Categories: Stories

SA muscling its way into Zimbabwe

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?

(40 VIEWS)

Charles Rukuni

The Insider is a political and business bulletin about Zimbabwe, edited by Charles Rukuni. Founded in 1990, it was a printed 12-page subscription only newsletter until 2003 when Zimbabwe's hyper-inflation made it impossible to continue printing.

Recent Posts

Will Mnangagwa go against the trend in the region?

Plans by the ruling Zimbabwe African National Union-Patriotic Front to push President Emmerson Mnangagwa to…

October 22, 2024

The Zimbabwe government and not saboteurs sabotaging ZiG

The Zimbabwe government’s insatiable demand for money to satisfy its own needs, which has exceeded…

October 20, 2024

The Zimbabwe Gold will regain its value if the government does this…

Economist Eddie Cross says the Zimbabwe Gold (ZiG) will regain its value if the government…

October 16, 2024

Is Harare the least democratic province in Zimbabwe?

Zimbabwe’s capital, Harare, which is a metropolitan province, is the least democratic province in the…

October 11, 2024

Zimbabweans against extension of presidential term in office

Nearly 80% of Zimbabweans are against the extension of the president’s term in office, according…

October 11, 2024

Zimbabwe government biggest loser when there is a discrepancy in the exchange rate

The government is the biggest loser when there is a discrepancy between the official exchange…

October 10, 2024