Socio-economic justice advocacy group, the Zimbabwe Coalition on Debt and Development (ZIMCODD) has called on the Government to reverse ongoing measures to partially privatize the People’s Own Savings Bank (POSB).
In a statement, ZIMCODD said privatisation of the savings bank is not in the nation’s best interests.
“Privatisation entails the transfer of parastatal ownership and control from the public to the private sector and threatens the public interest. This goes against the POSB Act which states that it is a people’s bank that must remain in the hands of the State. The Act’s intention is for government to defend citizens’ long-term financial interests in a volatile market economy through mechanisms such as a Bank dedicated to serving the public interest,” read the statement
The Parliament of Zimbabwe, ZIMCODD says should safeguard the autonomy of the POSB and provide critical oversight to ensure that the Bank remains faithful to its public mandate.
“Instead of privatizing POSB, government should increase the autonomy for this state-backed bank and enforce strict regulatory oversight by the banking supervisor. Selling off the Bank is not the only way to enhance the POSB’s ‘capacity to underwrite more business to the productive sectors, or access expertise and technology to improve banking operations and competitiveness,” ZIMCODD said.
The coalition says the Government should justify the need for selling off the bank since it is among the profitable state owned enterprises.
“Government of Zimbabwe must present clear evidence of the proposed benefits of the sale for public scrutiny and Parliamentary debate. There is no justifiable need to sell off the POSB. It is presently one of the few profitable and efficiently managed, State-owned Enterprises. The Bank posted a net profit of ZWL$24,7 million during the six months ended June 30, 2019, compared to the ZWL$8,11 million recorded during the same period in 2018.
“This objective fact undermines Government’s argument that privatization would foster increased competition, which would reduce the cost of financial intermediation and improve bank profitability. Why should the People’s Own Savings Bank become profitable in the hands of other owners not the people of Zimbabwe?
“Instead of selling off the Bank, ZIMCODD calls upon the Government to invest in further capitalizing the Bank’s expansion and modernization for improved efficiency and competitiveness. Just as Government has deployed taxpayer’s money to assume debts and rescue preferred industries, it is time that Government deploys public money to safeguard the only remaining banking Institution created in the public interest.” the coalition added.
POSB is wholly owned by the Government on behalf of the people of Zimbabwe and has over 400,000 customers countrywide.
