BARELY a fortnight after the International Monetary Fund (IMF)’s departure from Zimbabwe after its annual Article IV consultation visit where it warned of the “destabilising effects” of indigenisation on the banking sector, the battle for foreign-owned banks has intensified, with Finance minister Tendai Biti yesterday emphatically declaring the latest empowerment regulations “a nullity”.In General Notice 280 of 2012, gazetted last Friday, Youth Development, Indigenisation and Empowerment minister Saviour Kasukuwere laid down rules for the implementation of indigenisation in nine sectors which include, finance, tourism, education and sport, arts, entertainment and culture, engineering and construction, energy services, telecommunications, transport and the motor industry.
The gazette gave all foreign-owned banks with a minimum net value of $1 a year to increase indigenous shareholding to at least 51%.
However, Biti said this was unlawful.
“The regulations are a nullity. They are void ab initio (invalid from the outset),” Biti told the Zimbabwe Independent yesterday. “The law is very clear. There has got to be sectoral consultations and thresholds. The financial sector is sui generis (unique or special), so we need to be careful about how to proceed, otherwise we destabilise the economy. Those regulations are void; they are of no legal effect, an absolute nullity. In any case, if you indigenise a bank what are you indigenising? A building or computers?”
Economic analyst Professor Tony Hawkins has also been quoted as saying: “What is being indigenised? Is it money or brand names? The truth of the matter is that the majority of Zimbabwe’s banks are already indigenised.”
The battle for the fate of foreign banks has also escalated the fight between Kasukuwere and Reserve Bank of Zimbabwe governor Gideon Gono. Kasukuwere wants to seize foreign banks, while Gono says that would be destabilising to the economy. Biti and the IMF have also warned of the negative consequences of grabbing banks.
Outraged by Kasukuwere’s latest move, Gono on Wednesday stepped up attacks on the minister (Kasukuwere) over the issue.
“We regard the regulations gazetted as devoid of detail and rationality as they are contradictory in many respects with existing laws in the country such as the Banking Act and the RBZ Act,” Gono said.
“Both the RBZ and the Banking Acts have not been amended to exclude the RBZ from final responsibility of running Zimbabwe’s financial sector.Gono suggested government needed to be careful about Kasukuwere and National Indigenisation and Economic Empowerment Board chairman David Chapfika, as they are associated with bank collapses.
“The fact that the two main proponents (apparently Chapfika and Kasukuwere) of the recent illogical moves have presided over the failure of their two banks before, namely Unibank and Genesis (respectively), calls for Solomonic wisdom on the part of Zimbabwe’s population and leadership,” he said.
“Ordinarily, anyone who was near a failed bank is not a fit and proper person to deal with banking matters or to ever own, run or talk about the ownership of a bank again until cleared by the central bank; this is a universal practice.
“As the Reserve Bank, we repeat our earlier invitation to any Zimbabwean wishing to start a bank to come forward with their application and we will give them a licence to join the sector at 100% ownership, rather than waste money taking over other people’s banks,” Gono said.