ZiG stability creates growth opportunities: Unifreight

TRANSPORT and logistics company Unifreight Africa says the exchange rate stability of the Zimbabwe Gold has created opportunities for economic stabilisation and growth.

The Zimbabwe Stock Exchange-listed company said currency stability was critical for enabling enterprises to execute long-term business strategies.

Before the introduction of the ZiG, which replaced the Zimbabwe dollar in April this year, the economy was marred by inflationary pressures, local currency exchange rate and macroeconomic instability.

Since the introduction of the ZiG, which is backed by gold, other precious minerals and the US dollars, there has been macroeconomic stability as prices of goods and services in the market have remained stable.

In its annual report for the year ended 2023, Unifreight said: “While the introduction of the ZiG has presented certain challenges, it has also opened up opportunities for economic stabilisation and growth.

“The ZiG has contributed to the stabilisation of prices and reduced the volatility that businesses have been grappling with.

“This stability is crucial for planning and executing long-term business strategies.”

The transport and logistics firm said the new currency had also improved liquidity in the market, adding that with better access to a stable currency, businesses have been able to manage their cash flows more effectively, ensuring smoother operations and transactions.

In this context, Unifreight said it is committed to navigating the new economic landscape with agility and foresight, ensuring that the company remains at the forefront of Zimbabwe’s transport industry.

“Unifreight Africa is well-positioned for sustained growth and profitability,” it said.

The firm said its strategic investments in fleet expansion, focus on high-revenue sectors like tobacco, and diversification into cross-border haulage are set to drive significant value for shareholders and stakeholders.

As a result of adopting the new medium of exchange, Unifreight said, businesses have had to adjust their accounting systems, pricing strategies and payment mechanisms to align with the new currency, leading to temporary disruptions.

“While the formal market has shown resilience, the general public’s adaptation to the new currency has been gradual.

“Educating the populace and ensuring widespread acceptance remain critical for the currency’s long-term success,” it said.

The ZiG’s exchange rate dynamics have positively impacted the cost of imports and the competitiveness of exports.

Businesses involved in international trade have had to navigate these changes carefully to maintain profitability.

“At Unifreight Africa, we have proactively adapted to these changes by revising our financial strategies and ensuring compliance with the new currency regulations.

“We remain optimistic that the ZiG will foster a more stable and predictable economic environment, enabling us to continue delivering value to our shareholders and stakeholders,” said the company.

Meanwhile, the Reserve Bank of Zimbabwe has said it has observed the growing acceptance of the ZiG by both businesses and individuals.

At the recently held Institute of Chartered Accountants of Zimbabwe event in Victoria Falls, RBZ Deputy Governor Dr Innocent Matshe highlighted the progress made in boosting demand for ZiG, a key element of the Government’s strategy to curb inflation and restore confidence in the local currency.

The mandatory requirement for Government departments to accept all forms of payments in the multicurrency basket, including the ZiG, has been instrumental in driving its acceptance.-herald