A general resurgence in the productive sector has influenced widespread positive sentiment regarding the country’s growth prospects, despite wide discrepancies in the projected levels. In its Global Economic Prospects Report for June, 2018, the World Bank revised its growth forecast for Zimbabwe to 2.7% in 2018 from its January forecast of 0.9%. The forecast is slightly ahead of the International Monetary Fund (IMF) forecast of 2.4% made in April 2018 as well as the Business Monitor International forecast of 1.9% contained in its research paper for the third quarter of 2018.
Meanwhile, the Zimbabwean government projects that the economy will grow at a much faster pace at 6% for 2018, ahead of the initial projection of 4.5%. This is expected to be driven by strong performance in the mining and agriculture sectors.
The economy has continued to grapple with a sub-optimal monetary system characterised by incessant shortages of cash and increasing backlogs in foreign currency remittances. Price distortions have therefore remained widespread resulting in increased cost pressure.
The country’s inflation profile continued in positive territory during the period under review, coming in at 2.71% on a year-on-year basis as at 31 May, 2018. This positive profile has been sustained since February 2017 with the economy having previously gone for more than 2 years in deflation.
Performance on the Zimbabwe Stock Exchange was characterized by marked volatility during the half year ended 30 June 2018. There was substantial recovery in the second quarter resulting in a 2.9% growth in the industrial index on a year to date basis at 30 June, 2018. The market capitalization firmed by 4.02% to $10.5 billion.
The prevailing instability in the monetary environment presents both operational and value preservation challenges for business.
Half year results:
The Group’s performance outturn for the half year ended 30 June, 2018 was ahead of the performance for the corresponding period in 2017.
The results are discussed in more detail by the Group Chief Executive in his report.
Dividend:
The Board has not declared a dividend for the half year ended 30 June 2018.
Significant issues:
Below is an update on significant matters affecting the Group:-
1. The Group has continued to address governance related matters identified by the Reserve Bank of Zimbabwe (RBZ) through a Corrective Order initially issued on 7 March, 2017. Details of the order are contained in note 14.2 to the interim financial statements. The RBZ have been consulted and kept informed on progress made.
2. The Board remains seized with discussions around finding a resolution to the long standing dispute between the Company and a shareholder, Transnational Holdings Limited regarding the ownership of a subsidiary entity, Intermarket Holdings Limited.
This matter is the subject of a case that has remained outstanding at the Supreme Court of Zimbabwe since 2008.
Conclusion:
I would like to thank our staff and management, fellow board members, our clients, regulators and other stakeholders for the support rendered during the period under review.
Prof. C. Manyeruke
Chairman
07 August, 2018
