Farai Mabeza, Senior Staff Writer 
ABC Holdings (ABC)’s performance, across its subsidiaries in 2020 was negatively affected by the Covid-19 pandemic, resulting in a loss of US$27 million.
ABC is parent company to a number of sub-Saharan Africa banks operating under the BancABC brand and according to its results, which were published last week, the contagion affected businesses across the group.
Chairman Livingstone Gwata, however, said the performances of the group’s banking subsidiaries in Botswana and Zambia was “resilient” as they reported profit after tax of US$8,1 million and US$4,5 million respectively, despite the significant headwinds posed by the Covid-19 outbreak.
The Zimbabwean operation reported a loss of US$600 000, compared to a profit of US$7,8 million in 2019.
“Performance was impacted by loss on net monetary position and increased operating costs due to hyperinflationary pressures and currency depreciation.
“However, as part of balance sheet management, the bank invested in inflation and exchange rate hedging assets, which resulted in net asset value being sustained year on year despite the ravaging inflation,” Gwata said.
The pandemic disrupted economic activities and international trade in the country, thereby negatively affecting exports, tourism, and manufacturing.
The Zimbabwean economy has, however, benefitted from the currency reforms, which led to the adoption of the auction exchange rate system last June.
Inflation reached a peak of 838 percent year-on-year in July 2020, before trending downward to 349 by December.
Economic recovery in 2021 is expected on the back of favourable weather conditions that should see a recovery in agriculture, which is the backbone of the economy.
“Increasingly, more countries in the group’s operational markets have begun to tighten monetary policy to deal with the growth threat of rising inflation and currency weaknesses. Looking ahead, more African countries will have to manage widening fiscal deficits and the growing threat of possible debt accumulation to unsustainable levels,” Gwata said.
ABC believes the African Continental Free Trade Area agreement which came into effect in January 2021, will have a favourable impact on regional economies. It is expected to reduce tariff and non-tariff barriers among member countries and boost intra Africa trade over time. newsdesk@fingaz.co.zw
