Mugabe’s ministers at odds over indigenisation of banks

Patrick Zhuwao, Zimbabwe's indigenisation minister. Patrick Zhuwao, Zimbabwe's indigenisation minister.

Patrick Zhuwao, Zimbabwe’s indigenisation minister, says depositors’ funds at foreign-owned banks are not safe as the banks failed to meet the March 31 deadline to submit plans for “indigenisation” – local majority ownership.

But Zimbabwe’s finance minister, Patrick Chinamasa, has quickly contradicted Zhuwao, President Robert Mugabe’s nephew, by saying all foreign-owned banks and financial institutions have submitted credible plans.

Chinamasa is supported by the central bank in this latest row with Zhuwao.

Zhuwao set this and other deadlines and alterations to the indigenisation law over the last year. Most of the changes he announced were not legal, according to lawyers in Harare, and have been previously contradicted by Chinamasa.

Chinamasa issued a brief statement at the weekend saying that foreign banks had submitted “credible indigenisation and economic empowerment plans” ahead of the deadline set by Zhuwayo.

Last month, Zhuwao threatened foreign-owned companies – including banks – with closure, warning that if they missed the March 31 deadline to submit plans to give locals majority shareholdings he would withdraw their operating licences.

Several South African banks and financial institutions, such as Standard Bank and Old Mutual, have large operations in Zimbabwe.
Several South African banks and financial institutions, such as Standard Bank and Old Mutual, have large operations in Zimbabwe.

“The indigenisation plans,” Chinamasa said in his latest written statement, “are promotive of socially and economically desirable objectives and goals as set out in the gazetted indigenisation frameworks.

“The submitted plans are consistent with the letter and spirit of the Indigenisation and Economic Empowerment Act…”

Zhuwao quickly reacted by issuing a statement to journalists in Harare in which he wrote: “(Chinamasa’s) position puts at risk the savings and investments of depositors and shareholders in an all-ready compromised financial services sector.”

Zhuwayo and Chinamasa have previously argued in public and via statements about the indigenisation laws.

John Mangudya, governor of the Reserve Bank of Zimbabwe, also said last week that banks had complied with the indigenisation law.

Mugabe signed the Indigenisation and Empowerment Bill into law in 2008, but a serious push to implement it only began after Zhuwao’s appointment last year.

Zhuwao says Zimbabwe does not need foreign investment and he has scorned Chinamasa’s attempts to restore Zimbabwe’s relationship with the International Monetary Fund.

Source: IOL