adminBusiness Correspondent
OVER 20 long-established companies closed shop in the Central Business District in Mutare between January and August this year owing to rental wrangles and multiple economic challenges. While the business operating environment continues to be timorous in the wake of liquidity challenges in the country, a check by Post Business revealed that several long-established companies that were operating in the CBD in Mutare had closed shop between January and August 2014.
The biggest shocker among the companies that shut down in May was Bhadella Wholesalers, which was one of the leading and oldest wholesalers in the city.
In the hospitality industry, the exquisite Penhalonga-based hotel, La Rochelle stopped operations in January.
The hotel closed after receiving a final notice to vacate the property by the National Trust of Zimbabwe, the owners of the property.
Other notable companies that closed shop between this period are the graphics design company, Coar Signs, Sakubva Spar, wholesale giant, Kapjack, Stax Restaurant, Portuguese food outlet, Mirasole, the stationery and bookshop, Book Centre and motor parts shop, Mutare Parts to mention a few.
Other smaller enterprises include long established boutiques such as Impressions and Gwenzi Blue Fashions and multi-service providers such as Costrans, Calprez, Sarkmatz and Gedions Engineering.
While other companies are moving their offices from the CBD uptown into houses in the Avenues and low-density suburbs like Morningside nearer town, rental wrangles have been cited among the push factors affecting most businesses.
The owner of one of the boutiques now closed who requested anonymity said the business environment was increasingly getting tougher and the higher rental charges were making it worse.
“The current business environment is complex at the moment with cheap imports and smuggled goods upsetting the pricing of goods produced locally.
“While most local companies are facing serious competition from the cheap imports, property owners are not making things better. They charge high rentals despite the hostile business environment. Where do they expect us to get the money from when sales are dwindling?” he said.
In a recent interview, Affirmative Action Group chief executive officer, Dr Davison Gomo, blasted property owners and said there was need for Government to intervene and regulate rental charges in the CBD.
“We respect property rights and believe that those who own such properties must get a fair return on them.
“However, the landlords have become a law unto themselves and they hide behind law to commit acts of daylight robbery. There is need to look closely at the unfair business environment that is caused by some of the issues cited above and find ways to stop unscrupulous business practices in the interest of development,” said Dr Gomo.
With the Small to Medium Enterprises expected to steer economic growth under initiatives in the economic recovery blueprint Zimbabwe Agenda for Sustainable Socio–Economic Transformation there is obviously a need to look at how best to contain controllable push factors like rental charges, especially on commercial properties.
The Rent Board which is expected to be the go-between has often been criticised as a ‘toothless bulldog’ that has done little to direct market forces in the rental charges.
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