HARARE - Foreign banks are yet to comply with Zimbabwe’s indigenisation policy due to authorities’ delay in approving their compliance plans, the Bankers Association of Zimbabwe (Baz) says.
This is despite government’s pressure for the institutions to conform to the law compelling foreigners to cede majority shareholding to black locals — with former empowerment minister Saviour Kasukuwere having given them several ultimatums.
George Guvamatanga, Baz’s president, said the foreign-owned financial institutions are currently in negotiations with the Indigenisation and Finance ministries, and the Reserve Bank of Zimbabwe (RBZ).
“No foreign bank has fully complied with the indigenisation law,” he told Parliament, adding “but we have all submitted our compliance schedules to relevant authorities.
“It’s a clear understanding in the banking industry that we all have to abide by the laws of the land. I don’t expect any of our members not to support this law (Indigenisation) because it is our licence to operate,” said Guvamatanga.
According to Baz, there are 21 banks operating in the country, 16 indigenous and five foreign-owned.
The foreign banks include Barclays, Standard Chartered, Stanbic, AfrAsia and MBCA.
Guvamatanga noted that the financial services sector was the most indigenised industry in the country.
However, his revelations are in sharp contrast to Kasukuwere’s hard stance on foreign-owned banks.
Despite experts’ warning against indigenising the sensitive financial sector, he insisted that the institutions will not be exempted.
Economic analysts have blamed the controversial policy for scaring away foreign investors.
Last week, Canadian Ambassador to Zimbabwe Lisa Stadelbauer said investors were wary of the investment climate in Zimbabwe.
“Canadian companies are concerned with the uncertain business environment in Zimbabwe. They do not understand what is expected of them under the Indigenisation Act, and many are not willing to give up their controlling stake in their companies,” she said.
Stadelbauer noted that investors were concerned with what they saw as unequal and inconsistency application of the law and “they are concerned about the stability of the banking sector and corruption too.”
She said Canadian companies were currently active in 36 sub-Saharan African countries with the largest concentration of assets worth $10 billion in eastern and southern Africa.
“I believe there is a lot Canadian companies can offer to Zimbabwe. Very little investment of the $10 billion is in Zimbabwe, other neighbouring countries to Zimbabwe are seen as more attractive investment destinations for Canadian companies,” she said.