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YOUTH Development, Indigenisation and Empowerment Minister Saviour Kasukuwere on Friday ordered foreign banks operating in Zimbabwe to start lending money to blacks or “ship out’ in remarks that are likely to further unsettle foreign investors.
Briefing journalists at a cocktail party on Friday on his controversial empowerment law that seeks to force foreign-owned firms to cede 51% of their shareholdings to locals, Kasukuwere said there were some banks that were against financing black businesses.
“These British banks should change their attitudes; either they work to support our people or there is no need for them to be in First Street,” Kasukuwere said.
The remarks come on the background of concerns that locals do not have capital to participate in the indigenisation programme and will raise suspicion that government will force banks to fund the empowerment transactions.
Kasukuwere’s outburst is also likely to draw the anger of the central bank which superintends the financial services sector.
Reserve Bank of Zimbabwe (RBZ) governor Gideon Gono has in the past said government officials should keep their hands off the delicate financial sector.
Kasukuwere said there were some banks who had imposed “sanctions” by not lending out to locals. “You want our banking licence and you behave in this manner?” he questioned.
Foreign-owned banks have been getting the rap from both Gono and Finance minister Tendai Biti for having low loan-to-deposit ratios.
Statistics from the central bank show that as at December 18 last year, Stanbic had a loan-to-deposit ratio of 37,15%, Standard Chartered (23,15%), Barclays (19,94%) and MBCA (125,44%).
However, even locally-owned banks such as FBC Bank had low loan-to-deposit ratios.
Despite raking in US$97 818 888,52 in deposits, FBC loaned out a paltry US$16 255 352,42 representing a loan-to-deposit ratio of 16,65%.
Since the gazetting of the empowerment regulations in January there has been an outcry from concerned stakeholders that the move would scare away investors.
Kasukuwere told journalists there was no going back on the regulations.
“No minister must speak on behalf of another minister,” he said in remarks aimed at Industry and Commerce minister Welshman Ncube.
Ncube had told business executives on Wednesday that the regulations were before the Cabinet committee on legislation as they were prematurely gazetted.
He said the regulations were in place and concessions would be made to take the views of colleagues.
“I am implementing the laws of the country and I don’t have to fight anybody to implement the law,” he said.
Foreign owned banks have become the punching bags in the indigenisation scheme.
When the empowerment law was being formulated then Indigenisation minister Paul Munyaradzi Mangwana, told a parliamentary committee in 2007 that foreign banks unhappy with the proposed legislation “should pack and go”.
BY NDAMU SANDU
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