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Lovemore Mataire Harare Bureau—
The financial services sector is passing its own “package of economic sanctions” against Zimbabweans, forcing the government to propose banking sector reforms that should inject liquidity in the market to ensure depositors get value for their money, President Robert Mugabe said yesterday. Addressing thousands of mourners gathered for the burial of Senator Aguy Georgias at the National Heroes Acre in Harare, President Mugabe noted that people were losing the value of their savings with banks while paying huge interests on borrowings.
“Banks seem to pass their own sanctions package against us, including those who deposit with them. It’s only in banks where time reduces deposited savings, instead of growing them. One gets punished for depositing savings with banks, it seems. One gets less for one’s deposits, but pays more for borrowing,” said President Mugabe.
He said banks were undermining economic growth by charging exorbitant interest rates and other charges that eroded depositors’ savings. The President described the interest rates regime as extortionist as even small deposits were not spared the bank charges.
President Mugabe said the Minister of Finance and Economic Development, Cde Patrick Chinamasa and the Reserve Bank Governor John Mangudya, were looking at strategies to reform the banking sector and injecting liquidity in the market.
He said the acceptance of the Chinese yuan into the world currency basket should offer new opportunities for the country’s financial sector. The RBZ has since injected over $10 million worth of bond coins into the market and plans are afoot to inject more to ease liquidity challenges.
President Mugabe praised the late Sen Georgias for challenging the unfairness of the financial sector particularly banks which charged astronomical interest rates well beyond the principal sum borrowed (in duplum rule).
The rule states that interest rates charged on a debt should not exceed the principal borrowed from banks. “(Sen) Aguy wouldn’t have it. He successfully challenged such practices in our courts, in the process securing a judgment that promised relief to many. But there has been a lot of resistance to operationalising the tenets of that judgment, to great detriment of our economy,” President Mugabe said.
He said a good number of Zimbabweans would remember the late Sen Georgias as a shrewd businessman and the proprietor of Trinity Engineering, which specialised in the construction of coaches and trailers.
He built the business from scratch.
He said Sen Georgias challenged established businesses in the same field by clinching major deals at home and abroad. “He supported the fleet of our security establishment. He exported to different parts of Africa, as far afield as East Africa.”
President Mugabe said the conferment of National Hero status on Sen Georgias was part of the government’s appreciation and acknowledgement of his services and selfless dedication to the well-being of the country.
The late Sen Georgias started implementing value addition and beneficiatiation way before the government introduced the economic blue print, Zim-Asset, that has a cluster that encourages adding value to produce before export.
Online Reporter