PUBLIC listed companies are focusing on growing export sales and United States dollar transactions for revenue growth and capital.
PRISCA TSHUMA
As the Zimbabwe dollar continues to depreciate, more companies are depending on US dollar sales and growing their export sales to alleviate the poor performance driven by the local economy.
The local currency is expected to plunge against major currencies as money supply surges ahead of the this year’s general election. In its first-quarter trading update, Ariston Holdings said it would improve tea quality to grow export sales volume to counter effects of the local economy, which is forecast to be buffeted by headwinds during the year.
“Increased export sales will translate to increased profitability which mitigates against the effect of the low performance of the local market on the Group’s financial well-being,” said the group.
The slowdown in inflation and exchange rate volatility in response to Reserve Bank of Zimbabwe policy interventions resulted in increased foreign currency transactions and constrained Zimdollar liquidity.
Ecocash Holdings recorded a drop in volume of local-currency mobile money transactions in the third quarter ended 30 November 2022 as the market increased usage of the US dollar.
“The reduction of IMTT [intermediated money transfer tax] on domestic money transfer transactions from 4% to 2% effective 1 January 2023 is expected to further accelerate the adoption of United States Dollar digital money transfer services,” said the tech Group.
Seed manufacturer Seed Co Limited projected volume growth in Zimbabwe driven by increase in US dollar domestic sales for the upcoming quarter in 2023.
“In Zimbabwe the business is expected to experience volume growth as well as a notable increase in the contribution of hard currency revenue from encouraging export growth and a significant increase in domestic sales in USD,” said the company.
Meanwhile, companies like Axia Corporation and Innscor Africa have opted to migrate to the Victoria Falls Exchange to gain access to the US dollar capital and the low trading costs of 2.12%, which would enable the company to make savings and retain better value for the shareholders.
