columnBy Ken Yamamoto
In this latest article in his Disempowerment of Blacks by Blacks in Zimbabwe series, our columnist Ken Yamamoto discusses how, despite its vaunted black economic empowerment credentials, the country's leadership has, over the years, criminalised and disempowered black businessmen by running down their operations as in the case of Mutumwa Mawere and also made sure that credible entrepreneurs not in their good graces had their visions euthanized as Zanu PF tried to do in Strive Masiyiwa's case.
While doing their best to put down visionary black entrepreneurs for reasons never clearly explained, President Robert Mugabe and his government went on to nurture, support and enable the operations of shady white businessmen such as Billy Rautenbach and John Bredenkamp who made millions from the patronage and dodgy arrangements. Yamamoto says, had Mugabe nurtured and supported competent local business entrepreneurs, Zimbabwe would likely have become a $100 billion economy. Instead, its citizens flow in all directions, running away from home and a failing economy.
Ordinarily we would run this article in the opinion section of our publication but we felt the issues Yamamoto raises deserved greater prominence.
Snatching poverty from the jaws of prosperity
I HAD a chance to attend World Economic Forum (WEF) on Africa event held in Nigeria that took place from the 7th of this month. The conference had a theme "Forging Inclusive Growth, Creating Jobs" - a very well-timed theme. I met many successful and accomplished men and women on the continent running businesses impacting on hundreds of thousands of their continental kinsmen. Their entrepreneurial ventures are making a difference in many ways, such as providing jobs, training and skills development, building infrastructure and funding government through taxes and other levies (even though their leaders are in many ways irresponsible with that money).
In some of the sessions, I saw some successful Zimbabweans in various fields of business endeavour. I have met the same Zimbabweans, and other Zimbabweans in previous WEF events. Many of them are based out of Zimbabwe, and are leading successful organisations with outstanding competence. The most remarkable thing about these Zimbabweans, especially the ones that operate largely outside Zimbabwe is that they all left Zimbabwe at one point or another running away from (i) outright persecution and harassment from their leaders who are supposed to serve them, largely through the use of state machinery, (ii) intimidation by leaders who are supposed to nurture them, (iii) denial of opportunities by leaders who are supposed to avail them and (iv) destruction of opportunities by leaders who are supposed to provide them.
There is no more riveting story of sustained efforts at disempowerment and attempts at destroying talent than the story of businessman Strive Masiyiwa. His story epitomises how blacks can actually invest ceaselessly and with zeal, in destroying one another. His story has been variously told before. Masiyiwa recently gave an abridged version of how his countrymen invested sweat and blood to crash and burn his vision on his Facebook page.
Mobile phone services as we know them today (at least the digital GSM format) were first launched in Finland in 1991 by Elisa (then known as Radiolinja). Prior to that, mobile telephony had evolved in various ways and countries over the century, with Japan's NTT launching the first analogue cellular network in 1979. Masiyiwa, by his own account, read about mobile networks from magazines he used to subscribe to (back then the Internet as we know it today was not available for ordinary use). This empowered him to be ahead of the curve on this issue in Africa.
His story is a mixture of vision, faith, religion, and strength of character enabling him to swim against the tide of sustained attacks and aggressive efforts to disempower him by a corrupt mafia-like government that purports to empower citizens. According to Masiyiwa, his plan was to partner with the state-owned operator, then known as PTC, which he had worked for on a 50-50 basis. Unlike NTT, which had a long vision about cellular technology way back in 1979, PTC, in the 90s, actually thought this was a telecoms fad so they were not interested in developing such a venture. And they expressed this position in writing, which Masiyiwa used to set up his company.
Much of what happened to him, including being jailed, followed and intimidated is well known. What is profound though is that (i) Strive went to court (High Court and Supreme Court) several times to fight a black government bent on leaving him penniless - winning all the time (ii) he assembled a legal team with people of various races, nationalities and strengths, (iii) upon the telecoms monopoly being struck off by the Supreme court, twice, the Ministry of information worked overtime to craft a law that criminalised Masiyiwa's plans to set up a mobile network, (iv) Masiyiwa was alerted to the opportunity to challenge PTC's monopoly via the constitutional route by one Edison Zvobgo, who was a cabinet minister who told him that he was there when the Zimbabwe constitution was crafted in 1979 at Lancaster
(v) Joice Mujuru, then minister of information, now vice-president, ordered Strive to surrender to government the equipment he had imported from Ericson, a Swedish company, (v) it took Joshua Nkomo, an old man moving around on a cane, to intervene for Strive's firm to eventually be licenced (vi) Mugabe was in the background encouraging this circus to play out over several years (note that his nephew, Leo Mugabe, was a partner in a rival network that was quickly cobbled up to supplant Econet, together with James Makamba, Jane Mutasa, and Webster Shamu, who was then secretary general of the war veterans organisation in Harare), (the excuse that was used to try to silence Masiyiwa was that he was working for foreign governments - rings a bell?) and (vii) despite its success, Econet is still maligned by the state, according to recent comments by its CEO.
It would be really an amusing twist of fate if Robert Mugabe and Joice Mujuru have Econet lines or use Econet broadband, given their role in trying to cause a stillbirth of the company. I have used some Econet services in Zimbabwe, and their service is crappy and overpriced, but there is no doubt that it's the largest company in Zimbabwe, contributing the largest to GDP, direct and indirect employment, and so on. Econet is also the largest advertiser in Zimbabwe, supporting many related advertising and outdoor media companies. Its tax contributions and FDI investments are actually oiling the same charlatans that were responsible for its near demise at inception, much like a son who takes care of a mother who nearly aborted him years before. I have argued before that it's a sign of economic sickness when the largest company in a country is a telecoms company for the simple reason that it reflects a consumptive rather than productive economy.
The real irony of Masiyiwa's story is that he was the secretary of the empowerment lobby group, Indigenous Business Development Centre (IBDC), which was the first organisation in Zimbabwe, set up to lobby and pressure Mugabe and his government to provide conditions for the prosperity of black-run businesses. Before that, it is common cause that Mugabe was not interested in the development of black capital and the success of black entrepreneurs.
Specialising and investing in disempowerment
Businesses seized by the government ... Mutumwa Mawere
So how is it possible that a President of an entire country, his cabinet ministers, the intelligence agencies and other elements of the state machinery work so indefatigably hard to destroy a well-meaning person's transformational and life-changing vision? The single largest company in Japan by global revenues is Toyota. It is followed by many other firms such as Mitsubishi UFJ, NTT, Honda, Canon, Sumitomo, Mizuho Financial Group, Mitsubishi and so on. It is almost unthinkable what could have happened had the authorities in Japan stifled these firms when they were starting. They would have disempowered millions of Japanese employees and several million others in their global operations.
I cannot for the life of me comprehend how it was easy for the Zimbabwean politicians to harass an enterprising national for their selfish ends. It is also mind boggling that people like Edison Zvobgo would not have the guts to fight such matter in cabinet, opting to tip Masiyiwa off on what issues to bring up in the constitutional court. It tells a story about the leadership of Zimbabwe.
The foregoing Masiyiwa story is symptomatic of how the government of Zimbabwe has perfected the art if disempowering its own people. It is not just Strive Masiyiwa by the way. Every businessman of note in Zimbabwean has suffered various forms of harassment of one form or another. James Makamba, for example, may have fronted the team that connived in disempowering Masiyiwa by putting up the Telecel tender with a view to pulling the rug from under his feet, but he later tasted Mugabe's vile medicine and he has been in exile since. Nigel Chanakira effectively lost the bank he founded, largely due to the way the economy was run down.
Mutumwa Mawere, in spite of the controversy surrounding his acquisition of the Turnall and Newall owned SMM mines, was and may still be an entrepreneurial genius. Love him or hate him, Mawere took over a collapsed asbestos mine producing a globally toxic product, but he turned it around and ended up acquiring and controlling several other listed companies. However, it took Mugabe and his mafia a few months to bring the entire operation down, leaving it belly up.
Like they did with Masiyiwa, Patrick Chinamasa, with connivance from Gideon Gono actually created a law to codify and pave way for the permanent disempowerment of their fellow citizen. Ten years since this happened, Zvishavane, where Shabanie Mashava Mines is based, is a ghost town, leaving thousands of unemployed persons in its shadows. Several other business persons have suffered the same fate as Messrs Masiyiwa, Mawere, Chanakira, Mutasa, Ncube and so forth.
Hounded out of the country ... James Makamba
So what am I pointing out here? It's common for businesses and their managers to violate the law from time to time. And indeed they get punished. For example, Wall Street banks paid over $100 billion in fines to federal regulators. Banks such as JP Morgan, Wells Fargo, Credit Suisse, Barclays, HSBC, Bank of Totyo-Mitsubishi UFJ, among several others were fined for a variety of malpractices. But in country like Zimbabwe where the leadership has pretty much criminalised everyone, not only do they disempower black businessmen and run down their operations as in Mawere's case, they also make sure that credible entrepreneurs not in their good graces have their vision euthanized as they tried to do in Masiyiwa's case. It is strange that Mugabe and his government nurture, support, and enable the operations of shady businessmen such as Billy Rautenback and John Bredenkamp. It is now in the public domain, courtesy of one Temba Mliswa, that Rautenbach got free platinum claims from the Zimbabwe government and went on to sell those for a billion dollars to Eurasian Natural Resources Corporation (ENRC). Rautenbach, advanced $100 million to the Zanu PF election campaign in 2008 via Lefever Finance, a British Virgin Islands registered vehicle of Central African Mining and Development Company (Camec) in which Rautenbach had vast interests. This gave his company an effective 60% equity in Todal Mining (Pvt) Ltd, the company that owns the Bokai Platinum Project south west of Gweru, previously owned by Anglo American. In this web of transactions, Rautenbach ended up owning at least 7% of CAMEC shares which was listed on the LSE's Alternative Investment Market. ENRC later acquired CAMEC, for $945 million, leaving people like Billy Rautenback multi-millionaires, hence Mliswa's anger at losing out on the cash.
Opportunity lost for billion dollar businesses and a U.S $100 billion dollar economy.
If Zimbabwe's economy had decent stewards with a modicum of vision, Zimbabwe's economy would have been the third largest economy in Africa, or better, because it had a good head start. It could easily have been the Singapore or South Korea of Africa. Is your question what should have been done? The answer should not even be rocket science. Mugabe and his mafia should have incubated, nurtured, supported and helped fund, right from 1980, many competent business entrepreneurs to set up businesses that would have developed strength at home, and rapidly grown into the southern and eastern African region. If this had happened, Zimbabwe would today have been a $100 billion economy today at the very least, and instead of its citizens flowing in all directions running away from home, Zimbabwe would have been a magnet of immigrants dashing into the small country for opportunities.
People Zanu PF would rather deal with ... Billy Rautenbach
It was very possible and very opportune for, say, supermarket chains, telecoms firms, banks, engineering firms, manufacturing firms and services companies to start from Zimbabwe and grow into Zambia, Malawi, Mozambique, Namibia, Kenya, Tanzania, and even South Africa, later after it got independent. Zimbabwe was poised to galvanise this kind of growth much the same way a war-ravaged Japan rapidly grew and dominated the European, Asian and American markets with electronics and automobiles after the Second World War. There is absolutely no reason for, say, supermarket chains like Pick n Pay, to be expanding into Zimbabwe and the rest of the SADC region the way they are doing had Mugabe had a decent vision about the growth of the country and its entrepreneurs. What is happening in Rwanda today under Paul Kagame from a development point of view is what Mugabe should have done to Zimbabwe.
Masiyiwa had a far greater vision than Mugabe, so he indeed built his business to outgrow Mugabe and his mafia's destructive machinery. To build a billion dollar business, one has to look at the populations outside the country's borders for markets. Zimbabwe is a very tiny country with a population of around thirteen million. If Mugabe was in Tokyo, or Beijing - he would be a mayor. This means that it is not a very huge market and growth for any business has to come from outside. But achieving that requires meticulous planning and vision at home. It is my hope that with Mugabe's days numbered, as everyone's days are, the next leader will have a vision large enough to empower its own citizens to build strong businesses that will competitively take on the regional, continental and global markets and catapult Zimbabwe into a $100 billion economy if not more.
Ken Yamamoto is a researcher on Africa at an Institute in Tokyo. He researches and travels frequently in Uganda, Kenya and Zimbabwe. He recently added Rwanda to his purview. You can contact Ken on firstname.lastname@example.org