Bankers have bemoaned the impact of Western-imposed sanctions on Zimbabwe, which have led to the loss of more than 100 correspondent banking relationships since the restrictions were imposed at the turn of the century.
Correspondent banks provide services to other banks, usually, those in other countries, acting as intermediaries or agents, facilitating wire transfers, conducting business transactions, accepting deposits and gathering documents on behalf of others.
Such banks are most likely to be used by domestic banks to service transactions that either originate or are completed in foreign countries.
The United States imposed an international embargo against Zimbabwe through the Zimbabwe Democracy and Economic Recovery Act (ZIDERA) in 2001 to punish former strongman Robert Mugabe’s regime over alleged human rights abuses and electoral fraud.
Addressing delegates at the Institute of Bankers of Zimbabwe Summer School in Victoria Falls last week, FBC Bank managing director Webster Rusere said the sanctions have had far-reaching consequences on the financial sector. Rusere said:
What we need to do is to say how many correspondent banking relationships have been closed since 2001/2002. The number is 102. There is no bank that has not been affected by sanctions.
When you have a situation where your suppliers cannot access credit … Can you say that it is targeted? No, it is not.
Some mining companies are failing to access money from their banks and clients abroad after being seized by fiscal authorities in the United States over their dealings with the Mineral Marketing Corporation of Zimbabwe (MMCZ), which is under sanctions.
The MMCZ is the sole marketing and export agent for all Zimbabwean minerals, including nickel and chromite, but excluding gold and silver.
Resultantly, the RBZ early this year directed that the Zimbabwe Revenue Authority (ZIMRA) would now have the mandate to collect fees and commissions previously paid to the MMCZ.
The government estimates that sanctions cost the country over US$42 billion between 2000 and 2013, apart from sending thousands of firms into bankruptcy.
But Western powers maintain that the sanctions are only targeted at a few elites that have been blamed for high-level corruption, electoral fraud and human rights violations.
Last month, a United Nations special envoy, Alena Douhan, called on the US and the EU to consider lifting the sanctions saying they were hurting the general public.
More: The Standard