South Africa is now trying to flex its financial muscle in Zimbabwe as it seeks to increase both its political and economic influence in the region. This will be done through the recent take over of the local ANZ Grindlays Bank by the Standard Chartered Bank of South Africa.
ANZ Grindlays appears to be one of the most underrated banks because it does not cater for the majority who cannot afford its high minimum deposits but it has become the bank for the big investors especially farmers.
It has over the last few years increased its lending operations particularly to commercial farmers. Although other commercial banks have agri-business divisions, the only other commercial bank that seems to be deliberately targeting farmers is Zimbank.
Although there are only about 4 000 commercial farmers, they play a vital role in the economy of the country. This was amply demonstrated by the current drought which has led to the laying off of more than 7 000 workers in the agricultural industry and another 12 000 in the clothing and textile industries.
South Africa which is already Zimbabwe’s biggest trading partner and therefore holds Zimbabwe to ransom, although the landlocked country tries to be stubborn through its anti-apartheid stance, could therefore further enhance its position through this added financial control.
Already one South African owned multi-national, Anglo-American controls a substantial amount of investment in Zimbabwe and is reported to be one of the top five key players in the country’s economy.
Sources believe that Anglo was probably responsible for the demise of Hunyani which recently recorded a $21 million loss when it dumped a substantial amount of shares in Hunyani because it had lost confidence in the management of this publicly listed company.
Farming also plays a major role under the present Economic Structural Adjustment Programme (ESAP) as it brings in a lot of foreign currency on which the country depends.
Tobacco, for example, has largely been unaffected by ESAP and is bringing in a lot of foreign currency despite the concerted anti-smoking lobby.
Reports say there is now too much foreign currency under the Export Retention Scheme that people do not know what to do with it.
With good rains and new producer prices, Zimbabwe should be able to regain its position as a major food exporter. The big question though is that, with the financial controls in place, will South Africa allow this?
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