Finance minister Tendai Biti has set himself on a collision course with Indigenisation and Empowerment minister Savior Kasukuwere over foreign-owned banks being left out of the current indigenisation drive.
Speaking at the second Euromoney-Zimbabwe Investment conference in Harare yesterday, Biti said banks were different from mining companies and should be treated with caution.
“Banks are not in the commanding heights of the economy. They play an intermediary role,” he said.
Biti said since the country dollarised in 2009, banks had worked hard to grow their capital formations from $300 million to close to the current $4 billion.
The minister said banks had been playing a critical role in ensuring the country was able to meet its current trade deficit by facilitating the importation of goods into the country.
“What we are saying is that our exports are $3 billion and our imports are $7 billion,” he said.
“The market capitalisation of our top four banks is about $50 million, which means for a 51% stake, a local partner has to put in at least $25 million.
“If a black person has $25 million surely that person is fit enough for us to give him a licence as the requirement is $12, 5 million.
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“Don’t look at Barclays, don’t look at Standard Bank, come to us and we will give you a licence.
“If we threaten banks, they will take their funds to Sandton (South Africa) and we will remain with shells along Samora Machel and Robert Mugabe avenues,” Biti said to applause from delegates.
Barclays and Standard Chartered have come under increasing pressure from Kasukuwere to hand over 51% of their shareholding to local partners.
Biti said localising the economy was important, but should be done in a consistent and predictable manner.
On whether banks were complying with the recent government directive that financial institutions should keep at least 75% of their balances locally, he said discussions were ongoing.
“I have refused to legislate.That’s not the way we deal with banks,” he said.
Biti said since the introduction of a cocktail of measures that include drawing down $110 million from country’s Special Drawing Rights with the International Monetary Fund, the liquidity situation was beginning to ease.
Last week, Reserve Bank of Zimbabwe governor Gideon Gono vowed to resist moves to seize majority shareholding in foreign-owned banks saying he was ready to issue licences to locals with the capacity to start their own institutions.
Gono said as long as he was still central bank governor, banks would not be forced to capitulate. “As long as I am governor I will protect the sector from unintended consequences,” he said.
“Instead of sharing an existing cake, I have said those who have an appetite for banking please come forward.
“I will issue licences rather than destroy existing banks.
“The money in the banks doesn’t belong to shareholders, but to the people. Instead of indigenisation, let’s support the people to start new banks.
“Indigenising those banks will make life difficult for the people. The maximum shares for those banks are $40 to $50 million.”
