Category archives for: Banking

Gambia: Standard Chartered CEO Adenowo Meets President Barrow

The President of the Republic of The Gambia, His Excellency Adama Barrow on Monday 24th April 2017 received Mr. Olukorede Adenowo, the new Chief Executive Officer (CEO) of Standard Chartered Bank, The Gambia.

His Excellency President Barrow welcomed Mr. Adenowo to The Gambia and thanked him for paying a courtesy call to the Office of The President within the first week of taking office. “Standard Chartered is a household name in The Gambia and has been around for over a century. The Bank should continue playing the important role of encouraging good banking practices in order to rebuild the new Gambia”, President Barrow said. He assured the Bank to prioritise the security of The Gambia to foster investment.

The incoming CEO, Mr. Adenowo congratulated the President on his recent elections and pledged the bank’s support in complementing the Government’s efforts in the development of the country. He thanked the President for creating a conducive environment for investment in The Gambia and thanked him for granting him an audience for the courtesy call. Mr. Adenowo said that “Standard Chartered’s is here for good and will continue being a responsible investor in the country assisting in advisory, access to capital and support in the infrastructure investment plan. Standard Chartered Bank has more than 123 years experience in The Gambia and will help facilitate trade opportunities between Gambia and its trade partners because of its unshakeable belief in The Gambia’s future”.

He reaffirmed Standard Chartered’s support to ensure that the bank’s core business of banking supports sustainable growth. He committed to ensuring fair outcomes for our stakeholders and the bank’s unwavering support to the Government of The Gambia. The bank enables individuals to grow and protect their wealth. Help businesses to trade, transact, invest, and expand in addition to helping a variety of financial institutions with their banking needs.

About Olukorede Adenowo

Mr. K.O. Adenowo with 30 years post university experience joined Standard Chartered Bank in 1999, and was part of the founding team that helped start the Nigerian business. He has worked in various roles including Regional Head of Global Corporate Africa, Deputy Head of Origination and Client Coverage Nigeria, Head of Origination and Client Coverage, West Africa 4 and more lately Regional Head of Financial Institutions and Public Sector for West Africa.

In his most recent role as Regional Head of Financial Institutions and Public Sector for West and Central Africa, he provided strong leadership in building and managing key strategic FI relationships across West Africa for business success and growth in an increasingly stringent regulatory environment.

K.O. Adenowo is a Non-Executive Director of the Board of Standard Chartered Bank Sierra Leone and serves on the Board of a number of charities. He is a Fellow of the Institute of Chartered Accountants of Nigeria, has an MBA from the Lagos Business School (IESE) and graduated from the University of Ife, Ile-Ife Nigeria.

Gambia

Gambia’s Barrow Meets Sirleaf

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Mali: Ms. Soukeyna Kane New Country Director

Ms. Soukeyna Kane,World Bank’s Country Director for Mali, Guinea, Niger and Chad.

press release

BAMAKO, April 26, 2017 —Ms. Soukeyna Kane, a Senegalese national, is the new Country Director for Mali, Guinea, Niger and Chad. She will be based in Bamako, Mali.

Ms. Kane, joined the Bank in March 2003 as a Senior Financial Management Specialist and has held several positions in the Africa Region, Operations Policy and Country Services (OPCS) and Middle East and North Africa (MENA).

Prior to joining the World Bank, she was the Principal Internal Auditor at the African Development Bank. Her extensive experience in the private sector includes the position of Administrative and Financial Director in Assurances Generales Senegalaises (AGS), as well as manager and senior auditor with ERA Audit et Expertise, AEG Paris and Ernst & Young. Ms. Kane is a Certified Public Accountant and has a Master in Accounting and Finance. She graduated from Institut Commercial Supérieur in Paris.

Ms. Kane was most recently the Practice Manager, Governance – Europe and Central Asia (ECA) for the Bank.

In her new position, Soukeyna Kane’s top priorities will be to provide strategic leadership for formulating programs that support the World Bank’s twin goals: eradicate extreme poverty and improve shared prosperity in Mali, Guinea, Niger and Chad and the Sahel region more broadly; and maintain portfolio quality by working with internal and external partners for better results.

Ms. Kane’s appointment is effective May 1, 2017. She will be visiting Mali 1-5 May 2017 and meet with the national authorities.

Contacts:

In Bamako: Habibatou Gologo, +223 92 14 31 37, hgologo@worldbank.org

For more information on World Bank activities in Mali, please visit: http://www.worldbank.org/en/country/mali

For more information about the World Bank’s programs in Africa visit: www.worldbank.org/africa

For more information on IDA: http://ida.worldbank.org/

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Mali

New African Union Chief Puts Peace Back On the Agenda

The scene is not a familiar one at the African Union (AU): the AU Commission (AUC) chairperson, in shirtsleeves, walking… Read more »

Zimbabwe: Government Admits ‘Printing’ Money

By Phillimon Mhlanga

PRESIDENT Robert Mugabe’s embattled administration has for the first time admitted printing money in the form of a virtual currency through the Real Time Gross Settlement (RTGS), acknowledging this cannot be backed by United States dollar bank notes imported by local banks, the Financial Gazette’s Companies & Markets (C&M) can report.

Finance and Economic Development Minister, Patrick Chinamasa, made the disclosures in Parliament. He said: “Government funds its employees’ salary accounts through electronic transfers over the Real Time Gross Settlement platform. On the contrary, employees would want to obtain physical cash from the banks. This misalignment is the greatest cause of queues at banks for cash as both the Reserve Bank of Zimbabwe (RBZ) and banks would be required to withdraw foreign exchange from their nostro accounts to meet local cash demand.”

Nostro accounts are accounts held by local banks with offshore financial institutions. They are used predominantly to settle international obligations, including import of goods. Banks have used their nostro accounts to import US dollar bank notes but these have always been used to support real US dollar bank balances for local deposits.

Government had always been denying that it has been creating or printing its own money to pay wages and salaries for its strong workforce of more than 300 000. The salary bill is gobbling more than 90 percent of revenue, leaving very little for infrastructure development.

The printing of money through the RTGS platform can only be backed by local currency, rather than foreign currency which has to be earned through exports of other foreign currency receipts. It would therefore appear the introduction of bond notes, despite public protestations, was meant primarily to fund the virtual currency, which has been described by some analysts as phantom money.

The reason for government resorting to creation of money in the domestic economy has largely been its huge budget deficits, which it started incurring following the collapse of the inclusive government in 2013.

During the inclusive government, then finance minister, Tendai Biti, insisted that government would only spend what it collected in the form of revenue under his famous “we eat what we gather” policy.

He managed to keep government expenditure under check, despite protestations from colleagues, ensuring stability in the economy.

But since the collapse of the inclusive government, the budget deficit problem, which largely funded recurrent expenditure, emerged. In fact, the size of the civil service suddenly shot up, increasing the salary and wage bill.

Although Chinamasa has tried to curb this cost by reducing the size of the civil service through retrenchments, he has faced opposition from Cabinet colleagues.

Chinamasa has indicated that government employment costs are currently at over 93 percent of tax revenue. When government’s debt of over 40 percent of tax revenue is added to this cost, government expenditure far outstrips revenue.

“This shows that we are living beyond our means through borrowing from the market by way of Treasury Bills that translate into government overdraft at the Reserve Bank of Zimbabwe on maturity,” Chinamasa said.

There is indeed an increasing risk that the country may now be drifting towards an inflationary crisis.

Zimbabwe’s inflation was in deflation since October 2014, but since last year, especially after introduction of bond notes, there has been a significant increase in basic food prices.

Annual inflation rate went into positive territory for the first time in over two years in February this year, gaining 0,71 percentage points on the January 2017 rate of -0,7 percent to 0,6 percent.

It went up to 0,21 percent in March, sparking fears among economists of a return to the previous hyperinflationary period that saw inflation reaching a peak of 231 million percent in August 2008.

The International Monetary Fund (IMF) has projected that the country’s inflation is likely to hit three percent this year and 6,6 percent next year. Given the situation on the ground, this could be a generous assessment from the IMF because it could get worse.

Economists told C&M that the situation is likely to worsen because of the impending elections set for next year.

Prosper Chitambara, an economist with Labour and Economic Development Research Institute of Zimbabwe, said: “The economy is in a roller coaster. It’s in a crisis which will require bold structural reforms. Government knows what’s needed to be done but the will and commitment does not exist.”

He said there were foreign currency leakages because hard cash was going out of the country and not coming back.

“Businesses that are looking to receive money from outside the country are opening accounts outside the country because they have no confidence in government policies and the banking system. With elections coming up next year, we are going to see acceleration of leakages. Inflation, it’s a reflection of bond notes or it pushes inflation factors. In fact, there is a lot of temptation to print more bond notes outside the US$200 million threshold,” he said.

He was referring to the announced $200 million limit in bond notes by the central bank, whose basis is an alleged US$200 facility from the African Export and Import Bank to support exports.

The liquidity squeeze in the country has left many companies unable to pay foreign suppliers, driving many out of business.

According to the IMF, Zimbabwe’s economy is likely to grow by two percent this year.

In March this year, government reviewed Zimbabwe’s economic growth projection from 1,7 percent announced in the 2017 National Budget to 3,7 percent, on the back of a good agricultural season and firming metal prices.

An independent economist, Tinashe Masunda, said: “Zimbabwe has run out of foreign currency resulting in the country completely losing the ability to pay for imports. This means that productivity will continue to suffer as companies fail to access vital inputs because there’s no foreign currency to pay for them. As long as government continues to do things that discourage both local and foreign investment into the productive sector, the situation can only get worse.”

The country abandoned the Zimbabwean dollar in 2009 and adopted a multi-currency regime to escape hyperinflation.

But the foreign currency has been disappearing from the financial market, prompting the central bank to introduce bond notes last year. However, the bond notes appear to be disappearing from the banking system as well.

The severe cash crisis has resulted in banks limiting the amount of cash depositors can withdraw. Most banks have also suspended dispensing money through automated teller machines. In some cases, depositors spend days in bank queues but fail to access cash.

The situation is likely to persist until government urgently fixes the country’s economic fundamentals.

Chinamasa told Parliament that one of the reasons for the shortage of bank notes was that businesses were not banking cash. This, he said, has resulted in long queues for cash at banks.

“This indiscipline is counter-productive and cannot continue to be tolerated. Money is like blood, it needs to circulate for the economy to survive. Money should be circulating in order to deal with queues at banks,” said Chinamasa.

“To date, three traders have been hauled before the courts for not banking their sales proceeds in line with the laws of the country from as far back as June 2016. They have all pleaded guilty to the offence and they now await their sentences,” he said.

Chinamasa implored depositors to make use of plastic money. This, inevitably, would ensure that there is no pressure for the RBZ to print more bond notes to support cash it is creating through the RTGS.

He said: “The factors underpinning cash challenges are beyond banks. Banks find themselves in a difficult position where they are compelled to ration cash withdrawals in order to meet their customers’ demands. Banks have therefore continued to explore pragmatic measures to meet their customers’ demand for cash.

“Government, through the Reserve Bank of Zimbabwe, is advocating for the use of plastic money in order to ameliorate the mismatch or gap between electronic salary transfers and the demand for cash from banks. Embracing plastic money preserves foreign exchange in the nostro accounts for use for foreign payments whilst at the same time mitigating against non-banking of cash by traders.

Kenya: Dubai Islamic Bank Gets Nod to Operate in Kenya

By Brian Ngugi, Business Daily

The Central Bank of Kenya (CBK) has licensed the Dubai Islamic Bank – owned by the United Arab Emirates’ largest Shariah lender Dubai Islamic Bank – to carry out operations in the country.

CBK said in a statement that DIB intends to exclusively offer Shariah compliant banking services in Kenya.

“It becomes the third fully Shariah compliant bank to be licensed in Kenya, after Gulf African Bank Limited in 2007 and First Community Bank Limited in 2008,” said CBK Friday.

The lender has a presence in Bosnia, Indonesia, Pakistan, Sudan, Turkey and the UAE.

End of licensing freeze

DIB’s entry into the market marks the end of a moratorium imposed by the CBK on licensing of new banks.

“CBK welcomes the entry of international brands such as DIB into the Kenyan banking sector. DIBs entry will expand the offerings in the market, particularly in the nascent Shariah-compliant banking niche,” said the regulator.

Central bank said its entry signifies long-standing economic ties between Kenya and the UAE.

As at September last year, the Emirati bank had an asset base of $47.6 billion and capital of $7.4 billion.

Kenya

Media Freedom in Africa ‘Not Great’

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South Africa: Citibank Agrees to R69.5 Million Fine

Pretoria — Citibank has agreed to pay an administrative penalty of almost R69.5 million in relation to the bank’s involvement in a forex trading cartel, the Competition Commission said on Wednesday.

Citibank has also agreed to appear as a witness in the hearings involving the prosecution of other banks, which are also accused of being involved in this cartel.

About 17 banks, including Standard Bank, Absa, JP Morgan, Investec Ltd, BNP Paribas and Nomura, have been accused of being involved in currency manipulation.

Citibank admitted to the Competition Tribunal that between 2007 and 2013, it colluded with its competitors in respect of spot trading of ZAR currency pairs, in contravention of the Competition Act. These competitors are the banks that are cited as the respondents in the complaint referral.

“The [Competition] Commission believes that the case against the banks is very clear from its papers and we will be resisting any attempts to delay proceedings at the Tribunal on the basis of technicalities.

“We therefore call upon the banks to file their answers to the case in the interest of the speedy resolution of this matter,” said the Commissioner of the Competition Commission, Tembinkosi Bonakele.

The Commission notes that despite filing its papers with the Tribunal on 15 February against 17 banks, none of the banks have to date filed their answers to the case, except HSBC, which has filed papers, disputing that it participated in the cartel.

Subsequent to the Commission filing its case, the Tribunal convened a pre-hearing on 10 March, at which most of the banks indicated that they would be filing exception applications, challenging the commission’s case on the basis that it did not have jurisdiction to investigate and prosecute the matter.

Further, other banks indicated that they require evidence in the Commission’s possession against them.

The Tribunal’ by agreement of all parties’ directed among others’ as follows: the Commission is to file a supplementary affidavit to its complaint referral by 31 March 2017, and any banks wishing to file an exception applications should do so by 3 May 2017.

A second pre-hearing will be held on 23 June, where further directives on proceedings will be given.

The hearing of the exception applications is set down for 20 – 21 July 2017.

South Africa

Dam Levels Decline in Most Provinces

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Tanzania: TPB Bank Pretax Profit Increases in Q1

By Abduel Elinaza

TPB Bank has almost doubled pretax profit in quarter one of this year thanks to net interest, thus cementing further its bid to list on Dar es Salaam Stock Exchange (DSE) main market.

The bank, formerly known as Tanzania Postal Bank, posted a pretax profit of 6.82bn/- up from 3.99bn/- of the same quarter last year. The profit was mainly attributed to the net interest income that increased by 50 per cent to 15.83bn/- from 10.56bn/- after loans and advances went up by 4.4 per cent.

The leading bank in group lending showed interest to list on DSE main market in a bid to raise a working capital of between 70bn/- and 100bn/-. TPB is fully owned by government. The bank profitability pushed up earnings per share by 46 per cent to 237/- in the first three months of this year from 162/- of similar period last year.

At the end of March the bank assets grew by over 27bn/- to clock 427.54bn/-, pushed, mainly by loans and advances that increased 4.4 per cent to 310.27bn/-.

The loans growth was the outcome of customer deposits increase 8.0 per cent to 315bn/- from 292bn/-. Like many banks, TBP also is struggling with nonperforming loans after its ratio to total gross loans climbed 5.33 per cent form 4.04 per cent of last December.

NPLs amount reached 17.12bn/- from 12.42bn/- compelling the bank to set aside 1.6bn/- for impairment losses on loans and advances against 1.0bn/- of previous period. The bank maintained the same number of branches but increases its workforce to 710 staff from 660 staff at the end of last March.

TPB started as Tanganyika Postal Office Savings Bank in 1925. Last March, the bank was incorporated under the Companies Act (Cap 212) as TPB Bank PLC since it was established by the Tanzania Postal Bank Act No. 11 of 1991.

Tanzania

Magufuli Fires 9,932 Civil Servants

President John Magufuli has instantly sacked 9,932 workers who have been found using fake certificates. Read more »

Tanzania: Fake Insurance Cover Schemes Haunt Sector

By Issa Yussuf

Zanzibar — The Managing Director of National Insurance Corporation (NIC), Sam Kamanga has emphasized to member states of the Common Market for Eastern and Southern Africa (COMESA) to ensure that hitches hampering use of Yellow Card Scheme are removed.

Speaking on the sideline of the 42nd meeting of the COMESA management committee of the Yellow Card Scheme, he said efficiency of the service would be enhanced by computerizing operations of the scheme to curb forgery.

“So far the insurance business has been good and Tanzania has the chance to benefit more in the region because most of the vehicles pass through in the country,” he said.

Mr Kamanga said adding that fake insurance remains a problem and that they have been working with the police to stop the production. He said differences of official languages and legal framework regarding foreign financial operation have delayed the plans to introduce electronic payment, which is expected to end fake yellow cards.

According to the NIC board chairperson Mr Laston Thomas Msongole, the Yellow Card is essentially a Regional third party motor vehicle insurance scheme that provides third party legal liability cover and compensation for medical expenses resulting from road traffic accidents caused by visiting motorists.

He said besides offering third party liability protection to the insured or the driver whilst in a foreign country, the COMESA Yellow Card Scheme also offers emergency medical cover to the driver and passengers of the foreign motor vehicle involved in the traffic accident.

In his speech to open the meeting, the Zanzibar Minister of Finance Dr Khalid Salum Mohamed said asked members to create awareness and that the yellow card must be relevant to travelling motorists, road accident victims, insurance companies and the public in general.

“Accordingly, the general public in our countries and beyond also needs to be aware of the opportunities that are brought by these instruments.”

Ms Immaculate Morro- ‘COMESA Yellow Card Scheme’ Country Coordinator, said the scheme is currently operational in twelve COMESA Member Countries and one non COMESA member Country: Burundi, Democratic Republic of Congo, Djibouti, Eritrea, Ethiopia, Kenya, Malawi, Rwanda, Sudan, Tanzania, Uganda, Zambia and Zimbabwe.

Tanzania

Magufuli Fires 9,932 Civil Servants

President John Magufuli has instantly sacked 9,932 workers who have been found using fake certificates. Read more »

Zimbabwe: Employers Lose U.S.$40 Million to Cash Queues

By Kudzai Kuwaza

If we use an average minimum wage of US$250 per month the loss goes down to half. This will translate into slightly below half a billion US dollars per year if the cash shortages continue at the current rate. The losses to employers will be much higher if the cash shortages worsen.

Between U.S.$20 million and US$40 million is being lost monthly by employers through payment of wages and salaries to workers who are not productive as they will be queueing at banks for cash. This could result in a cumulative annual loss of nearly half a billion, a survey has revealed.

The country is experiencing a severe cash shortage that has crippled industry despite the introduction of bond notes into the market in November last year.

Meandering queues of depositors in need of the elusive cash has become commonplace with daily maximum withdrawals being reduced to as little as US$30 in some banks.

“On average, employees are spending 2,5 hours every time they visit the bank every week. This roughly translates into US$40 million lost in wages paid to employees who are not productive every month using a median wage of US$520 per month,” Industrial Psychology Consultants revealed in its report titled Productivity Losses As A Result of Bank Queues Report.

“If we use an average minimum wage of US$250 dollars per month the loss goes down to half. This will translate into slightly below half a billion US dollars per year if the cash shortages continue at the current rate. The losses to employers will be much higher if the cash shortages worsen.”

The report adds: “If we add actual productive losses due to unmanned work stations the losses are staggering. This is in view of the fact that 83,68% of the respondents visit the banking halls during working hours. Around 32,22% of the respondents visit the bank more than twice a week and 18,84% visit the bank more than four times a week.”

A total of 1 062 respondents participated in this survey. Of the respondents, 62,34% were male while 37,76% were female. Of the participants 7,8% are executives, 15,5% senior managers, 29,4% middle managers, 20,60% junior managers, 22,92% non-managerial while 3,82% did not specify their level. The report revealed that 76,80% of the cash withdrawn is taken by police fines followed by domestic workers and facial and hair treatment.

When asked why they would want to visit the bank when there are other payment options, most respondents said they need cash to either pay landlords, who refuse to accept other forms of payment, domestic workers, who do not have bank accounts, for transport or to give pocket money to their children.

“We have been through this road before during the hyperinflation environment. During that period individuals and companies perfected the art of dealing with cash shortages and it seems they are using the same tactics again; hoarding cash, demanding the most stable and secure form of payment for their goods and services. The authorities, like they did before, are responding with regulations and threats but all these failed before and it’s likely they will fail again this time around,” the report says.

“The authorities must create the right environment and confidence to allow ordinary people and businesses to take their money for banking. No sane person would go and bank US$100 cash which they will struggle to get from the bank when they need it. It is that simple.”

Zimbabwe

Minister Kasukuwere Suspends Entire Town Council

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Zimbabwe: Central Bank Governor Mangudya Rejects Rand Use Demands

Photo: The Herald

Reserve Bank of Zimbabwe Governor John Mangudya.

RESERVE Bank of Zimbabwe (RBZ) governor John Mangudya Thursday shut the door on any prospects of the country adopting the South African rand as its main currency, insisting no currency in the world would reduce misbehaving locals’ appetite for hard cash.

He was however, firm that the country’s battered economy was well on course for a miraculous rebound.

The central bank chief said Zimbabweans were too much fixated on the types of currency to use for their daily transactions while forgetting the damage caused by their own speculative behaviour when they handle hard currency.

“We have said it many times that it’s not a currency phenomenon in Zimbabwe,” he said.

“… If you can’t discipline yourself under a US dollar as a settlement currency, the same person is going to use the rand to do the same.”

Mangudya was guest speaker at Dr Ibbo Mandaza’s Southern African Political Economy Series (Sapes) Trust, an elite dialogue forum often patronised by diplomats and the intelligentsia.

He blamed locals for ignoring central bank pleas to use plastic money while preferring to spend hours outside banking halls so they could then use cash withdrawn for speculative purposes and for expensive exports.

The RBZ chief further said the country was not exporting enough to plug the hard currency deficit.

Zimbabwe’s government and the central bank are under pressure from some locals to dump the US dollar and adopt the more easily accessible South African rand as its main currency.

Locals say the rand use would best suit an environment in which some of the country’s trading partners in the region were already using it.

But Mangudya said Zimbabwe’s economic situation was totally different.

“The use of the rand as a settlement currency is potentially very inflationary when the fundamentals are not addressed.

“Otherwise you are going to suffer from what we call money illusion; you are thinking about too much money,” Mangudya said, adding that a multi-currency system that incorporates the US dollar, rand, euro and others was best for the country.

“Let’s be disciplined first before we go to other currencies. Nothing will change if we just go to other currencies.

“It’s not about the quantity but its usage of money. People have got rent seeking behaviour.”

He said banks were disbursing up to US$10 million daily in terms of cash withdrawals.

The former CBZ chief executive said it was by a miracle that the Zimbabwean currency survived all the pressures it has been subjected to over the years.

He refused to be drawn into comments that the current government’s destructive policies have had a greater hand in the worsening cash crunch.

Mangudya insisted he was an economist and not a politician.

“Those who want to dwell on politics should go and campaign. That one is an open field. If you want to dwell on politics, go and campaign become an MP then you change the status quo by way of policies,” he said.

He was however not too shy to apportion blame on sanctions which he said have increased “compliance risks” on international banks which used to give Zimbabwe lines of credit.

The foreign banks, Mangudya said, have responded by closing Zimbabwean accounts for fear of suffering “contamination risk”.

Despite all the negatives, he said, the country’s economy was on “a rebound” after government and the central bank have introduced a number of incentives to increase exports as well as reduce demand for cash.

Zimbabwe: Where Is the RBZ?

editorial

LAST week, we reported that cash barons were on the prowl in the country, rescuing Zimbabwean firms with huge sums of foreign currency to pay for critical imports, but in the process reaping huge profits from the enterprise.

Apparently, the cash barons are working in cahoots with bank executives, and are clearly able to transfer the cash they earn from their deals with local companies, mainly manufacturers, miners, drugs retailers and many other importers of critical raw materials, to their offshore bank accounts.

Reports received after we broke the story last week indicate that some of the transactions involve real cash — United States dollar bank notes paid for through electronic bank transfers.

By last week, the brokers — this is what the cash barons have essentially become — had facilitated foreign payments amounting to US$30 million. This gives a profit of US$4,5 million, if a facilitation fee of 15 percent is charged. This is a very good profit, but it translates into an additional cost for local producers, who will have to factor this in their pricing.

The effect is that prices, which are already on a northward trajectory, will increase the upward momentum. Already, the International Monetary Fund has projected that Zimbabwe, which was grappling with a deflationary environment since dollarisation in 2009, may see its inflation hitting six percent this year.

There are real fears that we may go back to a hyper-inflationary crisis of 2008, which forced government to abandon the Zimbabwe dollar and adopt a multiple currency regime that brought significant stability into the economy.

That stability was ruined by massive money printing, through the real time gross settlement system, after the collapse of the inclusive government in 2013, leading to shortages of US dollar bank notes and subsequently the introduction of bond notes by the central bank in November last year.

As some commentators pointed out, there is a real possibility that the banks are facilitating money laundering through transfer of cash offshore by the cash barons. They may be helping Zimbabwe’s productive sectors and the wider business community to stay in business, but there is a question that still needs to be asked: How does this happen under the watch of the Reserve Bank of Zimbabwe? What is the interest of bankers in facilitating offshore transfers for these cash barons when they tell the business community that there is no hard currency for critical commitments to keep our companies operating?

Our article last week indicated that the brokers are fronting political bigwigs and top bankers. This explains why they are able to siphon cash outside Zimbabwe using the same banking system that is failing to support the productive sectors of our economy.

The central bank should investigate this issue and come up with a resolution to our worsening economic situation, otherwise we should anticipate an unprecedented implosion that will significantly disrupt all economic activities in the country.

Zimbabwe

Minister Kasukuwere Suspends Entire Town Council

Local Government, Public Works and National Housing Minister Saviour Kasukuwere has suspended Chitungwiza Mayor Phillip… Read more »

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