The reversal of an earlier ban by the Reserve Bank of Zimbabwe (RBZ) on Zimplats from using the local banking system is a welcome development. However, the use of bullying tactics by the central bank in the first instance was not warranted.
Last week RBZ governor Gideon Gono issued a 24-hour ultimatum forcing Zimplats — the local unit of South Africa’s giant miner Impala Platinum — to bank locally or face a freeze of its accounts. The directive also barred the mining company’s bankers from facilitating its international transactions as well as processing exports.
At a time the country is desperate to attract fresh investment, potential foreign investors require all assurances that the country is ready to do business and adhere to trading agreements. This is the only way that the country can shed its pariah tag, which has over the past years rendered it a failed State that cannot co-exist with others in a world of international commerce.
There is no doubt that by forcing Zimplats and other mining companies to bank onshore, the RBZ is trying to deal with the liquidity crisis currently affecting the country, but there are better ways of solving problems than resorting to coercion and bully-boy tactics that scare off potential investors.
By Gono’s own admission, Zimplats contributes 25% to 35% of the country’s export receipts which is a clear indication that the company is of paramount importance to the country’s economic recovery.
We agree with Zimplats that the RBZ’s directive was unfortunate given that the company was already paying 75% of its total spent through the Zimbabwean banking system, with the balance relating mainly to the servicing of offshore loans. The company argued that offshore banking was done in the full knowledge of the RBZ.
Despite all the hullaballoo surrounding its operations, the platinum mining firm should be commended for keeping its eyes on the ball as indicated by the 7% rise in production to 45 000 ounces during the third quarter ending March 31.
It appears the RBZ, just like government, has a tendency of making hasty, emotional decisions. Companies such as Zimplats are key to the country’s economic turnaround, and the government needs to appreciate that when dealing with them.
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It only leaves egg on their face to hastily implement some decisions only to discover that they have erred because they were working on certain assumptions and then make a U-turn.
This is akin to “management by guesswork” and the results, consequently, can only be disastrous. We pray that in this particular case, the RBZ has learnt from its mistakes and there will be no repeat of such foolishness.
