eBusiness Weekly
Business Reporter
Fidelity Life Assurance says it does not see the 5,5 percent Government’s GDP growth target as a reality due to a poor rain season and the effects of the Russia – Ukraine war.
“Erratic rains have characterized the 2021-22 agriculture season throwing into doubt the attainment of the projected 5,1 percent growth in agricultural output and, in turn, the GDP growth of 5,5 percent in 2022,” the assurance company said in a statement.
Government lifted the ban on maize imports in a development that Fidelity Life believes signals the country may not have adequate stocks to last into 2022-23.
According to Fidelity Life, maize imports increase the demand for the scarce foreign currency resulting in some depreciation of the local currency, and the resultant increase in the foreign exchange rate and foreign currency induced inflation.
The global economy is currently battling soaring prices as a result of supply chain disruptions caused by the COVID-19 pandemic and the Russia – Ukraine war, which is further fueling inflation as the two nations are key players on the global commodities market, in particular, crude oil, sunflower and wheat.
The commodities in short supply are the ones which Zimbabwe is a net importer and is at the risk of imported inflation.
“The resurgence of high inflation is, in our view, the biggest threat to the economy in 2022 and the challenge on management is to ensure that revenue grows faster than costs. That growth is set to be achieved through a combination of new financial solutions and new markets,” Fidelity Life said.
The company said high inflation places on them the responsibility to ensure that they preserve value for their policyholders and all stakeholders. To that end, investment portfolio diversification is a priority in the current financial year.
Fidelity also released its financials and the insurer realised a profit after tax of $274,9 million on an inflation adjusted basis for the year ended December 31, 2021 representing a strong growth from a loss position of $65,8 million posted in the prior year.
Group total revenue in inflation adjusted terms increased by 90 percent from $1,74 billion recorded in the prior year to $3,3 billion recorded in the current year. According to the company, revenue was driven by investment income and net premium written which increased by 99 percent and 75 percent respectively.
Investment income increased from $866,0 million to $1,7 billion and net premium written increased from $611,8 million to $1,1 billion.
