Business Set To Lose US$5 million Due To COVID-19

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By Alois Vinga

A  ZIMBABWE National Chamber of Commerce (ZNCC) survey has predicted that businesses in Zimbabwe will lose revenue in excess of US$5 million due to the COVID-19 lockdown effects on productivity.

The chamber’s survey titled; “Sustainable and Flexible Economic Interventions to Address Covid19”, says the majority of respondents projected massive revenue declines.

“Total 38% project that they will lose revenue of above $5 million, 12% project that they will lose revenue of between $3 million-$5 million and 20% projected that they will lose revenue of between $1 million to $3million and 30% projected that they will lose revenue of below $1 million,” says the report.

Businesses also indicated that the lockdown had resulted in supply chain disruptions, labour supply disruption and uncertainty in future decision making.

The industry lobby group indicated that operating hours have been affected due to the lockdown with 42% of the respondents having resorted to working from home as a measure to protect employees from the exposure to COVID-19.

“Given the impact of COVID-19 which has resulted in a contraction of economic activity across all sectors, we project that the economy is going to decline by at least minus 9% in 2020,” ZNCC said.

A budget deficit of more than 5% of Gross Domestic Product against increased government expenditure due to the effects of COVID-19 has also been projected.

In light of the extended lockdown, ZNCC said the overall impact will result in a continued disruption in the supply chain demand for goods which is expected to remain low resulting in reduced production of goods and several workers being made redundant as some businesses will not be able to adapt.

A number of recommendations have been made to ease the burdens for companies in order to maximise the little available opportunities.

“Government should move from fixing the exchange rate because this is counterproductive as it weighs on exporters and the interbank while propping up smuggling of minerals and other export commodities. The Reserve Bank of Zimbabwe should move back to a managed float with regular review to prevent widening parallel market premiums,” ZNCC added.