Sources said the Financial Services Sectoral Committee recommended that foreign banks would be asked to sell 40 percent of equity to Zimbabweans instead of 51 as earlier targeted by the Indigenization and Economic Empowerment Act
A committee within Zimbabwe's Ministry of Indigenization has recommended foreign-owned banks be required to sell 40 percent of their shares to indigenous black Zimbabweans. Sources told VOA that the Financial Services Sectoral Committee submitted its advice to the Indigenization Ministry late last week.
The sources said the committee believes that foreign banks can only part with 40 percent of equity instead of 51 percent as earlier targeted by the Indigenization and Economic Empowerment Act. It recommended that the process begin next year with the transfer of least 20 percent of their equity to black Zimbabweans.
The banks would then sell another 20 percent at a rate of 5 percent over the next four years.
Some economists have warned that compulsory indigenization of the financial sector could derail the recovery of the banking sector which has been hit hard by liquidity constraints under the country's mixed hard currency regime.
Bulawayo-based economist Eric Bloch said the committee’s recommendations will be hard to implement. “No foreign bank is prepared to capitalize a (subsidiary) bank where they don’t have a controlling interest,” he said.
But economic commentator Bekithemba Mhlanga said banks should take the lead in the indigenization program before their assets are seized by government.