HARARE – The economic climate in Zimbabwe poses a threat to industries, with relentless foreign currency shortages now aggravated by a slide in foreign direct investment (FDI), according to CBZ Holdings Limited, the country’s largest banking group with a $2,4 billion assets base.
CBZ on Monday said post-tax profit for the year ended December 31, 2018 more than doubled to $72,1 million, from $27,8 million during the comparable period in 2017, tracking corresponding performance in total revenue, which rose to $199,5 million during the review period, from $175 million the previous year.
But chairman, Noah Matimba said the operating environment remained toxic.
In the absence of concrete action to address the challenges that confront the economy, uncertainties would remain endemic.
He called for the acceleration of ongoing moves by President Emmerson Mnangagwa’s government to reengage the international community and said unlocking bilateral financial support remained the cornerstone on which the frail economy would return to stability.
“The implementation of macroeconomic reforms and the liberalisation of the foreign exchange market on the back of foreign currency shortages and in the absence of meaningful FDI and bilateral support, pose a short to medium threat to the business operating environment,” Matimba told an analyst briefing in Harare.
“The continued improvement in the relationship with the international community will hopefully unlock the much-needed foreign currency inflows and enhance the exploitation of vast opportunities that Zimbabwe offers.
Despite the marginal improvements in the economic indicators, the country’s full growth potential continued to be limited by weak sectoral linkages, shortages of foreign currency and general macroeconomic uncertainties. To address the challenges and unlock broad based growth, the government embarked on macroeconomic reforms during the second half of 2018…despite the multicurrency system, the country continued to experience foreign currency shortages during the year with the Reserve Bank of Zimbabwe maintaining the foreign currency allocation system as part of measures to ensure that critical sectors and services received foreign currency for their import requirements,” noted Matimba.
The CBZ board declared a $6,4 million final dividend for the review period, bringing to $9 million total dividends paid to shareholders in 2018.
The group’s asset base grew to $2,4 billion during the review period, from $2,1 billion the previous comparable period.
It is projected to expand during the year to December 31, 2019, according to chief executive officer, Blessing Mudavanhu.