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Quarter to forget for listed Zimbabwean firms – The Zimbabwe Mail – The Zimbabwe Mail

LISTED firms say tight monetary policies introduced at the beginning of the third quarter of 2022 significantly dampened consumption and investment levels in the period under review.

This week saw a flurry of trading updates from listed firms, with the majority reporting a massive decline in sales volume as aggregate demand suffered from a hawkish monetary policy stance.

In July this year the Reserve Bank of Zimbabwe (RBZ) hiked the bank policy rate to 200 percent from 80 percent and introduced gold coins as part of measures to curb bloating inflationary challenges.

This according to listed firms led to liquidity crunch across value chains and saw aggregate demand tumbling.

Edgars Stores Limited chief executive officer Tjeludo Ndlovu summed it all up and said the liquidity crunch had resulted in customers cutting on purchases in local currency, negatively affecting sales growth.

Third quarter unit sales for the Edgars Group were down 26 percent from prior year, Ndlovu said in a trading update for the 13 weeks ended October 9, 2022.

In the Edgars Chain — Q3 unit sales of 186,179 were down 23 percent on prior year same period and also down 37 percent on Q2 largely on account of reduced aggregate demand following a sharp increase in minimum lending rates (MLR) announced in early July. In the Jet Chain — unit sales of 283,877 were down 27 percent on prior year.

At Carousel Manufacturing unit sales for the quarter were down 24 percent on prior year and Ndlovu said the sales reduction was due to weaker aggregate demand from the retail chains in response to the reduced appetite for credit.

Dairibord also suffered a seven percent drop in volumes for the third quarter compared to the comparative period in 2021.

According to acting company secretary Maurice Karimupfumbi notable declines were recorded in July and August only to resurge in September where volumes grew by six percent ahead of the prior comparable period.

He said performance was compounded by exchange rate disparities which manifested in course of the period which Dairibord alludes “impacted competiveness, subduing demand in the formal trade as consumers shifted to the informal trade”.

Reduced spending resulting from the measures instituted by the Government to stabilise the exchange rate and tame resurgent inflation saw Zimpapers recording subdued advertising volumes in its digital and publishing divisions. Advertising volume for the third quarter to end of September declined by 28 percent compared with the previous quarter.

“The 28 percent volume decline was mainly caused by the Government’s economic interventions of increasing the cost of borrowing and freezing payments to its contractors to tame inflation and run-away exchange rates,” Zimpapers chief executive Pikirayi Deketeke said.

“These worthwhile interventions had a negative effect on the overall demand for the division’s products as disposable income shrank. A number of advertisers were affected by these measures as they adopted a well-and-see approach.”

Another listed entity Proplastics said the monetary policy shifts, mainly the 200 percent on locally denominated borrowings, saw negative effects in the business stemming from significant increase in borrowings and finance costs.

Among challenges met by Proplastics in the quarter was the late settlement of allocated foreign currency amounts from the auction, a position that prompted the company to grow pricing preference in foreign currency.

As it stands, Proplastics cash sales ratio is now skewed in favour of the United States dollar and the firm is currently relying on local USD sales and export proceeds in sustaining all import requirements.

On its part, Delta Corporation, which reported its half year to September 2022 results on Wednesday this week, said “the recent curtailment of local currency liquidity has resulted in softening of demand for goods and services in some formal channels”.

It was however not doom and gloom as other firms recorded volumes growth during the period under review.

In its quarterly update, Simbisa Holdings acknowledged that the emergence from Covid 19 restrictions saw the firm performing extraordinarily and it continues to ride the wave of economic recovery from the effects of the pandemic.

Group chief executive officer Basil Dionisio said the moderation in trading restrictions, enabled local operations to grow by 46, 3 percent in customer counts ahead of the previous year compounded by effective promotional activities it conducted over the course of the period.

Financial services player CBZ Holdings noted that the economy has progressively mended from the effects of the pandemic and this has led to the renewal of economic and business activity on a large scale which has in turn allowed the group to increase its transactional volumes resulting in a firm balance sheet.

ZB Group company secretary Tinashe Masiiwa said even though the economy registered a significant contraction at the height Covid-19 pandemic it showed greater signs of recuperation during the third quarter of 2022, citing the tourism sector as the major beneficiary of this development.

Meanwhile some firms are still seeing a bleak outlook with Edgar’s Ndlovu expecting the operating environment “to remain challenging and complex in the face of difficult choices on economic policy, rising global inflation and high local inflation.”

Deketeke said going forward, demand will remain constrained as the liquidity crunch is likely going to continue.

“As such, the third quarter performance would be in line with the third quarter.”

While Delta expects the operating environment to remain “complex and challenging particularly as the nation approaches the general elections in 2023,” it also hopes “the stability of the exchange rate and the corresponding reduction in month-on-month inflation recorded since July 2022, will sustain in the short-term.

The Group remains focused on exploiting the firm aggregate demand which is largely driven by mining activities, diaspora remittances and infrastructure developments and the increased social activities, according to chairman Sternford Moyo.

Proplastics’ chairman Gregory Sebborn however said albeit complications in the trading environment his entity’s operations remain alive to obtaining trials and would continue to devise different initiatives to enhance the firm’s profitability and revenue generation.

With regards to the central bank’s 200 percent increase in bank lending rate CBZ acknowledged the move had a positive impact on the monetary and fiscal restraint in Zimbabwe which became growingly evident during the third quarter of 2022.

ZB shared similar sentiment and said it was optimistic that the obtaining tight monetary policy and use of gold coins supported by effective monitoring of activity in the financial sector by the authorities would go a long way towards promoting stability of the economy. – Business Weekly

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S Africa’s Ramaphosa faces impeachment threat over farm scandal – Zimbabwe Independent

An independent panel appointed by the speaker of South Africa’s parliament has found preliminary evidence that President Cyril Ramaphosa violated his oath of office, findings that could lead to his eventual impeachment.

Parliament will examine the report, which was submitted on Wednesday, and decide whether to push ahead with impeachment proceedings next week.

This comes just weeks before an elective conference that will decide if Ramaphosa gets to run for a second term on the governing African National Congress’s (ANC) ticket at 2024 polls.

The president immediately denied any wrongdoing and has not been charged with any crimes.

“I categorically deny that I have violated this oath in any way, and I similarly deny that I am guilty of any of the allegations made against me,” Ramaphosa said in a statement issued by the South African presidency on Wednesday.

On Thursday, he delayed an appearance in parliament to answer questions, requesting time to consider the report, noting that the panel’s recommendations had “implications for the stability of the country,” parliament said in a statement.

In June, it emerged that an estimated $4m in cash was stolen from Ramaphosa’s game farm in 2020, raising questions about how the billionaire president, who took to power on the promise of fighting corruption, acquired the money and whether he declared it.

The three-person panel was set up in September and tasked with ascertaining whether there was sufficient evidence to show that Ramaphosa committed a serious violation of the constitution or the law or grave misconduct, National Assembly speaker Nosiviwe Mapisa-Nqakula said when she was handed the report earlier on Wednesday.

The panel said Ramaphosa should face further scrutiny on his ability to stay in office.

“In all the circumstances, we think that the evidence presented to the Panel, prima facie, establishes that the president may be guilty of a serious violation of certain sections of the constitution,” the report found.

These include not reporting the theft directly to police, acting in a way inconsistent with holding office and exposing himself to a clash between his official responsibilities and his private business.

While Ramaphosa has confirmed that a robbery occurred at his farm, he said the cash was from proceeds from the sales of game. He has denied breaking the law or any regulations relating to his office.

John Steenhuisen, the leader of South Africa’s main opposition party, the Democratic Alliance (DA), said Ramaphosa was in a tight bind, Reuters news agency reported.

“The report itself leaves the president in a virtually untenable position, particularly as it relates to his own party’s step-aside rules and the strong line that he has taken against others within his party,” he said.

Ramaphosa came to power in 2018 on a promise to root out graft after the corruption-stained era of his former boss, Jacob Zuma, and has generally insisted that any party official accused of corruption leave office pending investigations.

The alleged cover-up has tarnished the president’s reputation and overshadowed his bid for re-election at the helm of the ANC.

Ramaphosa, 70, is the favourite to win at the ruling party’s December 16-20 conference, where he faces a challenge from Zweli Mkhize, 66, an ex-health minister who resigned from the government last year amid corruption allegations.

In November, the spokesperson to the president, Vincent Magwenya, told journalists that Ramaphosa would “gladly step aside” if he were to be criminally charged.

The chances of impeachment are slim given the ANC’s dominance of parliament, where it holds 230 seats, or nearly 60 percent of the total, and typically votes along party lines. Impeaching a president requires a two-thirds majority.

The inquiry is separate from a criminal investigation that police are conducting, and which Ramaphosa has welcomed.

The report will be debated in the national assembly on December 6, said the speaker, Mapisa-Nqakula.

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America, Europe easing their stance on Zimbabwe – Bulawayo24 News

The current economic stability prevailing in the country is indirectly forcing the West to mend its relations with Zimbabwe, economic analysts have said.

Economic analysts, Abednigo Matsika said that the recent developments that include the invitation to the US-Africa summit and proposals towards re-joining the Commonwealth were a manifestation of how President Mnangagwa’s Engagement and Re-engagement policy was bearing fruits.

“We are witnessing a change of stance by the West on Zimbabwe. Of late, the West has been warming up to the Government and has been pouring money to support various developmental projects in the country. Recently, the EU pledged over 100 million Euros to support women empowerment and agriculture programmes in the country. This shows that relations between the West and Zimbabwe are thawing,” said Matsika.

Matsika added that days of Zimbabwe’s isolation by the West were coming to an end. He said the sudden surge of traffic by the EU, US and the United Kingdom (UK) into Zimbabwe was positive and will lead to the removal of the illegal sanctions imposed on the country by the West.

In explaining how Zimbabwe-West relations were warming up, Matsika said that last week, the country and EU signed financial agreements totalling US46 million under the Zimbabwe-EU cooperative programme. Matsika added that the US46 million aid was an affirmation that the engagement and re-engagement drive with the international community was bearing fruits and that the EU was rapidly moving out of the sanctions orbit.

According to Matsika, the recent visit by the Commonwealth delegation led by Assistant Secretary General, Luis Franschesci shows that the bloc was willing to have Zimbabwe as member of that community. He added that the imminent readmission of Zimbabwe to Commonwealth would spur economic growth and open an avalanche of business opportunities for the country.

Meanwhile, a source within CCC said that the thawing of relations between Zimbabwe and the West had triggered uncertainty within that party which traditionally survives on Zimbabwe’s isolation from the rest of the World. The CCC feels that these developments would rob it of an advantage of boasting that they have the keys to the removal of sanctions and to good relations with the West.

The source said that CCC was plotting to stage violent demonstrations to tarnish the image of the Government.

“The CCC leadership has been shocked by the thawing of relations between Zimbabwe and the West. We are now planning to stage violent demonstrations in a bid to compel the state security to arrest participants. The idea is to portray Zimbabwe as a country that represses the opposition voice,” said the source.

The source further claimed that Chamisa recently held a caucus meeting with his few trusted lieutenants and expressed worry over the surveys that continue to signpost a ZANU PF victory in the forthcoming elections.

According to the source, Chamisa informed his friends in the region and beyond that a political strategist had advised him to stage violent protests in the country and blame ZANU PF for the same. The move according to the source is meant to force the West to tighten up screws on sanctions.

“Without sanctions, we are gone. We must create conditions that help our supporters, including those in the UK and US to disrupt the reengagement process. We would disrupt the current economic stability .We need economic pain to win,” said the source.

The source added that Chamisa was assembling a team of ruffians who would stage the demonstrations and subsequently get arrested.

On the other side, a ZANU PF supporter Regai Chandiwana of Seke argued that the improvement of relations between Zimbabwe and the West and the possibility of the removal of sanctions would level the electoral playing field which had, hitherto been skewed in favour of the opposition.

“They had the advantage of holding the electorate hostage by threatening to ensure that sanctions would continue to bite if citizens do not vote for the CCC. If   sanctions are lifted, then for the first time in history elections would be fair,” said Chandiwana.

Meanwhile, efforts to get a comment from CCC interim national spokesperson, Fadzayi Mahere were futile as her phone was not reachable.

All articles and letters published on Bulawayo24 have been independently written by members of Bulawayo24’s community. The views of users published on Bulawayo24 are therefore their own and do not necessarily represent the views of Bulawayo24. Bulawayo24 editors also reserve the right to edit or delete any and all comments received.

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National Foods new mill to increase capacity by 2 000 tonnes per month – The Zimbabwe Mail

ZIMBABWE Stock Exchange (ZSE) listed food processing giant National Foods Holdings Limited’s new mill at their Bulawayo site is set to increase wheat milling capacity by 2 000 tonnes per month.

In an annual report for 2022, the company’s chairman Mr Todd Moyo said the new mill is set to start operating early next year.

“The installation of the new mill at our Bulawayo site has commenced and the mill remains on track for commissioning early in 2023.

The new mill will increase wheat milling capacity by around 2 000 tons per month,” he said.
The establishment of the new flour mill in Bulawayo comes at a time the Government is pushing its devolution agenda of industrialising production zones to boost local economies through employment creation.

In an annual report for 2022, the company’s chairman Mr Todd Moyo said the new mill is set to start operating early next year.

The food processing giant is also embarking on an exciting period of expansion with the entry into a number of new categories, as it seeks to value and add its portfolio of basic products.

Mr Moyo said the introduction of a new milling plant will see the localised manufacturing of products, which had previously been imported, reducing foreign currency requirements and increasing demand for locally processed products.

This is in line with the Buy Zimbabwe campaign, which has seen more people buying more Zimbabwean-made products and is fully supported by the Government as it is critical in attaining an upper-middle-class status by 2030 anchored by the National Development Strategy 1 (NDS1).

“The prospects for the current winter wheat crop look encouraging which is a most welcome development as it will reduce import dependency. National Foods continues to play a major role in supporting the local contracted wheat crop,” he said.

The Buy Zimbabwe campaign has helped drive a robust private sector-led initiative resulting in increased local products and the creation of jobs consistent with NDS1.

The chairman added that National Foods continues to keenly support contract farming of maize, soya beans, wheat, sugar beans, sorghum and popcorn.

“During the current winter season around 12 000 hectares of wheat has been planted, representing a significant portion of the contracted crop.

that National Foods continues to keenly support contract farming of maize, soya beans, wheat, sugar beans, sorghum and popcorn.

“In addition to this, 40 000 tons of maize and soya beans were delivered during this year’s summer cropping programme.

“The various products grown under this programme now constitute a significant portion of the Group’s raw material requirements,” he said.

Meanwhile, the food giant’s revenue for the year increased by 33 percent to record $128,4 billion, driven by both volume growth and inflation-driven price increases.

The food giant’s revenue for the year increased by 33 percent to record $128,4 billion, driven by both volume growth and inflation-driven price increases.

The group’s volume for the period increased by eight percent to 569 000 tonnes from 523 480 tonnes compared to the prior year.

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