HARARE — The government will offload 49% of its holdings in the Agricultural Development Bank of Zimbabwe (Agribank) by year-end through privatisation to recapitalise the institution which urgently requires a $50 million cash injection, an official has said.
Responding to questions from the parliamentary portfolio committee on lands and agriculture on Tuesday, acting permanent secretary Pfungwa Kunaka attributed the delay in privatising the bank to a shortage of funds.
He said a technical committee was established in 2012 to oversee the process while financial and legal advisors were engaged.
“With guidance from Cabinet, by year-end we should have identified a partner who will come on board. It’s a process, but we have covered some ground,” he said.
Kunaka said the government was yet to evaluate the offers that have been received and to invite other interested partners to invest in the bank.
Agribank, is currently capitalised to the tune of $23 million. The committee demanded a clear strategy from the Finance ministry on how the bank would be recapitalised, pointing out that the two-year delay in completing the process was hindering the development of the agriculture sector.
Kunaka said Finance minister Patrick Chinamasa would soon appraise Cabinet on progress and seek further support for the process. The privatisation would leave the government with a controlling stake of 51% under the empowerment law, he said.
The committee chairperson David Butau, legislator for Mbire constituency, questioned how the proposed partner could drive the bank forward without control.
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“If you bring in a private equity partner they would want to make sure that their investment sweats for them,” he said.
The MPs said no investor would part with $50 million for an asset that was worth $23 million without claiming full ownership. — The Source
