Retail outlets close due to ZWG surge

Recent closures of leading retail stores in Zimbabwe have led Parliament to demand an explanation from Finance Minister Mthuli Ncube. The closures, attributed to the ongoing economic crisis and currency depreciation, have raised alarms about the sustainability of the country’s business environment.

Struggling to cope with an increasingly hostile economic environment, many retail chains have closed branches across the country. Latest data reveals that Zimbabwe’s sixth currency, the Zimbabwe Gold (ZiG), is rapidly losing value against the US dollar and is currently trading at around ZiG40 on the black market.

At a recent parliamentary session, Citizens Coalition for Change (CCC) MP Zivai Mhetu expressed concerns about the repercussions of these closures on the economy. “Our economy is becoming increasingly hostile to businesses and if this trend continues we may soon witness an exodus of companies,” Mhetu warned. He cited the recent closures of major retailers, including Unilever and Truworths, as indicative of wider economic difficulties. He also highlighted reports that leading Botswana-based supermarket chain Choppies is planning to exit the Zimbabwean market despite its development in other Southern African Development Community (SADC) countries.

Mhetu expressed concern about Choppies’ struggles in Zimbabwe, saying: “The only place that is facing operational challenges is Zimbabwe. This is a clear indication of our troubled business environment.” Last month, retail stores warned of possible total closures, citing the overvaluation of the local currency as a major impediment to their operations.

The MP also highlighted the potential social impact of these closures, especially on employment. “The closure of major companies triggers unemployment, something we cannot afford as our unemployment rate is already incredibly high. According to statistics released by ZIMSTAT earlier this year, only 46.3% of working-age Zimbabweans are employed.”

Mhetu called for urgent action to combat currency instability and inflation, warning that without intervention more businesses could follow Choppies’ path. He reiterated that the government must stabilize the currency and create an environment conducive to business growth. “National Development Strategy 1 talks about creating 760,000 formal jobs by 2025. We must act quickly to achieve this target,” he insisted.

As the economic crisis continues to unfold, pressure is mounting on the government to implement effective measures to revitalize the retail sector and restore confidence among businesses operating in Zimbabwe.