The Sunday Mail
Sunday Mail Online
OK Zimbabwe says recommendations by the Reserve Bank of Zimbabwe to remove the 10 percent limit on the exchange rate used by formal retailers as well as removal of IMTT (Intermediated Money Transfer Tax) on bank card transactions is positive for the sector.
The retail giant also welcomed the move to extend the multicurrency system to 2030, as it is expected to boost market confidence and assist in planning.
Chief executive officer Mr Maxen Karombo told shareholders at the company’s recent annual general meeting that macroeconomic stability will be critical in helping the group drive volumes.
“We await the promulgation of the necessary legal instruments to effect these positive changes,” he said.
The removal of the 10 percent trading margin when charging for goods and services by formal businesses is part of the continuous fine-tuning and further liberalisation of the foreign exchange market.
The limit on the 10 percent margin came through SI 118A, gazetted under the Presidential Powers (Temporary Measures) (Amendment of Exchange Control Act) Regulations, 2022.
Mr Karombo said the formal retail channel experienced weak consumer demand during the first half.
OK also operated at volumes that were severely below break-even point.
“In the first quarter, our volume performance was a negative 21,6 percent, and the second quarter followed a slightly worse position at just under 24 percent, and our year-to-date number is a 22,6 percent volume decline from last year,” he said.
He said the group’s financial services arm will be branded Vimbai Capital.
“The group will also focus on improving operating efficiencies despite the challenging operating environment,” added Mr Karombo.
“Given the steep rises in costs, we will optimise our cost initiatives across our operations by streamlining processes, renegotiating some of the supply contracts so that we land cheaper prices for customers and implementing various efficient measures to reduce our overheads.”
Other key focus areas, he said, include the strategic partnerships with the Shoprite Group of South Africa, money transfer agencies and insurance companies.
“We will also look at cost optimisation initiatives across our operations, streamlining processes, renegotiating supplier contracts and implementing efficiency measures to reduce overheads.”
Other priorities will also include acceleration of digital transformation initiatives and investment in enhancing the group’s online presence, improving the e-commerce platform and expanding delivery capabilities in line with changing consumer preferences.
“The group continues to monitor global supply chain disruptions and proactively manage any potential impact on operations.”
Mr Karombo indicated that shortened trading terms from suppliers resulted in high incidences of stock-outs.
There were also increased operational costs from property rentals, electricity, labour, security and cleaning services.
