NewsDay Editorial: Nhema spot-on on foreign-owned banks

REPORTS that foreign-owned banks in Zimbabwe could have a reprieve via the prerogative powers of Youth, Indigenisation and Economic Empowerment minister Francis Nhema following President Robert Mugabe’s call for lower, negotiated and equitable indigenisation thresholds for the banking sector, point to a step in the right direction.

NewsDay Editorial

Clearly, it is a move towards a more sensible, more rational position because these banks are central to this economy as they are major players. Foreign-owned banks in Zimbabwe include Standard Chartered, Stanbic, MBCA and Barclays Zimbabwe.

There has been talk that these banks were not prepared to cede 51% control to black Zimbabwean groups and that they would be booted out of Zimbabwe.

But the new stance could encourage investors to pour their money into the country’s economy. We believe there is no reason for antagonism. Foreign-owned banks should obviously comply with the country’s empowerment laws like any other sector, but they should be allowed to present their case and if it warrants that government gives them time to comply over a period of time, the better.

The stand-off with government had resulted in banks taking a cautious, but conscious decision to continue to maintain their long-standing commitment to doing business in Zimbabwe. What that did to the country was to project a completely unwarranted bad image of a government eager to grab what others have sweated for without paying a dime. In other words, a repeat of the chaotic land reform programme which left hundreds of thousands homeless after looting and land grabbing.

As a result of that, Zimbabwe plunged in terms of investor confidence on doing business in the country. And the announcement by Nhema that the government had softened its stance on the indigenisation of banks, saying the institutions would not be required to immediately turn over their majority stakes to indigenous Zimbabweans, was more than welcome. Let the indigenisation of foreign-owned banks be done gradually.

Nhema was quoted as saying: “If you are going into sections of the service industry like banks, manufacturing and others where there is no resource to begin with, then you cannot say the 51% is mine.”

According to the law, no company should be exempted, but it is a commendable move to gradually implement the requirements so as not to disturb the flow of business and/or the economy.

This means that all foreign-owned companies that are exploiting Zimbabwe’s natural resources should not wait to be immediately compelled to do so, but make a plan themselves.

Government should ensure that each investment made in the country benefits the country’s youths by way of training unemployed youths annually. We also urge indigenous people who have benefited from the indigenisation and empowerment programme to assist their communities. But, we are worried that in the name of indigenisation, we may destroy efforts to create more wealth for the majority by creating employment for thousands of Zimbabweans.

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  1. This what should have been done before. The damage has already been done

    1. What do you expect when you put a person like Kasukuwere in charge? He has left a trail of destruction and Mugabe only realised until it was too late that he was not competent for such a job. Such a protfolio requires a sober minded and competent preson, someone who can think beyond one month and be able to fully harness the nation’s natural resources to the benefit of the populace.

  2. it shows ku indeginisation portfolio is nw in hands of the learned ones. Wel done francis. Dai ange ari kasukas hahahaha dai mabank atobuda mu zim aya.

  3. I am sure Xavier is biting his lower lip whilst running around looking for poachers in the national parks.

  4. This is what was supposed to be done with land reform not the smash and grab system used. Back to the banks:is the damage repairable?

  5. Willard Mubvumbi

    For Nhema, i think he is gonna create more foes than friends.

  6. pamwe tingararama

  7. The former minister was wrong in the fact he had adapted the condom approach, ie one size fits all. The new minister is pragmatic as each sector should be looked at differently and its easier to idiginise new projects as the promoters are aware of the requirements than existing ones

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  10. Spot on really! Kasuks the way you were handling nyaya yemaBanks was worrying.Happy that waakuzoita mutsimba nemaPoachers maBanks haadi maBouncer….and use your energy kuti tiwanewo mvura muHre

  11. kasu anga auraya nyika he wanted to personalise th ind policy no one even benefited from th “upfumi kuvadiki ” kunze kwehama dzake chete

  12. sometimes smart thinking ndoinongodiwa ,not the bullyng approach which scares off investors

  13. I have always been saying this on many a forum with people bashing me left right and dead in the middle. Each type of industry needs its own threshold, each company in each industry still further needs its own quotas. We can simply compel, through an act of parliament, all the companies that want to keep 100% stake to full disclosure of business activities, just as ZSE listed companies have mandatory auditing and scrutiny from government auditors. A 100% foreign owned manufacturing company is better in every sense than non existen one or operating in another country.

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