Zim needs only 7 banks says IMF team

Zim needs only 7 banks says IMF team

Zimbabwe's financial institutions are shutting down

• IMF delegation in Zim on surveillance

• Zimbabwe repays IMF debt

• Mugabe pulls Zim out of C'nwealth

By Godfrey Marawanyika
19/03/04
ZIMBABWE'S small, inflation-plagued economy can take no more than seven commercial banks, says an International Monetary Fund (IMF) delegation currently on a routine visit to the country.

This is less than half the 17 registered commercial banks serving Zimbabwe's population of about 13 million people, most of whom survive on less than US$1 a day.

Officials who attended a meeting with IMF officials this week told the Zimbabwe Independent that the IMF delegation said a smaller number of banks would restore normalcy and public confidence in the financial services sector - currently dogged by allegations of poor corporate governance.

While government officials who attended the meeting are said to have rejected IMF dictates, the Bretton Woods team is understood to have expressed grave concerns at the country's runaway inflation, the foreign-currency parallel market and a liquidity crunch that has placed at least two financial institutions under curatorship.

The team this week met with Ministry of Finance officials and senior bankers.

The Washington team, led by Doris Rose, arrived in the country on Tuesday for routine Article IV consultations. In the next fortnight the team will meet central bank governor Gideon Gono and his senior officials, officials from the Zimbabwe Revenue Authority, and the Ministry of Agriculture.

The last Article IV meetings were held in July last year.

Since Friday last week, Intermarket Building Society and Barbican Bank and its asset management arm have closed shop after the central bank found the two were not in "sound financial positions".

The IMF team has also been having problems with fixing appointments with business lea-ders. Confederation of Zimbabwe Industries chief executive officer Farai Zizhou yesterday confirmed that their meeting with the IMF delegation had been postponed.

The IMF is said to have spoken highly of Gono's monetary policy launched in December last year. They however said there would be no decision on Zimbabwe's membership status until the end of June when the executive board meets - The Zimbabwe Independent
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