Employers push for 2nd Covid-19 stimulus package

THE Employers Confederation of Zimbabwe (Emcoz) wants the Government to come up with a second Covid-19 stimulus package to bail out businesses from the adverse effects of the pandemic to stimulate economic growth.

Following the outbreak of the Covid-19 pandemic the Government last year came up with a $18 billion economic recovery stimulus package aimed at re-invigorating the economy and providing relief to individuals, families, small businesses and the industrial sector.

Of the $18 billion package, a total of $3,02 billion was allocated to the industrial sector in the form of loan guarantees. While no comprehensive report has been issued pertaining to the impact of the bailout package, Emcoz president, Dr Israel Murefu, yesterday said Covid-19 was having a negative bearing on the Gross Domestic Product (GDP) and industrial capacity utilisation this year.

“Obviously, there are other factors that might improve the economy like the good rain season we are experiencing, and if we are able to get a second stimulus package then it might assist business,” he said.

“We think that a second stimulus package in the form of cash or a facility where companies borrow real cash and be able to improve their working capital requirements is needed if we are to give this economy some modicum of life and also if productivity and capacity utilisation is going to improve.”

There are high hopes that business will start ticking in the right direction following the move by the Government to relax the tight level four lockdown regulations.

The ongoing vaccination programme has also raised hopes for a return to normalcy amid a drop in the number of new Covid-19 cases and deaths.

In the 2021 National Budget the Treasury has projected that Zimbabwe’s economy would grow by a margin of up to 7.4 percent with the agriculture sector and mining expected to contribute more.

Reserve Bank of Zimbabwe (RBZ) Dr John Mangudya also expressed the same optimism in his recent 2021 Monetary Policy Statement.

Although industry leaders fear the disruption caused by Covid-19 lockdown measures would cripple targeted growth, the RBZ has predicted a faster recovery in economic performance for this year on account of a strong balance of payments position and the good agriculture season.

Dr Murefu said while the first stimulus package was mainly in the form of guarantees very few businesses benefited from it. He insisted that most businesses require stimulus funding to improve working capital as their balance sheets have been weakened by the adverse effects of lockdowns and the rising cost that comes with implementing measures to contain the spread of the viral disease.-ebusinessweekly.co.zw