 172 people have lost their jobs since January.
Business leaders told The Sunday Mail that under-performing companies will not pay bonuses.
Employers’ Confederation of Zimbabwe (Emcoz) director Mr John Mufukari said, “It is impossible to give a general answer, but the CZI Manufacturing Sector Survey Report gives a very good picture of which sectors of industry are likely to be giving bonuses this year.
“While some companies are doing well, generally, the rest are not doing any good. Those doing well are likely to give bonuses and, naturally, those barely keeping their heads above the water will definitely not give out bonuses.
“If they are to do they will have to borrow, which is almost inconceivable given the cost of borrowing in the country.”
CZI president Mr Charles Msipa said select companies in the tobacco, clothing and beverages sectors made profits and thus could afford bonuses.
He pointed out, though, that the private sector was not obliged to make the payout.
“It really depends on individual companies; the picture is mixed. It is not 100 percent doom and gloom in the manufacturing industry.
“Some are struggling to pay salaries and wages such that they may not be able to pay their employees bonuses this year. But for those doing well, they might afford.
“Overall, the manufacturing sector has lost competitiveness this year. But some sectors such as the tobacco, selected clothing and beverages sectors are doing better. I am not saying they can and should definitely give bonuses to their workers: I am saying they are in a better position to do so compared to other companies in other sectors in the industry.
“However, an important issue to note is that civil servants normally expect a 13th cheque at the end of the year, but for private companies, it is more of an incentive based on results produced at the end of the year.”
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