eBusiness Weekly
Harare, July 13, 2020 (New Ziana) – Financial services giant, Old Mutual Zimbabwe said on Monday it was seeking “clarity” on its future after claims by a senior ruling party official that there had been a decision to “eject” the company out of Zimbabwe’s financial system.
The announcement, made by Zanu PF acting spokesperson Patrick Chinamasa following last Friday’s Politburo meeting, sent shockwaves in the financial market.
But it has still remained unclear what decision regarding the company was made, and by who.
“The Politburo welcomed the decision to eject Old Mutual from the financial system of this country and the closure of Ecocash agents who had caused runway inflation through illegal parallel exchange market rates,” Chinamasa said.
The diversified financial services giant, which has been in existence for 175 years, is a major player in the financial market and is one of largest institutional investors in the country.
But it has lately seen its relations with the government sour amid allegations by authorities that the Old Mutual Implied Exchange Rate (OMIR) was one of the instruments driving the devaluation of the local currency.
OMIR is a gauge of the value of the Zimbabwe dollar which is based on the difference in the value of the firm’s shares in London and Harare.
The OMIR at ZW$122.22 to the United States dollar, currently stands at nearly double the official Zimbabwean exchange rate of ZW$65.87.
Other players in the market then use the OMIR to price their goods and services as a true reflection of the value of the local currency.
Reacting to media reports following Chinamasa’s pronouncements, Old Mutual said: “We are working with all relevant stakeholders to seek clarity on the matter.”
“We advise you that all our services and operations are continuing as normal. Old Mutual Zimbabwe Limited and its business unit including CABS, continue to be financially stable and sound,” the insurance giant said, adding it would update the market on “any significant changes”.
The firm insisted that its operations comply with the law of the land.
“As part of the community, Old Mutual remains committed to serving its customers and to contributing to the development and growth of the economy,” the insurer said.
Insurance sector regulator, the Insurance and Pensions Commission of Zimbabwe has been silent on the matter.
In a statement last late month, government had cited use of the OMIR and mobile money transfers among factors that were driving the parallel foreign currency market, and devaluing the Zimbabwe dollar.-New Ziana
