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Zimbabwe Gov't Sells Off Struggling Bank to ZANU-PF Minister

Zimbabwe's Finance Minister Tendai Biti says the government has granted Mines Minister Obert Mpofu a license to run the struggling state-controlled Zimbabwe Allied Banking Group.

Biti told reporters in Washington that Mpofu is expected to start operating the bank as soon as all the payments are made to the government.

The bank had been struggling to raise the minimum $12.5 million capitalization required by the Reserve Bank of Zimbabwe.

ZABG, reserve bank officials and the board of the central bank confirmed that Mpofu has bought the commercial bank for $10 million. Minister Mpofu declined to comment.

Biti said Zimbabweans willing to venture into the banking sector should approach his ministry.

But economist John Robertson immediately questioned Mpofu’s source of funds and his ability to run the bank.

“People venturing into the banking sector must be fit and proper and in this case since the ZABG buyer is a government minister, it raises a lot of questions,” said Robertson.

Zimbabwe has 23 commercial banks with at least three of them owned by foreign companies.

According to the Zimbabwe Banking Act, individuals are expected to have a 25 percent shareholding in such banks.