Mnangagwa says Zimbabwe banks have gone rogue

PRESIDENT Emmerson Mnangagwa says most of Zimbabwe's banks have gone "rogue" and are operating in contravention of the country's laws.

Writing in his column in The Sunday Mail, he said only 31% of deposit taking institutions passed a recent integrity test.

His statement puts into question the role of the Reserve Bank of Zimbabwe (RBZ)'s credibility as a regulator of the banking sector.

"Today, I can share with the nation that out of the 16 deposit-taking institutions we have in our economy, only five passed the integrity test, with the rest having been involved in activities that ran contrary to terms of their operating licences. Punishments have since been meted out," Mnangagwa wrote.

"Let no one ever think that my administration will flinch from, or hesitate to take corrective action, however drastic. In addition, the size of offenders means nothing to us; we will come for you once you dabble in the unlawful and unethical. No one player is stronger than government; or above punishment."

Efforts to get further information relating to the identity of the culprits and their specific crimes from RBZ governor John Mangudya were fruitless yesterday.

But Mnangagwa said "devious saboteurs" had attacked the country's mobile banking platforms before government plugged loopholes.

He said the culprits then turned to the financial sector.

"The fight against economic destabilisation began with a determined crackdown on errant actors in the mobile telecommunications industry. Actors in this sector had taken advantage of clear legal lacunae, and of our desire to use mobile platforms for financial inclusivity, to cause mayhem in financial markets. We acted against them. We continue to watch them so their actions and conduct remain proper and lawful," he
said.

"Always mobile and on the hunt for new loopholes, the same greedy and devious economic actors moved into our financial sector where they consorted with several banks and other deposit-taking institutions to resume their arcane, unlawful activities."

Mnangagwa said his government had to take drastic actions in May, including freezing all lending by banks, so that the Financial Intelligence Unit (FIU) could move in and carry out thorough investigations to account for all culprits, and for all those aiding and abetting the corruption.

Mnangagwa recently claimed that there was a ring of economic saboteurs working against his regime and causing unnecessary price hikes.

In June, Mnangagwa said 12 banks were penalised for financial indiscipline through fuelling inflation and undermining the local currency.

At the time, Mnangagwa told a rally in Mudzi that the culprits had pleaded for their identities to be kept a secret for fear of losing business.

Yesterday, Mnangagwa also said latest investigations had shown that there was huge demand for goods and services offered by the public sector, which has, in fact, been stoking the black market, leading to currency and price instability in the whole economy.

He said the public sector had largely been guilty of sins of omission.

"We have not always been a prudent procurer, a weakness which has levied very costly consequences to the whole economy. The pricing of fuel coupons by these private players has been based on extortionate huge mark-ups, and on black market rates of anything between $900 to $1000 per USD dollar," he said.

"Meekly, the public sector, which accounts for over 70% of fuel purchases in the market, has been a price-taker. Even players who obtain their fuel from our Noczim [National Oil Company of Zimbabwe] at official rates and at prices gazetted by our own Zera [Zimbabwe Energy Regulatory Authority] have been abusing ministries, departments and agencies using the same extortionate pricing formulae. That way, billions of dollars have been paid out to these devious suppliers."