Africa-Press – Zimbabwe. SOUTH African cement manufacturer, PPC Limited, has recorded a ZAR413 million (US$23,24 million) loss owing to blocked funds held by the Reserve Bank of Zimbabwe (RBZ) on behalf of its local subsidiary, PPC Zimbabwe.
Although the amount remains on the books as a non-current statutory receivable, PPC has applied a 100% credit risk adjustment — effectively signalling doubt in recovering the funds amid Zimbabwe’s ongoing economic challenges.
Blocked funds refer to foreign currency-denominated obligations — typically debts or payments — to foreign suppliers and service providers that the RBZ was unable to settle immediately due to a shortage of foreign currency and strict capital controls.
These blocked funds make up part of the assumed debt of the RBZ, which the Ministry of Finance, Economic Development and Investment Promotion took over under Finance Act No. 7 of 2021.
Based on the 2024 Public Debt Report released last year, the total amount of blocked funds and other RBZ liabilities assumed by Treasury amounted to nearly US$2,86 billion as of September 2024.
“Management assessed that there is a high level of credit risk associated with the RBZ, resulting in the application of a fair value credit risk adjustment of 100% (2024:100%), which resulted in a cumulative negative fair value adjustment of ZAR413 million as at 31 March 2025 (2024:ZAR422 million (US$23,74 million)),” PPC said in its financial year results ended March 31, 2025.
“The net fair value loss on the Zimbabwe blocked funds of ZARnil (2024:ZARnil) comprises an increase of the intrinsic value of ZAR9 million (2024: ZAR23 million) and a credit risk fair value loss of R9 million (2024:ZAR23 million).”
PPC said no formal confirmation had been received from the RBZ regarding repayment of the blocked funds, and as such, the investment was classified as non-current.
“The investment is a statutory receivable, and as no repayment terms have been agreed, it is not a financial asset as defined,” PPC said.
“It is, however, PPC’s policy to value the Zimbabwe blocked funds as if it were a financial asset, and therefore it is valued at fair value through profit or loss.
“The challenging general economic environment and the unavailability of foreign currency in Zimbabwe were considered in the determination of an appropriate fair value adjustment to be applied to the blocked funds.”
During a recent Parliamentary meeting, it was revealed that the central bank was failing to meet foreign currency obligations.
“Hyperinflation, the challenging general economic environment and the unavailability of foreign currency in Zimbabwe were considered in the determination of an appropriate fair value adjustment to be applied to the blocked funds,” PPC said.
For More News And Analysis About Zimbabwe Follow Africa-Press
