NMBZ Holdings chief executive officer James Mushore has warned that the cancellation of domestic consumers’ debts owed to local authorities and plans to write off more utility bills may worsen the liquidity crisis.
Addressing an analyst briefing in the capital yesterday, Mushore said while business accepts the outcome of the July 31 elections, the post election government faces a herculean task of sourcing long-term capital to stimulate economic growth.
NMBZ Holdings’ after tax profit was up 0,04% to $2,6 million for the six months to June.
“I think the stagnation in the economy and the liquidity problems are going to be exacerbated now with the cuts or cancellation in rates and bills. The suggestion of cancellation of other utility bills is certainly going to impact on liquidity going forward and obviously this affects everybody,” Mushore said.
He said the bank’s non-performing loans for the six months to June had increased due to an underperforming economy.
The group’s loans and advances were up 10% to $210,6 million during the period under review. Independent estimates suggest that Zimbabwe lost nearly $1 billion to offshore markets due to uncertainty that gripped the country in the run up to elections.
Official figures show that Zimbabwe’s economic growth rate is this year expected to slow down due to underperformance of mining, manufacturing and agriculture.
Outgoing Finance minister Tendai Biti last month warned that seven commercial banks exposed to local authorities may fold following Local Government minister Ignatius Chombo’s directive for municipalities across the country to write off public debt.
Chombo ordered local authorities to scrap all outstanding rates as at June 30, 2013.
NMB group chairperson Tendayi Mundawarara, however, said the bank would remain aggressive in sourcing lines of credit despite the biting liquidity constraints.
“We eagerly wait to see whether the economic environment will now become more certain and predictable post the recent harmonised elections. Whatever the case, the group will continue to scout for more international lines of credit. The group will also explore growth opportunities in other markets,” Mundawarara said in a statement accompanying the financial results.
Bernard Mpofu,Acting Business Editor(NEWSDAY)