By A Correspondent
The Zimbabwean government’s persistent failure to pay its service providers on time has pushed several companies to the brink, forcing many to either shut down or scale back operations—leading to massive job losses across the country.
According to Zimbabwe National Chamber of Commerce (ZNCC) Chief Executive Christopher Mugaga, the situation has become critical, with hundreds of thousands of workers affected.
Quoted by the Daily News, Mugaga said:
“Businesses have been feeling the impact of the government’s non-payment for services rendered. Many of our members are in dire financial straits. Some have already closed, and others are being forced to downsize, shedding jobs in the process.”
He warned that unless the government takes immediate steps to settle its debts with service providers, the country risks further economic instability and rising unemployment.
“We are seeing ripple effects throughout the economy. When companies don’t get paid, they can’t meet their own obligations—whether it’s paying workers, suppliers, or taxes,” Mugaga added.
The World Bank recently joined a growing number of voices urging the Zimbabwean government to honour its financial commitments promptly. In its latest economic brief, the institution emphasised that consistent and timely payments to suppliers are key to stimulating business confidence, promoting job creation, and fostering overall economic growth.
“Government arrears to private sector suppliers weaken business operations and contribute to a slowdown in economic activity,” the World Bank noted in its report.
Business leaders say confidence in the government’s procurement processes has been severely eroded, with contractors and suppliers increasingly reluctant to engage in public projects.
“This isn’t just about outstanding invoices,” said another executive within the ZNCC. “It’s about trust. Right now, that trust has been broken, and it will take more than promises to restore it.”
The continued financial mismanagement has prompted calls for urgent reform in public sector spending and procurement to avoid further economic deterioration.