(Last Updated on November 20, 2020 by ZIMDAILY EDITOR)
The Zimbabwe Stock Exchange (ZSE) listed firms have reported year-on-year sales volume growth for the three months to September 2020 in spite of Covid-19 ravaging the economy and way of life.
Economic instability, a volatile exchange rate, runaway inflation and Covid-19 combined to make the operating environment hostile for many businesses.
But their resilience, supported by exchange rate stability as well as a slowdown in inflation, saw listed firms pushing volumes that were higher than those sold in the three months to September 2019.
A possible enabler to this growth could be the slowdown in inflation experienced in the three months to September 2020 when compared to what was experienced prior year comparative.
Last year, consumers had to contend with month-on-month inflation of 21 percent, 18,1 percent and 17,7 percent for July, August and September 2019 respectively. This year the rate of price increases were lower at 35,5 percent, 8,4 percent and 3,8 percent for July, August and September 2020 respectively.
While last year, the exchange rate doubled between July and September 2020, this year, it has remained stable for the comparative three months thanks to the introduction of the foreign currency auction trading system supervised by the Reserve Bank of Zimbabwe.
The introduction of the Foreign Currency Auction System and Statutory Instrument 185 of 2020 allowed for the implementation of precise pricing strategies by businesses while enhancing budgeting and spending capability by consumers.
This sense of stability must have brought confidence to consumers to spend again even though wages and salaries still lag price increases that have been witnessed across the economy.
The most encouraging consumer spend must be that recorded by Axia at its TV Sales & Home business unit.
When the economy is struggling, you would expect consumers to cut back on big ticket spending, but in what could be a sign of returning confidence, sales volume for TV Sales & Home, for the three months to September, were 48 percent higher than the comparative turnover.
The uptrend seems to be across board with the construction and related products sector also registering not only recovery from the Covid-19 induced first half slump, but ahead of what was achieved for the three months to September 2019.
At cement maker Lafarge, sales volume for the three months to September 2020 were 7 percent ahead of the comparative prior year.