'Barclays snub has nothing to do with indigenisation'

HARARE - Indigenisation minister Saviour Kasukuwere says the snub of Barclays’ Zimbabwe unit in the merger of the group’s African operations with those of Absa Group has nothing to do with empowerment laws, but the institution’s internal affairs.

This comes as analysts say the omission of the Zimbabwe unit from the $2,1 billion deal is a clear manifestation of the consequences of the indigenisation programme.

Kasukuwere yesterday dismissed the allegations.

“You know what you are asking me is nonsense, we are only there to provide empowerment to indigenous Zimbabweans, and couldn’t care less for what happens to Barclays. As far as I am concerned, these allegations are b******t,” Kasukuwere told businessdaily.

Under Kasukuwere’s controversial indigenisation policy, foreign-owned banks, including Barclays, are not exempted from ceding at least 51 percent stakes to locals.

Basically, the law requires all foreign-owned firms — despite nature of operations — with an asset base of $500 000 plus to comply.

International and local analysts have fingered the policy as the underlying reason for the exclusion of Barclays’ Zimbabwe unit from the merger.

The merger is expected to be completed by June this year and will result in Barclays Bank increasing its stake in Absa from 55,5 per cent to 62,3 percent.

Absa Africa will be renamed Barclays Africa.

Observers have expressed concern that the move would hurt recovery prospects in the already volatile Zimbabwean banking sector.

Eric Bloch, a local economist said the exclusion of Barclays Zimbabwe exposed the “fear and wait-and-see approach” being adopted by foreign investors, as a result of the indigenisation programme.

“All this showcases the level of anxiety among investors. They don’t have the assurance that their investments are safe in Zimbabwe and as a result the country is losing out on billion-dollar transactions,” Bloch said.

Takunda Mugaga, an independent economist, also said the implementation of the policy was clearly repulsive to foreign investors.

“Investors need assurance that they are not throwing money down the drain, and with the implementation of the policy and the recent intervention of the army in the policy; who can blame investors for the wait and see attitude?” he questioned.

With Zimbabwe excluded, the deal involves Barclays’ units in Botswana, Ghana, Kenya, Mauritius, Seychelles, Tanzania, Uganda and Zambia.

Recently, Business Council Zimbabwe president David Govere said the international community viewed Zimbabwe as a bad investment destination because of its long history for disputed elections and bad governance.

“Since international capital is one of the most timid resources, it follows certain conditions chief among them a good image. It gives investors security in the investment ground,” Govere said.

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