Backlash over bank lending ban

Various stakeholders and experts have condemned stabilisation measures introduced by President Emmerson Mnangagwa to ‘stop economic hitmen’ from sabotaging the economy. They said the measures, mainly the banning of lending by banks, were unconstitutional, inadequate and ill-advised. As previously reported in Legalbrief Today, Mnangagwa has ordered banks to stop extending loans to both private companies and government departments. The measures – which were implemented on Monday – come in the wake of the deterioration of the parallel market exchange rates to reach a high of US$1/Z$400 in a development which monetary authorities have blamed on sabotage, speculative borrowing and indiscipline. New Zimbabwe reports that officials at leading financial services provider, BancABC, say the ban would result in banks resorting to dealings to compensate for ensuing losses. Last year, Ethiopia affected almost similar measures when it barred banks from providing loans backed by collateral, such as land and buildings following findings that the money was being used on the black market. The Zimbabwe Banks and Allied Workers Union said Mnangagwa’s measures would weigh heavily on ordinary Zimbabweans. Secretary-general Peter Mutasa described the measures as ‘anti-people’.