via Nieeb to indigenise banks – DailyNews Live by Kudzai Chawafambira 9 FEBRUARY 2014
The National Indigenisation and Economic Empowerment Board (Nieeb) — a government body created to implement the indigenisation programme — says it is pursuing the indigenisation of foreign-owned banks despite the inadvertent dangers that could befall Zimbabwe’s battered economy.
This comes as the non-constituency Senator representing people living with disabilities, Nyamayabo Mashavakure asked Nieeb on how it was going to implement indigenisation plans on foreign-owned financial institutions at a time when depositors’ confidence in the banking system has been severely compromised while the liquidity crunch bites.
“What exactly are you indigenising? Is it the depositors’ money or other things that do not involve depositors’ money? You have to explain and extend it to insurance companies and other financial sector services whether our contributions are indigenised as well,” he said during Nieeb’s oral evidence presentation to the Parliament’s Indigenisation and Economic Empowerment committee last Thursday.
In response, Nieeb chief executive Wilson Gwatiringa said indigenisation for all businesses entails re-arranging the shareholding structure of the business.
“The re-arrangement entails the sell and purchase of shares. It does not cascade down in banks’ depositors funds. No one touches that or operating assets.”
“Its (indigenising banks) to do with shareholding at the top where for example, a consortium of indigenous Zimbabweans may go and buy a stake in Standard Chartered Bank and pay for the shares.
“The consortium will stay as shareholders and have rights and obligations,” he said.
Despite repeated warnings that indigenising the foreign-owned institutions could be disastrous to the sensitive financial sector, Nieeb remains adamant.
Market watchers note that even the recent Monetary Policy Statement (MPS) presented by acting Reserve Bank of Zimbabwe (RBZ) governor Charity Dhliwayo did not attempt to address such a pertinent issue which is still a bone of contention.
“The monetary policy statement certainly and intentionally overlooked the issue of indigenisation because they are aware that it can’t be an option at this hour.
“Zimbabwe is a dry market at the moment which cannot have the luxury of demanding 51 percent of a rat when they know it is time to build an elephant,” said leading economist Takunda Mugaga.