Harare – A number of businesses with operations in Zimbabwe have forecasted a bleaker outlook in the 2019 financial year, citing persisting economic headwinds.
A review of recently released earnings statement by Getbucks, Simbisa Brands, Axia Corporation and Old Mutual limited over the last two weeks show that businesses’ confidence over Zimbabwe’s economic rebound prospects is still low or has gravitated lower compared to the prior year, as the new administration struggles to steer the ship in the right direction.
Following the June 2018 harmonised election contested victory, President Emmerson Mnangagwa’s led government has embarked on a number of policy change initiatives to turnaround the country’s ailing economy, with the recent introduction of the inter-bank foreign currency exchange market and the subsequent introduction of the RTGS dollar among the major highlights to date.
Reporting on its earnings for the 12 months period to December 2018, Old Mutual limited said change in Zimbabwe’s functional currency had a material impact on reported profits and net asset value.
During this period, the Group’s operating and baseline performance came off by 4 percent and 11 percent respectively below the comparable period in 2017.
On its 2019 outlook, the Group is doubtful of Zimbabwe’s economic prospects, saying that the recent currency reforms are contributing to continued uncertainty.
“Although a new government under President Mnangagwa came into power in the year, economic and political instability still persists in Zimbabwe,” the Group said in a statement.
Old Mutual said Real GDP growth is likely to be depressed in “our dominant Southern Africa markets as both Namibia and Zimbabwe face economic headwinds.”
Likewise, fast foods operator Simbisa Brands reported a dim outlook on Zimbabwe even though the Group is optimistic of management’s potential to initiate productive measures.
“We expect challenges in our trading environment to persist, particularly in Zimbabwe where further price increases, labour unrest and continues uncertainty continue to disrupt the normal course of business,” the Group CEO Basil Dioniso said in a statement accompanying the financials.
Axia Corporation offered a rather lukewarm outlook, but did not stop shy of identifying challenges posed by the weaker macro-economic environment.
“The Group is very hopeful about the country’s prospects and growth potential despite the current prevailing economic realities which are likely to persist in the short to medium term,” said Axia in a statement accompanying its financial results.
On the contrary, micro-finance services provider, GetBucks offered a bullish 2019 outlook saying “prospects for the future are bright” despite taking into consideration the challenging economic environment.
As has been the case over the past years, Zimbabwe’s economic fortunes have remained tied to political events thus, hope for real economic transformation also depend on the political players ability to initiate a substantive dialogue to solve the country’s socio-economic crisis.
Investments on Zimbabwe Stock Exchange are also reportedly low further showing that confidence is still low despite a raft of monetary and economic measures introduced so far by the government.
-Equity Axis News
