Maravi

Zambia needs easy financial regulatory regime - Rabo

Zambia needs easy financial regulatory regime - Rabo
By Chiwoyu Sinyangwe
Thu 05 Apr. 2012, 13:55 CAT

ZAMBIA needs to develop a regulatory mechanism that is easy to understand and of good international sense to attract more foreign investments, says Rabo Financial Institutions Development.

And Rabo Financial Institutions Development, Rabobank's majority shareholders, says the bank will be "somehow surprised if there was an adverse outcome" on probe into the 49 per cent sale of Zanaco in 2007.

In an interview, Rabo Financial Institutions Development managing director Bruce Dick said in regulating the financial sector, what was important in business or banks or anything else was to ensure that there was transparency and certainty.

"What businesses or banks struggle with is when you create situations that people cannot understand and they can't agree with the logic, the you create uncertainty and you will build in risk premiums which will cost people money because you will end up having to pay risk premiums to attract the money into their businesses because they will accept the volatility and uncertainty," Dick said.

"What we don't want to see develop is a whole lot of regulatory activity that we can't understand and doesn't make good sense in an international environment."

Dick said there was need for political leaders to put in place an environment in which clearly spelt out and easily tailored economic rules are in put in place to ensure businesses thrived.

"What people external to Zambia will look at - institutional or international investors - is that they compare the opportunity to come to Zambia with the opportunity to go some other place, and if they see or find things they can't understand, the money is gonna go somewhere else," he said.

[Did he really use the word 'gonna'? - MrK]

"That is the big challenge for the political environment to make sure that they keep it transparent and easily understood."

[I like transparent and easily understood. The Windfall Tax is the right tax for exactly that reason. - MrK]

And Dick, who is Zanaco's board chairman, said he was confident that the bank's operations would not be hurt by the outcome of the Sebastian Zulu-led commission of inquiry whose report is expected this week.

"I don't think there are issues that Zanaco should be concerned about, if there are any issues that will come out, it will be to do with the sale process vis a vis the shareholder," he said. "That is not an issue for Zanaco."

He said Rabobank's concern is that they have done "everything according to the rules and they would sit there and be somehow surprised if there was an adverse outcome".

"Rabobank is not sitting there squawking in their shoes thinking that some huge event is about to occur because from our Netherlands view point, everything was done in accordance to the rules that were providing in and in an open and transparent way," said Dick.

Labels: CORRUPTION, RABOBANK, ZANACO

posted by MrK @ 3:45 PM