We almost touched the stars

11 Oct, 2019 - 00:10 0 Views

eBusiness Weekly

Alfred M. Mthimkhulu

To an article I wrote some three months ago, a social media acquaintance commented “American history is amazing to read”. I liked the comment but it continues to haunt.

The article had taken us back to 1862 in America. That wilderness, still immersed in slavery, was now on the verge of a Civil War in the middle of a deep financial crisis. President Lincoln had taken over. Using Presidential Emergency Powers, he introduced a new currency backed by nothing to be legal tender. It was quickly nicknamed the Greenback; an awesome currency the world of our time knows so well. It all began in those miserable months of 1862. Then, it was a lousy story.

We humans love stories. As a teacher, I find them more effective than textbooks and PowerPoint slides hence our love for case studies in business schools. The image of little ones gathered by the fire place as granny strokes the budding fires of the mind is profound and timeless in spite of its modest background of a deem-lit and smoke-fill mud hut. We have always been fantastic story tellers.

But my grandmother did not tolerate imaginary stories. She was a devout Sabbath-keeping Christian. Folklores and such stories were not truthful and her grandchildren were not going to hear such lies. The bible had lots of stories, truthful stories. And so grew my interest in real-life stories. There is a story I hope to tell someday. I may title it “the Zimbabwe Stock Exchange’s roaring nineties”. It will begin as the Cold War ends in the tumble of the Berlin Wall in 1989. It will make it crystal clear to the listener that for developing countries like my own, there was only one path to economic prosperity and that path passed through Washington DC, the base of the World Bank Group. Flirtations with socialism were halted.

Consequently, the ZSE opened-up to international investors in the early 1990s. Investors poured in. Global banking giant Barclays, (soon to disappear from the continent), sold its shares to the public and listed on the ZSE in 1991. HSBC Securities acquired what was then Quincor Stockbrokers. Yet another leading brokerage became part of the Robert Fleming Group, a respected investment house.

Local companies flocked to the stock exchange to raise capital by selling their shares to the public. They included former co-operatives Colcom and Seed Co. As the public bought the shares, the former co-operatives took the money and used it to expand operations for higher profits thus increasing the net worth of the new investors.

The 1990s were a bumper period of listings in Zimbabwe especially if we discount the 2000s-era listings which were rather cosmetic with, for instance, conglomerates weaning-off subsidiaries. That’s what Delta did in 2001 by listing Pelhams and OK Zimbabwe so that it focused on beverages. The roaring 90s were about firms raising capital to fund new technologies for making better or new products for the local market and for export. The decade had opened with the listing of a gold miner, Falgold. The following year, locally-owned investment bank, NMBZ Holdings Limited, opened its doors. In 1997, the bank raised capital for expansion through a listing on the London Stock Exchange and on the ZSE. The bank still stands.

Then there were State-owned enterprises: Cotton Marketing Board, Dairy Marketing Board and the bankrupt Bank of Credit and Commerce International which became CBZ — all transformed and listed between 1997 and 1998. Twenty years later, all are indispensable names in corporate Zimbabwe.

In that decade, the Econet story is the most told: how a state monopoly was challenged by an entrepreneur, how the entrepreneur won the case and how with the corporate finance team of NMBZ the entrepreneur raised tonnes of money by sale of shares and bonds to the general public, pension funds and so forth. In full sight of projected losses in the Econet prospectus, we signed the cheques and dropped them off at the issuing bank.

Not long after, the music stopped. Remember Elvis Priestley’s song “Almost” where he cries on what could have been: “We almost touched the stars, . . .  The saddest part of all is knowing; We almost went all the way.” Only we didn’t.

I ran into an old colleague recently. We reminisced on the roaring nineties. We wondered what it would take to pick things up from “almost”. In the 1990s, Government had set forth to Washington and that was not bad at all. It was not a brutally cold economic policy as appraisals of Structural Adjustment Programmes usually say. To some extent, people mattered in that economic policy framework and deliberate efforts were in place to send people to work, even those who had just lost their jobs. I remember my first formal job in the mid-1990s. I worked with a consultant to the then Social Dimensions Fund (SDF) which was under the Ministry of Labour and Social Welfare. The SDF was meant to be a revolving social safety fund to help people who had lost their jobs. Such would be trained in business management and funded to start own businesses if they so-decided.

That’s a sketch of the roaring nineties story I may tell someday. It is about the indispensability of international capital and international brands for local private sector growth and development — it is about being plugged into a global network of capital and expertise. It is a story that underscores the role of the primary market function of the ZSE in raising capital for new and old businesses. The story will laud privatisations particularly how they unlock the value of national assets.

None but us can tell these stories with the fine details that posterity will appreciate. The stories may not be amazing reads in the here and now. It could be too soon for this maybe our 1862 of some sort, or 1865. They will let us know a century from now.

 

Alfred Mthimkulu is a Senior Lecturer, Graduate School of Business, NUST, Email: [email protected],Twitter: @mthimz

 

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