Zimbabwe excluded from Barclays Africa operations merger

Date:

Facebook10
X (Twitter)210
LinkedIn10
Share
10
Follow by Email10
Copy link

ZIMBABWE’s indigenisation programme has been singled out as the major reason for the exclusion of Barclays’ Zimbabwean unit from the merger of the group’s African operations with those of Absa Group.
The deal is worth US$2,1 billion.

Zimbabwe’s empowerment law compels foreign-owned companies, including banks, to turn over their majority shareholdings to black indigenous people.

Youth Development, Indigenisation and Empowerment Minister Saviour Kasukuwere has been on the warpath with the country’s four foreign-owned banks — Barclays Zimbabwe, Nedbank’s MBCA Bank, Standard Bank’s Stanbic and Standard Chartered.

Barclays and Absa Group, one of South Africa’s top four banks, agreed to combine their Africa operations in a US$2,1 billion deal that would create the continent’s largest retail bank by branch network and customers.

The deal entails Barclays combining the operations of Absa, whose business is predominantly based in South Africa, with its businesses in Botswana, Ghana, Kenya, Mauritius, Seychelles, Tanzania, Uganda and Zambia.
Apart from Barclays’ operations in Zimbabwe, Egypt does not form part of the transaction. Analysts have suggested that Egypt has been omitted due to domestic political problems related to the transition.

Analysts who spoke to BDlive, an SA business news online, have said they were concerned about the exclusion of Zimbabwe in the deal. They said the move would hurt recovery prospects in the volatile banking sector.

Economist Dr Eric Bloch, a senior partner at H&E Bloch, 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 and empowerment programme.

“All this showcases the level of anxiety among investors,” said Dr Bloch. “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.”

Zimbabwe National Chamber of Commerce chief economist Mr Kipson Gundani said: “The specifics as to why Zimbabwe was avoided could differ, but this is typical of the way investment has been flowing into the country. The indigenisation programme has generated high risk in the country, which is either real or imagined.”

But Barclays Zimbabwe marketing and corporate affairs head Mr Dennis Mambure downplayed fears that the local banking unit had become an “outcast” as a result of the indigenisation programme.He said its contribution to Barclays was significant and would not be affected by developments in other operations.

Robert Mugabe is responsible for Zimbabwe's woes
Robert Mugabe is responsible for Zimbabwe's woes

When Barclays and Absa finalise the merger, Barclays Zimbabwe will be managed under the One Africa Structure, as the merger kicks off in the first half of this year.

Barclays, which already owns a majority stake in Absa, will raise its interest to 62,3 percent from 55,5 percent and the group will be renamed Barclays Africa Group to reflect the enlarged portfolio and pan-African focus of the business. — BDlive.

Facebook10
X (Twitter)210
LinkedIn10
Share
10
Follow by Email10
Copy link

3 COMMENTS

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Share post:

Subscribe

spot_imgspot_img

Popular

More like this
Related

End Police Brutality: WALPE

HARARE - The Women’s Academy for Leadership and Political...

CSOs Demand Release of Detained Female Activists

By Rumbidzai Mutomba HARARE- Civil Society Organizations (CSOs) say they...

Obituary: Lucy Yasini: A symbol of journalistic resistance

Opinion By Nigel Nyamutumbu The only weapon Lucy Yasini carried...

79 CCC activists arrested while gathered at Jameson Timba’s residence

HARARE- Amidst the aftermath of brutal mistreatment from the...