The deal, announced in Harare will not only see the group repositioning itself among leading financial institutions in Zimbabwe but also open the floodgates to credit lines through African Development Corporation (ADC)’s extensive network, PFG executive director George Manyere said.
Yesterday’s transition was the first in a financial institution since the February formation of a unity government between President Robert Mugabe and Prime Minister Morgan Tsvangirai that brought an end to a debilitating financial crisis in Zimbabwe following a decade-long economic meltdown.
The investment by the Germans is a feather in the cap for the unity government’s efforts to resuscitate Zimbabwe’s economy which analysts say needs to grow by an average 15 percent for the next five years to generate employment.
The deal saw PFG and the Frankfurt Stock Exchange-listed ADC obtain a waiver on Harare’s stringent banking and empowerment policies to allow foreign investors a controlling 54 percent stake in order to facilitate recapitalisation of Zimbabwe’s financial services sector.
The southern African country’s indigenisation laws restrict foreign companies to a maximum of 49 percent stake of a business with the remainder reserved for Zimbabweans while the country’s central bank has put in place policies to make sure that no single investor will own more than 10 percent shareholding of a financial institution.
But ADC chief executive officer Dirk Harbecke said these policies were waived after they presented their plan for Zimbabwe, detailing a long term road map which will see PFG expanding into the region following consolidation in Zimbabwe.
“We have confidence in the new team at PFG and in the potential of the group to grow,” he said.
“We are not looking in the past (but) there is a need for change. We will make sure we restructure and build a successful financial institution. That is our aim in Zimbabwe and that is the aim of the team here. We will partner with PFG, restructure it and expand, possibly in the region. The next phase will be to put in place a substantive team to drive the institution,” Harbecke said.
ADC, which manages more than US$1 billion worth of assets in both developed and emerging markets, has investments in commercial banking, asset management and insurance and has been in African in the past three years.
It is controlled by the Altira Group, one of Germany’s leading independent asset managers and has spread its tentacles to Rwanda, Mauritius and Guinea.
The group is planning to make the troubled southern African country the hub for its investments into the region.
“In Africa, we are investing in countries with strong prospects for growth,” Harbecke said.
“We are planning to make Zimbabwe the hub for our investments in southern Africa,” the ADC chief said, rejecting claims that the investment climate in Zimbabwe was still volatile.
“That statement is not true. The environment has changed dramatically in the past 12 months. We have been screening the market since last year. We think this is the right time to invest. We might be the first to invest in Zimbabwe but investor perception has changed and more investors are coming because of the stable currency situation.
“Because of the unity government, there has been a lot of improvement in the economy. It (the economic crisis) is going to be solved. How fast we don’t know but the prospects are good. You will find that step by step, other investors will begin to come. This is a small problem, sooner or later, recovery will be achieved,” he said. – ZimOnline