Zimpapers Logo

Mr Guvamatanga

Business Reporters
Government should implement significant and decisive interventions to enhance investor confidence to promote local production as a way of reducing the import bill, Barclays Bank Zimbabwe managing director Mr George Guvamatanga said.Presenting a trading update yesterday at the company’s annual general meeting Mr Guvamatanga said the country’s economy was not facing liquidity challenges but there was need for support of local production to curtail the influx of imports.

He said the country is importing unnecessary commodities which if produced locally could generate employment as well as enhance circulation of liquidity locally.

“The economy requires significant, decisive interventions to enhance investor confidence to promote local production, promote exports and maintain the import bill.

“I have often times argued that maybe the economy is not really facing liquidity challenges because an economy facing liquidity challenges would not import $2 million worth of apples in a single month or $700 000 worth of mineral water and other beauty products,” said Mr Guvamatanga.

“I think it makes a huge difference if those imported products were produced locally and the question that we should be asking ourselves is how many people could have been employed.”

He said the issues that are affecting the economy are productive issues and this provides the need for implementation of policies that promote productivity.

“The economy has the money but it simply comes and goes because we are importing. Further, we do not have access to lines of credit and that means that we are paying upfront before the goods come into the country. So as soon as the money hits our account it goes out again to import and employment simply being created elsewhere,” said Mr Guvamatanga.

He said Barclays had seen a high risk credit environment with non-performing loans at 15,9 percent and they are also anticipating slower growth in deposits under the prevailing economic conditions.

On performance, the bank’s total income for the period to April 2015 was $14 million showing a year-on-year growth but lagging behind internal targets.

Interest income for the period reflected growth in both corporate and retail loans while year-to-date profit was slightly above budget.

Mr Guvamatanga said non-funded income growth of one percent is subdued and the bank will continue efforts to embrace and integrate its e-channels.

Costs for the year-to-date have been controlled within budget and 2015 operating costs include some specific property and IT maintenance and upgrade costs.

“We will build on the things that we started in 2014 but still continue with our safe banking model. We would like to grow a quality loan book, increase participation in the key sectors of the economy and continue to widen tentacles in the market.

“We will continue to leverage on the Barclay’s group capabilities and also take some of our customers offshore,” said Mr Guvamatanga.

He said the bank has already provided local customers with lines of credit in excess of $140 million.