A TOP Zimbabwean banker Mr. George Guvamatanga has charged the Zimbabwean government to show policy consistency and re-engage the international community to normalise diplomatic relations while attracting foreign investment.

Mr. George Guvamatanga who is the MD  of Barclays Bank and also Bankers Association of Zimbabwe (Baz) president, stated this at the 2013 Zimbabwe Independent Banks and Banking Survey event at a local hotel in Harare that government must move with urgency and clarity to tackle the resurging economic problems which followed the recent general elections.

Guvamatanga said government also needed to recapitalise the Reserve Bank of Zimbabwe (RBZ), indicating a functional and adequately capitalised central bank would restore its lender-of-last-resort status. He said good corporate governance within the banking sector is critical to boosting market confidence, improve liquidity and save financial institutions from collapse.

While deposits grew from US$3,7 billion between June 30 2012 to US$3,9 billion by June 30 2013, banks are saddled with massive non-performing loans. Banks have been keen to lend as shown by the loan-to-deposit ratios of over 90%, but companies are failing to repay, thus contributing to the liquidity problem. The deteriorating balance of payments due to the widening gap between exports and imports, among other things, is exacerbating the situation.

Apart from liquidity challenges, local banks have failed to attract deposits due to a reputation of bad corporate governance that has seen some players closing and depositors losing their money.

The international community, according to Guvamatanga, closely watches an economy's performance on the International Monetary Fund (IMF) and World Bank ratings, hence the need for government to consolidate relations with the IMF staff monitoring programme after more than a decade of isolation.