OK Zimbabwe Limited, a prominent supermarket chain, has praised government-led stability measures following a robust 33.3% surge in its revenue amid economic calming strategies.
Early in 2023, the Zimbabwean dollar sharply declined, hitting an exchange trough of US$1 to ZW$80,000, spurring market unrest and drastic price escalations. Reacting decisively, financial regulators introduced several strategies, significantly the extended utilization of the local currency for tax payments, liquidity-absorption tools, and Gold Backed Digital Tokens, substantially alleviating currency exchange strains.
Further stabilization is anticipated with the Reserve Bank of Zimbabwe’s recent launch of the Zimbabwe Gold currency, poised to temper the rampant demand for the US dollar by offering a viable investment alternative.
Herbert Nkala, OK Zimbabwe’s chairman, outlined the company’s annual progress up to March 31, 2023, lauding the regulators’ initiatives. “The authorities curbed the economic slide, notably through soaring interest rates, absorbing surplus cash flow,” Nkala noted, highlighting that the reforms led to a spike in borrowing costs, which eventually relaxed to around 80% annually.
The company’s revenue jumped to ZWL311.3 billion, up from ZWL233.6 billion, a 33.3% increase. However, customer volume dropped by 7.7% due to reduced consumer spending and cash flow limitations.
Despite revenue growth, post-tax profits fell by 36.0% to ZWL5.2 billion. Nkala attributed this to operational costs spurred by frequent power shortages, forward-market inflation, and currency exchange impacts on various expenses. “We’re implementing cost-reduction strategies to enhance future profitability,” he added.
The firm’s resilience amidst economic headwinds highlights the critical interplay between corporate performance and national financial policies, underscoring the importance of stability in restoring market confidence.
