Kasukuwere cannot cancel licenses of foreign companies

Zimbabwe's vocal indigenisation minister, Saviour Kasukuwere, does not have the power to cancel licenses of foreign owned banks over non-compliance with a controversial empowerment law, the country's deputy indigenisation minister, Tongai Matutu says.

NewsDay quoted the deputy minister, who addressed parliament last week in response to parliamentarians' queries on the empowerment ministry's policy position on behalf of the government following threats issued by Kasukuwere that foreign banks' licenses would be revoked for non-compliance.

He said "the issue of indigenisation has become contentious" and conceded that it was increasingly becoming "polarized". He pointed out that much should not be drawn into Kasukuwere's explosive statements as "the spirit of Kasukuwere's communication" was aimed at ensuring compliance by the particular banks.

Standard Bank's Zimbabwe subsidiary, Stanbic Bank, Standard Chartered and Barclays Bank are some of the foreign banks that Kasukuwere singled out and threatened with revocation of licenses for failure to comply.

"But, as to whether or not their (foreign banks) licences are going to be revoked, I believe that the relevant authority in the form of the Reserve Bank governor has issued a sufficient statement as to whether the licences are going to be revoked," Matutu is further quoted as saying.

Several other foreign companies with operations in Zimbabwe are up in arms with the government over the issue while the latest information suggests that Kasukuwere's empowerment ministry has rejected compliance submissions by Mwana Africa and Nestle.

"We note that your company is a wholly-owned subsidiary of Nestlé SA and, therefore, non-indigenously owned, and obliged to comply with the indigenisation and economic empowerment legislation ... Your plan therefore falls short of the 51% indigenous shareholding requirement," Kasukuwere wrote in a recent letter to Nestle.

Central bank governor, Dr Gideon Gono also rubbished the empowerment minister, saying his fiery ranting over the issue was mere "irrational exuberance" coming from someone who did not understand banking.

Finance Minister, Tendai Biti also cautioned against Kasukuwere's "confrontational approach" and revealed that his ministry was helping banks negotiate for lower mandatory thresholds that should be ceded under the indigenisation law.

Although the law is being spearheaded by the Zanu-PF side of Zimbabwe's coalition government, some government officials - including some with links to President Robert Mugabe - are said to be opposed to Kasukuwere's "confrontational approach" to enforcing compliance with the law, sources said.