Africa-Press – Zimbabwe. B – y Alois Vinga
LEADING retailer OK Zimbabwe has credited the Reserve Bank of Zimbabwe’s (RBZ) foreign exchange auction system for enabling stable prices in the market.
The top retailer’s statement comes as US$45,1 million allotted at the platform this week.
Presenting the retail group’s annual report, OK Zimbabwe non-executive chairperson, Herbert Nkala said while inflation levels were high particularly during the first half of the financial year, with annual inflation peaking at 837,5% in July 2020, it gradually declined to close at 240,6% in March 2021.
“Foreign currency availability and exchange rate stability improved during the year mainly due to the success of the foreign currency auction system introduced in June 2020.
“This together with the liberalisation on the use of foreign currency for domestic sales under Statutory Instrument 185 of 2020 brought some stability into pricing and product supply,” he said.
Nkala, however, said while the foreign currency component of the group’s sales remained low, they were largely adequate for the company’s inventory and capital expenditure import requirements.
His remarks come when this week, the RBZ weekly auction allotments were a total of US$45,1 million.
Traders on the Small to Medium Enterprises (SMEs) platform were allotted US$8,4 million while those on the main auction platform were allotted US$36,6 million.
Priority went towards financing raw materials, machinery, and equipment which received US$15.3 million and US$7,8 million respectively on the Main platform.
The two clusters received US$1,8 and US$2,4 million respectively on the SMEs platform.
The official exchange rate remained at $85,50 against US$1.
Meanwhile, OK Zimbabwe bemoaned the lockdown measures saying they negatively impacted business through supply chain disruptions and reduced consumer disposable incomes.
During the annual period 2020-21, the group was also unable to hold its flagship promotion, the Grand Challenge due to the Covid-19 pandemic containment measures.
Volumes for the year declined by 13% from the prior year while the improvement in volume performance relative to the decline of 27% reported for the half-year is on the back of easing of the restrictions during the second half of the financial year.
Going forward, Nkala expects the group to pursue more innovative initiatives to grow market share profitably on the back of refurbishment and expansion drive which will be reinforced, with a number of stores targeted for refurbishment and potential new sites under consideration.
