StanChart exit was always written on the wall: A brief dive into history

by | Apr 27, 2022 | Business, Opinions | 0 comments

Hosia Mviringi

Standard Chartered Bank recently announced a dramatic divestiture of its investment from the Zimbabwean market.

“The Reserve Bank of Zimbabwe wishes to advice the public that Standard Chartered Bank Zimbabwe has formerly advised that Standard Chartered Bank Group has made a decision to divest its business interests in Zimbabwe.”

This was a statement of announcement by the Reserve Bank of Zimbabwe on April 21, 2022.
Some of an imperial inclination have predicted a financial apocalypse as a result of the Group’s pulling out of the Zimbabwean market.

The historical background

Standard Chartered Bank Zimbabwe, together with the former Barclays Bank were colonial instruments which were established at first to facilitate slave trade, then subsequently to support the remnants of colonial conquest in the mould of Commercial farmers.
At the turn of the millennium when Zimbabwe moved to repossess and recover stolen land from the white commercial farmers, the value and purpose of these two entities literally fell off.

The demise of these banks was imminent forthwith.
Their role as facilitators of imperialism, conquest and plunder of African resources diminished, thus their painstaking yet progressive withdrawal from Zimbabwe and a reorganisation in other territories.

In the case of Zimbabwe, the two institutions had tried a long wait, two decades to be specific, hoping that fortunes will turn, hanging on the hope of a reversal of the land reform and return of their favoured clientele, which never materialised.

To add salt to injury, the entry of indigenous banks to the scene and the proliferation of micro banking and mobile money effectively sealed their fate.
It literally put the final nails onto the coffins of the colonial legacy financial institutions.

Furthermore, in the early years of the landmark agrarian land reforms, the two colonial banks had hoped to thrive on the patronage of a few imperial multinational corporations that remained operational in Zimbabwe in the mining and manufacturing sectors such as the British American Tobaccos, Lonhro, British Petroleum (BP) and Dutch Shell (BP & Shell) and a few others.
But these provided a small portion of the usual business to the two banks, thus a progressive closure of their once sprawling branch network, which has culminated in a final closure of operations within the geographical territory.

The subsequent withdrawal of BP (now ZUVA), BHP Billiton, Anglo-American and many other British companies in protest over the land reform meant that the two financial institutions would not survive in Zimbabwe without a change of business culture and focus.

To understand the role of the two financial institutions in the bigger scheme of the colonial legacy, the two were frontline actors in the transatlantic imperial hegemony of the former colonial powers.

Financial institutions, as well as big multinational corporations, and to a larger extent, Non-Governmental Organisations, are a key Foreign Policy component of the imperial Europe and America in Africa whose role borders on perpetuation of colonial interests.

Such practices expose and socialise Africans to unfair market policies and practices which are hitherto propagated and promoted as “international best practices”.
They impose a flawed business and social culture which favours former colonial masters.
The colonial banking institutions had a ‘well-structured’ role as supporting institutions to colonial expansionist looting escapades.

Their roles involved sourcing foreign funding for on-lending to the favoured colonial clientele, that is the White commercial farmers and multinationals, and NGOs whose role was to accumulate as much wealth as possible for onward expatriation to Europe and America.

Their funding models were structured in a special way that encouraged local recipients of the funding to ensure that a portion of African resources, be it agricultural produce or such natural resources as raw minerals or land resources ended up in Foreign White hands.

That is how most European capitals were built on stolen African resources.
These banks participated and facilitated, in a central position, in the illegal and grossly immoral slave trade and looting of African resources.

A dead end for the banks

The insistence of the banks on Title to Agricultural land is testimony to the colonial assertion.
The banks would then become agents of transfer of agricultural land from indigenous black farmer beneficiaries back to the former owners for a song in exchange with the so-called ‘bad debt’.

The banks’ role as inheritors of the colonial mandate faltered at the government of Zimbabwe’s refusal to grant title deeds to new black land owners, dealing a fatal blow to the banks’ existence on the Zimbabwean market.
The role of Standard Chartered and Barclays Banks should be understood in the context of imperial facilitators of a century long plunder of African resources.

They, together with the much revered White commercial farmers, represents the unrepentant twin evils who, in their entire existence in Zimbabwe, have never represented the interests of their African hosts.

No financial earth tremors

In fact, there won’t be any financial earth tremors on the Zimbabwean financial market as a result of the departure of the two colonial banks.
Standard Chartered Bank Zimbabwe, which according to Central Bank data, accounted for a paltry 3.25 per cent of all Bank loans on the Zimbabwean market, will now be seeking for a buyer for its local assets valued at about ZW$17.8 billion.

A tale of unintended consequences

The draconian US Zimbabwe Democracy and Economic Recovery Act of 2001 (ZDERA) became the straw that broke the camel’s back when in 2019 Standard Chartered Bank Zimbabwe was fined US$18 million by the US government’s Office Of Foreign Assets Control (OFAC)

The Office of Foreign Assets Control (OFAC) is a department of the U.S. Treasury that is charged with enforcing economic and trade sanctions imposed by the U.S. against countries and groups of individuals.

Standard Chartered Bank suffered a similar fate as CBZ Bank, which even though not on sanctions list was fined a whooping US$385 million for facilitating $oreign transactions on behalf of  ZB Bank which was acting on behalf of specified entities and individuals.

One of the central roles of a banking institution is among other things facilitating trade through an established corresponding banking relationships with foreign banks. Standard Chartered Bank inevitably found itself in an unenviable position where it was then impossible to play this role as well as the on-lending role which hitherto used to be its mainstay.

Many indigenous Zimbabweans can testify to how the two banks remained rigid and disdainful to the native African clientele, even in the post land reform era, offering no incentives to the blank transacting public through stringent conditionalities for holding a transactional account with them.

It is equally poignant to point to the fact that, regardless of how the indigenous black farmers excelled, even to the point of beating the all time high tobacco production margins of 220 million kilograms in one season, the two colonial banks were strictly under instructions never to support the new farmers as this would defeat the purpose of their existence as imperialist enablers.
Any support to local farmers would have worked to defeat the role of imperial economic sanctions on the country.

It had always been apparent that their systems were segregatory in favour of the Caucasian brothers and sisters. When Barclays Bank moved to dispose of its stake through a sale of assets to Malawi based First Capital, it was a manifestation of a long period of procrastination and vain hopefulness.
There was no market any longer for the financial institutions.

For most Zimbabweans, there is actually nothing to remember about these two banks, except for the landmark buildings from where their imperial mandate thrived, and a deplorable culture of intolerance towards the black indigenous transacting public.

Chati homu chareva!