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Zimbabwe: Foreign owned banks given a year to cede half their business to locals

Written by: Sapa
Published: Tuesday, July 3, 2012

Zimbabwe’s leaders have given a year’s ultimatum to foreign-owned banks and other firms to cede a 51 percent stake to local black people in compliance with empowerment laws, a government notice said.

A notice in the government gazette, dating from Friday but made public on Tuesday, gave one year as a “maximum period a business may continue to operate before it attains the minimum indigenisation and empowerment quota.”

Zimbabwe enacted in 2007 a law that compels all foreign-owned companies to hand over a majority stake of 51 percent to local blacks.

The law has led mining firms including the country’s biggest platinum mine Zimplats, which is a subsidiary of South Africa’s Impala, to submit their schedules to cede majority shares to locals.

Thelatest notice has widened the targeted sectors to include banks, hotels, education institutions and telecommunications firms.

Britain’s Standard Chartered Bank and Barclays Bank are among the major foreign banks with operations in this former British colony.

Last year, Indigenisation Minister Saviour Kasukuwere said foreign banks had shown “disrespect” of the laws by failing to comply.

But Finance Minister Tendai Biti and central bank governor Gideon Gono are opposed to the laws affecting banks, saying the move would hurt the economy.

President Robert Mugabe, who spearheaded the seizures of white-owned land in 2000, a policy that severely hurt the once vibrant agricultural sector, has threatened to take over foreign firms if they fail to meet the regulations.