. . . as Zim economy flounders
ZIMBABWE’S post-election period has seen some local firms being plunged into survival mode, while others are frantically crafting rescue packages as the country’s economy flounders, The NewsHawks has established.
The country held its general elections on 23 and 24 August and incumbent leader Emmerson Mnangagwa retained power in a plebiscite described by the opposition as a sham. Regional and international observers raised the red flag, saying the polls had fallen short of widely accepted benchmarks.
The Zimbabwe Electoral Commission declared Mnangagwa as the winner of the 2023 presidential election after he got 52.6% of the vote. Chamisa received 44% with the remainder being divided among leaders of smaller political parties.
Ahead of the polls, Zimbabwe was battling high inflation, a weakening domestic currency, power outages and perennially high unemployment rates, making the issues top the national agenda.
Mnangagwa promised to mend the economy, but economic and political analysts have expressed doubt, arguing that the growing international isolation may mean that Zimbabwe’s recovery will be slow and painstaking.
Just this week, one of the country’s largest wholesalers Metro Peech & Browne’s corporate rescue practitioner submitted its first report to the Master of the High Court which showed that the company is technically insolvent as it has a negative net asset value of (US$8 878 493) as per the statement of affairs.
“We have been engaged by several potential investors, who have expressed interest on the Asset (Metro Peech & Browne). As at the publication of this report 10 prospective investors have formally and informally expressed their interest,” reads part of Metro Peech’s proposed turnaround plan.
“This is an indication of the value given to both the brand and its network. Most of the branches of the company are located on good strategic sites. This includes those locations which are under construction. All the small poorly located and invisible branches have been closed.
“The shareholders of the Company are committed to be involved and to contribute to the restructuring of the business. The business model has been reviewed and continues to be refined and this has resulted in overhead structures being reduced significantly. This brings down the break-even point. Governance structures are being redefined and the corporate rescue plan will also focus on improving the model.”
Metro Commodities was founded in 2007, during a very difficult economic period in Zimbabwe. The company was founded with the objectives of offering affordable, top-quality bulk and pre-packed basic commodities to customers locally and across the country’s borders.
In 2010, the first Metro Peech & Browne Wholesalers branch was opened in Harare’s Msasa area. 19 additional stores were subsequently opened over the next 10 years in 13 major towns and cities around Zimbabwe.
Today, with wholesale branches in Msasa, Mutare, Chitungwiza, Kwekwe, Gokwe, Kadoma, Masvingo, Zvishavane, Chipinge, Chinhoyi, Chiredzi, Bindura, Bulawayo, Gweru, and Seke Road the financial position of Metro Peech & Browne Wholesalers has cast under the spotlight the state of the economy as well as the company’s business model.
The company says due to the financial distress, the business has closed branches in Mutare, Mrehwa, Shurugwi, Marondera and Rusape.
Beta Holdings Ltd, one of Zimbabwe’s largest brick makers, says it is facing “unprecedented” financial problems worsened by the prevailing economic challenges. The company’s workers are on strike over a salary backlog. The firm is pleading with its stakeholders.
Beta management acknowledges the operating challenges that the organisation has faced over the last few months. The current macro-economic and liquidity challenges have not spared the company,” the company says in a statement.
The company, the statement says, remains optimistic of turning around its fortunes.
Early this month, one of the country’s leading brokerage firms, IH Securities, said Zimbabwe is yet to fully realise economic gains despite several measures announced by the authorities to stabilise the macro-economic environment.
“The country continues to face currency headwinds evidenced by the depreciation of the ZWL [Zimbabwe dollar] by 85% year-to-date. Of note is the movement of the exchange rates, both the parallel market rate and the interbank rate, in tandem with money supply,” IH says.