9 May 2012

Zimbabwe: New Boss for BAZ

THE Bankers Association of Zimbabwe (BAZ) has elected George Guvamatanga, the managing director of Barclays Bank (Zimbabwe) Limited, as its new president. Guvamatanga succeeds FBC Holdings Group chief executive officer, John Mushay-avanhu, who has led BAZ for the past year.

Guvamatanga will be deputised by Agribank CEO, Sam Malaba. Mushayavanhu confir-med the new election outcome to The Financial Gazette's Companies & Markets on Tuesday. "The two have been elected BAZ president and vice respectively," Mushayavanhu said.

The Bankers Association of Zimbabwe was established in 1992 to provide a forum for the consideration of matters of policy and mutual interest concerning member banks. It comprises of banks registered and authorised to conduct banking services in Zimbabwe and provides information, research and operational support services primarily to the banking industry.

Recently, BAZ has had to defend banks against several allegations, among them criticism of high interest charges on borrowings which industry and commerce allege are extortionate and meant to support hefty packages for bank executives.

BAZ has also been put to the defense over the planned indigenisation of foreign-owned banks, which include Guvamatanga's Barclays whose parent is the UK-based Barclays Plc, Stanbic Bank which is owned by South Africa's Standard Bank Group, MBCA Bank which is owned by South Africa's Nedbank Group as well as multinational conglomerate, Old Mutual, and British-owned Standard Chartered Bank.

It would appear Guvamatanga's term would be the most interesting, if not more challenging one, given that Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere has escalated his campaign for the localisation of the four banks' shareholding.

Finance minister Tendai Biti has indicated that he is against indigenisation of the banks. He told investors at a Euromoney Zimbabwe Investment Conference recently that there was no need to indigenise the banking sector because a majority of the players were local.

Reserve Bank of Zimbabwe governor, Gideon Gono, has equally objected to the planned localisation of the foreign-owned banks, saying: "As long as I am the governor, I will protect the banking sector from moves that may cause unintended consequences because when the trouble starts people will look at the governor. And I have got enough experience about these troubles."

But Kasukuwere has countered this, arguing that the foreign-owned banks were not special and have to comply with the law.

"Like our law says, all (foreign-owned) institutions operating in Zimbabwe should have majority ownership belonging to our locals. This is not a Kasukuwere thing because there is a law (and) the issue is not about having US$25 million to buy into operating banks or to start your own; the issue is majority ownership must go to Zimbabweans," Kasukuwere said.

In its position paper on the issue, BAZ notes: "The architecture of the financial sector reveals that there are 28 financial institutions in Zimbabwe, 15 of which are commercial banks. Of these, four are international banks which translates to 15 percent of the financial institutions. In light of the laws under discussion, only 15 percent may be said to have foreign ownership but even then, indigenous Zimbabweans are already the ultimate beneficiaries, to all intents and purposes through the employees, management, pensioners and in some cases the general public which participates on the Zimbabwe Stock Exchange."

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