FOREIGN-owned banks have submitted their indigenisation compliance plans to the National Indigenisation and Economic Empowerment Board (NIEEB) in spite of a war of words between the banks’ regulatory authority the Reserve Bank of Zimbabwe and the Indigenisation ministry over the law.
RBZ governor Gideon Gono’s position is that the planned sale of the 51% stakes in the financial services sector is illegal because there is no law that provides for arbitrary expropriation of banking assets in Zimbabwe.
However Indigenisation minister Saviour Kasukuwere says there are no sacred cows when it comes to observing the laws of indigenisation.
The four foreign owned banks — Barclays Bank of Zimbabwe, Stanbic, Standard Chartered and MBCA — submitted their compliance plans to the board last year.
The other foreign-owned bank, Ecobank, has already complied with the law after African Development Corporation had a share swap deal with Brainworks Capital, a local private equity firm.
Gono has, however, urged the authorities not to use the one-size-fit-all approach.
He further added in apparent reference to the Indigenisation Act, that no legislation is superior to any other except the constitution.
He said no one had the right to encroach in other people’s territories by making frequent attacks on banks even when one “may not be as knowledgeable as we are”.
NIEEB Compliance manager Zweli Lunga told businessdigest that the board had communicated with the banks , adding marathon meetings are scheduled for next week to finalise and fine tune the plans for compliance with the country’s law.
Lunga said contrary to the stay-away-from-banks stance being promoted, the foreign owned banks had brought in their plans for approval because “it is what is required of them by the law”.
According to documents seen by businessdigest, Barclays, which has a localised shareholding of 32,23% wants to give a stake to an employee share ownership scheme, a pension fund scheme as well as be given empowerment credits.
The other three banks have almost similar plans.
Lunga said: “Barclays employee share ownership scheme is acceptable to us. Where we have a problem is on the empowerment credits. This is why we need to have meetings with the banks so that we craft the best way of implementing the plans.”
Barclays has also proposed to raise funding for the agricultural sector of up to US$100 million.
Reached for comment this week, Kasukuwere said indigenisation was not just a policy but the law, which means all the companies that fall within the brackets, must comply.
Kasukuwere said: “If there is in any foreign-owned company, which does not want to follow the law then we will consider them as having taken a political position.”
The minister said he had instructed the board to interrogate and scrutinise the plans within a week and should come up with a position after that.
However, Gono this week refused to back down, insisting until he has been consulted and laws harmonised, any move on banks would be unlawful. He said the central bank was guided by relevant laws which must be equally respected.
“We have been saying this since 2007 before Kasukuwere was Minister of Indigenisation and I would like to repeat that a one-size-fits-all policy reflects a sub-optimal strategy towards achieving indigenisation and empowerment aspirations of the people in the financial sector, and this matter is as clear as the difference between morning and evening.
“Those who want to proceed without consultation are oblivious to the downside consequences of trying to indigenise people’s deposits.”