SCHWEPPES executive Demos Mbauya (DM, pictured) was recently elected as the president of the Employers’ Confederation of Zimbabwe (Emcoz), taking over form Israel Murefu. Deputy business editor Kudzai Kuwaza (KK) caught up with Mbauya to discuss a variety of issues. Here is how their discussion turned out

KK: What are your objectives during your term of office?

DM: Emcoz is a membership driven organisation. Its decisions and functions are exercised through consultation with employer associations. Every year a congress is held in September/October to formulate mandate for the executive. The leadership of Emcoz therefore derive their brief and remit from congress resolutions.

As part of the rebranding and repositioning of Emcoz, a survey was carried out to get feedback on the expectations of its membership. The membership shared valued feedback, which is being acted upon to improve service and add value. Our focus will therefore be on service delivery and value addition to our broad and wide membership. A strong and vibrant Emcoz on the back of strong participation from its membership enables the confederation to make its voice heard and contribute meaningfully towards creation of a conducive environment for business to operate and grow.

KK: What are your members’ expectations?

DM: There are examples regionally and globally that social dialogue is crucial for economic growth and social cohesion. From the time of the Kadoma declaration in 1997, Zimbabwe has experienced progress in creating a regulatory framework to promote social dialogue through the promulgation of the TNF Act in 2019. The great expectation from our membership is that social dialogue and tripartism via the TNF be vigorously pursued as a means not only to resolve current socio-economic challenges but to harness and nurture national consensus, cohesion and commitment towards socio-economic advancement of our country.

Collective bargaining is an essential part of social dialogue between labour and business. There is commitment on our part to elevate and amplify our role in providing leadership, guidance and capacity building to employer associations to execute their mandate effectively and successfully in the collective bargaining process. At national level we will engage social partners to explore ways of strengthen collective bargaining institutions and processes.

KK: What opportunities for intra-African trade does the creation of the African Continental Free Trade Area (AfCFTA) bring?

DM: The creation of AfCFTA through the entry into force of the Agreement Establishing the AfCFTA (AfCFTA Agreement), on May 30, 2019, presents important opportunities for boosting intra-African trade and promoting business in Zimbabwe to position themselves strategically. In addition, Sadc Industrialisation Strategy, among other things, is promoting regional value chain linages and trade liberalisation.

Both have implications for competitiveness of local business in terms of cost and quality and it will determine the extent to which we will play to win. Labour polices, laws and practises in Zimbabwe will need continuous review and refining to adapt to the reality of a regional and Pan African economy. In that regard, measures to promote industrial and workplace productivity are key focus areas for Emcoz.

KK: What role does the informal sector play in the Zimbabwe economy?

DM: The informal sector in Zimbabwe has a significant contribution to national GDP. The ILO has come up Recommendation No. 204 (R204) aimed at supporting the formalisation of the informal economy, promoting the economic inclusion of workers, and fostering an entrepreneurial spirit as well as contributing to Decent

Work and social dialogue. Emcoz, in partnership and collaboration with ILO, will be working on capacity building for employers to craft and implement a formalisation strategy.

The promotion of labour laws, polices and standards that foster a conducive business environment and are in line with the Decent Work Agenda is constant focus areas for Emcoz. In that regard, we will push for the finalisation of the Occupational Health and Safety Bill, Productivity Institute Bill and Labour Amendment Bill through consensus building process among the social partners.

KK: What challenges and opportunities have come with the Covid-19 pandemic?

DM: Before Covid-19, the largest disruptions to work involved new technologies and ever-increasing globalisation. Covid-19 has, for the first time, elevated the importance of the physical dimension of work. The Covid-19 pandemic has accelerated trends in regard to the future of work. There is need for public policy that expands and improves the national digital infrastructure.

A related and pertinent issue is to the extent to which labour laws and polices caters for the evolving work arrangements.

In collaboration with relevant social partners, we will promote policies and programmes that bring youth and women into gainful employment and increase access to social protection and opportunities to participate in social dialogue. These are some of the issues that we will be seized with.

KK: Your congress theme revolves

around working in a Covid-19 environment: Why did you choose the topic?

DM: The world of work has been deeply affected by the Covid-19 crisis. Throughout the Covid-19 pandemic, businesses and governments faced the need to solve multiple, competing priorities simultaneously. One of the most difficult aspects of this was finding ways of keeping the economy going while at the same implementing measures to protect the health of employees and general citizenry.

Several companies have suffered significant disruptions which have threatened their viability. According to the ILO's immediate forecast model, working hours worldwide fell in the first quarter of 2020 by around 4,5% (equivalent to around 130 million full time jobs, based on a weekly duration of 48 hours) compared to the situation before the crisis (fourth quarter 2019).

By the end of the second quarter of 2020, total working hours worldwide were 10,5% lower than the quarter before the crisis. The pandemic has evolved and with it, the measures taken by governments and businesses.

To meet the challenges posed by the pandemic, businesses in Zimbabwe had to react in agile and decisive ways. As we move into the next phase, now is the time for businesses to seek out and seize the opportunities emerging in the recovery period.

This involves conducting an “after-action review” to collect data and insights on lessons learnt from the pandemic and then using these to prioritise actions to enhance business value today and build strategic resilience for tomorrow.

Businesses that take these steps now will be well-placed to capitalise more effectively on the opportunities — and will continue winning in their market and work places as they build resilient business models hence our theme for the Congress “Beyond the Covid-19 Crisis: A Workplace in Transformation”.

KK: What has been the impact of power outages on business?

DM: There has been increased production costs as companies use alternate means of power for example, running heavy duty machinery on diesel. The demand services more expensive and less competitive on the market. The demand for imported goods will increase at the expense of local goods. This development will lead to an increase in the demand for foreign currency thus, creating shortages that will trigger the exchange rate to fluctuate upwards.

KK: What, in your view, is the solution to the problem of exchange rate disparities?

DM: Our view is that currency management and Return On Equity are fundamental issues which are among the broader national socio-economic issues that must be presented before TNF and resolved through social dialogue and social pacts.

KK: Inflation has begun to go up again after months of falling. Does this concern you as Emcoz?

DM: September inflation soared 4,3%, gaining 0,55 percentage points on the August 2021 rate of 4,18%. So far, this is the highest price movement since January this year as the local currency continues to lose ground against the United States Dollar (USD). The Zimbabwe dollar has been depreciating rapidly during the past few weeks on the parallel market, a development that has led to price hikes of goods and services as businesses seek to consolidate profits in local currency. As business, our concerns are as follows:

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Stagnation of the official exchange rate on the RBZ-run auction market which is not consistent with proper functioning of the Dutch auction system.

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Anticipated reduction in spending, and a consequent fall in sales businesses, hence low revenues.

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To compensate for inflation, employees may ask for pay rises above the rate of inflation. This will lead to higher costs for businesses and could result in prices being increased further, adding to more inflation.

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A possible reversal of the gains brought about by the RBZ auction system as well as sound macroeconomic policies.

KK: Do you think the country’s growth rate will reach 7,8% as projected by government?

DM: Yes. Given the bullish trend of international mineral prices, the scaling up of a vaccination drive to combat the Covid-19 pandemic as well as positive spin-offs from a good agricultural season following high rainfalls received in the past season, we are of the view that the projected 7,8% growth rate is achievable.

However, there still remain some militating factors against this projection and these are foreign exchange shortages, high inflation, as well as punitive or restrictive financial laws such as SI 127 of 2021.

KK: The Finance minister, Mthuli Ncube is expected to present the 2022 budget next month. What are your expectations?

DM: The upcoming budget should consolidate the gains of economic stability while addressing the following key expectations for the 2022 budget:

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Setting out a pathway to managing foreign exchange inefficiencies and punitive exchange control regulations;

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Addressing Covid-19-related health and social challenges;

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Implementing structural reforms that will improve the ease of doing business and manage endemic corruption;

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Improving civil service remuneration The budget needs to address the cost of fuel problem by reducing import and excise duty paid on fuel. This will go a long way in managing costs of production.