Leave Foreign Banks Alone – Zim Reserve Bank Governor

“Indigenising those banks will make life difficult for people. The maximum shares for those banks are $US40 to $US50 million. It is folly for someone to think that they can share amongst themselves that money after taking over the banks,” said Gono who was addressing a breakfast meeting on Thursday of businesspeople here.

Gono urged indigenous Zimbabweans who are interested in the banking sector to start their own banks.

“If you have got an appetite with banking, please come to us with your whole family or totem. We will issue you with the licence to start your own bank provided you have the initial capital of $US 12,5 million. Why should people want to a share in a bank for nothing?” asked the governor.

The Minister of Indigenisation and Youth Development Saviour Kasukuwere has been fighting with the country‘s oldest and biggest foreign owned banks, Standard Charted bank and Barclays Bank over the banks’’ indigenisation. Zimbabwe has passed legislation that forces companies to cede 51 percent of their shares to black locals.

Kasukuwere has threatened to forcibly take over the banks if they fail to adhere to the indigenisation requirements.

At the same occasion, Gono called for street protests against Finance Minister, Tendai Biti and Industry and Commerce Minister, Welshman Ncube for failure to release the US$40million meant for the resuscitation of Bulawayo industries.

Government launched the $40 million Distressed Industries and Marginalised Areas Fund (DIMAF) in October last year to revive Bulawayo ailing firms.

“Businesses and ordinary people in Bulawayo should demonstrate against Biti and Ncube for failing to disburse the DIMAF to struggling companies,” said Gono. “It is shocking that since October the fund is still lying idle and companies are not benefiting.”

“I am prepared to lead the demonstrations against Biti and Ncube with a placard written: Where is DIMAF?” “The question is: where is the US$40million and who is supposed to benefit from it if companies are not accessing funding. The funds should be disbursed now.”

Business associations raised complaints over stringent conditions set by the Central African Building Society, CABS, saying the disbursing entity is for example asking for unrealistic collateral of over $150 000 yet some of the firms are applying for $100 000.

The Association for Business in Zimbabwe (ABUZ), the Zimbabwe National Chamber of Commerce (ZNCC) and the Confederations of Zimbabwe Industries (CZI) added that CABS is also requesting companies to produce audited financial results for the past three years which is difficult for financially distressed companies that had nearly collapsed.

“Some of the companies have not had their accounts audited since they went into financial distress, as is being required by CABS yet these are the very same firms that need urgent capital injection but who unfortunately cannot meet the requirements,” said a business executive.

About 87 companies shut down in Bulawayo last year alone, rendering 20 000 jobless.