CHAIRMAN’S STATEMENT ECONOMIC OVERVIEW
The Zimbabwe economy is estimated to have grown by 4% in 2018, driven by strong growth in mining, agriculture and construction of 13%, 12% and 8% respectively. While international commodity prices have remained under pressure, performance by the mining sector has been sustained by increased throughput. The downside to the Gross Domestic Product growth was the acute shortage of foreign currency evidenced by parallel currency market premiums and sharp rise in inflation in the last quarter of the year. The annual inflation rate rose to 42.1% year-on-year by December of 2018 compared to 3.5% at December 2017. The 2% Intermediate Money Transfer Tax was introduced in October 2018 to boost government revenues and reduce dependence on deficit monetisation. The equities market benefitted from the migration to real assets especially in the second half of the year as inflationary fears increased. The mainstream Zimbabwe Stock Exchange (”ZSE”) Industrial Index closed the year up 46.3% (2017: 130%)…
The business achieved growth in revenue but experienced pressure in operating costs in line with developments in the country, particularly the last quarter of the year…
Zimbabwe is expected to record GDP growth of 3.1% in 2019 owing to subdued performance in agriculture on account of erratic rainfall patterns and inconsistent access to foreign currency. The implementation of the Transitional Stabilisation Programme launched in 2018 to operationalise Vision 2030 which targets Zimbabwe becoming a middle income country is expected to set the economy on a recovery path. The policy is premised on tackling macroeconomic problems, in particular the resolution of the foreign currency crisis as well as improving foreign direct investment and finding an acceptable plan to the foreign debt resolution. Furthermore, the Government’s ability to live within its means will be key in keeping a lid on inflationary pressures and cost of doing business. First Mutual is adopting various strategies to exploit opportunities arising from these Government initiatives.
We continuously endeavour to develop our governance and reflect an ethical and accountable leadership focused on value creation for all stakeholders.
Mr A R T Manzai was appointed as non-executive director, effective 1 January 2018 and Mrs D Tomana was appointed effective 30 July 2018. On behalf of the Board, I welcome them and look forward to their positive contribution.
Mr C Nziradzemhuka and Mr J Sekeso resigned as non-executive directors, effective 15 June 2018 and 7 February 2019 respectively. On behalf of the Board, I would like to thank them for the valuable contribution they made to the Group.
At a meeting held on 10 April 2019, the Board resolved that a final dividend of RTGS $2. 1 million, being 0.29 RTGS cents per share be declared from the profits of the Group for the year ended 31 December 2018. The dividend will be payable on or about 24 May 2019 to all shareholders of the Company registered at close of business on 10 May 2019. The shares of the Company will be traded cum-dividend on the Zimbabwe Stock Exchange up to the market day of 7 May 2019 and ex-dividend as from 8 May 2019.
Lastly, I would like to thank our customers, regulators, shareholders and other stakeholders for their efforts and support to the Group. I would like to thank fellow Board members, management and staff for their unwavering commitment, wise counsel and vision in taking the Group forward.