Zimbabweans on Mugabe’s neck over sale of Barclays Bank to Malawi’s First Merchant Bank

President Robert Mugabe’s Zanu PF party wants the ageing leader to reverse the sale of Barclays Bank of Zimbabwe (BBZ) to First Merchant Bank of Malawi (FMB), as the sale contravenes the country’s indigenisation laws.

Barclays Plc on Tuesday agreed terms with FMB for the sale of BBZ.

The agreement has already been communicated to BBZ employees, although it has not yet been established how much the Malawian bank will pay for the 67% stake.

However, according to a cautionary issued by BBZ on Friday, the deal is still to get the green light from the central bank and other regulators.

Kudzai Chipanga, leader of the Youth League in Zanu PF, told Mugabe on Friday that the deal has to be reversed to allow for indigenous shareholders through the government or local banks.

“We are worried that Barclays is being bought by a foreign company instead of locals. This raises the risk of foreigners sabotaging us,” Chipanga said.
He was speaking at a rally in Marondera, about 70 kilometres east of Harare, where Mugabe is meeting young people from his ruling Zanu PF party ahead of elections in 2018. Mugabe was due to address the youth on Friday afternoon, and will go around the country to meet young people in the next weeks.

“We want to ask if there is nothing the government can do to be able to buy the Barclays stake in line with indigenisation laws. We have banks such as CBZ and we have to look at other (ways) on how we can have locals owning the bank,” Chipanga said as he turned to address Mugabe, who was seated at the high table.

Barclays said in its cautionary that the acquisition by FMB is “subject to terms and conditions” that include “approval of the Reserve Bank of Zimbabwe”.

The indigenisation policy requires foreign companies to be at least 51% controlled by local Zimbabweans. However, Mugabe intervened last year after disagreements among his ministers over implementation of the policy in the banking sector.

The new position is that foreign banks will be allowed to keep majority shareholding. Existing foreign miners are now required to spend more than half of their earnings inside the country, but will not be required to cede majority shares.

This provides FMB with much-needed certainty as it ups its presence across southern Africa. The Malawian bank also has a presence in Mozambique, Zambia and Botswana.