Africa (Business)

Zim central bank eases government's takeover talk

AFP

Zimbabwe's central bank chief has dismissed government threats to seize foreign-owned banks that fail to meet black ownership requirements.

A close ally of President Robert Mugabe dismissed threats that banks, including Standard Chartered, face imminent closure for failing to comply with the country's indigenisation laws. (AFP)

Gideon Gono – a close ally of President Robert Mugabe – on Wednesday dismissed threats that banks, including Standard Chartered, face imminent closure for failing to comply with the country's indigenisation laws.

"Destabilising a large bank such as Standard Chartered has serious systemic consequences that can lead to unintended results which are opposite to those that we would have hoped to achieve," Gono said in a statement.

His comments come after the National Indigenisation and Economic Empowerment Board warned over the weekend, that the British-owned bank was in line for takeover.

Gono said Standard Chartered and its clients should ignore that threat.

"Standard Chartered Bank clients are advised to go about their business in a sober and normal manner because nothing of the sort which was announced by the board officials is of any legal or practical effect," Gono said.

He added that only the central bank had the authority to issue and withdraw banking licenses from players in the Zimbabwean financial sector.

Seizure of majority stakes
Last year, Gono warned that the country's fragile economy could grind to a halt if the government rushed its planned seizure of majority stakes in foreign-owned banks.

Gono's latest comments appear to put him at odds with another of Mugabe's close allies, Saviour Kasukuwere, the minister charged with implementing Mugabe's 2007 indigenisation law.

The law forces all foreign-owned companies to hand over a majority stake of 51% to local people. Some mining companies have submitted compliance plans to the state.

In January Kasukuwere said banks would be the next focus of compliance, urging Barclays, Standard Chartered Bank and Stanbic to move in that direction.

African conglomerate, Ecobank which has operations in the southern African nation, has complied with the regulations.

Mugabe's partner in the shaky power-share government Prime Minister Morgan Tsvangirai is opposed to the regulation, saying it will hurt the country's ailing economy. – AFP

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