Operating Environment
Following a COVID-19 induced contraction in 2020, the domestic economy is estimated to have grown by 7.8% in 2021, underpinned by the good 2020/21 agriculture season, higher international mineral commodity prices, as well as reasonable success in the management of the COVID-19 pandemic.
In as much as COVID-19 continued to pose a significant operational challenge, with the second and third waves sweeping over the country, the national vaccination program gradually began to bear fruit. The number of cases and fatalities reduced progressively. Resultantly, lockdown restrictions were eased and businesses could operate normally.
Although inflation remained high during the year under review, there was a significant improvement in the inflation profile, from 362.63% year on year inflation recorded in January 2021, to end the year at 60.74% by December 2021.
Group Performance
The Group posted a profitable performance for the year. This is discussed in greater detail by the Group Chief Executive in his report.
Capital Requirements
As at 31 December 2021, all Group companies, with the exception of ZB Building Society, were in compliance with prescribed minimum capital requirements. The target was to finalise the consolidation of the Group’s banking operations, that is, ZB Bank Limited, ZB Building Society and Intermarket Banking Corporation Limited [a property owning company], by 31 December 2021, but the transaction has taken longer than anticipated, and is now scheduled to be completed in 2022.
Dividends
The Board has declared a dividend of ZW144.93 cents per share for the year ended 31 December 2021.
Compliance & Regulatory Issues
The Group has dealt with all governance issues which were the subject of a Corrective Order issued by the Reserve Bank of Zimbabwe [RBZ] on 7 March 2017 and reviewed in March 2018, and awaits the lifting of the order upon satisfactory review by the regulator.
Directorate
Mr R. Mutandagayi resigned as the Group Chief Executive Officer on 30 May 2021 and Mr. F. Kapanje resigned as Group Finance Director on 30 November 2021. I would like to extend my gratitude and appreciation to them for their distinguished service to the Group.
Mr S. T. Fungura and Mrs E. N. Mungoni were appointed as Group Chief Executive Officer with effect from 1 August 2021 and as the Group Finance Director on 1 January 2022 respectively and | wish them both success In their new roles.
Messrs PM.V. Wood, S. Dimairho and L. Zembe were appointed to the ZB Financial Holdings Limited Board as Non-Executive Directors with effect from the 23rd of September 2021 for Mr P.M.V. Wood and 29 September 2021 for Mr. S Dimairho and Mr L. Zembe. I look forward to their invaluable contributions towards the Group’s continued success.
Outlook
In the outlook, the domestic economy Is projected to maintain the growth momentum in 2022 and beyond, with the Government of Zimbabwe projecting 5.5% GDP growth In 2022, supported by higher output in mining, manufacturing, agriculture, construction as well as the accommodation and food services [tourism] sector.
The inflation outturn is expected to continue improving In 2022, supported by a tight monetary policy, complemented by fiscal discipline. However, the slow-down in inflation remains under threat from possible expansion in the monetary base to fund obligations such as civil service wage increases and the 2023 harmonised national elections, the widening gap between the formal and alternative market exchange rates, among other factors.
Downside risks to the attainment of projected economic growth for 2022 pertain mainly to the possibility of a suboptimal 2021/2022 agriculture season, following prolonged dry spells during the season, which look set to negatively impact on the food security situation. Furthermore, although the COVID-19 pandemic situation appears to have improved significantly, there remains significant uncertainty as regards the path that the virus will ultimately take, including the efficacy of vaccines to combat any future variants. Risk also arises from uncertainty in international commodity prices, and higher than anticipated international oil prices especially following the Russian invasion of Ukraine and resultant disruption of supply chains.
Conclusion
I wish to extend my appreciation to all our valued stakeholders, for the continued support to the ZBFH Group. I would also like to express my gratitude to Board colleagues, Management and Staff, for their collective contributions to the 2021 performance.
P. Chiromo
Chairman
28 April 2022
