Although the period opened with relative stability in the Zimbabwean market, the second half was characterised by accelerated inflation, drought conditions as well as regulatory and tax changes which increased pressure on consumer liquidity.
The operating environment was dynamic during the period, with regulatory policy changes ushering in a new currency. On the global front, geopolitical tensions, high interest rates and natural disasters hamstrung growth in most major economies.
Axia’s markets battled currency headwinds during the period, with the Zambian Kwacha depreciating by 37% against the US$ between June 2023 and June 2024 whilst the Malawian Kwacha depreciated by 69% on the official market. In Zimbabwe, persistent foreign currency shortages and competition from informal markets impacted demand for FMCG products.
The operating environment remained complex during the review period, largely characterized by a fluid policy environment. Of note, substantial fiscal policy changes were instituted by the MoFED thereby changing the VAT status of most goods in the group’s portfolio.
The month of September marked a defined shift of monetary policy by key central banks into a rate cutting cycle. According to Reuters, five of the nine central banks overseeing the most heavily traded currencies that held meetings in September lowered benchmarks.
The period under review saw a fluid and challenging environment, with the final quarter of FY24 witnessing currency reforms in the form of the introduction of the Zimbabwe Gold currency. Price distortions persisted in the formal sector with less consumer activity recorded in that channel.
