By A Correspondent| Choppies Enterprise Limited is considering pulling out of Zimbabwe, citing financial strain caused by the instability of the Zimbabwe Gold (ZiG) currency, introduced in April to replace the Zimbabwean dollar as the official currency.
Choppies owns Nanavac Investments (Pvt) Limited, which operates under the Choppies Zimbabwe brand, and reports that its operations have become a financial burden.
While operations in neighboring Zambia and Namibia are stable or showing signs of growth, the situation in Zimbabwe remains problematic, according to the company’s annual report for the period ending June 30, 2024.
The report states, “The new ZiG currency, which replaced the Zimbabwean dollar, has not yet stabilized the economy, leading to a decline in performance for our Zimbabwean operation. We are evaluating our presence in the country and considering possible actions.”
Choppies, which has 287 stores across Botswana, Namibia, Zambia, and Zimbabwe, operates 30 of those stores locally, employing over 1,050 people. If it exits the Zimbabwean market, these jobs could be at risk.
The retailer faces several challenges in Zimbabwe, including high inflation, unemployment, and a lack of foreign currency, all of which continue to impact its operations.
CEO Ramachandran Ottapathu explained, “Due to the continued risks, we are weighing various options for Zimbabwe. Our long-term strategy focuses on reducing debt, and we have already exited loss-making areas, with Zimbabwe now under review.”
In Zimbabwe, Choppies reported assets worth BWP128 million against liabilities of BWP122 million as of June 30, highlighting the thin financial margin with debt obligations limiting stability.
The company also noted Zimbabwe’s economic downturn, with projected real GDP growth dropping from 5% in 2023 to 1.9% in 2024. Declining agricultural output and persistent power cuts have led to a reduced domestic market and added financial strain on Choppies and other businesses.
With 45.3% of Zimbabwe’s population in need of food assistance and consumer spending squeezed, Choppies faces an increasingly challenging business landscape in the country.
Choppies’ potential exit could mark another setback for Zimbabwe’s economy as businesses continue to feel the strain of economic instability.