HARARE - Reserve Bank Governor Gideon Gono still stands by his 2007 statement on indigenisation saying the there was need to strike a balance between the objectives of indigenisation and the need to attract investment, a development which could set him for a collision course with Zanu PF officials.

He said a few greedy well connected officials were making the most noise on indigenisation to grab so that they grab the wealth on their own.

Gono has in the past clashed with the Minister of Indigenisation Saviour Kasukuwere while several Zanu PF hawks, who are eying to grab companies through the controversial indigenisation law, have also been at odds with the central bank governor over the issue.

The central bank maintains that senior government officials and well connected individuals were already positioning themselves to muscle into certain mining, manufacturing, financial and other entities that are performing well and contributing to foreign currency inflows of the country.

Speaking to the Daily News yesterday Gono said he still stands by “every word” of what he said in the statement but reiterated that since the law had already been approved by Parliament and ascended to by President Robert Mugabe, the law had to be followed.

“The law must be complied with but my advice of 2007 still stands. Our advice is still valid. Our advice on the banking sector remains that those who want banks must come to us and we give them banking licences,” said Gono.

This comes amid reports that  Zimbabwe is losing huge sums of money with investors transferring millions of dollars from the country as they are not sure if their investments are safe.

Gono said while the policy is “noble” as it is aimed to empower the majority of Zimbabweans, it is being done in the wrong way and therefore benefitting a small clique who wanted to amass wealth  in a “starkly greedy but irresponsible manner.”

An advisor to government on economic policies, Gono said: “ We should ensure that the empowerment drive was not derailed by a few well-connected cliques, some who are already making the most noise in ostensible support of this initiative, who would want to amass wealth to themselves in a starkly greedy but irresponsible manner whilst the intended majority remain with nothing as happened in the past with respect to government empowerment schemes such as the land reform programme.”

The monetary policy document of the October 1, 2007 states that indigenisation should be implemented in a manner which would enable the investors to plough back while at the same time getting a return on their investment.

“Specifically, the local foreign-ownership thresholds must be taken and implemented as down the horizon targets as opposed to excitable but impractical overnight conversion events.”

He recommended that for organisations worth over $500 million, the degree of indigenisation should be 20 percent over a period of five years and 45 percent from the sixth to the 10th year and that full compliance of the 51 percent could only be possible after 15 years.

This approach he said,  would not only  promote fair valuation and reasonable return of initial investment outlays but would go a long way in ensuring a smooth transition from old to new shareholders.

“Where foreign investors bring in clear long-term benefits to the country, a reasonable degree of flexibility ought to be exercised in allowing investors to hold at least in the initial stages, majority shareholding so as to deliberately accord them escalated dividends that enable them to plough back their initial investments outlays.”

“Beyond pre-agreed time thresholds, foreign shareholding can then be diluted on a gradual win-win basis, in line with the otherwise noble objectives of indigenisation and empowerment.

Turning to the issue of foreign-owned banks Gono said: “Of particular concern to us as monetary authorities would be attempts to forcibly push the envelop of indigenisation into the delicate area of banking and finance.

“To this end, we call upon those with interests in the financial sector to approach the central bank with their applications for new banking licences. Generally, we believe that 27 years down the road, there should be no free lunches,” said Gono in the 2007 statement which he said is still valid advice.

Government, however insists that indigenisation should  take place at 51 percent across the board but the flip side is that at this rate only a few will benefit from the national programme.