Wings clipped- Zimbabwe companies say about tight monetary policy

Dairibord: Sour quarter

According to Dairibord, the tight monetary policy measures “resulted in liquidity challenges across the value chain, constraining aggregate demand and growth of the business”. While price increases slowed down, the company says, “exchange rate disparities impacted competitiveness and suppressed demand in the formal trade, as consumers shifted to the informal trade.”

Dairibord’s Q3 sales volumes fell 7% compared to the same time last year, affected by the policy changes that hurt business in July and August.

Edgars: A dressing down

Edgars says while the measures brought some stability, the high interest rates and liquidity shortages “dampened consumption and investment levels resulting in our customers cutting on ZWL purchases negatively affecting our sales growth”.

In the Edgars chain, unit sales were down 23% compared to last year, and fell 37% from the second quarter, “largely on account of reduced aggregate demand following a sharp increase in minimum lending rates announced in early July.” Credit sales constituted 45.6% of total sales compared to 60.2% for the second quarter.

Delta: A glass half empty

The country’s biggest beverage producer says consumer spending is being driven by increased activity in mining, infrastructure and farming. But “the recent curtailment of local currency liquidity has resulted in softening of demand for goods and services in some formal channels”, Delta says.

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