Zambia threat to close Shoprite

Zambia threatened to shut all Shoprite stores yesterday - a move that will tarnish its image as an investor-friendly frontier market - because the South African retailer fired 3000 striking workers.

Labour Minister Fackson Shamenda said the company had backtracked on the sackings and had been given 10 days to resolve the pay dispute that triggered the strike.

"We told [Shoprite management] that we would revoke their trading licence if they went ahead with the dismissals," Shamenda said.

"I have now given them 10 days in which to negotiate and resolve the problem. All the outlets are working normally now and I am on my way to buy bread from Shoprite."

A Shoprite spokesman refused to comment.

Workers led by the National Union of Workers, who went on strike to demand higher pay and improved working conditions, have returned to work, said the union's president Robert Munsanje.

Zambia, the second-biggest market for Shoprite outside South Africa, is one of the growth hot spots for South African retailers trying to offset weak growth prospects at home.

"It appears Shoprite was within its rights to fire those workers but, given Zambia's potential, it is in its best interests to come to an amicable understanding on how this sort of thing is to be handled," said Savusha Kander, a portfolio manager at Ashburton Investments, in Johannesburg.

Lusaka attracted more than R30-billion in foreign investment in the first half of this year, above the government target for the whole year, President Michael Sata said last month.

Sata swept to power two years ago on a platform that promised an activist state that would defend workers and reduce poverty in his country, the continent's top copper producer.

''Sata was always going to be interventionist - that's what he campaigned on. But his interventions are legitimate, or have been so far," said Francois Conradie, a political analyst at NKC Independent Economists.

"They were all cases of enforcing labour, and health and safety, rules, and refusing to tolerate big foreign-owned companies exploiting Zambian workers."