Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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Bread shortages in Harare as Lobels bakery shuts down

Bread shortages in Harare as Lobels bakery shuts down

By Tichaona Sibanda
9 June 2011

Lobels bakery, since independence the largest bread-making company in 
Zimbabwe, has shut down due to financial mismanagement which effectively 
crippled operations at the firm.

Founded in 1950 by the Lobels family, the bakery in its heyday was arguably 
the most popular in the country. The family later sold its business to a 
consortium of local businessmen who include Retired Brigadier-general David 
Chiweza, Livingstone Gwata and Hebert Nkala.

Three of its top managers were recently fired on allegations of fraud and 
misappropriation of company funds totaling $10 million. Those dismissed 
included chief executive officer Burombo Mudumo, finance director, Nesbert 
Gufu and Tonderai Chipere.

The company board accused the trio of failing to pay workers’ salaries for 
the past three months. The bakery also struggled to procure flour supplies 
and failed to settle its debts to several suppliers.

Our correspondent Simon Muchemwa told us management at the bakery has 
released a statement saying they will remain closed for the next two months 
while they try to arrange new financing from potential investors.

Many companies in Zimbabwe have closed in the last decade because of 
persistent economic problems. Critics blame the problems on Robert Mugabe’s 
poor economic policies, especially the violent land grab that effectively 
destroyed the agricultural backbone of the country.

Muchemwa said companies that have been taken over by black Zimbabweans in 
recent years have also fallen on hard times, due to lack of skills and the 
technical know how to run big companies.

In recent months the inclusive government, on the insistence of ZANU PF, has 
pushed for the so-called ‘indigenization’ law that requires companies to 
give a majority stake to black Zimbabweans. The controversial Indigenisation 
and Economic Empowerment Act requires that all large businesses, including 
banks and mining industries, ‘sell 51 percent of their shares to ‘indigenous 
But many observers have commented that, as in the land grab, it will be 
unlikely that the shares will be purchased. Government ministers have 
already stated that there are no plans to pay for shares in mines.

Analysts argue that this law will have catastrophic consequences, apart from 
scaring away international businesses operating in the country as well as 
potential investors.

Muchemwa said critics in the country accuse Mugabe of using the empowerment 
campaign to seize thriving businesses and hand them over to his allies as a 
reward for their support. The MDC-T led by Prime Minister Morgan Tsvangirai 
has castigated the empowerment drive as a ‘looting tool by greedy elite.’


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