Former Finance Minister Tichaendepi Masaya says printing more money without linking the value of the money with real goods produced is not sustainable. A thorough scrutiny of the existing policies, and synchronisation of monetary and taxation policies is therefore needed more urgently than ever before.
Masaya who is chairman of Trust Holdings, one of the fastest growing financial institutions, says the country’s economy had continued to deteriorate with shortages of varying commodities and practically all denominations of the local currency.
The shortage of cash, “a first of its nature in the history of the financial services sector”, had negatively affected confidence and service delivery in the financial sector.
The government and financial institutions had to urgently put in place measures to overcome this crisis to avert serious dislocation of economic activity.
Inflation which had shot up from 208 percent in January to 364.5 percent in June together with negative balance of payments and negative interest rates had continued to fuel consumptive spending.
This in turn discouraged savings which were critical for the recovery and growth of the economy.
Despite these negatives, the financial institution had a sterling performance with interest income increasing from $3.9 billion in June last year to $34.8 billion, nearly three times the 12.9 billion realised for the year ending December.
Fees and commission income rose from $1.5 billion to $4.1 billion. Though dividend income fell from $668.7 million to $575.6 million, net trading income shot up from $686 million to $5 billion while profit from investments rocketed from $56.1 million to $2.9 billion.
Operating profit increased from $4.3 billion to $28.8 billion, more than double the $127 billion it realized for the year ending December. Net profit stood at $15.1 billion, up from $1.6 billion, more than double the $6 billion it realised last year.
Trust Bank contributed the bulk of the profit. It realised net profit of $12.9 billion up from $1.5 billion during the first half of last year and $4.2 billion for the full year.
Trustfin had a net profit of $511.2 million, up from $363.4 million last year and $98.5 million during the first half of last year.
The banking group acquired a controlling stake in CAL Merchant Bank in Ghana and should assume control of operations in the last quarter of this year.
It is also negotiating the acquisition of a business in Malawi and the opening of a start-up project in Botswana