Staff Writer 
Elton Manguwo
Staff Writer
POWERSPEED Electrical Limited (Powerspeed) says the shortage of capital on the domestic market has put its expansion plans under serious threat as currency uncertainty continues to deter borrowers from long-term funding.
The electrical and hardware supplier said the development was also impeding it from implementing its innovative idea and diversification of its product offering.
Most local banking institutions are facing funding challenges from global financiers owing to a plethora of challenges, mainly the negative country perception risk.
“As a consequence, our expansion initiatives are currently under threat, which hampers our ability to innovate and effectively respond to the growing demands of the market,” Powerspeed’s company secretary, Martin Gurira, said in a statement accompanying the group’s financials for the year ended September 30, 2024.
The situation is exacerbated by excessively high interest rates, which are largely a result of the perceived risk associated with the country’s economic landscape.
“The company remains committed to enhancing its market presence and operational capacity, but the current economic climate necessitates a focused approach to overcoming financial hurdles,” Gurira said.
In addition, the company flagged the uncertainty surrounding the functional currency and future viability of the US dollar as a challenge that continues to deter long term borrowing efforts.
The group faces exposure to foreign currency risk related to transactions conducted in currencies other than the ZiG.
“The lack of clarity regarding currency stability and policy direction raises concerns among potential lenders and investors and, as a result, financial institutions are hesitant to provide long-term loans, limiting our access to the capital necessary for large-scale projects,” said Gurira.
The group achieved a profit of US$4,3 million on a turnover of US$128 million as high operating costs took a toll on margins.
Despite the positive performance, primary focus remained on enhancing shareholder equity, which concluded the year just below US$50 million.
“In light of challenges, the group’s overall performance has not met our expectations. However, we are pleased to report that we have maintained profitability and continued our commitment to pursuing expansion opportunities,” stated Gurira.
The company recorded an increase in trading volumes over the previous period and strategies to increase market share continue to bear fruit.
“Our strategic initiatives have focused on various aspects, including improving product offerings as the retail Benefits card, which was launched in November 2023, has grown dramatically with over 90 000 registered customers,” said Gurira.
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