Stockbrokers trade on the floor of the Zimbabwe Stock Exchange (ZSE) in Harare, February 24, 2015. REUTERS/Philimon Bulawayo
In a bid to boost investment and revive its struggling economy, the Zimbabwe central bank has recently announced that the country will allow foreigners to buy stakes of up to 49 percent in companies listed on its stock exchange.
Central bank governor John Mangudya in a speech stated that with immediate effect, banks would be penalised if they allowed external transfers not approved by the central bank. He also urged the creation of an Economic Crimes Court.
“We have … increased the threshold of foreign investors on the stock exchange from 40 percent to 49 percent in line with the indigenisation and economic empowerment policy,” Mangudya said.
The central bank chief said Zimbabwean companies and individuals had illegally transferred $1.884 billion in 2015, blaming this on lax foreign exchange controls since the country abandoned its currency in 2009 in favour of foreign currencies.
The money was being transferred through non-remittance of export earnings, unapproved foreign investments, tax evasion and smuggling, he added.
“This country needs to plug the leakages of foreign exchange for the economy to undergo durable and robust transformation,” Mangudya said.
The Southern African nation is still struggling to overcome a steep 1999-2008 recession that saw its economy contract by nearly 50 percent, with problems exacerbated by a devastating drought and plunging prices for the commodities it exports.
