OK Zimbabwe commends interest rate cut, exchange stability

LISTED retail giant OK Zimbabwe has commended the reduction of interest rates by the Central Bank and continued exchange rates stabilisation but urged authorities to provide more incentives for productive sectors to invest in capital projects.

In a trading update for the third quarter ended 31 December 2022, the retail outlet said during the period under review measures instituted by fiscal and monetary authorities began to bear fruit.

“The trading environment in the quarter under review was characterised by episodes of high annual inflation, which hovered above 200 percent. However, the monthly inflation rates showed signs of slowing down towards the end of the quarter as measures instituted by fiscal and monetary authorities began to bear fruit,” said the company.

Last week, the Reserve Bank of Zimbabwe reduced interest rates from 200 percent to 150 percent, a development that has excited industry players who were being affected by expensive lending costs.

The interest rates were increased in July last year in response to negative inflation expectations emanating from rampant speculation and market indiscipline.

“We welcome the reduction in interest rates pronounced by monetary authorities, and the envisaged further liberalisation of the Willing Buyer Willing Seller foreign currency management system,” said the company.

“We can only urge the authorities to provide more incentives for productive sectors to invest in growth projects and stave off current operational cost increases necessitated by power shortages and exorbitant fuel costs.”

OK Zimbabwe also noted positive strides by the Government in sustaining relative exchange rate stabilisation through monetary policy interventions.

“Resultantly, forex collections improved in direct comparison to the prior quarter,” it said.

In the period under review, OK sales volumes decreased by 11,33 percent for the quarter and 9,37 percent for the nine months to December 2022 compared to the prior year driven by declining consumer spending power.

The group embarked on a volume recovery plan, which resulted in a growth of three percent being recorded for the month of December 2022 compared to the prior year.

Revenue grew by 18,3 percent for the quarter and 28,4 percent for the nine months in inflation-adjusted terms compared to growth of 320,4 percent and 315,8 percent for the quarter and nine months to December 2022 respectively in historical cost terms.

Food Lover’s Market

Despite operational setbacks, OK Zimbabwe says it continues investing in volume growth strategies embedded in various strategic projects, which have a high potential to contribute to growth, and improve the overall business performance in the last quarter and the coming financial years.

To that end, the business managed to complete two strategic projects by acquiring Food Lover’s Market franchise stores from Talwant Trading (Private) Limited and its subsidiaries.

Three stores – Food Lover’s Market Avondale, Borrowdale, and Bulawayo were added to the OK Zimbabwe Limited stable.

Forex-Image taken from Shutterstock

The first in-store pharmacy operated by OK Zimbabwe Limited was opened in Glen View, trading under the Alowell Pharmacy brand.

It said the rollout of more pharmacies is planned in various other branches during the last quarter of 2023.-chronicl.cl.zw