Business Reporter- The country’s leading sugar milling plant, Triangle Limited, has announced plans for a mass retrenchment, citing viability challenges.
This is happening despite Emmerson Mnangagwa’s administration touting the mantra “Zimbabwe is Open for Business.”
Despite the rhetoric, policy inconsistencies and a hostile economic environment have driven several companies to scale back or shut down operations entirely under Mnangagwa’s administration.
In a statement addressed to employees but without specifying the actual number of targeted employees, Triangle Limited attributed the phased retrenchment process to a combination of rising operational costs, currency instability, inflationary pressures, and the adverse effects of government policies.
Among the challenges highlighted were the skyrocketing costs of key inputs such as fertilizer, fuel, and imported goods and services. Additionally, the company lamented the impact of the government’s decision to exempt sugar from VAT, effectively barring firms from reclaiming VAT on essential production inputs.
The influx of low-cost, duty-free sugar imports has further compounded the company’s financial woes.
These economic hurdles are not unique to Triangle Limited.
Across various sectors, businesses have struggled to stay afloat in an environment characterized by erratic policy shifts and a lack of clear economic direction.
Mnangagwa’s much-publicized Zimbabwe Investment and Development Agency (ZIDA), established to attract foreign direct investment, has fallen short of reversing the tide of deindustrialization and company closures.
Harare’s erratic policy landscape has created an unpredictable business environment that deters local and foreign investment.
For example, the exemption of certain products, like sugar, from VAT—while aimed at reducing costs for consumers—has inadvertently crippled industries reliant on VAT rebates for input costs.
This, coupled with inflation that erodes purchasing power and inconsistent foreign currency policies, has made long-term business planning nearly impossible.
Moreover, the government’s inability to stabilize the Zimbabwean dollar and control inflation has led to recurrent shortages of foreign currency, undermining companies’ ability to procure essential inputs.
The ripple effect of these challenges has not only stifled industrial productivity but has also resulted in widespread unemployment, as retrenchments become a common coping mechanism for distressed firms.
The Zimbabwe Is Open for Business initiative, introduced as a flagship policy under Mnangagwa’s administration, has largely failed to deliver tangible results.
Investors remain wary, citing issues such as weak property rights, corruption, and inconsistent regulatory frameworks.
Despite lofty promises, the initiative has yet to foster a conducive environment for sustained economic growth and job creation.
Instead, the economic climate has continued to deteriorate, with companies like Triangle Limited forced to retrench workers or scale back operations.
The retrenchment at Triangle Limited is yet another grim reminder of the economic challenges confronting Zimbabwe under Mnangagwa’s administration.
Efforts to get a comment from the Triangle Limited management were fruitless at the time of publishing.