eBusiness Weekly
Business Writer
Zimbabwe’s leading asset management firm, Imara Asset Management Ltd, is optimistic the local economy will continue to witness growing demand and economic growth this year as was the case in 2021.
According to Imara most businesses in the country save for those in the formal retail and hospitality sectors, did remarkably well in 2021 thanks to growing demand.
Some of the companies that reported strong demand include Afdis, which revealed this week that it had registered a volume growth of 48 percent for the nine months to December 2021 compared to the same prior year period.
Parent company Delta also said recently that it had recorded double digit growth rates across its various product lines such as
lager beer, sparkling beverages and traditional beer.
The growing demand was achieved despite the various lockdowns in 2021 caused by the continued outbreak of new Covid-19 variants.
The local economy was largely buoyant last year with usually conservative and skeptical international financial institutions also acknowledging the economy had recorded strong growth rates.
In a statement on Zimbabwe released two weeks ago, the World Bank said the country’s economy grew by 5,1 percent in 2021 mainly boosted by higher agricultural production, improved capacity utilisation in industry, and stabilisation of prices and exchange rates.
This was an upward review from earlier projection of an 3,9 percent GDP growth rate.
On its part, the Zimbabwe government revealed the economy had grown by an even higher 7,8 percent growth.
Interestingly Imara is of the view that the 7,8 percent growth is on the low side.
“Indeed, looking at the underlying growth in volume demand across many sectors in 2021 might suggest that 7,8 percent is on the low side,” said Imara.
The asset management firm expects strong demand to continue this year again.
“We see no reason why that should not also be the case in 2022 especially with further economic growth forecast.
“We expect listed companies to continue to report positive volume and earnings growth”.
Both government and international financial institutions are optimistic the economy will grow.
According to the world bank growth is expected to strengthen further in 2022 as the negative impacts of Covid-19 subside, rain levels remain good, and implementation of policies outlined in the National Development Strategy accelerates.
“Good vaccination progress is likely to boost tourism, trade, transport, and other sectors that were negatively affected by pandemic disruptions,” the Bank said.
Given such optimism, Imara is keen to see “how the momentum in volume growth continues into 2022”.
“We expect listed companies to continue to report positive volume and earnings growth,”the asset management firm said.
“Consumption should be buoyant in 2022 assuming of course no more lockdowns,” said Imara in an Investment Note for January signed off by chief executive John Legat.
According to Imara, rising real wages, growing informal economy and the payment of a part of civil servants’ salaries in USD will be favourable toward consumption.
“If the agricultural sector is indeed another good one, then farmers’ incomes will benefit as they did in 2021.”
