Harare - Executives with foreign-owned banks are expecting reforms to Zimbabwe’s indigenisation policy to come into effect during the third quarter.
Finance Minister Patrick Chinamasa told investors and fund managers, gathered for the Imara Investment Conference in Harare, on Thursday that President Robert Mugabe’s cabinet had decided to review the policy.
The policy requires foreign firms to give a 51 percent stake to black Zimbabwean partners.
This threshold has unnerved investors and has been blamed for low investor appetite for Zimbabwean projects.
Banking sector executives said that reforming the contentious policy would bring the clarity needed to aid efforts to attract investors.
“We now have a clear understanding of indigenisation in the banking sector,” said George Guvamatanga, the managing director of Barclays Zimbabwe.
“I wouldn’t say it’s still an issue that concerns us.”
The Zimbabwean unit of British-listed Barclays is one of about four foreign-owned banks that would have been affected by the indigenisation law.
The others are units owned by Standard Bank, Nedbank and Standard Chartered Bank.
Other banking executives said reforms to the indigenisation policy would help them secure fresh capital for use in the economy.
They said the move to review the policy was in response to the “continued meltdown in the economy” and the government’s growing realisation that “fresh capital is needed to boost the productive base” of the economy and curb rising imports.
Zimbabwean banks are battling for liquidity.
The foreign-owned banks are the most stable as they are able to capitalise on their international parentage.
“I think by the third quarter we will be able to see some final clarity on the issue,” said Guvamatanga, the immediate past president of the Bankers Association of Zimbabwe.
Speaking to the investors, Chinamasa said that the government wanted to come up with a “framework that is transparent”.
“There have been a lot of misconceptions and confusion around that issue of indigenisation,” he said.
“We understand that as investors you come here to make money and you are the goose that lays the golden eggs – but don’t take all the eggs away with you.”
Chinamasa had told parliament earlier that the cabinet had decided to review the indigenisation policy as a way of clarifying it because it had become apparent that it had unnerved investors.
“Cabinet yesterday took a decision that we should align the investment laws, indigenisation law, the empowerment laws to our policies as pronounced by His Excellency (President Mugabe),” he said.
“The cabinet directed the minister of youth and indigenisation to take up this issue.”