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Nedbank boss upbeat over HSBC initiative

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Mpeshe Selebalo

 MASERU — Nedbank Lesotho boss Lazarus Murahwa sees talks between Old Mutual and Europe-based HSBC as a positive development for the southern Africa region.

Old Mutual is the largest shareholder in the Nedbank Group.

HSBC last month was reported to be in talks with Old Mutual to buy the insurer’s 52 percent stake in Nedbank.

Europe’s biggest bank said it hoped to push its stake to 70 percent in a potential US$8 billion deal that would give HSBC an entry into the African market.

Nedbank Lesotho is 100 percent-owned by the Nedbank Group which is based in South Africa.

Speaking in an interview with the Sunday Express on Friday, Murahwa said the talks on the deal were a positive step for the region.

“This could only be positive for the southern African region as a whole that a bank of this size has shown interest to invest in the region,” he said.

“It shows that there is international confidence in the South African economy.”

Murahwa said the benefits of the deal would filter to Lesotho whose economy is closely linked to that of South Africa.

He said HSBC had shown interest in increasing its footprint on the African market.

“The southern African region remains largely untapped and there is a lot of potential in its mineral resources and some sectors such as the agricultural sector,” he said.

On the local economic front, Murahwa said the time was ripe for businesses to borrow because of the prevailing low inflation rates.

The latest figures released by the Bureau of Statistics showed that inflation was at 3.4 percent in July, down from 3.8 percent the previous month.

“It is interesting as inflation has averaged 3.9 percent for the first seven months of this year and this trend should continue towards the end of this year,” Murahwa said.

Fuel prices have dropped three times since June and the decline has had a positive influence on consumers who now have more disposable income.

The South African rand, which is pegged one-to-one against the Lesotho loti, has been appreciating over the past several months.

Murahwa said it was difficult to estimate how long this appreciation, which affects Lesotho’s exports, will continue.

“The strength of the rand has nothing to do with regulatory influence,” he said.

“There have been a lot of capital inflows into the economy showing more confidence by international investors.”

Murahwa said the cut in government expenditure this year had slowed down business in most sectors of the economy.

“On a positive note though the roll-out of the Millennium Challenge Account and the construction of roads and other large projects such as the Metolong Dam and the referral hospital have brought a lot of income into the local economy,” he said.

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