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Opposition Member of Parliament, Zivai Mhetu (CCC), has demanded that Finance Minister Mthuli Ncube explain the reasons behind the closure of branches by several formal retail chains across the country, and what measures are being taken to address this issue.
Speaking during a recent Parliamentary session, the Epworth North MP warned that the closure of retail outlets’ branches is detrimental to the country’s economy. He said (via <a href="https://www.newzimbabwe.com/parliament-demands-answers-over-closure-of-retail-outlets-amid-zwg-fluctuation/">NewZimbabwe.com</a>):
<blockquote>
Our economy is becoming increasingly hostile for businesses and we could soon witness an exodus of companies if this trend continues.
This is evidenced by the closure of Unilever, and Truworths and recent reports that Choppies, a leading supermarket chain based in Botswana is considering pulling out of Zimbabwe.
Choppies’ experience is worrisome because it is doing well in other SADC countries. It is only in Zimbabwe that it is facing operational challenges. It is a clear indication of our business environment that is problematic.
</blockquote>
Last month, Choppies announced it was considering withdrawing from Zimbabwe due to challenges faced by its local subsidiary, which have adversely affected the group’s financial performance.
These challenges are largely attributed to the instability of the Zimbabwe Gold (ZiG) currency, which was introduced in April to replace the Zimbabwe dollar as the official domestic currency.
Mhetu further argued that the closure of formal retailers will exacerbate the unemployment rate in the country. He said:
<blockquote>
Closure of big companies triggers unemployment, something we cannot afford as our unemployment rate is already incredibly high.
Only 46.3% of Zimbabweans of working age are employed according to statistics released by ZIMSTAT earlier this year.
Without urgent efforts to address currency instability and inflation. More businesses are likely to follow the Choppies route.
It is imperative that Zimbabwe stabilises its currency and creates an environment where businesses can thrive. The National Development Strategy 1, speaks on creating 760 000 formal jobs by 2025.
</blockquote>
The local currency has undergone six name changes but has yet to achieve stability, confidence, trust, or sustainability due to inflation fueled by excessive money creation by the Government.
Its previous iterations include the original currency post-independence, that is, the Zimbabwe dollar, then later bearers’ cheques, traveller’s cheques, bond notes, RTGS dollars, and now ZiG.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Pindula News

Opposition MP Zivai Mhetu wants to know why many stores are closing in Zimbabwe. He is worried these closures will hurt the country's economy. Choppies, a big supermarket, might leave Zimbabwe because of problems with the local currency. This could lead to more people losing their jobs. Mhetu thinks the government needs to fix the currency and create a better environment for businesses. The Zimbabwean currency has changed many times but still faces problems like inflation. It's important to stabilize the currency to help businesses and create more jobs for people.

Parliament Seeks Answers On The Closure Of Formal Retail Outlets

Botswana retailer Choppies Enterprise Limited is considering withdrawing from Zimbabwe due to challenges faced by its local subsidiary, which has impacted the group’s financial performance.
These challenges are attributed to the instability of the Zimbabwe Gold (ZiG) currency, introduced in April to replace the Zimbabwe dollar as the official domestic currency.
Choppies holds a 100% stake in the local company Nanavac Investments (Pvt) Limited, which operates as Choppies Zimbabwe.
In its annual report for the period ending June 30, 2024, Choppies conceded that Zimbabwe continues to be a challenging environment. It said:
<blockquote>
Operations in Zambia remain fairly stable and should improve significantly, following the ending of the drought and El Niño conditions which affected hydroelectric generation resulting in power cuts.
Once Namibia reaches critical mass, we believe the business will be profitable. Zimbabwe, however, continues to be a challenging environment.
The new ZiG currency, which replaced the Zimbabwean dollar, has not as yet helped to stabilise the economy, and consequently, the Zimbabwean operation has experienced a decline in performance. We are evaluating our operations in the country and will address the situation.
</blockquote>
Choppies says it has 11 388 employees (10 289 Choppies, 1 099 Kamoso) in 287 stores (185 grocery retail, 75 liquor stores, 27 hardware stores) across Botswana, Namibia, Zambia and Zimbabwe.
In Zimbabwe, Choppies has 30 stores and employs 1 051 (567 male and 484 female), who could end up losing their jobs if the retailer pulls out of the country. Said Choppies chief executive officer Ramachandran Ottapathu:
<blockquote>
The long-term focus of our strategy is to reduce debt. We have exited all loss-making areas apart from Zimbabwe which is something we are currently considering. We are also looking into expansion plans throughout the group.
The economic challenges in Zimbabwe including high inflation, high unemployment levels and a shortage of foreign currency continued to impact our operations.
Due to the continued risk posed to the group, the company is weighing various options in Zimbabwe given the stress on the group’s financials.
</blockquote>
The local currency has undergone six name changes but has yet to achieve stability, confidence, trust, or sustainability due to inflation fueled by excessive money creation by the Government.
Its previous iterations include the original currency post-independence, that is, the Zimbabwe dollar, then later bearers’ cheques, traveller’s cheques, bond notes, RTGS dollars, and now ZiG.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Choppies, a store, might leave Zimbabwe because of problems with the currency. The currency keeps changing names but is still not stable. This has caused issues for Choppies' business in the country. Choppies has many employees and stores in Zimbabwe. The other countries where Choppies operates are doing better. Choppies is thinking about leaving Zimbabwe because the economy there is not good. This decision might mean that people could lose their jobs. The company is looking at its options to see what to do next.

Choppies Weighs Exit From Zimbabwe

Former Vice President <a href="https://www.pindula.co.zw/Phelekezela_Mphoko" rel="noopener noreferrer" target="_blank">Phelekezela Mphoko</a> and his son, Siqokoqela, have dragged MDC vice president, who is their former legal representative, <a href="https://www.pindula.co.zw/Welshman_Ncube" rel="noopener noreferrer" target="_blank">Welshman Ncube</a> to court for failure to transfer payment made to them in a business deal.
The Mphokos, through their lawyer Zibusiso Ncube of Ncube and Partners, on Tuesday filed summons at the Bulawayo High Court. Ncube of Mathonsi Law Chambers is cited as a defendant.
Mphoko and his son are demanding US$1.5 million from Ncube for allegedly squandering part of the US$2,9 million they got as shares from Choppies Enterprises after they were bought out of the company. Part of the summons read:
<blockquote>Prof Ncube while acting in his capacity as their attorney under a contract of mandate and having separately been contracted to do so in a written addendum to a settlement agreement signed between the plaintiffs, Choppies and him on January 11, 2019, received the money.
… wherefore, the plaintiffs pray for a judgment against the defendant to pay the sum of $832 500 to the first plaintiff (Phelekezela Mphoko) and $619 708,50 to the second plaintiff (Siqokoqela) as well as payment of five per cent interest on the amounts.</blockquote>
Choppies operates 212 stores in SA, Botswana, Zambia, Kenya, Mozambique and Zimbabwe.
<h4>More: <a href="https://www.chronicle.co.zw/mphoko-sues-welshman-us15-million-from-choppies-squandered/" rel="noopener noreferrer" target="_blank">Chronicle</a>, <a href="https://www.timeslive.co.za/news/africa/2019-12-10-former-zim-vice-president-sues-opposition-leader-over-choppies-payout/" rel="noopener noreferrer" target="_blank">TimesLive</a></h4>

Former VP Mpoko Sues Chamisa's Deputy Over Choppies Payout

The Botswana retail giant Choppies it’s set to pull out of its key markets South Africa and Kenya as its regional largest retailing shop initiative collapses The Business Daily reports.
Choppies which is headquartered in Botswana has been having a difficult year which includes leadership wrangles, accounting irregularities and stock issues which resulted on their counter being temporarily suspended from both the Botswana Stock Exchange and the JSE.
According to an independent analyst Syd Vianello:
<blockquote>They went into a number of markets, one after the other. I think they moved into new markets without properly developing their infrastructure, lines of communication and management.</blockquote>
Choppies was founded in 1986 and now has 200 retail shops in Zimbabwe, Botswana, South Africa, Kenya, Tanzania Zambia and Mozambique.
More: <a href="https://www.chronicle.co.zw/choppies-plans-to-exit-sa-kenya-markets-regional-expansion-drive-collapses/">The Chronicle</a>

Choppies Regional Expansion Move Collapses Plans To Exit South Africa And Kenya

Emerging reports suggest that former Vice-President Phelekezela Mphoko and his son Siqokoqela misled the government into believing that their family owned 51% shares at Choppies a company headquartered in Botswana. It has emerged that the family was given only 7% shares for facilitating the company’s entry into Zimbabwe. The law demanded that 51% of the total shares of foreign companies be owned by locals.
Mphoko’s actions robbed the country transactions of about US$500 000 and upwards as per the indigenisation laws.
Choppies’ suspended chief executive Ramachandran Ottapathu was quoted saying that Mphoko and his son had not invested a cent in the operation. He said:
<blockquote>As a matter of fact, Choppies operations in Zimbabwe are owned, in the main, by Choppies Enterprises Limited, a company registered in Botswana. The reference of the 51% being owned by the Mphokos was done so as to comply with legislation which was put in place by the government which precluded foreigners from owning big stakes in businesses in preference to locals.</blockquote>
More: <a href="https://www.newsday.co.zw/2019/06/mphoko-pockets-us3-million-to-exit-choppies/" rel="noopener noreferrer" target="_blank">NewsDay</a>

Former VP Mphoko Misled Govt On His Shares At Choppies

Mr. Ramachandran Ottapathu, the suspended Choppies Enterprises chief executive officer has denied any wrongdoing and has vowed to challenge his ouster in court. He was responding to the company after it criticised him in Stock Exchange News Services (Sens) announcements in Botswana and South Africa on Monday. Choppies claimed that Ottapathu’s suspension was “valid and proper” and related to a collection of activities and conduct by him.
Ottapathu was suspended last month by the retail group over accusations of financial variances. The group has said that it intends to first complete investigations which are already underway and in due course reveal to shareholders why Ottapathu was suspended. Mr. Ottapathu said:
<blockquote>This is simple character assassination, which does not give me a chance to defend myself. I was suspended without notice and without a hearing.
I deny the insinuations and allegations that I have done anything wrong. I have said repeatedly that I have not been involved in material wrongdoing or that I benefited financially from any of the transactions, which have now been under investigation since our shares were suspended almost a year ago.
I am going to challenge my suspension in court at the soonest opportunity — as I do not believe it is justified or that it was done in a manner, which was valid or proper.</blockquote>
Early this year, vice president Phelekezela Mphoko’s family pulled out of the Botswana-listed giant retail firm as a result of Boardroom wars.
More: The Chronicle

“This Is Simple Character Assassination", Suspended Choppies CEO Denies Wrongdoing

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