To venture or not to venture, is the query

Nigel Chanakira

Nigel Chanakira

Business Reporters
While Government did everything it could to create a conducive economic environment for indigenous entrepreneurs to thrive, many have fallen by the wayside after failing to navigate the high waves of economic turbulence.
Like a malignant cancer on the bone, fate has also claimed the scalps of innumerable companies that were headed by Zimbabweans raising questions about what is wrong with the leadership qualities of independent indigenous executives.

Zimbabwe adopted the US and other monetary currencies to reverse total economic meltdown. All seemed well, businesses had misread the economy, inflation and other ills of a chaotic economic system were in the rear-view mirror, so it seems, but a new challenge was brewing in the not so distant horizon. Maybe money grew on trees.

The owners, chief executives and financial directors forgot the first lesson in business. Rather than running their financial models and analysing debt and equity, the whole lot quickly leveraged non-cash generating businesses 100 percent in debt, and none thought of equity placements. However, the economy had called their bluff and suddenly showed its true colours.

The high profile entrepreneurs and executives that failed to stand the heat included Kingdom Financial Holdings’ Nigel Chanakira, Interfin Banking Corporation’s Farai Rwodzi, Renaissance Merchant Bank’s Patterson Timba, Barbican Bank’s Mthuli Ncube and First National Bank’s Nicholas Ruturi.

Most intriguing about these founding directors is the fact that most of them were invested in the financial services sector and at one point or the other had significant spells with owner-managed arrangement in running the companies.

Collapse of indigenous founded companies is not the only feature characteristic of the post-dollarisation era that saw several indigenous companies, mostly banks, going under after they failed to adapt to the new economic dispensation.

But the trend stretches way back into history, raising concern about the unsustainability of owner-managed companies and the importance of strong corporate governance structures.

Other indigenous entities that became casualties of  owner management include Time Bank, founded by Chris Tande, ENG Capital started by Gilbert Muponda and Nyasha Watyoka, Intermarket Holdings by Nicholas Vingirayi and Lifestyle Holdings by Tawanda Nyambirai as well as Royal Bank’s Jeffrey Muzwimbi.

Save for TN Financial Holdings, most of the failures of these financial services companies involved allegations of abuse of power and resources, which also exhibited strong signs of serious corporate governance deficiencies.

Former RioZim managing director Josh Sachikonye left the company on the brink of collapse as did                  starafricacorporation under former chief executive Pattison Sithole.

The script was not different for Edwin Chimanye’s David Whitehead Textiles and TransZambezi Internationals’ Edwin Moyo, Cecil Muderede’s Jaggers Wholesalers.

Harare businessman Zac Wazara’s Medical Air Rescue Services is under judicial management while its sister company Valley Technologies is dead and buried.

Similar misfortunes befell indigenous firms such as Cairns Holdings Limited, which was once headed by the late Philip Chigumira, Fred Mtandah’s CAPS Holdings and Oliver Chidawu’s Pelhams Limited.

It should, however, be noted that the transition to dollarisation resulted in most indigenous owned and managed companies failing to adapt to the new rigorous environment characterised by tight liquidity, high cost of labour, funding, utilities, power and stiff competition from lower priced imported products.

But it has not been the same situation for companies with strong external links for effective corporate governance and financial resources support and these include Delta Corporation, Schweppes Zimbabwe, Nestle, PPC Zimbabwe, National Foods, Zimplats, Mimosa Mining Company, to name but a few.

The jury is still out on whether these firms succumbed to the sanctions poisoned environment or the managerial weaknesses of the owner managers.

Alternatively the reason could be the sector they ventured into – the financial services sector – was not ready for many players.

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  • zvazviri

    you said it yourself,companies with strong external links.isn’t indigenisation for locals then strong local links as well.

  • Maclause


  • Buz

    the First National Bank guy is called Samson Ruturi not Nicholas Ruturi. Nicholas Musona was one of the directors.

    • minority shareholder

      actually its First National Building Society…..

  • Shareholder

    Mr Editor, which conducive business environment the government has created? Introduction of the multicurrency regime is not creating a conducive business environment; that was a contingency plan made for a worst case scenario. Government hasn’t done anything positive so far, in as far as the economic environment is concerned.
    Secondly, I do not think Nigel Chanakira can be classified as a failure. Kindly look at his business portfolio and re-write your article. Kingdom bank has operated for 20yrs, and it is still operating. His exit its a sign of bad economic environment; and to him its a strategic move to switch his portfolio composition by selling Zim-stake and invest the money somewhere productive. Nigel Chanakira has mentored various entrepreneurs of which many are successful in Zim and abroad. Unlike, Strive, I can give more stars to NC bcz he has done a lot in promoting entrepreneurship. Whilst Strive is never in ZW, at the sametime his Econet business is greed, with an ‘I want it all’ attitude.

  • chamunorwa chokwadi

    According to Strategic Management theory these companies collapsed due to On the Job Consumption as these guys used company resources to live lavishly at the expense of the companies they ran.These guys are all educated but they exhibited no confidence in their own businesses hence the looting they did & this is the biggest problem Indigenous Zimbabwean Black Business people have to overcome they need to adhere to good corporate governance but it seems they would rather enrich themselves personally at the expense of the companies they found in-fact these companies are means for them to loot and leave a trail of impoverished employees & disgruntled customers yet we see them driving fancy cars in town .These guys are JUST CRIMINALS.