HomeBusinessBanking sector in jitters

Banking sector in jitters

-

THE banking sector is jittery after President Robert Mugabe and Zanu PF were controversially voted into power.

Gamma Mudarikiri
Own Correspondent

Players fear indigenisation of foreign-owned banks, a development they say is likely to destabilise the financial sector.

Zanu PF, in its economic policy, indicated it would intensify the process of indigenising foreign-owned banks including Standard Chartered, Barclays, Ecobank, Stanbic and MBCA, a unit of South Africa’s Nedbank — which together account for a 70%-plus market share.

Bankers’ Association Zimbabwe (BAZ) officials, although indicating that they would not comment on political-related issues, told Southern Eye Business there was uncertainy on what will unfold concerning the fullscale implementation of the indigenisation law under the new government.

“We still don’t know what will happen with regards the indigenisation of the banks as there is no one so far after the election, who has approached us on the issue,” one of the BAZ officials said.

National Indigenisation and Economic Empowerment Board (NIEEB) chief executive officer Wilson Gwatiringa, however, said they will continue with the indigenisation process although he could not be drawn into giving specific details on the progress made to finalise the process on individual banks.

“We will continue with the process as we have been doing, but I cannot give you the detail for the progress we have made on the different banks,” Gwatiringa said.

The seven foreign-owned banks in Zimbabwe hold deposits of $1,3 billion compared with $3 billion held by locally-owned lenders.

Barclays, Standard Chartered and the local units of South Africa’s Standard Bank and Nedbank, have all submitted proposals to comply with the law.
Under the country’s law, foreign-owned companies must sell or cede 51% of their operations to black Zimbabweans or the State-owned NIEEB.

Zanu PF in its manifesto had indicated that it would indigenise 1 138 companies valued at $14,3 billion.

Economic analyst Erich Bloch, however, has indicated that if the party implemented the indigenisation policy without modification, it would scare away foreign direct investment and as such would be detrimental to the already weakening economy.

 Twitter feedback @mudarikirig

Recent Posts

Stories you will enjoy

Recommended reading