A REUTERS report says Standard Chartered Bank has announced plans to exit certain jurisdictions in the Middle East and Africa, including Zimbabwe.
Another report says Stanchart has launched a new US$40 million head office, energy efficient building in Lusaka, Zambia.
As expected, this has sent tongues wagging in Zimbabwe. Social media is awash with divergent views on the new moves by the bank.
A Twitter handle — @baba_nyenyedzi, Tinashe, says Standard Chartered must explain its decision to leave Zimbabwe after 130 years.
There is reference made to a US$100 million facility advanced to Zimbabwe through this bank. Apparently only one company managed to meet the qualifications required to access the facility.
Beyond this, the story is a mystery so far and it appears that an allegation is being made that the decision to exit Zimbabwe may be linked to this.
Another response was by politician Linda Masarira @lilomatic of LEAD party, who says the exit of Standard Chartered is a great opportunity for indigenous banks to fill the gap.
This ideology goes back to the days of former president Robert Mugabe, when there was diplomatic attrition between Harare and London. Most of the narratives that arose during that period have remained in people’s psyche.
It resonates with the Pan-African sentiment. It, however, ignores the fact that in as much as Standard Chartered is a British founded bank, it is also an international financial institution with vast experience and capacity to link marginalised emerging markets to world financial systems.
In Zimbabwe, the bank first came in 1892 and was operating in a bell tent in Bulawayo. Today though headquartered in the capital city, Harare, in Bulawayo it occupies the iconic and landmark Standard Chartered building at the intersection of Fife Street and 8th Avenue, diagonally adjacent to the equally magnificent Large City Hall.
It would not be wild to speculate that Standard Chartered was in some capacity involved in its construction, completed in 1895.
There is a lot of history attached to the bank. It is woven into the fabric that makes the banner that identifies Zimbabwe.
At one point, Zimbabwe was said to be a ‘breadbasket’ of the region.
Zimbabweans of all ethnicities understand and embrace farming. It is a culture that was developed over decades and Standard Chartered was there to finance that revolution. Huge investment was made into the agriculture sector over the colonial decades. The bank was an important financier.
Concern has been raised that Standard Chartered had become irrelevant to the present day Zimbabwean economy as their funding and loans portfolio had dwindled.
For a financial institution with international shareholding, they could not continue to finance the agriculture sector because it has become famous for politically driven programmes with little transparency and accountability.
Record high inflation and unstable microeconomic fundamentals made the business of lending risky.
Nevertheless, Stanchart remained committed to staying in their oldest market in Africa and even put up a statement that said “here to stay” on their promotional materials.
Standard Chartered Bank Zimbabwe has won a number of awards including,
- Bank of the year 2012 and 2013
- Best bank in Zimbabwe
- Lifetime Investor- Financial sector
- 1st runner up, investor of the year- Financial sector
The other group in the debate has not kept their views a secret on how the government has messed up the financial services sector, saying the planned move by Standard Chartered to exit Zimbabwe was inevitable.
To further ignite the debate among Zimbabweans, Standard Chartered is reported to have commissioned a new headquarters Lusaka, Zambia.
Standard Chartered is not the first international banking brand to leave Zimbabwe. In 2017, Barclays Bank left citing a strategic plan to focus on the United States and UK markets.
The closure of businesses in any country should be a concern to the government as that can be interpreted as an unconducive business environment.
Even if an argument is made that others in similar operations are doing fine, the departing business is letting you know that the effort needed to stay is no longer worth it. Some of these businesses have stayed in warzones, so their commitment to profit is unquestionable.
Standard Chartered has stayed in Zimbabwe through very tough times.
Economic chaos since the late 1990s saw the bank scale down its widespread branch network and agencies to only a few left in the prime big town locations.
A workforce that ran into thousands of people was reduced to only about a hundred. This was clearly a result of a hostile operating environment and declining profitability.
The hostile operating environment has persisted. Currency failures are at the centre of it all.
The international fast food giant Kentucky Fried Chicken (KFC) recently closed its Victoria Falls outlet citing low business.
True to reputation, the denialist mentality rose up and the local franchise management was labeled with all sorts of inaptitude adjectives.
On social media, a number of reasons were debated. The popular view questioned why a competitor brand, Chicken Inn of the Innscor Group was thriving in the same town.
It came down to pricing, among some, rather than lame arguments from the peculiar palate of Victoria Falls residents, unsavoury KFC flavour mix and tourists not being fond of fast food.
The truth of the matter is that businesses that can manipulate the currency crisis in their accounting matrix, legally or otherwise will thrive in Zimbabwe.
The foreign currency and exchange rate adaptation skill is an industry on its own capable of yielding healthy profits. Organisations that stick to international accounting best practices will always find it difficult to compete.
Recently,President Emerson Mnangagwa warned large businesses that are pushing up the exchange rate and specifically mentioned Innscor as the alleged leading culprit.
The news that Standard Chartered is planning to leave a territory that has their oldest footprint on the continent is sad and regrettable.
Colonial history is part of our legacy as Zimbabweans. We have a duty to take whatever little good that came out of it, preserve it and make sure it becomes an asset for future generations.
What happened in South Africa is one way of doing it, where Standard Bank (Chartered) domesticated its asset base to form one of the now famous big four banks with significant local share ownership. This did not come about because the bank’s profitability was in decline or being squeezed out to accommodate the indigenous.
It was a growth trajectory that needed weaning from the parent structure.
They have since penetrated the regional market, including Zimbabwe as Stanbic Bank.
The authorities in the Zimbabwe government must do everything possible to retain established global brands, especially those that were there at the building of the modern Zimbabwe economy.
It will go a long way in reversing the negative geopolitical sentiment and high business risk profile that has become associated with the country.
The rebuilding of Zimbabwe needs a positive international perception and reputable international businesses, such as Stanchart, are the best ambassadors to carry that message and image.
- Tshuma is an entrepreneur and social commentator from Bulawayo. A former retail banking professional. Twitter @TaisaPT