ZIMBABWE – HARARE – Strive Masiyiwa has become an expert at walking the fine line between business and politics. He had to. The man once picked by Time magazine as one of its 15 “global influentials” – he regularly rubs shoulders with Nelson Mandela and former UN secretary general Kofi Annan in his charity work, and was picked by the Rockefeller Foundation to join its board of trustees six years ago – started his working life in Zimbabwe after the civil war and still has thousands of employees there, despite not having returned to the troubled country for nine years.
As founder and chief executive of Econet Wireless he has pursued his ambition of creating a truly African multinational business, spinning a web that spans seven countries, more than 25 million customers and generates an estimated $3bn (£1.8bn) in annual revenues.
He has fought his way through Africa’s often tangled legal jungle and had the security forces on his tail – more often than not sitting outside his house.
Next week his legal team will enter a courtroom in the Netherlands to mount the next challenge: throwing a spanner in the works of what could potentially be one of the biggest deals in African history, the $10bn sale of rival mobile-phone operation Zain.
In the offices of his London advisers, the softly-spoken Masiyiwa, who lives in South Africa, is reticent about criticising the Zimbabwe government. “To be fair, over the years I know there are people within the establishment who still are very antagonistic to me, but it is fair to say the administration and the president have come to understand that I am just a businessman and we have been allowed to run our businesses. We don’t get in their way and they don’t get in our way.”
However, being seen as a businessman and not a political agitator has taken time, especially given how Masiyiwa started his business. His parents fled what was then Rhodesia when Masiyiwa was about seven, as part of the black diaspora caused by Ian Smith and his minority white group’s declaration of independence from Britain in 1965. Purely because his parents’ neighbours in their new home in Zambia were Scottish, he found himself in an Edinburgh boarding school with their son.
His intention was to go back to Zambia and fight along with the guerillas across the border in the civil war. But when he returned and met his cousin, who ran a training camp for the Zimbabwe African National Liberation Army, which would eventually became Robert Mugabe’s Zanu-PF, he was told the war was essentially won and what the country would need was people who could run it.
Instead of a rifle, he was given a letter for the British Council that would help him get funding for a university education in Britain.
On graduation, he worked for the Zimbabwean phone company, ZPTC, then, armed with a bank loan wrung out of Barclays only after he ceded to the branch manager’s demand that he trade in his pride and joy, a flashy Volkswagen Golf known throughout Harare, for a “bakkie” – South African slang for a pick-up – he created his own engineering firm, which was soon hoovering up lucrative government contracts.
Challenge
But in the early 1990s it became clear mobile phones were going to be the next big thing, so he approached ZPTC with plans for a wireless joint venture. They said no, adding that if he tried to do it alone it would violate their monopoly. Thus began a protracted fight that resulted with Masiyiwa losing in the Zimbabwean supreme court. The judgment made it plain that, if he had the nerve, he could challenge Zimbabwe’s own laws in the constitutional court.
“The day we filed the case, every single contract we had with any government organisation ended,” he says.
“It was really a bad day and it just got worse. I got to the house and there were three or four cars outside and I said to my wife ‘Who are those guys?’ and she said ‘They are central intelligence and police and have searched the house looking for weapons … they said they’re going to be with us for quite a while’. They were with us for three years.”
He sold his engineering business, and rolled his court case into a new company he called Econet.
The court ruled in his favour 11 times before he got his licence to operate in Zimbabwe. Despite ZPTC launching its own network while Masiyiwa was stuck in court, within six weeks of launch Econet was the market leader.
Masiyiwa left Zimbabwe with his family in 2000 for South Africa. Part of the reason it would be unwise for him to return is almost certainly linked with a decision he took that same year to make a personal loan to the owners of Zimbabwe’s three independent newspapers, including the Daily News, which was later shut down by Mugabe’s regime.
Masiyiwa maintains that the real reason he moved to South Africa was to realise his dream of creating a truly multinational African business: “This is the space we have been trying to fill, to pioneer the development of African companies that have a global outlook.
South Africa was the only place where there was an outlook about building businesses that go to other countries.”
Most major telecoms companies have “had a pop” at Africa. Vodafone and Orange are still there, India’s Bharti is tying up a deal with South Africa’s MTN, while Essar is looking at investing in UAE-based Dhabi Group’s businesses in the region.
All this movement has made Econet look quite attractive and Masiyiwa admits: “I probably get an offer to buy us out, on average, twice a month.”
Seeking to head the other way is Kuwaiti mobile phone operation Zain. Its bosses want to get out of Africa and last month French conglomerate Vivendi suggested spending $10bn on a stake in the business.
Those conversations have since “gone cold”, in part because of the French need to go on holiday in August, but they could also be utterly derailed by Masiyiwa. Which takes us to that courtroom in the Netherlands.
In late 2000, Masiyiwa led a consortium that won a licence to operate a mobile phone network in Nigeria. Econet had 5% and claims it had a right of first refusal to buy out the rest of the network in the event of any bid emerging. A bid did emerge from a company called Celtel, but a series of legal obfuscations blocked Econet from ever getting the chance to bid.
Celtel was subsequently acquired by Zain and the fast-growing Nigerian mobile phone business now accounts for about half of all its roughly $1.7bn African profits.
In court, Masiyiwa’s lawyers are arguing he should be allowed to buy back Zain’s Nigerian business at the price set in 2006, in effect blasting a hole straight through Zain’s plans to sell its whole African operation with Nigeria as the jewel in its crown.
Compassionate
At any point in the protracted Nigerian “campaign”, Masiyiwa could probably have bought himself out of the problem, but he has risen to prominence not just because of what he has done but because of what he won’t do.
One of the central tenets of Econet Wireless is “zero tolerance for corruption”, rooted in Masiyiwa’s Christian faith which has also seen him use his fortune to help 26,000 orphans get an education through the Capernaum Trust he set up with his wife.
He has also helped the Nelson Mandela foundation to get started, is on the board of trustees of the Rockefeller Foundation and works with Kofi Annan’s Alliance for a Green Revolution in Africa and the Bill & Melinda Gates Foundation to try and use agriculture to deal with hunger on the continent.
“Christianity is a value system that calls on me to be compassionate, it calls on me to help the weak,” he says. “I generate a lot of money for me and my shareholders and people who have been associated with me, but that cannot be an end in itself.” (guardian.co.uk)