Almot Maqolo, Staff Writer 
SUPERMARKET chain Choppies Enterprises (Choppies) has confirmed receipt of a US$1,8 million lump sum payment for blocked funds from the government of Zimbabwe aimed at settling outstanding obligations to foreign shareholders and restoring confidence in the business community.
Blocked funds refer to foreign currency earnings that externally based companies like Choppies had generated through their Zimbabwean operations but could not repatriate due to foreign exchange shortages.
These funds were trapped in Zimbabwe as the Reserve Bank of Zimbabwe (RBZ) could not provide the necessary foreign currency for the transfers.
For Choppies, this created a massive operational headache. The group’s profits from Zimbabwean stores sat idle in local banks, while suppliers outside the country demanded payment in hard currency.
In a significant policy shift, the RBZ announced its commitment to releasing some of these blocked funds, providing businesses with foreign currency to repatriate their earnings or settle external obligations.
“The group proceeded to transfer the ZWL equivalent of the legacy debt at a rate of US$/ZWL1:1 to the RBZ as per requirement of the Exchange Control directive RU 28 of 2019 amounting to ZWL$29,624,114.07.
“In this regard, the group received communication from the RBZ dated May 4, 2022 to the effect that an amount of US$29,624,114.07 had been successfully registered with the Bank’s Exchange Control division as blocked funds to be paid in instalments of US$125 000 per week until it has been paid in full.
“Subsequent to the year end, the government ended the obligated payment of blocked funds with a lump sum payment of US$1,8 million made after year end,” Choppies stated in its consolidated and separate annual financial statements for the year ended June 30, 2024.
Despite the positives, Choppies remains exposed to significant risks in Zimbabwe as the release of blocked funds, while a welcome step, may not be a consistent or long-term solution.
“The economic situation in Zimbabwe continues to be a threat to the Choppies Zimbabwe segment. The segment is not being funded by the rest of the group,” the company said.
“The group is weighing various options in Zimbabwe given the stress it is placing on our overall performance. There are sufficient cash reserves to settle all liabilities for which Choppies Enterprises has provided guarantees.”
The Botswana-headquartered grocer, which also operates in Zambia and Namibia, has in recent years pulled out of underperforming markets which includes South Africa, Kenya, Tanzania and Mozambique.
Of particular concern is the performance of Choppies Zimbabwe, which has emerged as a notable drag on the company’s overall financial performance.
“We do not expect to provide any material cash support to the Zimbabwean segment from Botswana or any other segment,” Choppies added.
At the group level, Choppies Enterprises has reported solid revenue growth, with total revenues reaching BWP8,5 billion for the fiscal year ending in June 2024, up from BWP6,5 billion in the previous year.
newsdesk@fingaz.co.zw
