The volatile Zimbabwean market is chasing away investors with Old Mutual Limited announcing a decrease since the beginning of the year to 31 March 2019.
Zimbabwe is currently under economic hardships with rising inflation and foreign currency shortages that have witnessed industrial players suspending operations due to lack of access to raw materials.
The country has also witnessed the violence that has damaged reputation after authorities hiked fuel in the beginning of the year.
The energy sector meets challenges also with electricity load shedding which is likely to negatively impact the industrial sector, being introduced due to a low production at Kariba power station while at the same time fuel shortage impact the transportation sector
Old Mutual, in its operating update for the 3 months ended 31 March 2019, says the country’s equity markets remain volatile, decreasing 17% since the beginning of this year.
“Inflation reached 67% at the end of March 2019, reflecting the increased cost of imports,” the company says. “Our customers’ in this market are impacted by the rising inflation and the resultant impact thereof on their disposable income levels.”
Inflation is being accompanied by Zimbabwe’s RTGS currency losing value against the US Dollar.
The introduction of RTGS currency by the Reserve Bank of Zimbabwe (RBZ) has also witnessed money service providers introducing two prices on shelves, one of the US Dollars and the other for RTGS.
Vice President Constantino Chiwenga described the increasing of prices that has led to inflation as economic terrorism and threatened unspecific actions against hiking costs.
Finance and Economic Development Minister Mthuli Ncube has shown optimistic that inflation shall come down by the end of this year with RBZ authorities expecting change by October this year.