- Tsaone Segaetsho
African economies been characterised by fluctuations, turbulence, volatility and uncertainty resulting from the global COVID-19 pandemic. This reality is reflected in the latest financial result for the year ended in 2023 of the Botswana Stock Exchange-listed continental financial giants, Letshego Group.
For the Letshego Group, West Africa has been the most affected by the currency knocks, once-off variables that affected the Group’s results during the year.
Letshego Group CEO, Aupa Monyatsi, when commenting on the latest results released in March for the year ended in December 2023, discribed the group’s core operating performance as ‘resilient’.
“We achieved strong top-line growth across a number of our business segments including insurance and mobile lending, reporting pleasing loan growth of 9 percent year on year,” he said, adding that outside the foreign exchange impact in West Africa, the group’s performance would have been largely in line with expectations.
“Foreign exchange volatility remained a concern, particularly in Nigeria where there was a sharp devaluation of the official exchange rate from 1USD:NGN463 to 1USD: NGN523 by June last year. The Naira lost further value in the second half of 2023, hovering between NGN 800–1 000 to the United States dollar and further movement has been seen in the current year. With the continued exchange rate volatility across our markets, foreign exchange losses moved by P143 million year on year from a gain of P91 million last year, to a loss of P52 million in the current year,” said the financial report.
This has caused the group’s 82 percent downward spiral in profit before tax as it achieved a profit before tax of P121 million in 2023, compared to a restated profit of P684 million in 2022.
“While the group’s strategy implementation to 2025 has been somewhat delayed by the headwinds that started during the COVID-19 era, strong progress continues to be made on the 6-2-5 strategy. We are consolidating the business and transitioning to optimise structures, including digital self-service to further our sales growth and strengthen our collection and recoveries capabilities,” the report added.
Letshego Group said Sub Saharan Africa economic recovery slowed for the second year in a row, recording an estimated growth of 2.9 percent in 2023 relative to 3.6 percent in 2022. The growth is still uneven and will remain so across the region. The Group further observed that monetary and fiscal policies varied materially across the markets in which it operates, as sovereigns responded variously to local economic challenges and prevailing headwinds during the year.
Letshego Africa chairman Philip Odera said: “The group continues to operate in a challenging global macro environment; however, we have continued to prioritise resources for markets that are primed for growth. Against this backdrop, we remain confident in our ability to navigate the opportunities before us, including the strength of our core product proposition to drive sustainable growth and deliver value to all stakeholders.”
