Dairibord will no longer pay dividends because of RBZ’s ban on loans

In the mind of whoever advised president Mnangagwa to ban banks from issuing loans things were supposed to be simple. Loans would be banned and the nameless currency manipulators who were taking loans and “manipulating” currency markets would be stopped dead in their tracks. The thing though is that banning loans was always going to result in unintended victims. Former parastatal Dairibord is now one of those affected. The company had initially declared a dividend which was supposed to be paid to shareholders on the 13th of May 2022. Thanks to the RBZ’s ban that will no longer be happening. Below is a statement from Dairbord on the issue:

Given the significant changes in the operating environment, Dairibord Holdings Limited(“Company”) board,at a meeting held on 10 May 2022, has considered it prudent not to pay the scheduled dividend recently announced whose original details are set forth below:

The original announced dividend was ZW$0.41 per share. The changes in the financial operating environment and resultant uncertainty have significantly disrupted the credit markets. This caused the company to revise the announced dividend position supported by the need to preserve working capital for the company. The board will reconsider the dividend position at half-year of 2022. Any inconveniences caused to our shareholders are sincerely regretted.

Dairibord’s full statement

Dairbord is not the only one. A lot of individuals and companies are scrambling following the shutting down of liquidity lines by the government. Already the government has already been forced to give an exception to farmers as their ill-conceived plan was now threatening the core economy. Rash decisions like this and SI 127 of 2021 are never a good idea. They are crafted by individuals who do so without consulting stakeholders and history has shown that eventually they never achieve what the creators wanted but instead make things worse. They are all ultimately scrapped.