eBusiness Weekly
Kudzanai Sharara
The Nedbank Group is committed to its investment in Zimbabwe and the implementation of a new core banking system as well as re-branding of the Zimbabwean unit from MBCA Bank Limited to Nedbank Zimbabwe (Nedbank Zim) is a statement of intent of long-term plans, a senior official with the South African-based banking group said.
The banking group (Nedbank), which recently reported a 26 percent increase in half-year profit, said with the IMF forecasting sub-aharan Africa GDP to grow 3,3 percent in 2018 (the highest growth expected since 2011), Nedbank is committed to long-term and profitable growth in its Africa businesses including Zimbabwe.
In emailed responses to Business Weekly, Nedbank chief operating officer Mfundo Nkuhlu, said its Zimbabwean unit had implemented a new core banking system and recently re-branded MBCA Bank Limited to Nedbank Zim as a statement of intent of its long-term commitment and investment in the country.
Nkuhlu said, following the recently held elections, the country is now in a space, which will hopefully generate long-term business and investor confidence.
Although the elections are being contested and now before the courts, the market has looked at the elections as a key milestone of Zimbabwe’s future, according to Nkuhlu.
“The biggest challenge for the Zimbabwean market has been the political uncertainty, and the market has looked at the recent election as a key milestone of Zimbabwe’s future.
“Zimbabwe is now in a space where it is working through this new political era, which will hopefully generate long – term business and investor confidence.”
Nkuhlu said investor confidence should help the country unlock its foreign currency constraints, generate foreign direct investment, grow GDP and create jobs.
Zimbabwe is currently going through chronic foreign currency challenges that have seen both public and private institutions fail to meet their foreign payment obligations.
This publication has carried reports of listed entities that have not been able to bring in sufficient raw materials and equipment to meet their production requirements despite increased consumer demand.
Foreign direct investment has also been very low, but political and economic developments in the last eight or so months have seen growing investor interest with Government pointing to investment commitments of more than $16 billion.
According to official figures Business Weekly obtained from the Zimbabwe Investment Authority (ZIA) for the period between January and June 2018, ZIA had approved 165 investment proposals valued $15,7 billion.
The number of projects already given the green light in the first half of the year by the Investment Board represent a 166 percent jump when compared to the same period of 2017.
Nedbank also believes there is potential for growth in the Zimbabwean economy particularly in sectors such as agriculture, manufacturing and services.
“It is evident that there will be growth prospects in Zimbabwe through the infrastructure investment programme and sectors such as agriculture, manufacturing and services,” said Nkuhlu.
He added that Nedbank sees this as an opportunity to participate and provide credit line for these growth enhancing sectors, among others.
“Nedbank certainly sees Zimbabwe making a meaningful contribution to the Nedbank Group as the economy grows. Zimbabwe is the second largest economy in the SADC region in terms of GDP but the country has been performing below its potential.
“The resetting of political management and confidence building will help drive a relatively speedy turnaround of the Zimbabwean economy. One of the advantages that Zimbabwe has over its SADC neighbours is the high quality of human capital — some of which is in the diaspora.
“If the current conditions were to become more favourable, the country could witness a return of this human capital in the diaspora to drive further growth and development,” Nkuhlu said.
Nedbank recently launched an integrated cross-border remittances transfer solution, which enables Nedbank Money App users to transfer money to accounts in 33 African countries.
The biggest volumes will come from Zimbabweans living outside Zimbabwe according to Nkuhlu.
In its last set of results for the half year to June 2018, NedbankZim’s revenue grew to $21, 1 million from $16 million, while profit after tax was up 61,4 percent to $4,3 million from $2,7 million recorded during the same period last year.
Nedbank Zimbabwe MD Charity Jinya, said strategic initiatives resulted in growth of 26 percent of the bank’s account base and increase of 271 percent in point-of-sale machines.
She said the launch of a new core banking system and the rebranding of the bank from MBCA Bank Limited to NedbankZim were some of the key initiatives done during the first half of the year.
Jinya said her bank looks forward to continued improvement of the country’s economic outlook as the country progresses in the re-engagement with the international community and achieves arrears debt clearance.
“This will form a solid foundation for us to build the Nedbank brand equity and to leverage propositions already available at group level for the benefit of our clients.”
Nedbank Zimbabwe was the country’s first merchant bank incorporated in 1956 as the Merchant Bank of Central Africa. It was then converted into a fully-fledged commercial bank and adopted the name MBCA Bank in 2004 before rebranding to Nedbank Zim early this year.
Nedbank Group, one of the top four banks in South Africa, owns a 74 percent stake in NedbankZim. Other stakeholders include Old Mutual, which owns an 18,30 percent stake. The local unit recently ceded 7,5 percent shares to its workers through the Employee Share Ownership Scheme in line with the approved indigenisation plan.
