Retrenchments due to harsh economic environment have dealt a heavy blow to the Tonse Alliance administration’s election campaign promise to create one million jobs in the first 12 months in office.
In the past week, Manica (Malawi) Limited and Bakhresa Malawi Limited announced plans to scale down and lay off some employees while Kanengo Tobacco Processors Limited folded.
Developments at the three companies have cost about 225 jobs.
In a memo dated March 31 addressed to Ministry of Labour, Manica (Malawi) Limited said it will be undertaking an organisational restructuring exercise to retrench some employees as operational and staff costs are high due to large number of employees compared to the revenues generated.
Manica, a subsidiary of Ceva Logistics Group of Companies—an international company based in France, said it will undertake the exercise to bring its revenues in line with the group’s requirement and evaluate each existing job and retain only those which are the main key results areas.
R e a d s t h e communication: “The exercise will mean several divisions will be merged to form one and some other jobs will be made redundant.”
In an interview yesterday
Minister of Labour Ken Kandodo observed that while the government understands the extent to which the Covid-19 pandemic has affected economies worldwide, including the private sector, the development is a setback to the one million jobs initiative.
However, he hoped that with cases of the Covid-19 on the decline, there will be a turnaround which could improve economic activities and spur job creation initiatives.
Kandodo said: “It is most unfortunate that at this time, when the government is looking at increasing job creation, companies should be scaling down operations.
“But we do understand because the impact of the Covid-19 pandemic has been great worldwide. It is sad that such an established company should be retrenching.”
In his reaction, Employers Consultative Association of Malawi (Ecam) executive director George Khaki observed that the situation, which has been worsened by the increase in the minimum wage from K35 000 to between K38 000 and K50 000, reflects the challenges brought about by the pandemic with transport and warehousing sector being one of the worst affected.
He said: “Now with a good number of countries experiencing a third wave of the pandemic and implementing lockdowns and other restrictive measures, it means locally our enterprises will continue to have low productivity and more jobs will be lost.”
In its Assessment of the Impact of Covid-19 on Employment in Malawi, Ecam and the International Labour Organisation estimated that the pandemic would cost the Malawi labour market between 273 712 and 680 496 current and future jobs.
The assessment projected that if the crisis persists in the first quarter of 2021, the sector could lose 274 084 jobs.
Malawi Congress of Trade Union’s general Secretary Denis Kalekeni said yesterday government needs to cushion and provide a conducive environment for the private sector by creating a social protection scheme.