Zimbabwe threatens foreign banks over empowerment

HARARE – Zimbabwe's central bank said it planned to take punitive measures against foreign-owned banks that resist demands to transfer majority shareholding to local blacks under a controversial empowerment policy.

President Robert Mugabe’s ZANU-PF is pushing plans to force all foreign companies to cede controlling stakes to blacks, a policy which his rival Prime Minister Morgan Tsvangirai has denounced as “looting and plunder” by a greedy elite.

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 Analysts say the move is likely to discourage foreign investment in the recovering economy.

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In an interview with the official Sunday Mail newspaper, Reserve Bank of Zimbabwe (RBZ) Governor Gideon Gono said the government was in consultation on how to handle the empowerment programme for the financial sector.

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Gono did not say whether foreign banks had submitted plans to comply with empowerment laws but urged them to do so.

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Gono was unavailable for comment on Sunday. He gave no details of timeframes or what the RBZ’s punitive measures would be, but appeared to suggest licences could be withdrawn.

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LICENCES

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“In my next monetary statement (expected in July), I will announce punitive measures we will be taking as a central bank against those banks showing signs of reluctance to comply.

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“We cannot be having licences held by institutions that choose to be selective when it comes to which laws of the country to comply with and which ones not to.” 

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Gono said Zimbabwe’s banking sector was generally in a healthy state but could be threatened by a loss of staff at the central bank, where hundreds have applied to leave because of depleted resources, low wages and poor working conditions.

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The central bank retrenched 75 percent of its staff early this year and Gono said most of the remaining 530 wanted to go, which would leave it “facing closure” and unable to competently supervise the financial sector.

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Foreign-owned banks in Zimbabwe include Barclays Bank, Standard Chartered Bank and Stanbic Zimbabwe — a subsidiary of South Africa’s Standard Bank.

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Foreign mining companies in Zimbabwe have up to September 30 to comply with a law requiring them to surrender at least 51 percent of their local equity to black investors.

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Miners include AngloPlat and Implats, the largest platinum producers in the world and mining giant Rio Tinto, which runs a diamond mine.