Covid-19 increases unemployment in Sofala, Mozambique

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Covid-19 increases unemployment in Sofala, Mozambique

3:32 CAT | 11 May 2020

Beira. capital of Sofala province, in central Mozambique. [Photo: DW]

Unemployment has increased in Sofala province, central Mozambique, since the beginning of the state of emergency . Several companies have closed their doors due to a lack of customers and there are many hundreds of jobs at risk.

More than 2,000 jobs in Sofala are being directly affected by the Covid-19 crisis, according to the General Labour Inspectorate in the province. Several companies have had to permanently close their doors, while others are reducing the number of employees per shift as they cut back on production.

According to Armindo Nhalungo, chief inspector at the General Labour Inspectorate in Sofala, at least 65 companies have already announced their intention to shut down.

“By April 30, we had received 65 letters from companies, some communicating the suspension of activities and others communicating temporary lay-offs”, Nhalungo said.

“Some companies have chosen to suspend activities entirely with the indication that workers’ wages would be paid under the terms of Article 123 of the Labour Law”. In all, 2,254 employees from various sectors are affected.

Expenses multiply

With the extension of the state of emergency in Mozambique for another 30 days, many companies anticipate even greater difficulties. Augusto Zalembessa, who operates in the restaurant sector, is already putting a cost containment plan in place.

“In order not to accumulate debts, we are trying to reduce energy costs. As you can see, we are trying to switch off some freezers to reduce energy costs. We have already closed some taps to conserve water, so that we do not have a huge water bill. We are also trying to separate the workers into shifts. They are now divided into two shifts, which will also help,” he says.

Zalembessa told DW Africa that he was going to write to the municipal council asking for a reduction in monthly charges and in his tax bill.

Mass layoffs

The Mozambican Workers’ Organisation (OTM) is concerned about the mass dismissal of workers without the government’s recommendations being observed. OTM representative Bento Gotine reveals that he has been talking to employers about alternatives to redundancy.

“We have been holding daily meetings to see what can be done to reduce the current rate of redundancies. The situation is worrying, because small and medium-sized companies are the ones that suffer the most, and they are the ones that employ most people,” he said.

Extension of the state of emergency

With the extension of the state of emergency, the General Labour Inspectorate in Sofala says it has received more complaints and letters from companies increasingly concerned about the possibility of closing.

The Beira Commercial Association, which brings together about 90% of commercial activities in Sofala, is also alarmed by the crisis.

“One of the things that most concerns us is the issue of unemployment, because, regardless of the business issue itself, we have to look to the future of our workers,” its president, Jorge Fernandes, says. “The authorities need to pay attention.”

Mozambique has 91 Covid-19 cases, 34 of whom have fully recovered. So far, no deaths have been reported.

Source: Deutsche Welle