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Zimbabwe to seize foreign banks, miners
Bad news for banks in Zimbabwe. But then, everything in Zimbabwe seems pretty horrendous for everyone involved.
Reuters reports that Zimbabwe will transfer control of all companies, including foreign owned banks, to locals if a planned empowerment bill is passed. Foreign banks with a presence in Zimbabwe include Barclays, Standard Chartered and South Africa’s Standard Bank.
“The bill refers to both public and private companies and yes, this includes mining companies and banks, which will be impacted like everyone else,” Minister of State for Indigenisation and Empowerment, Paul Mangwana told Reuters.
Barclays shares were down 1.3 per cent in morning trade in London, while Standard Chartered fell 0.36 per cent (although the Barclays move also reflected developments in the ABN Amro bid battle).
Barclays has done business in the southern African nation since 1912 and has more than 1,000 employees in the country, according to a DK research note from earlier this year.
The Zimbabwe government has also ordered that prices of basic goods and services be cut in half to help Zimbabweans battling the world’s highest inflation rate, reports Reuters. Last week, the US ambassador further ingratiated himself with the regime in Zimbabwe by forecasting the country’s inflation will hit an eye-watering 1.5m per cent by the end of 2007. Outgoing envoy Christopher Dell said that Robert Mugabe’s government “is now committing regime change on itself,” noting that prices are being increased twice each day.
For the banks, this has lead to complaints that the maximum cash withdrawals allowed for individuals are set too low, according to a story on AllAfrica.com. With withdrawals pegged at ZIM$1.5m, after the last review in April, individuals complain that they can’t cover their basic daily requirements.
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