Harare — Reserve Bank of Zimbabwe (RBZ) governor Dr John Mangudya said he is satisfied with the level of compliance to the indigenisation laws of the country in the banking sector, and focus should be on increasing its role in economic development and empowerment. Foreign banks operating in Zimbabwe include Barclays Plc, Standard Chartered Plc, Standard Bank Group Ltd, Ecobank and Banc ABC.Cabinet last week directed that with effect from April 1, 2016, all line ministries should issue orders to the licensing authority to cancel licenses of businesses that fail to submit their indigenisation plans by March 31.
Some foreign firms had been reluctant to comply with the law which requires that locals control at least 51 percent of a foreign business valued at over $500 000.
Dr Mangudya told New Ziana that most foreign owned banks had their indigenisation plans approved, but did not reveal the number of banks which were compliant.
He cited Banc ABC, which he said was now just working on implementing what was approved in its indigenisation plan.
“Banks are complying and we are satisfied with the level of compliance,” he said.
Dr Mangudya said for the economic empowerment component of the indigenisation agenda to succeed, there was need to prop up banks to increase funding in the economy.
“We want to make sure that banks start to provide more money to agriculture, to women and many other empowerment projects.”
He said compliance in the sector was also being guided by simplified indigenisation guidelines that the Government introduced in January this year.
Under the new indigenisation framework, introduced in January, companies in the manufacturing sector have up to four years to ensure compliance while the remainder, including financial services, tourism, engineering and construction, energy and telecommunications, have one year.
A total of 16 sectors are reserved for locals, while all Government departments, statutory bodies and local authorities are now required to procure 50 percent of their goods from local businesses.
Besides disposal of shares, companies can comply by implementing community development projects that can earn them “empowerment credits.”
All indigenisation applications will be submitted through the Zimbabwe Investment Authority for processing. — New Ziana.