FILE PHOTO: People walk past the Reserve Bank of Zimbabwe building in Harare, Zimbabwe, February 25, 2019. REUTERS/Philimon Bulawayo/File Photo
ZIMBABWE-CURRENCY FILE PHOTO: People walk past the Reserve Bank of Zimbabwe building in Harare, Zimbabwe, February 25, 2019. REUTERS/Philimon Bulawayo/File Photo
Image: Philimon Bulawayo

Zimbabwe’s mooted monetary policy changes, which include the introduction of Real-Time Gross Settlement (RTGS) dollars in that country’s multi-currency system, will improve packaging company’s liquidity, the group said on Wednesday.

Nampak becomes the latest company to express optimism about the introduction of a formalised floating foreign exchange market in Zimbabwe.  Earlier in March listed cement maker PPC said the move would curb the high inflation and excessive premiums created by the parallel exchange rates in Zimbabwe.

“This is expected to unlock liquidity and bring about certainty in the foreign exchange market in future to improve the competitiveness of the Zimbabwean economy. Nampak is evaluating in detail the impact of this recent announcement on its operations but views this as a development that should in the fullness of time lead to improvements in liquidity as experienced in Nigeria and more recently Angola,” Nampak said.

 It said the availability of foreign currency in Zimbabwe “remains challenging” and only R27m, or 2%, of the opening cash position was transferred from Zimbabwe in the five months to February 2019.

Nampak's cash balance in Zimbabwe remained relatively stable at R1.3bn.

Meanwhile, Nampak said in the five months, it had repatriated R1.5bn from Angola and Nigeria.

“There is currently no restriction on the transfer of cash from Nigeria. Kwanza availability is at times the constraint in the Angolan economy particularly when US dollars are made available by in country banking partners, but insufficient Kwanza are available at the dates on which the US dollar Kwanza bonds either mature or can be converted to cash ahead of maturity dates,” Nampak said.

Nampak said on Wednesday that while SA consumers remain under pressure, it is benefiting from higher sales of canned fish and vegetables.

SA’s slowing economy, together with higher interest rates, fuel prices and electricity tariffs, is placing pressure on disposable income, the group said.

“This current economic climate is not expected to change before the elections to be held in May 2019.

“This rather constrained economic environment is not, however, completely negative as consumers have been resorting to trading down to value and in-house brands, as well as purchasing greater volumes of canned fish and vegetables, both of which trends have been favourable,” Nampak said.

Nigeria, meanwhile, is “well on its way to recovery”, helping the group’s Bevcan volumes in that market reach record production levels.

“The consumer is expected to remain resilient in 2019 and beyond, and Nampak is consequently investigating the viability of doubling name-plate capacity to 2-billion cans per annum [in Nigeria],” it said.

Nampak said it is in talks with a black-owned company in SA regarding the sale of its glass business.

The preferred bidder, which is supported by a large multinational “with significant glass expertise”, would be responsible for its own funding.

Nampak aims to conclude an agreement by April.

The group said it would consider other asset sales to “sharpen” its focus.

hedleyn@businesslive.co.za