Africa (Business)

Ex-Barclays chief aims to lure investors back to Zim

AFP

A banking mogul has promised to help return investors spooked by Zimbabwe's asset seizures and local-ownership laws, says minister Patrick Chinamasa.

Former Barclays chief Bob Diamond. (Reuters)

Former Barclays chief Bob Diamond will help Zimbabwe tap much-needed international investment through a €150-million external bond, Finance Minister Patrick Chinamasa said on Wednesday.

Chinamasa said the banking mogul – who left Barclays under a cloud of scandal in 2012 – promised to help lure back investors spooked by asset seizures and politicised local-ownership laws.

"They promised me that they are going to organise issuance of a bond, a European bond of up to €150-million [$265-million]," Chinamasa said in Harare.

Diamond's Africa-focused investment vehicle Atlas Mara recently paid $265-million for a 50% stake in regional banking group BancABC, its first acquisition on the continent.

BancABC has operations in Botswana, Tanzania, Mozambique, Zambia and Zimbabwe. Diamond's investment in its Zimbabwe operations is expected to include $40-million for shareholders and $40-million towards operations in Zimbabwe.

Diamond resigned as Barclay's chief executive after the bank was found guilty of manipulating a key inter-bank interest rate.

Safe bet
"We have many ideas and many thoughts and we are very anxious to get going," Diamond said.

"We feel that the combination of Atlas Mara and BankABC will be ... a significant benefit for jobs and economic growth."

Chinamasa on Wednesday sought to assure Diamond – and the world – he had made a safe bet.

"We welcome foreign direct investment here and I want to assure you that we are a safe destination," he said.

Under Zimbabwe's indigenisation law, foreign firms have been forced to sell majority shareholding to local partners.

The law has sent shivers down the spines of foreign investors in the country and scared away those outside at a time the economy is crying for capital injection.

Cash crunch
Chinamasa said Atlas Mara was "free to choose local partners and also to decide and negotiate a price".

"They will submit their plan in due course to the ministry of indigenisation ... What we are witnessing today is part of the effort to alleviate our liquidity challenges."

Zimbabwe's banking sector has been facing a cash crunch, which is has hampered economic growth.

In December, riots broke out at two banks, which ran out of cash for depositors. – AFP

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