Indigenisation: What is RBZ’s role?

Bank of Zimbabwe.
Parliament passed a law on Indigenisation and Empowerment and the minister responsible has been conscientising the nation on this law and also negotiating and implementing the policy.
What one might ask is: Where is the role of financial institutions in this equation?
Surely, the RBZ through the Ministry of Finance should be the advisor and the custodian of all financial transactions of this policy.
Many people are questioning whether those areas or provinces that have minerals are the only ones to benefit from community trusts.
What about provinces that have no minerals or may have resources underground that have not been exploited for lack of investors and capital?
If all the shares being taken over by Government were transferred to the RBZ, then the problem of community trusts being just for one particular area would not arise.
In Nigeria, the oilfields are located in one southern state but the revenues are for the whole country.
What that southern state is worried about is the environmental damage that they want the oil companies to address rather than claiming that the oil revenues should mainly be for their state.
If one takes the diamonds being mined in Manicaland province as an example, surely the revenue or shares of diamond companies should be held by the RBZ.
The revenue realised should be channelled through the RBZ.
The RBZ should be the custodian of the nation’s money or if I may use the correct term, should be the holders of the financial reserves of the country.
Recently, CZI called for the recapitalisation of the apex bank as a way of guaranteeing offshore lines of credit. How can a country gain any credible credit ranking while its Reserve Bank is broke?
It does not make sense to allow a situation where the Reserve Bank is made redundant in a country.
It is not the Ministry of Finance that can conduct financial affairs with the outside world.
The Reserve Bank should be the only financial institution that should conduct the country’s financial foreign policy just like the Federal Reserve in the USA does.
It has been reported that China has loaned about US$1 trillion to America. Surely, the US Federal Reserve Bank holds the money. The same should apply to Zimbabwe. When the IMF visits Zimbabwe, it discusses financial and economic affairs with the RBZ.
The RBZ should be our own IMF in spearheading the economic development of the country.
Of late, the Ministry of Finance has been known to be talking about collecting money to meet Government expenditure. Industrialisation of the country should be the preserve of the RBZ.
Yes, there is no doubt that some still hold grudges against the RBZ for taking their foreign currency during the hyperinflation period where the printing of money was the major role of the RBZ.
Those days have passed with the adoption of the multi-currency system. Everybody must now look to the future where the RBZ should play its central role of being custodian of our financial resources.
In many developing countries, their reserve banks play a major role not only in mobilising finances but also in identifying the industries that require financial support for sustainable economic development.
Recently in the USA, the motor car industry was facing collapse and the US government bailed out the car makers with money provided by the US Federal Reserve Bank.
The money has since been repaid. The same happened with distressed banks that required capitalisation.
Why can we not learn from what               has happened in other countries and stop treating the RBZ like a foreign concern?
The allocation of 51 percent shareholding to the Government and other entities must be done by the RBZ.
The financial arrangements must be negotiated by RBZ.
It is known that policy formulation will still remain the preserve of the Government but the day-to-day implementation of those policies should be managed by financial institutions.
The major problem facing the indigenous banks is that of capitalisation.
If the RBZ was fully capitalised, those banks which are struggling would be able to get financial support from them.
The supervision of companies that have transferred shares to Government should be the task undertaken by the RBZ.
Owning shares, sometimes does not mean that there will be money at the end of the financial period.
Companies may declare losses with no money to pay dividends. Those that trade shares are the ones that make money.
If shares are just held in trust without being traded, no money may be forthcoming to the shareholder. Many people have shares in companies but the dividends are really nothing to take to the bank.
Therefore, the indigenisation and empowerment programmes must involve the Reserve Bank as a custodian of the country’s financial institutions and must be use to effect economic development that benefits all the country’s regions.