A survey of the banking sector conducted by Econometer Global Capital, a regional finance and economics research firm, shows that while the sector remains a source of hope for a struggling economy it is still struggling.
According to Econometer, bankers put a hold on making any meaningful decisions on where to allocate their funds because of policy inconsistencies in the central bank and the central government.
“They are more focused on ensuring the survival of their institutions and rightly so,” Econometer said.
The economics and finance research firm said many initiatives were put on hold as political grandstanding and the unpredictability of monetary policy’s direction gained ground. Now that the impact is better understood, banks are likely to invest in long term strategic planning.
Econometer also warned of job losses if the government proceeds with its indigenisation plans for the sector.
“The call for indigenisation of the banking sector poses a latent threat to the stability of a sector which is already on a cliff edge. On average, 1,250 jobs are on the wire in the banking sector if the plans to implement the policies go ahead,” Economter said.
Banks in the country have faced a lot of criticism from industry and farmers alike for failing to avail adequate credit to facilitate the resuscitation of full scale operations.
The central bank Governor Gideon Gono in March extended the deadline for commercial banks to reach the $100 million capital thresholds from 2014 to 2020. Gono cited the ongoing uncertainty fueled by the 51 percent indigenisation programme as the main reason for the decision.
Post published in: Business