NEW: Companies delay releasing results to meet RBZ rule on ZiG

Business Reporter

SEVERAL companies listed on the Zimbabwe Stock Exchange (ZSE) have delayed releasing their audited financial statements for 2024 to comply with the Reserve Bank of Zimbabwe (RBZ)’s new ZiG-based reporting requirements.

The Zimbabwe Public Accountants and Auditors Board (PAAB) and the Securities and Exchange Commission (SecZim) have since adopted the central bank’s new directive announced in the 2025 Monetary Policy Statement (MPS).

RBZ Governor Dr John Mushayavanhu announced in January that all reporting entities should now present their financial accounts in ZiG, in line with the Government’s thrust to promote use of the local currency.

All reporting entities have been presenting their financial statements in US dollars.

In Zimbabwe, under the Public Finance Management Act [Chapter 22:19], a reporting entity is a public sector entity required to prepare financial statements.

It includes ministries, departments, agencies, councils, constitutional entities, statutory funds and designated corporate bodies.

According to PAAB, all entities, irrespective of their functional currency, must present financial statements in ZiG for periods ending on or after December 31, 2024.

“Entities must follow guidance from IAS 21 paragraphs 38-43, ensuring that financial statements are translated using the Reserve Bank of Zimbabwe’s official exchange rates.

“This will enhance comparability and promote consistency in financial reporting,” PAAB said.

ZiG was introduced in April last year to replace the inflation-weary Zimbabwe dollar.

Since its introduction, it has managed to tame inflation and stabilise the exchange rate.

Government and officials believe that the use of a foreign currency is not sustainable, as an overly strong foreign currency makes the country less competitive while its limited supply makes it difficult for the central bank to implement its monetary policy, which is critical in influencing growth.

By aligning financial reporting with international standards and national monetary policies, the PAAB and SecZim seek to enhance investor confidence and promote a uniform approach to corporate reporting.

Several reporting entities, including First Capital Bank Limited, African Sun Limited and First Mutual Holdings, have announced delays in publishing their financial results.

“The delay has arisen from the requirement to comply with the recently issued PAAB technical paper on financial reporting and auditing, which stipulates that where a company’s general purpose financial statements are in United States dollars, special-purpose financial statements must also be prepared in Zimbabwe Gold (ZiG) and the translated special purpose financial report must be audited.

“As First Mutual Holdings Limited auditors have indicated, the ZWG special purpose financial statements represent a separate mandate; this has resulted in some unavoidable delays,” said FMHL company secretary Ms Sheila Lorimer.

First Capital Bank company secretary Ms Sarudzai Binha said: “The delay is due to the additional time required to incorporate technical work associated with the change in functional currency, as well as the dual audit process relating to the USD functional currency and ZWG presentation currency.”

The Victoria Falls Stock Exchange (VFEX) has since granted the companies an extended period up to the end of this month to publish their audited results.

This reprieve allows the companies to meet regulatory requirements while ensuring the accuracy of their financial statements.

Financial statements for First Capital Bank Limited, which were initially due by March 31, 2025, are now expected to be published by April 30, 2025, following approval from the VFEX.

Similarly, African Sun Limited, the largest player in Zimbabwe’s hospitality sector, has notified its shareholders and the investing public of the delay in releasing its financial statements.

The company has attributed the delay to ongoing audit processes and has secured an extension from the VFEX until April 30, 2025.

First Mutual Holdings has also announced the delayed publication of its financial results, which were initially slated for March, but are now expected to be released by April 30, 2025.

The company’s brief statement mentioning “ongoing audit processes” suggests it is facing similar challenges to the ones faced by fellow reporting entities.

The extended deadline provides a window for these firms to ensure that their financial statements are accurate and compliant, which is critical for maintaining trust in Zimbabwe’s capital markets.