Barclays urges policy reforms

HARARE - Barclays Bank of Zimbabwe (Barclays) says government must implement policy reforms to revive the country’s moribund economy.

Its managing director, George Guvamatanga, said Zimbabwe’s economy “requires significant decisive interventions to enhance investor confidence, promote local production and contain the imports bill”.

“The economic landscape demands a responsive and scalable business approach,” he told an Imara Edwards (Imara) investor conference recently, adding that there should be clarity on key policies that local and foreign investors consider critical.

This comes as Zimbabwe’s economy, which rebounded between 2010 and 2012 after a decade-long depression, is slowly sliding into recession due to poor economic policies among other challenges.

Economic analysts say despite the country holding vast mineral deposits, unattractive policies continue to deter investors — resulting in the contraction of the economy.

Last week, the World Bank predicted that Zimbabwe’s economy would expand by a mere two percent this year, against government’s 6,4 percent forecast.

Despite President Robert Mugabe ruling out a one-size-fits-all indigenisation approach, saying only companies utilising the country’s natural resources will be required to immediately turn over majority stakes to indigenous Zimbabweans, investors remain sceptical.

Thedias Kasaira, Imara’s managing director, said “most investors want to see it (amendments to the indigenisation law) in black and white rather than just talks”.

“Our position is that as long as there is no clarity on the law people will continue to doubt,” he said, adding “but we believe there is nothing really wrong with it as long as it is applied to all in the same way.”

Economic experts have, however, called on the government to follow up on its softened tone with legislation that would provide assurance to foreign investors.

Eric Bloch, a senior partner at H&E Bloch Consultancy, said a government with enough willpower could change the indigenisation law.

“The trouble is that our government knows how to work at three speeds and that is slow, very slow and stop,” said Bloch.

“They can change the indigenisation law fairly rapidly, as some of the sections do not need Parliament’s approval.

“Because of the urgent economic issues that the government is faced with, it can prioritise this and push through for changes,” he said.

Comments (5)

Indeed all engrossing and gracious ways should be found for this noble cause as Mr Bloch insinuates. Matters to ponder should holistically address other contentions beyond the cited laws. Thumbs up for the moderation done so far and I earnestly hope there is still room to do more.

T. S. Njikizana - 23 June 2014

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