(MONITOR UG) Bank of Uganda cuts lending rate
By Martin Luther Oketch
Posted Wednesday, December 4 2013 at 00:00
Bank of Uganda has announced that it is
continuing with its accommodative monetary policy stance by reducing the
Central Bank Rate to
11.5 per cent for the month of December
from 12 per cent.
Briefing the press yesterday on the Central Bank Rate for the month of December, the Deputy Governor Bank of Uganda, Dr Louis Kasekende, said this is aimed at encouraging increased private investment in the economy.
Mr Kasekende said: “Real economic activity to show ed signs of recovery, part ly boosted by the accommodative monetary policy stance and public investment.”
Bank of Uganda explains that the accommodative monetary policy stance is also meant to lift Uganda’s economic growth, which has continued to be below the growth potential.
“Going forward, the growth will benefit from the private consumption, which is projected to rise as consumer and household credit extension gradually gain momentum,” Mr Kasekende.
Uganda’s GDP growth rate in 2013/14 is being projected at 6.2 per cent up from 5.8 per cent in 2012/13, and projected to pick up more speed in financial year 2014/15 to 6.5 per cent.
However, Mr Kasekende said economic growth remains below potential, with downside risks due to the uncertainties in the global economic environment.
The executive director of research, Dr Adam Mugume, said the outlook for Uganda’s economic growth is bright, and is being supported by increased foreign direct investment in the country mainly in the oil sector.
moketch@ug.nationmedia.com
Labels: BANKING, LENDING RATES, UGANDA
Read more...
(NEWZIMBABWE) Chinese, Nigerians blamed for cash woes
03/01/2014 00:00:00
by Staff Reporter I Agencies
THE country's black empowerment agency says at least 90 percent of foreign shop owners don't have bank accounts and are hiding away money or smuggling it out of the country, worsening cash shortages in the troubled economy.
National Indigenisation Economic Empowerment Board (NIEEB) chief, Wilson Gwatiringa, said many of the foreign retailers lack proper identification documents required to open a bank account, leading to hundreds of million dollars staying out of the formal economy, state media reported Friday.
“These operators where operating without bank accounts, they are (also) not registered with the Zimbabwe Revenue Authority,” Gwatiringa said
“This means they are not paying tax and that their money is not being accounted for in the banking system.
“We are (now) directing that all the applicants must have bank accounts and must be registered with the tax authority and provide a tax clearance certificate so that they are proper business people who contribute to the economy in a manner that it is expected and that they must pay tax and the funds they handle must pass through the banking system.”
The NIEEB boss said that "raises eyebrows" after government recently allowed foreign shop owners - mostly Chinese and Nigerian nationals - to continue in retail trade, a sector reserved for local blacks.
Last year the agency said foreign retailers had up to January 1 this year to leave the sector.
But Indigenisation minister Francis Nhema this week lifted the ultimatum and commended the foreigners for playing a "very important role" in providing services to Zimbabweans.
“What we are saying is: new licensing in reserved sectors, from January, will be skewed in favour of indigenous people,” said the minister.
“Those foreigners operating in the reserved sectors of our economy should continue. One needs to understand that they have played a very important role in terms of providing services to our people during their time of need.
“We encourage those already in the industry to welcome new players and assist them wherever possible; working with them in the spirit of fair competition, which can only make Zimbabwe a great nation.”
An independent financial research group last year reported that 85 percent of small businesses in the "informal economy," with a turnover of at least $7 billion, weren't paying taxes.
Labels: BANKING
Read more...
(NEWZIMBABWE, 'THE SOURCE') Angry depositors beat up Mpofu bank staff
16/12/2013 00:00:00
by The Source
COMMENT - This sounds more like the MDC's psychological warfare. 'Bank runs against 'the Mpofu bank'? - MrK
ROWDY Allied Bank depositors on Monday assaulted workers at the Third Street Branch and vandalised property after they failed to withdraw their money, a sign of deepening cash shortages in the country.
Onlookers alleged that a group of soldiers who had been queuing to withdraw their salaries attacked the bank staff after failing to get the money and were joined by other depositors in the assault.
A security guard reportedly threw a teargas canister into the rowdy customers inside the bank which had closed doors to control the crowd, resulting in some breaking the glass doors to flee.
Management at the bank declined to comment, referring all questions to the bank’s head office.
However, a bank official who declined identification because they are not authorised to speak to the press told The Source that the bank had been facing cash shortages.
“This is not something new, most branches did not have cash ready as early as 8AM and so the people should have been patient,” said the official.
The bank’s marketing manager, Ruth Verah said she could not immediately comment on the incident.
Zimbabwe Allied Banking Group (ZABG) was rebranded Allied Bank Limited last year after an investment vehicle owned by transport minister, Obert Mpofu injected $23 million into the bank.
The attack on Allied Bank personnel follows a similar incident at Metropolitan Bank’s Mutare branch, which required police intervention to rescue workers.
Labels: BANKING, OBERT MPOFU
Read more...
BoZ calls on banks to improve risk management
By Gift Chanda
Thu 05 Dec. 2013, 14:00 CAT
THE Bank of Zambia has called on commercial banks to improve risk management to withstand external shocks as they deepen links with the global financial system.
Speaking at a PricewaterhouseCooper (PwC) organised discussion forum for bank directors and executive committee members of management held in Lusaka yesterday, Dr Tukiya Kankasa-Mabula, BoZ deputy governor in charge of operations, emphasized the importance of safe and sound banking systems. She said countries and their commercial banks must evolve with international trends to manage risks.
"To be part of the international financial system and to remain competitive, countries have to adopt internationally accepted standards," she said.
She highlighted the role the Basel II framework could play in further enhancing the risk management practices of banks.
The Basel II framework is an internationally adopted best practice standard that promotes better risk management, greater transparency and corporate governance in the operation of commercial banks.
"Questions have been raised by the industry, especially in developing countries, about the relevance of the Basel framework as it was designed for internationally active banks," Dr Kankasa-Mabula said.
Dr Kankasa-Mabula said the position of the central bank was that as Zambia integrates with the rest of the world, the country cannot afford to have regulatory standards in the financial sector that deviate from global ones.
"Any deviation will hurt the country both by way of perception and also in actual practice. The perception of a lower standard will put Zambian banks at a disadvantage in global competition," she said.
"In practice, it has to be recognised that Basel II provides for improved risk management systems in banks. It is important that Zambian banks have the cushion afforded by these risk management systems, to withstand shocks from the external systems, especially as they deepen their links with the global financial system."
And Stephen Scott, a senior associate at PwC South Africa, said commercial banks that adopt the Basel II framework may find it easier to tap into capital markets to boost onward lending especially to the SMEs.
He said the adoption of the Basel II framework by commercial banks would be a step in the right direction.
Labels: BANKING, BOZ
Read more...
(NEWZIMBABWE, REUTERS) Nhema: Flexibility on banks only, not mines
21/11/2013 00:00:00
by Reuters
ZIMBABWE is not softening its drive to force foreign-owned mines to sell majority stakes to blacks, but could be flexible with banks if they agree to lend more, especially to young people, a cabinet minister said on Thursday.
The government has said it is reviewing black economic empowerment deals agreed in the last two years, raising hopes among investors that Harare could roll back on its demands that foreign-owned firms sell at least 51% shares to locals.
But Francis Nhema, the new youth and economic empowerment minister said those reviews did not signal a major policy shift toward mining companies.
"Government is not letting up and is in fact saying let all companies take note," Nhema told Reuters.
"Most of the mines are asking questions, they want us to confirm that it is a win-win situation and that they are not disadvantaged."
But he was more flexible over foreign-owned banks, saying the government would want to see them increase their lending.
A team set up by the government in 2010 recommended that locals could own up to 40 percent shares in foreign-owned financial services firms while the central bank has urged caution when it comes to banks.
"The banks, we have asked them to come forward and we are looking at that sectoral recommendation. There is no one-size- fits-all approach. Every sector is different," he said.
Foreign banks active in Zimbabwe include units of Barclays Plc and Standard Chartered Plc as well as South Africa's Standard Bank.
Labels: BANKING, FRANCIS NHEMA, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE), MINING
Read more...
Govt committed to strengthening financial systems - Kasonde
By Fridah Nkonde
Tue 19 Nov. 2013, 14:01 CAT
HEALTH minister Joseph Kasonde says the Zambian government will ensure that systems and structures are strengthened for improved public financial management and expenditure accountability.
During the official opening of the Global Fund regional meeting for Africa Impact II in Lusaka yesterday, Dr Kasonde said he was happy that the governance dialogue and implementation, through the jointly developed governance management and capacity strengthening plan, had continued to be strengthened with all parties committed to fulfilling their responsibilities.
The aim of the meeting is to provide information on the New Funding Model and share experiences and lessons learned by countries that have been involved in the interim process of the NFM and to make suggestions on how the process can be improved.
"The Global Fund has since disbursed over five billion United States dollars (US$5,041, 831,713.78) to the countries represented here which are Ethiopia, Kenya, Mozambique, Tanzania, Uganda, Zambia and Zimbabwe. These funds, together with funds from other cooperating partners, and indeed from our own respective governments (between six per cent and 16 per cent share of health in total government expenditure), have supported us in implementing programmes against three communicable diseases, that is, HIV and AIDS, Tuberculosis and Malaria," Dr Kasonde said in a speech read for him by health deputy minister Christopher Mulenga.
He said Zambia had been privileged to have received over US$720 million from the Global Fund since its inception.
Dr Kasonde said the funding had contributed to having over 480,000 people currently on ART, over 4.3 million Insecticide-Treated Nets distributed and 57,000 new TB smear positive cases detected and treated.
And Uganda's Infectious Diseases Institute executive director Dr Alex Coutinho said it was evident that the Global Fund had done a tremendous job to help fight HIV and AIDS, Malaria and Tuberculosis.
Dr Coutinho said there was need for Global Fund recipients to efficiently utilise the funds and make a difference in people's lives.
Labels: BANKING, HEALTHCARE, JOSEPH KASONDE
Read more...
Seyuba asks financial firms to help SMEs create wealth
By Vincent Chilikima in Solwezi
Fri 15 Nov. 2013, 14:00 CAT
NORTH Western Province permanent secretary Augustine Seyuba has urged financial institutions in the province to tailor products that will enable local SMEs to create wealth.
Speaking during a meeting at his office for 11 financial institutions operating in Solwezi, Seyuba implored the managers to support the government's policy of reducing the cost of doing business.
He said the booming mining activities in the province required a vibrant and innovative banking sector that would tailor its products to accord an opportunity for local SMEs to create wealth.
"I do not subscribe to 'poverty reduction' but to 'wealth creation' because certain terminologies tend to maintain a status quo. So your cost of borrowing should not discourage SMEs in doing business," he said.
Seyuba cited invoice-discounting as one of the services that may be relevant to SMEs that conduct business with the mines, adding that banking institutions should focus on stimulating economic activities of the local people.
He further implored bankers to innovate localised bank products that take into consideration the disparities of poverty levels between the rural and urban dwellers adding that bank managers should feel obliged in helping the province to develop.
"You need to appreciate the locally available skills and resources so that you come up with relevant financial empowerment programmes. For example, we can develop our timber industry to produce world class furniture and products," he added.
Seyuba further called for relevant corporate responsibility projects that improve the social wellbeing of the people in the province such as support to agriculture, education, health and the welfare of the girl child.
Meanwhile, chairperson of the newly formed North Western Financial Institutions Forum, Davy Maibale, commended Seyuba's initiative of bringing bankers together and for providing a forum that would link them to government policies and operations.
Maibale, who is also Zanaco Solwezi branch manager, said the forum would be meeting quarterly to review how each financial institution was incorporating government and stakeholder suggestions in their operations.
He said banks would be considering product expansion such as ATMs to all the districts and social responsibility infrastructure development programmes such as borehole provision and youth development programmes.
Amongst the financial institutions present at the meeting include: Zanaco, NATSAVE, Barclays, FNB, Stanbic, Finance Bank, Stanchart, Cavmont, Investrust, Focus and ABI.
Labels: AUGUSTINE SEYUBA, BANKING, SMEs
Read more...
BoZ explains lack of new commercial banks
By Chiwoyu Sinyangwe
Fri 13 Sep. 2013, 14:00 CAT
LACK of new commercial banks coming into the market has nothing to do with recently increased minimum capital requirements for commercial banks, says BoZ acting director for bank supervision Wilson Kalumba.
Kalumba said fierce competition in the local banking sector was discouraging some foreign commercial banks from opening their operations in the country.
He said the decision by the Bank of Zambia to raise minimum capital requirement for setting up of a commercial bank in the country to US$100 million for a foreign-owned bank and US$20 million for a local bank would not discourage would-be "serious investors" in the sector.
Since the Patriotic Front came into power, the local banking sector has not seen the entry of a new commercial bank.
"We had closures of banks in the late 90s, we never saw any entrants and so, even when capital levels were low, we only started seeing new entrants from 2007 coming upwards when we had these 'big' West African banks coming. At the time when we had low capital levels, we had no influx of banks. So...the fact that we are not receiving applications for new banking licences has got nothing to do with the minimum capital requirements," Kalumba said.
He said competition in the local banking sector was becoming stiff.
"I think also it has to do with the competition that is there," Kalumba said.
"We have 19 commercial banks and like in many other jurisdictions, you find that five banks take maybe 70 per cent of the market and the rest are struggling in the 30 per cent. So, it's a very competitive environment. I guess from the business perspective, there isn't as much attraction now. Banking is a business. It has to make business sense. Even before we increased the minimum capital requirement significantly, and I would expect that maybe a US$100 million means somebody is seriously considering to do banking."
He said the increase in minimum capital requirements for commercial bank would instead increase financial inclusion in the country with the BoZ's target of ensuring 50 per cent of the population have access to banking facilities by 2015.
And Kalumba said capping of interest rates by commercial banks and micro-financial institution would aid to hedge local borrowers from exploitation by regulating lending institutions.
He said there was no evidence that financial institutions had cut back on lending due to a cap in their lending rates.
"There was a lot of exploitation through these high interest loans and generally when interest rates are high, it constrains lending because people can't afford," said Kalumba.
"Banks are still lending and we hope that even the microfinance sector should be able to either find cheaper sources of finance so that they can lend at the cheaper rates than the current levels."
Labels: BANKING, BOZ
Read more...
(NEWZIMBABWE) Furious Gono denies indigenisation U-turn
16/08/2013 00:00:00
by Staff Reporter
CENTRAL bank governor Gideon Gono on Saturday accused the Zimbabwe Broadcasting Corporation (ZBC) of carrying out a hatchet job on him, following a TV report on Friday night claiming that he had performed a U-turn on his opposition to the indigenisation of banks.
Gono said the ZBC had removed his comments from their context and selectively omitted certain qualifications to his statements before the Bulawayo business community "for reasons best known to themselves”.
The RBZ chief, who is due to present his Mid-Term Monetary Policy statement later this month, said it was also curious that the ZBC had waited a whole week before running their report.
“The ZBC decided to select certain speech bites from both my statement and that of Dr Eric Bloc, with whom I shared a platform in Bulawayo on Wednesday, August 7,” Gono said in a statement.
“What ZBC did to both of us is akin to running with a portion of a statement while leaving out a very important condition to that statement. It's like telling people that the Highway Code says ‘do not drink’ or ‘do not drive’, when the full sentence says ‘do not drink and drive’! That’s what the ZBC did to us.”
Gono has been vocal in his opposition of a “one size fits all” approach to the indigenisation of banks, to bring them in line with Zimbabwean law which requires foreign companies to hand-over a controlling stake to locals.
London-based Standard Chartered and Barclays are among the banks that would be targeted for indigenisation – a policy being vigorously pursued by the Indigenisation and Empowerment Minister Saviour Kasukuwere.
Gono said: “Let me reiterate for the umpteenth time and state that there can never be a U-turn by the central bank or by the governor or board on this matter. We will not allow untrained hands to play with gun-powder to the detriment of this whole economy, depositors or the wishes of my principal, President Robert Mugabe, who is very clear with regards to the sensitivity and critical importance of the financial sector.”
The RBZ chief, who has already filed a complaint with Tarzen Mandizvidza, the ZBC General Manager, said he told his audience in Bulawayo that “we’re not opposed to indigenisation in the banking sector, but we insist that it be done in an orderly manner”.
“I want to assure all stakeholders that there will not be the kind of forced, unstructured, chaotic or illegal interventions in the banking sector along the lines that some quarters have been calling for. That will not happen, nor will that ever be allowed under my watch,” he said.
“Indigenisation can never be a euphemism for self-enrichment or disorder. I’m quite convinced that when we come to it, the programme will be handled professionally by experienced, competent, mature, steady and knowledgeable hands of which the central bank will be an integral part in as far as approving feasible parameters and guiding the process is concerned and ensuring that the country's banking and exchange control laws are judiciously followed."
Labels: BANKING, GIDEON GONO, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE)
Read more...
(SUNDAY MAIL ZW) Gvt calls for financial inclusion of SMEs
Sunday, 21 July 2013 00:00
Stories by Prince Mushawevato
A lack of affordable funding has remained a major challenge for small and medium-scale enterprises (SMEs) as financial institutions’ confidence in the sector remains low, a Government official has said.
Speaking during the Zimbabwe SME Banking and Micro Finance Summit, the Minister of Small and Medium Enterprises and Co-operative Development, Sithembiso Nyoni, said SMEs were failing to expand operations due to high interest rates and stringent lending conditions.
The sector has proved to be the country’s economic pillar as most big companies continue to struggle.
“There is need for banks to avail more loans and support for small and medium-scale enterprises, as the country is increasingly becoming reliant on these businesses,” she said, adding that Government research has shown that the sector is performing relatively better than the formal sector.
“Compared to day-to-day office workers, SMEs are performing way better in terms of revenue generation and employment creation.
“And this is why we say development of the sector is a key condition in promoting equitable economic development,” said Mrs Nyoni.
She also noted that success of small and medium businesses was not only premised on the availability of funds, but also on the genuine involvement of various stakeholders that had direct and indirect influence to the sector’s operations.
In his presentation at the summit, United Nations Development Programmes (UNDP) Zimbabwe economic advisor Mr Udo Etukudo said it was important for developing countries to promote financial inclusion.
“Banks need to find a more progressive way to support smaller players. SMEs play a big role in developing economies; they provide some services that big industries cannot. The banks are the fuel and without them, there is no development for the sector.
“Creative changes take place and we need to be adoptive to them. Small and medium firms need access to finance to improve their productivity and subsequently export rates.
“At the same time, big companies and SMEs need to co-operate, not view each other as competitors,” explained Mr Etukudo.
Market watchers contend that SMEs need to formalise their operations through registering with Government so as to get recognition from financial institutions.
The sector’s major source of funding includes Government, through the Small Enterprises Development Corporation (Sedco), family and friends.
Countries such as China, India and Iran have also supported.
Last year, the Chinese government made available a US$30 million facility through the Infrastructure Development Bank of Zimbabwe (IDBZ).
It is estimated that close to US$2 billion generated by SMEs is circulating outside the formal banking channels.
It is believed that SMEs are the largest employer after Government, and will be critical in generating a $100 billion economy by 2040.
A Government-commissioned scientific Small and Medium Enterprises Survey 2012 report, compiled with the assistance of the World Bank, revealed that the informal sector has created nearly six million jobs in the country and contributes US$7,4 billion to the economy.
Labels: BANKING, FINANCING, SMEs
Read more...
(STICKY) (UBUNTU PARTY SA) March Against The Banks In South Africa
Saturday 6 July 2013 – Sandton, Johannesburg, South Africa
Join the event HERE:
https://www.facebook.com/events/136840266518030/
FREEDOM FROM FINANCIAL SLAVERY
For the institution of a PEOPLE’S BANK that issues interest-free money BY THE PEOPLE FOR THE PEOPLE.
The UBUNTU Liberation Movement and UBUNTU Party has applied for a permit for a public march in SANDTON, Johannesburg on Saturday 6th July 2013. The intention is to raise our voices in unity and shine a light on the ongoing atrocities by the banks against the people of South Africa.
While most of the people and media are blissfully ignorant and unaware of the unlawful and fraudulent activity of the banks, no one is untouched by their criminal activity and more than 20 million South African’s lives have been destroyed by their draconian behaviour. The banksters have blood on their hands.
They act with impunity and seem to be above the law. Their actions go unpunished and are so well hidden and protected by a complex legal system that many who have tried to expose them, have been silenced in various ways. Sadly the media has not yet recognised this silent destroyer of humanity and has not reported accurately and responsibly on their activity, often calling the visionaries that stand up against these atrocities as “new age hippies trying to wangle their way out of debt.” We urge the media, who should be the watchdog against injustice, to inform themselves, stand with the people, and play their part in bringing these banking cartels to justice and help institute the will of the people. Our combined legal actions against the banks has made it clear that the courts hold the rights of corporations higher than the rights of living breathing human beings.
The objective of this protest is to highlight this injustice and expose the fraudulent activity and crimes against humanity committed by the banksters.
We will deliver and serve memorandums to the major banks, their major law firms, and the OMBUDSMAN FOR BANKING SERVICES, that has shown to be complicit with the banks, hiding their crimes and not acting independently and impartially destroying many lives in the process. The memorandums will contain critical questions that expose their fraudulent activity, and that they have refused to answer after thousands of requests from the people of our land. The highlight of the march will be the serving of a key memorandum on the RESERVE BANK OF SOUTH AFRICA in Pretoria, which is a private corporation that has hijacked the country from its people and has been given the freedom to dictate financial policy to the people of South Africa.
While the main march will take place in Sandton, we will also deliver a memorandum to some key media like RADIO 702, E-News, and the SABC in Auckland Park to mobilise the media to stand with the people and stop perpetuating the lies of the corporate criminals.
The country belongs to the people. It does not belong to the government or any other private corporation that has laid claim to it.
MORE DETAILS TO FOLLOW – TELL EVERYONE – OUR UNITY IS OUR STRENGTH.
“Justice is indivisible. Injustice anywhere is a threat to justice everywhere.” Martin Luther King.
In pure truth
Michael of the family Tellinger
Born free, with inalienable rights that nobody may violate or take away.
Labels: BANKING
Read more...
Financial services are blood to the economy - Gondwe
By Misheck Wangwe in Mpongwe
Sat 29 June 2013, 14:01 CAT
BANK of Zambia governor Dr Michael Gondwe says the country desires favourable financial services that will significantly contribute to the fight against poverty and reduce income inequality between the rich and the poor.
Speaking when he opened the National Savings and Credit Bank (NATSAVE) Mpongwe branch yesterday, Dr Gondwe said that financial services play an important role in improving income-generating opportunities and overall improved living conditions among households.
He said better access to finance not only increases economic growth, but also helps to fight poverty.
"The role that financial services play in an economy is sometimes compared to the significant role that blood plays in the human body. It should be stressed that no economy can function efficiently without good financial products and services," Dr Gondwe said.
He said the opening of the branch by NATSAVE in Mpongwe was expected to spur economic growth and contribute to ease the access to financial services which had for a long time been a hindrance to economic development in the district.
Dr Gondwe said the bank had continued to implement the Financial Sector Development Plan that would address various weaknesses in the Zambian financial system, among them being the low financial intermediation and limited access to finance.
"BoZ has incorporated financial inclusion as part of its current strategic plan in which it has undertaken to achieve financial inclusion to 50 per cent of the population by 2015 from the level of 37.3 per cent. The rationale for this objective is that it responds to the need to bring the poor into the financial system and thereby avail them the opportunities to financial access and growth," Dr Gondwe said.
NATSAVE board vice-chairperson Fred Siame said the bank had in the recent past opened Chavuma branch in North-Western Province and Kalabo in Western Province, and plans were underway to open the Lufwanyama branch next month, all in an effort to meet the financial needs of the people in rural areas.
Siame said the bank was confident that the NATSAVE branches that had been opened would stimulate the districts to achieve the much needed development.
Bank managing director Cephas Chabu said the bank's resolve was to continue making a difference in the lives of the people both in the rural and urban areas by banking the unbanked and creating access to financial services through the opening of branches and delivering affordable financial products.
Labels: BANKING, MICHAEL GONDWE
Read more...
DC bemoans inadequacy of banks in Siavonga
By Henry Sinyangwe
Mon 27 May 2013, 14:00 CAT
THE inadequacy of banking facilities in Siavonga is hampering access to financial services, says district commissioner Brave Mweetwa.
And Mweetwa says Siavonga will soon have a modern shopping mall expected to house various business houses.
In an interview, Mweetwa said Siavonga district only had one bank - Zanaco Plc - despite the area being one of the major tourist destinations in the country.
He said Zanaco was always congested owing to inadequate banking facilities in the district.
Mweetwa urged banks to establish branches in the area as it was growing at a fast rate in various sectors of the economy.
"A number of investors have shown interest to come and build shopping malls. We need one modern shopping mall that is going to house a number of business houses. Siavonga has the potential to develop into a major tourism destination, and in terms of scenery it is no match to most of Zambia's towns," he said.
Mweetwa said the district also lacked a proper fuel service station.
And Mweetwa said Lake Kariba presents the district with opportunities to grow its aquaculture and tourism industries.
"We have a challenge as a district as we do not receive enough rainfall, so we want to concentrate more on using the God given resource like the water that we have. We are happy that a number of companies like Lake Harvest from Zimbabwe and Yalelo Investments are already on board in developing the aquaculture industry," said Mweetwa.
Yalelo Investments, a Zambian firm being run by former Lusaka mayor Fisho Mwale, has invested US $2.5 million in a fish growing project in Siavonga that is expected to create over 200 jobs for the locals.
Labels: BANKING, BRAVE MWEETWA, SIAVONGA
Read more...
(NEWZIMBABWE) Biti cracks whip on 'undemocratic' banks
16/05/2013 00:00:00
by Paradzai Brian Paradza
ZIMBABWE’S banking system needs “democratisation”, Finance Minister Tendai Biti said on Thursday as he revealed that only 19 percent of Zimbabweans had access to financial institutions.
The government will shortly announce new regulations for the banks to compel them to make their services more accessible even for the rural areas, reduce the cost of banking and increase the use of debit cards.
“There is no financial inclusion in Zimbabwe. Only 19 percent of Zimbabweans are banked and one brick and mortar branch is serving 77,000 people. That’s not good enough,” Biti told a news conference in Harare.
“If you go to the rural areas, people put their money in muhozi (granary). If it’s women, my own grandmother, they put their money in funny parts of their anatomy. It’s not good enough. So we need to ensure the democratisation of the banking services.”
He said there was need for the sector to roll out services into the rural areas to enhance accessibility, citing the Kenyan experience, where rural shops are able to offer banking services to the people, as a case study to adopt.
He went on: “Mobile banking and electronic banking can solve some of the problems, but they are not extensive. One of the things we are trying to bring under the banking amendments, we agreed with the financial sector, is that we are going to allow what we call bank agencies like they did in Kenya.
“The second intervention we have proposed is that of e-banking, in Zimbabwe you still find people using cash. We need to start using debit cards.”
Biti said the spate of bank failures and negative real returns on deposits has over the years eroded customer confidence in the sector, resulting in most people and businesses conducting their transactions outside the formal banking channels.
He said the government will this week gazette comprehensive banking reforms to prevent future bank failures through a series of interventions such as ensuring that every bank lists on the stock exchange as well as extending liability to the bank owners and directors should the bank fail.
Meanwhile, Biti trashed threats by his Indigenisation and Empowerment colleague Saviour Kasukuwere on the sector, saying the law requires that there should be discussions with the sector representatives before any changes are made. Those consultations are still in progress.
“On the indigenisation of the banking sector, we have made it clear to Minister Kasukuwere that according to his own regulations; the indigenisation of a sector can only take place in consultation with the line minister, in this case the Minister of Finance. We have not consented,” Biti said.
“This is why you have not heard us make a comment on this issue because we still need to follow the law and the law is clear that there has to be sectoral agreement.”
Kasukuwere has recently threatened foreign-owned banks with forfeiture of their licences for failing to cede majority shareholding to locals in line with the law. But the minister faces opposition from Reserve Bank governor Gideon Gono and Biti who say banking should be ring-fenced because it is a “sensitive” sector.
Labels: BANKING, SAVIOUR KASUKUWERE, TENDAI BITI
Read more...
(NEWZIMBABWE) US lifts sanctions on two banks
24/04/2013 00:00:00
by Staff Reporter
THE United States government said Wednesday it had removed sanctions against the state-owned Agricultural Development Bank of Zimbabwe and the Infrastructure Development Bank of Zimbabwe.
The banks were among institutions and individuals slapped with sanctions by the US more than a decade ago over allegations of electoral fraud and human rights abuses.
On Wednesday the U.S. Treasury Department’s Office of Foreign Assets Control issued a licence that authorises transactions with the two banks “provided they don’t involve someone under U.S. sanctions”.
The US said the development was part of an “action for action” response to encourage continuing political progress after the country organised a referendum on a new constitution with fresh elections expected later in the year.
“Our sanctions program reflects a continuing commitment to help the people of Zimbabwe restore the stable, peaceful, democratic country they rightly deserve,” the State Department official said.
“We are prepared to consider further rolling back our sanctions on Zimbabwe in response to positive progress on Zimbabwe’s part in meeting its reform commitments.
The move comes after the European Union (EU) also suspended its own sanctions, offering to remove them completely if the country organise credible new elections.
Zimbabwe has however rejected conditional easing of the sanctions which President Robert Mugabe and his Zanu PF party say are illegal and responsible for the country’s economic problems.
Labels: BANKING, SANCTIONS, ZDERA
Read more...
It Can Happen Here: The Bank Confiscation Scheme for US and UK Depositors
By Ellen Brown
Global Research, March 29, 2013
Web of Debt
Confiscating the customer deposits in Cyprus banks, it seems, was not a one-off, desperate idea of a few Eurozone “troika” officials scrambling to salvage their balance sheets. A joint paper by the US Federal Deposit Insurance Corporation and the Bank of England dated December 10, 2012, shows that these plans have been long in the making; that they originated with the G20 Financial Stability Board in Basel, Switzerland (discussed earlier here); and that the result will be to deliver clear title to the banks of depositor funds.
New Zealand has a similar directive, discussed in my last article here, indicating that this isn’t just an emergency measure for troubled Eurozone countries. New Zealand’s Voxy reported on March 19th:
The National Government [is] pushing a Cyprus-style solution to bank failure in New Zealand which will see small depositors lose some of their savings to fund big bank bailouts . . . .
Open Bank Resolution (OBR) is Finance Minister Bill English’s favoured option dealing with a major bank failure. If a bank fails under OBR, all depositors will have their savings reduced overnight to fund the bank’s bail out.
Can They Do That?
Although few depositors realize it, legally the bank owns the depositor’s funds as soon as they are put in the bank. Our money becomes the bank’s, and we become unsecured creditors holding IOUs or promises to pay. (See here and here.) But until now the bank has been obligated to pay the money back on demand in the form of cash. Under the FDIC-BOE plan, our IOUs will be converted into “bank equity.” The bank will get the money and we will get stock in the bank. With any luck we may be able to sell the stock to someone else, but when and at what price? Most people keep a deposit account so they can have ready cash to pay the bills.
The 15-page FDIC-BOE document is called “Resolving Globally Active, Systemically Important, Financial Institutions.” It begins by explaining that the 2008 banking crisis has made it clear that some other way besides taxpayer bailouts is needed to maintain “financial stability.” Evidently anticipating that the next financial collapse will be on a grander scale than either the taxpayers or Congress is willing to underwrite, the authors state:
An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositors] into equity [or stock]. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution.
No exception is indicated for “insured deposits” in the U.S., meaning those under $250,000, the deposits we thought were protected by FDIC insurance. This can hardly be an oversight, since it is the FDIC that is issuing the directive. The FDIC is an insurance company funded by premiums paid by private banks. The directive is called a “resolution process,” defined elsewhere as a plan that “would be triggered in the event of the failure of an insurer . . . .” The only mention of “insured deposits” is in connection with existing UK legislation, which the FDIC-BOE directive goes on to say is inadequate, implying that it needs to be modified or overridden.
An Imminent Risk
If our IOUs are converted to bank stock, they will no longer be subject to insurance protection but will be “at risk” and vulnerable to being wiped out, just as the Lehman Brothers shareholders were in 2008. That this dire scenario could actually materialize was underscored by Yves Smith in a March 19th post titled When You Weren’t Looking, Democrat Bank Stooges Launch Bills to Permit Bailouts, Deregulate Derivatives. She writes:
In the US, depositors have actually been put in a worse position than Cyprus deposit-holders, at least if they are at the big banks that play in the derivatives casino. The regulators have turned a blind eye as banks use their depositaries to fund derivatives exposures. And as bad as that is, the depositors, unlike their Cypriot confreres, aren’t even senior creditors. Remember Lehman? When the investment bank failed, unsecured creditors (and remember, depositors are unsecured creditors) got eight cents on the dollar. One big reason was that derivatives counterparties require collateral for any exposures, meaning they are secured creditors. The 2005 bankruptcy reforms made derivatives counterparties senior to unsecured lenders.
One might wonder why the posting of collateral by a derivative counterparty, at some percentage of full exposure, makes the creditor “secured,” while the depositor who puts up 100 cents on the dollar is “unsecured.” But moving on – Smith writes:
Lehman had only two itty bitty banking subsidiaries, and to my knowledge, was not gathering retail deposits. But as readers may recall, Bank of America moved most of its derivatives from its Merrill Lynch operation [to] its depositary in late 2011.
Its “depositary” is the arm of the bank that takes deposits; and at B of A, that means lots and lots of deposits. The deposits are now subject to being wiped out by a major derivatives loss. How bad could that be? Smith quotes Bloomberg:
. . . Bank of America’s holding company . . . held almost $75 trillion of derivatives at the end of June . . . .
That compares with JPMorgan’s deposit-taking entity, JPMorgan Chase Bank NA, which contained 99 percent of the New York-based firm’s $79 trillion of notional derivatives, the OCC data show.
$75 trillion and $79 trillion in derivatives! These two mega-banks alone hold more in notional derivatives each than the entire global GDP (at $70 trillion). The “notional value” of derivatives is not the same as cash at risk, but according to a cross-post on Smith’s site:
By at least one estimate, in 2010 there was a total of $12 trillion in cash tied up (at risk) in derivatives . . . .
$12 trillion is close to the US GDP. Smith goes on:
. . . Remember the effect of the 2005 bankruptcy law revisions: derivatives counterparties are first in line, they get to grab assets first and leave everyone else to scramble for crumbs. . . . Lehman failed over a weekend after JP Morgan grabbed collateral.
But it’s even worse than that. During the savings & loan crisis, the FDIC did not have enough in deposit insurance receipts to pay for the Resolution Trust Corporation wind-down vehicle. It had to get more funding from Congress. This move paves the way for another TARP-style shakedown of taxpayers, this time to save depositors.
Perhaps, but Congress has already been burned and is liable to balk a second time. Section 716 of the Dodd-Frank Act specifically prohibits public support for speculative derivatives activities. And in the Eurozone, while the European Stability Mechanism committed Eurozone countries to bail out failed banks, they are apparently having second thoughts there as well. On March 25th, Dutch Finance Minister Jeroen Dijsselbloem, who played a leading role in imposing the deposit confiscation plan on Cyprus, told reporters that it would be the template for any future bank bailouts, and that “the aim is for the ESM never to have to be used.”
That explains the need for the FDIC-BOE resolution. If the anticipated enabling legislation is passed, the FDIC will no longer need to protect depositor funds; it can just confiscate them.
Worse Than a Tax
An FDIC confiscation of deposits to recapitalize the banks is far different from a simple tax on taxpayers to pay government expenses. The government’s debt is at least arguably the people’s debt, since the government is there to provide services for the people. But when the banks get into trouble with their derivative schemes, they are not serving depositors, who are not getting a cut of the profits. Taking depositor funds is simply theft.
What should be done is to raise FDIC insurance premiums and make the banks pay to keep their depositors whole, but premiums are already high; and the FDIC, like other government regulatory agencies, is subject to regulatory capture. Deposit insurance has failed, and so has the private banking system that has depended on it for the trust that makes banking work.
The Cyprus haircut on depositors was called a “wealth tax” and was written off by commentators as “deserved,” because much of the money in Cypriot accounts belongs to foreign oligarchs, tax dodgers and money launderers. But if that template is applied in the US, it will be a tax on the poor and middle class. Wealthy Americans don’t keep most of their money in bank accounts. They keep it in the stock market, in real estate, in over-the-counter derivatives, in gold and silver, and so forth.
Are you safe, then, if your money is in gold and silver? Apparently not – if it’s stored in a safety deposit box in the bank. Homeland Security has reportedly told banks that it has authority to seize the contents of safety deposit boxes without a warrant when it’s a matter of “national security,” which a major bank crisis no doubt will be.
The Swedish Alternative: Nationalize the Banks
Another alternative was considered but rejected by President Obama in 2009: nationalize mega-banks that fail. In a February 2009 article titled “Are Uninsured Bank Depositors in Danger?“, Felix Salmon discussed a newsletter by Asia-based investment strategist Christopher Wood, in which Wood wrote:
It is . . . amazing that Obama does not understand the political appeal of the nationalization option. . . . [D]espite this latest setback nationalization of the banks is coming sooner or later because the realities of the situation will demand it. The result will be shareholders wiped out and bondholders forced to take debt-for-equity swaps, if not hopefully depositors.
On whether depositors could indeed be forced to become equity holders, Salmon commented:
It’s worth remembering that depositors are unsecured creditors of any bank; usually, indeed, they’re by far the largest class of unsecured creditors.
President Obama acknowledged that bank nationalization had worked in Sweden, and that the course pursued by the US Fed had not worked in Japan, which wound up instead in a “lost decade.” But Obama opted for the Japanese approach because, according to Ed Harrison, “Americans will not tolerate nationalization.”
But that was four years ago. When Americans realize that the alternative is to have their ready cash transformed into “bank stock” of questionable marketability, moving failed mega-banks into the public sector may start to have more appeal.
Ellen Brown is an attorney, chairman of the Public Banking Institute, and the author of eleven books, including Web of Debt: The Shocking Truth About Our Money System and How We Can Break Free. Her websites are webofdebt.com and ellenbrown.com. For details of the June 2013 Public Banking Institute conference in San Rafael, California, see here.
Labels: BANKING, GREAT DEPRESSION II
Read more...
Gono in indigenisation about-turn
02/02/2013 00:00:00
by AFP
CENTRAL bank chief, Gideon Gono, who has previously warned government against the seizure of foreign banks this week appeared to make an about-turn, but cautioned the process must be orderly.
"All banks should observe the laws of the country including the indigenisation ... law," Gono said in his monetary policy statement on Thursday.
"The process to indigenise the banks should, however, take cognizance of the sensitivities around the operation of the banks to restore confidence, trust and stability in the sector."
Zimbabwe in 2007 adopted a law that forces foreign owned companies to sell 51 percent of shares to locals.
But last year the central bank governor warned the country's fragile economy could grind to a halt if the government rushed its planned seizure of majority stakes in foreign-owned banks.
UK-based Standard Chartered Bank and Barclays Bank, and South Africa's Standard Bank, are just some of the major foreign banks with operations in Zimbabwe.
Top African conglomerate, Ecobank earlier this month complied with the local regulations giving up majority stake to locals.
The black empowerment drive, which is being spear-headed by long ruling President Robert Mugabe saw the world's number two platinum miner Implats cede 51 percent of the shares in its local unit Zimplats, to Zimbabwean investors.
The campaign has been described as illegal and a threat to Zimbabwe's ailing economy by Prime Minister Morgan Tsvangirai.
Gono said Zimbabwe's economy remains fragile with low export earnings, lack of credit lines or foreign direct investment resulting in the liquidity crunch.
The country which trashed its local dollar because of hyper-inflation four years ago in favour of hard currencies is facing the problem of fake US dollar and South African rand notes in circulation.
"Under the multiple currency system, the proliferation of counterfeit notes has gathered pace in a worrisome manner," he warned.
Zimbabwe's central bank which has complained about banks charging steep bank charges and interest rates of up to 30 percent announced a lending rate ceiling of no more than 12 percent.
Labels: BANKING, GIDEON GONO, INDIGENIZATION AND EMPOWERMENT ACT (ZIMBABWE)
Read more...
Micro Finance Service Providers’s lending interest rate capped at 42% by Bank of Zambia
Time Posted: January 3, 2013 6:14 pm
The Bank of Zambia has with immediate effect introduced a cap on the effective annual lending interest rates that licensed non-bank financial institutions can charge their customers. This follows similar recent measures taken on commercial banks by the central bank.
Bank of Zambia Head of Public Relations Kanguya Mayondi in a statement released to media said that this measure has been necessitated on account of
the exorbitant interest rates that some non-bank financial institutions have continued to charge their customers.
Mr Mayondi explained that the capping of interest rates is aimed at making borrowing from non-bank financial institutions more affordable and equitable especially to the vulnerable micro-borrowers served by this sector.
He said that as a consequence, the maximum effective annual lending interest rate for non-bank financial institutions designated as microfinance service providers by the Bank of Zambia shall not exceed 42%.
He said that consequently, the Bank will designate non-bank financial institutions qualifying under this measure.
Mr Mayondi added that the maximum effective annual lending rate that will be charged by all other non-bank financial institutions will not exceed 30%.
He said that the interest caps of 42% and 30% have been arrived at by multiplying the commercial bank maximum effective annual lending interest rate, which currently stands at 18.25%, by factors of 2.302 and 1.644, respectively.
He stated that the Bank of Zambia will periodically revise the factors applicable to the non-bank financial institutions interest caps, in response to changes in economic fundamentals and the commercial bank rate.
Mr Mayondi further added that the conditions will apply to new loans written, while existing loans will be allowed to run their course on the current terms unless refinanced.
Meanwhile the Bank of Zambia has directed commercial banks and business entities to accept cheques issued prior to 1st January 2013 in the old currency.
Head of Public Relations Kanguya Mayondi said that the central bank has received reports that certain business entities and some commercial banks are turning away customers holding cheques prior to 1st January 2013 in the old currency.
Mr Mayondi said that cheques issued prior to 1st January 2013 in the old currency are just as good and should accordingly be accepted and processed.
He reminded all business entities and commercial banks that the cheques have a validity period of six months and therefore cannot be deemed to be invalid because of the currency rebasing exercise.
Mr Mayondi said that Cheques, therefore, should be accepted accordingly as they will be processed through the banking system by dividing the amounts by 1,000 to convert the values into the rebased currency.
He said that the Bank of Zambia, in this regard, wishes to remind all business entities and commercial banks that cheques issued prior to 1st January 2013 and in the old currency must be recognized and accepted as payment in order to ensure that well-meaning customers are not inconvenienced.
Labels: BANKING, KANGUYA MAYONDI, LENDING RATES, MICRO-FINANCE
Read more...
Barclays clients complain about debit anomalies
By Henry Sinyangwe
Thu 27 Dec. 2012, 12:20 CAT
SOME Barclays Bank clients have complained of having their accounts over-debited whenever money is being recovered for unprocessed Visa debit payments. But Barclays Bank Zambia has apologised to its customers for the inconvenience.
Several customers expressed concern that the bank was not immediately deducting money from their accounts each time they made electronic transactions such as swiping.
The clients further complained that some of the transactions that took place many months ago were being deducted this month without any notice.
They also criticised what they termed "over-deducting and unnecessary bank charges".
"We are being inconvenienced because there are so many anomalies," said a client, who refused to be named.
They also wondered why the bank only debited their accounts months after transactions had taken place as some of them did not have enough money in their accounts.
But Barclays Bank Zambia says the debit problem was caused by its remedial action to recover the unprocessed Visa debit payments from customers who made transactions using Visa electron.
Reacting to the customers' concerns in a joint statement yesterday, head of customer service Agatha Yowela and communications manager Banji Gwaba Lufungulo assured customers that the bank remained committed to resolving any concerns that they may have regarding the recent debiting of their accounts with unprocessed Visa debit payments.
"Barclays Bank Zambia Plc wishes to apologise to our esteemed customers who have been inconvenienced during this recovery process. We further wish to advise customers that the Bank will continue to keep its communication channels open with them should they require clarity on the matter," they stated.
Labels: BANKING, BARCLAYS BANK, CORRUPTION
Read more...
Barclays clients complain about debit anomalies
By Henry Sinyangwe
Thu 27 Dec. 2012, 12:20 CAT
SOME Barclays Bank clients have complained of having their accounts over-debited whenever money is being recovered for unprocessed Visa debit payments.
But Barclays Bank Zambia has apologised to its customers for the inconvenience. Several customers expressed concern that the bank was not immediately deducting money from their accounts each time they made electronic transactions such as swiping.
The clients further complained that some of the transactions that took place many months ago were being deducted this month without any notice.
They also criticised what they termed "over-deducting and unnecessary bank charges".
"We are being inconvenienced because there are so many anomalies," said a client, who refused to be named.
They also wondered why the bank only debited their accounts months after transactions had taken place as some of them did not have enough money in their accounts.
But Barclays Bank Zambia says the debit problem was caused by its remedial action to recover the unprocessed Visa debit payments from customers who made transactions using Visa electron.
Reacting to the customers' concerns in a joint statement yesterday, head of customer service Agatha Yowela and communications manager Banji Gwaba Lufungulo assured customers that the bank remained committed to resolving any concerns that they may have regarding the recent debiting of their accounts with unprocessed Visa debit payments.
"Barclays Bank Zambia Plc wishes to apologise to our esteemed customers who have been inconvenienced during this recovery process. We further wish to advise customers that the Bank will continue to keep its communication channels open with them should they require clarity on the matter," they stated.
Labels: BANKING, BARCLAYS BANK
Read more...
