Business

PSDA opposes listing of banks on LuSE

ANGELA CHISHIMBA, Lusaka
INTENTIONS to compel commercial banks to list on the Lusaka Stock Exchange (LuSE) will not bring about development, says the Private Sector Development Association (PSDA), describing the move as “a comestic approach”.
In reacting to Minister of Finance Alexander Chikwanda’s statement that Government would compel commercial banks to list on the local bourse as a strategic way to develop the country, PSDA chairperson Yusuf Dodia feels the intention discourages the spirit of liberalisation.
“First thing, we had agreed as a free-market economy, any mechanism to compel private sector is against the spirit of individual innovation… I don’t see what the real goal of compelling commercial banks to list on LuSE is,” he said.
In a free-market system, the entrepreneur takes a great risk to launch a business, putting up capital, with the hope that the product or service will succeed.  If the risk is considered a disadvantage, when the business succeeds, the profit and control of the business’s future is determined by the owner, not the government.
Mr Dodia said forcing banks to list on the LuSE will not develop the country but suggested that Government should instead consider to re-introduce Statutory Instrument 55 which empowered the Bank of Zambia to monitor inflows and outflows of international transactions.
He said this will ensure export earnings come back to the Zambian economy to develop the country and Zambians will be able to borrow money from banks and build businesses.
He, however, said listing on the exchange which is a platform for long-term capital is supported but not making it mandatory as currently most of the foreign firms that are listed on LuSE hold the largest chunk of share while the minority are owned by locals.
“While compelling commercial banks to list on LuSE would create  opportunities for people to buy shares in these banks, Zambians would have a token shareholding.
“It is a wrong signal to force investors to list on LuSE… Zambians have a small stake; the economy is being run by large foreign investors. We need to see more Zambians getting a bigger piece of the investments,” he said.

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