Choppies Considers Zimbabwe Exit Amid Economic Pressures

Botswana’s Choppies Enterprise Limited, a prominent retail player, is contemplating a potential exit from Zimbabwe, as its local subsidiary’s performance continues to impact overall financial results.

The challenges stem from Zimbabwe’s currency instability, particularly following the introduction of Zimbabwe Gold (ZiG) in April. Intended to replace the Zimbabwe dollar, ZiG was expected to stabilize the economy.

Choppies controls Nanavac Investments (Pvt) Limited, operating as Choppies Zimbabwe. Despite Choppies’ extensive regional reach, Zimbabwe remains an unpredictable market for the retailer.

In its annual report ending June 30, 2024, Choppies acknowledged the turbulent Zimbabwean market. While Zambian operations show promising recovery after drought and El Niño, Zimbabwe tells a different story.

Hydroelectric challenges from El Niño hit Zambia, but Choppies anticipates improvement. Namibia also holds potential once critical mass is reached. Zimbabwe, however, resists stability.

The ZiG currency’s promise of economic relief has yet to materialize, leaving Choppies’ Zimbabwean division struggling. The retailer now assesses various strategic responses to the situation.

With 11,388 employees across 287 stores in Botswana, Namibia, Zambia, and Zimbabwe, Choppies’ regional footprint is expansive. Zimbabwe accounts for 30 stores, employing 1,051 staff who now face uncertainty.

Choppies’ CEO, Ramachandran Ottapathu, has emphasized debt reduction and sustainable growth as strategic priorities. The retailer has withdrawn from unprofitable regions, Zimbabwe remaining a potential exit.

Zimbabwe’s high inflation, unemployment, and foreign currency shortages weigh heavily on Choppies’ operations. These factors drive the company’s reevaluation of its Zimbabwean position amid financial strain.

Zimbabwe’s currency history reflects ongoing instability. Following independence, iterations of the Zimbabwe dollar evolved to bearers’ checks, traveler’s checks, bond notes, RTGS dollars, and now ZiG.

Each attempt at currency stabilization has faltered. Inflation, often driven by excess money supply, persists. Confidence, sustainability, and economic trust remain elusive in the currency landscape.

This instability presents continuous operational and financial risks. The company’s contemplation of withdrawal from Zimbabwe underscores the unpredictable nature of the nation’s economic environment.

The Zim Bulletin