BULAWAYO — Former African Sun chief executive officer, Shingi Munyeza, has said the firing of over 25 000 workers across the country following the July 17 Supreme Court ruling which allowed companies to dismiss workers on a three months’ notice was long overdue and necessary to save struggling businesses.
Munyeza, who left the Zimbabwe Stock Exchange-listed hospitality group early this year, said companies had been running with wrong and unsustainable business models adopted during the hyperinflation era.
Munyeza, who was speaking recently at Harvest House International Church Conference’s business session in Bulawayo, said it had been abundantly clear companies were no longer able to pay employees under a hard currency system and so the Supreme Court judgement had given the companies huge relief.
“The correction that is happening is very painful right now,” said Munyeza. “I feel sorry for those who have been given three months’ notices but let me tell you as a business person, there was no way that could have been corrected.”
Munyeza said companies were burdened by expensive cost structures established during the hyper-inflation era and had no other option but to take advantage of the ruling to reduce the number of employees and therefore cut costs.
The business mogul said there was still need for the dismissal of incompetent people occupying key positions in companies such as parastatals.
“There is some worrying trend of incompetence and some of you need to apply for demotion,”
“Our parastatals are run, generally speaking, by incompetent people. You wonder how we manage to have the entire aeroplane that carries about 120 people carrying one person from Johannesburg when other planes are full.
“How does that happen in a civilised country like Zimbabwe?” he asked, referring to a situation that once happened on an Air Zimbabwe plane.
Munyeza said when many skilled people left Zimbabwe at the height of hyperinflation, they were replaced by people who had no understanding of management, creating problems for companies.
“There is some worrying trend of incompetence and some of you need to apply for demotion,” he said.
He later told the Financial Gazette’s Companies & Markets that policymakers had to address the country’s debt overhang of over US$9 billion, arguing that it was a stumbling block to foreign direct investment into the country.
“It (debt) is causing negative inflows in foreign direct investment and it also increases our interest rates and when you trace that back, it is from a debt overhang,” said Munyeza.
He said policy inconsistency was also a huge impediment in luring investments into the country. Financial Gazette