Zimbabwe has given international banks operating in the country a year to comply with a controversial indigenisation programme under which foreign companies are supposed to transfer 51 per cent stakes to black Zimbabweans.

A government notice has said all foreign-owned banks with a minimum net value of $1 will have to reduce their shareholding to 49 per cent by next July in a move that could affect banks including Barclays, Standard Chartered and South Africa’s Standard Bank.

The indigenisation law was passed by parliament in 2007, but the government’s focus has mainly been on mining houses, with groups such as Impala Platinum, at the centre of the storm.

The policy is being pushed by President Robert Mugabe’s Zanu-PF party and observers say it is partly motivated by political factors with elections expected to be held the next year.

In March, Implats said it had reached an “agreement in principle” to sell 31 per cent of its shares to the government, setting aside another 20 per cent for employees and a community trust. But details of the terms of any deal, how it would be financed and how it would be valued have not been clarified.

An official at a foreign-owned bank with operations in Zimbabwe said that while the rhetoric on banks was increasing, it would be hard for the government to attempt to force indigenisation on the sector.

“It’s not like any government could just take over a bank – the bank would just shut down, but they [the government] don’t want that and we don’t want that, so it’s probably not going to happen,” the official said. “There’s a lack of clarity about what they can do.”

Both Tendai Biti, finance minister, and Gideon Gono, the central bank governor, have also clashed with Saviour Kasukuwere, the Zanu-PF minister pushing indigenisation, over the proposal, warning that with only 15 of the 26 banks making profits in the first quarter, it is not the right time for such an initiative.

Mr Kasukuwere insists that he has the power to ignore their advice, but it is unclear how he could implement his threats.

“It is pure intimidation,” said a Harare-based banker.

The indigenisation policy has been blamed for exacerbating investor uncertainty in the country as it has sought to recover from the economic crisis triggered by Mr Mugabe’s land reform programme of the 2000s when white-owned farms were seized without compensation.

Since a unity government was formed between Zanu-PF and the opposition Movement for Democratic after violent and disputed elections growth has picked up, largely because of the dollarisation of the economy.

The International Monetary Fund forecasts the economy will expand by 5 per cent this year. But the recovery remains fragile, while the volatile political environment and indigenisation programme are fuelling uncertainty.

“There is the appetite to do more business, but it’s very hard in this environment,” a bank official said.

Get alerts on Zimbabwe when a new story is published

Copyright The Financial Times Limited 2018. All rights reserved.

Follow the topics in this article