Zimbabwe gives banks an ultimatum

Comment on this story
IOL pic july4 zimbabwe bank ultimatum Reuters File picture - Men cast shadows on the wall as they walk past a banking centre in the Zimbabwean capital, Harare. An independent research group says Zimbabwe's capital is the world's fourth-worst city to live in, based on daily hardships and political risk.

Harare - Zimbabwe has given foreign-owned banks one year to hand over 51 percent stakes to locals, according to a government notice, as President Robert Mugabe ramps up a drive to force all foreign-owned businesses to surrender majority control to blacks.

A government notice released last week said all foreign-owned banks had a year to cut their shareholding to 49 percent, a directive described as “illegal” by Prime Minister Morgan Tsvangirai, who is sharing power with Mugabe in a fragile coalition.

Mugabe and Tsvangirai differ sharply on policy, including the drive to transfer ownership of foreign-owned firms.

“The Prime Minister would like to inform the public and the concerned stakeholders that there is no such government position because no such issue has been discussed and agreed upon by cabinet,” Tsvangirai's office said in a statement.

The southern African state has already forced mining companies such as Rio Tinto and Impala Platinum , the world's second-largest platinum miner, to turn over majority stakes in their local units to black Zimbabweans.

Emboldened by his success against miners, Empowerment Minister Saviour Kasukuwere is now targeting banks.

Kasukuwere, a 41-year-old member of Mugabe's Zanu-PF party, has clashed with central bank Governor Gideon Gono and Finance Minister Tendai Biti over the banking sector.

Biti, a senior member from Tsvangirai's Movement for Democratic Change party and Gono, a Mugabe ally, have opposed Kasukuwere, arguing Zimbabwe only has four foreign banks out of 26 financial institutions.

Kasukuwere could not immediately be reached for comment but he has previously vowed to pursue foreign banks, which he accuses of refusing to provide loans to the agriculture industry and small black businesses.

Tsvangirai's office accused him of trying to “project an image of a voracious government keen to compulsorily grab almost all institutions and companies in the country”.

Standard Chartered Bank, Barclays Bank and South Africa's Standard Bank and Nedbank all have operations in Zimbabwe and would be affected by the latest regulations.

Zanu-PF has been criticised over the past decade for patronage when seizing white-owned farms. Critics say many farms are now in the hands of party loyalists instead of the landless black peasants who were supposed to benefit.

Critics of the takeovers of mines and banks say Zanu-PF is using the policy to try and win votes ahead of elections which will be held in the next 12 months.

The government notice also said private schools, which used to be a preserve for whites but are now largely multi-racial, should in the next year be majority-owned by blacks. - Reuters

sign up

Comment Guidelines

  1. Please read our comment guidelines.
  2. Login and register, if you haven’ t already.
  3. Write your comment in the block below and click (Post As)
  4. Has a comment offended you? Hover your mouse over the comment and wait until a small triangle appears on the right-hand side. Click triangle () and select "Flag as inappropriate". Our moderators will take action if need be.

  5. Verified email addresses: All users on Independent Media news sites are now required to have a verified email address before being allowed to comment on articles. You are only required to verify your email address once to have full access to commenting on articles. For more information please read our comment guidelines