Mixed views over 2024 prospects

In the first quarter, businesses observed authorities making several significant modifications to fiscal policy.

LISTED companies have expressed mixed views about the prospects for the 2024 financial year, with some advocating for consistent policies, while others remain optimistic about the nation's growth potential.

In the first quarter, businesses observed authorities making several significant modifications to fiscal policy.

As a result, the value-added tax status of most basic commodities was altered from zero-rated to exempt, affecting items such as stock feeds, flour, salt, and maize meal.

A look at the recent trading updates for the fourth quarter ended December 31, 2023 and the first quarter ended March 31, 2024, reveals that companies have differing views about the current financial year.

Innscor Africa Limited said the outlook for the summer cropping season was largely negative due to the devastating El Niño drought conditions currently prevailing.

Innscor stated that this would result in lower maize and soya production across the region, leading to a greater reliance on imports for these commodities.

“From a winter wheat perspective, the drought conditions are also expected to negatively impact planting, which could have some effect on the mill-bake value chain toward the later part of the current calendar year,” Innscor said.

National Foods stated that the changes made to the value-added tax status  of many of their products during the quarter will make it increasingly challenging for the formal sector to compete against the informal sector and grey imports.

The firm urged authorities to deploy some policy consistency in the period ahead. This would enable local players in the formal sector producing basic commodities to focus on consistently supplying consumers during what is expected to be a challenging period.

"The group’s focus will be to ensure adequate stocks of competitively priced basic goods for the consumers across the country over the next 12 months,” it said.

“In  the period ahead,  considerable  focus  is  also being placed  on ensuring that the new categories that have been added to the group’s portfolio are  successfully  launched, and achieve  the  targeted returns on investment.”

African Sun emphasised that access to foreign currency through formal channels remains critical, particularly given the suspension of the auction system following the introduction of the new currency.

However, going forward, the group expects to see continuing improvements in its business, driven by the recovery of the international market, which has been lagging since the waning of the pandemic.

For Simbisa Brands, there is still significant growth potential in the delivery segment. Growing and improving this revenue stream remains a key focus area, with significant progress made so far in the financial year.

The group said despite the reprieve in exchange rate pressures, it remains committed to maintaining strict cost controls to protect its margins. This approach ensures that its top-line growth initiatives translate into improved profitability.

“The short to medium term strategy will hinge on increasing footfall into the existing store network through value offerings and intensified promotional and marketing initiatives,” Simbisa said.

“The group is leveraging technology to drive the latter, using customer feedback platforms to continuously improve our products and customer service.

“We will continue to grow our store footprint, with the group intending to open a further 55 company-owned stores, up to December 31, 2024.”

ZB Financial Holding said despite the predicted short-to-medium trading environment challenges, it remained resilient and committed to providing value-adding financial solutions to the nation at large.

This comes as the economy is negatively impacted by an El Niño-induced drought, which will require the country to spend billions on food imports.

Another banking entity, FBC Holdings said Zimbabwe presented a compelling case for robust economic expansion and improved living standards, driven by a dynamic private sector.

“The nation’s competitiveness in agricultural value chains remains strong, despite the El Niño-induced drought. Furthermore, the potential for tourism and the significant reserves of energy transition minerals, particularly lithium, are poised to impact economic activity positively,” it said.

NMBZ Holdings noted the new monetary framework had re-monetised the local currency and enhanced its functions as a medium of exchange and store of value.

The group added that it will continue to focus on its core business and expand its footprint in all identified growth sectors of the economy.

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