6 June 2017

Zimbabwe: Sale of Barclays Exposes Indigenisation Hypocrisy - Zunde

The imminent acquisition of Barclays Bank Zimbabwe by a Malawian bank, First Merchant Bank as widely reported is both curious and depressing. Curious in that indigenisation has been a political mantra for many years, especially since the year 2000 yet there was no attempt to acquire this valuable asset. Depressing in that Barclays just like Standard Chartered Bank, for many years, were the epitome of banking in Rhodesia and later Zimbabwe.

The Malawian (FMB) bank that is taking over Barclays Zimbabwe's operations has been in the dock for dubious bank transactions in Malawi and Uganda amid accusations of failure to comply with the two countries' money laundering laws. Even the Zimbabwe Herald's business editor described the deal as one that 'raises eyebrows' because of poor corporate governance and malpractices in lending at FMB. Zimbabwe is an economy where politicians and their hangers on are known to have stashed billions of dollars off-shore. The country's president admitted that $15 billion dollars disappeared without trace. Is this development the great "lost and found"?

Under Barclays UK, Barclays Zimbabwe is known to have been conservative as it is likely that the UK standards would have influenced the bank's operations, systems and processes. The Zimbabwean division has had to withstand direct assaults from the government for not 'playing ball'. This takeover removes Barclays Zimbabwe's operations from UK standards to those of a bank whose record is nothing but dubious. The value of FMB is approximately half of that of Barclays Bank Zimbabwe. Is this a tale of "the mouse that swallowed the elephant"? There seems to be some chicanery of significant magnitude behind this deal.

The unusual silence from the 'indigenisation brigade' gives it away. That the Reserve Bank of Zimbabwe has remained mum on the deal suggests there is much more to the deal that what meets the eye. It suggests that there is another subplot behind what the public reads in the business press. Shenanigans of the deal are likely to be laid bare in the coming weeks as it is 'ratified' and the workers' legal challenge unfolds in public.

For decades, there has been new entrants into the banking industry but most of them crumbled before they went anywhere. At the time of hyperinflation of the late 90's through to 2008, some banks found it tough and closed shop including one owned by a government minister, "Overt" Mpofu and yet Barclays and Standard continued to offer professional services to Zimbabweans.

The two institutions were leading innovators in the world of technology which transformed banking as we used to know it. A credit card issued by Barclays Bank was well respected around the world. Undoubtedly, Barclays Bank Zimbabwe has a very large market share. This makes it both viable and attractive.

The big question is "Why did acquisition of Barclays Bank Zimbabwe fail to catch the attention of those who claim to be champions of indigenisation, including Mugabe's interesting nephew, Patrick Zhuwao"? Was this not a perfect opportunity to go for not only 51% but at least 68% ownership? Given the news of multi-millionaires in Zimbabwe who flash dollars like confetti, why was it not perfect sense to acquire Barclays majority shareholding at a paltry US$60 million? Is this not mere pocket money to some of our brothers and sisters with the right political or family connections?

Is it not a shame or at least a challenge when a Malawian bank buys Barclays Bank Zimbabwe while Zimbabweans watch without doing anything? Why didn't we invest in this decent business? And yet we have the guts to stand on roof tops and shout that Zimbabweans are the smartest people in Southern Africa, really?

Have we thought about the 1000 plus employees likely to be affected by this development? What is going to happen to them and their families? Is FMB bound by anything that stops it from sending home most of these Zimbabweans? Where will they go? Is this what we mean by creating 2.2 million jobs? Or is it a matter of creating one job at Air Zimbabwe and another in the Censorship Board then multiply those two by a factor of one million and we have achieved ZimAsset target? What a shame!

While ZUNDE strongly supports foreign direct investment (FDI), the FMB/Barclays deal is more of changing hands than anything. There is no new money being injected into the economy as a result of this transaction. Zimbabweans must have benefitted from this, only if their government was not duplicitous and with sound policies!

Instead of forming a new bank called EmpowerBank or whatever where Bona Mugabe curiously became a board member, was it not going to be easier and sensible to purchase a performing and existing bank such as Barclays and take advantage of the intellectual property and goodwill created over many years dating back to 1902? The deafening silence from indigenisation parrots, as said before, paints a gloomy picture.

No right thinking Zimbabwean supports indigenisation in its current shape and form which is nothing but extortion and manipulation. However, if the policy and its proponents have been exposed before, the sale of Barclays Bank Zimbabwe to a Malawian bank makes the argument for indegenisation nothing but a fallacious and stupid political rhetoric. They would rather invade than invest!

A perfect opportunity to empower Zimbabweans through a clean business transaction has just been lost - indigenisation hypocrisy!

Moses Chamboko is a pro-democracy activist and intern secretary general of Zimbabweans United for Democracy (ZUNDE)

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