Harare - Econet Wireless Zimbabwe has paid a first-quarter dividend for the first time since dollarisation, as cash rich Zimbabwean companies and individuals battle to preserve the value of their bank balances.
In an unprecedented move, Econet announced that it has declared a dividend of 0.386 cents per share amounting to $10m for the first quarter ended May 31 2017.
Dividend-paying Zimbabwean companies normally pay interims or final dividends but with bank balances losing value by the day, Econet has decided not to wait until the half year, when the value of the $10m would have depreciated.
To make payments using electronic money, Zimbabweans are charged a premium of between 30% and 50%.
The company reportedly said this was at the request of its foreign investors, who prefer the company to pursue share buybacks than paying cash dividends.
“Foreign investors had indicated to the company that they prefer the company to pursue share buybacks as opposed to cash dividends because the foreign shareholders are experiencing delays in repatriating their dividends to their countries of domicile,” said Lovemore Nyatsine, executive assistant to Econet’s group CEO.
He however noted that local shareholders prefer cash dividends.
On why the company was not deploying cash into expansion projects, Nyatsine said the challenge is in the non-availability of foreign currency.
“Business opportunities are available in the country. However in a TMT (technology, media and telecom) business, which requires a lot of technology input from outside the country, such opportunities are limited by the availability of foreign currency.”
SUBSCRIBE FOR FREE UPDATE: Get Fin24's top morning business news and opinions in your inbox.