Oliver Kazunga
Zimbabwean businesses must build successful models at home before expanding into the region, renowned businessman Mr Shingai Mutasa has said.
Mr Mutasa, whose TA Holdings group has interests in insurance, agro-chemicals, and hospitality in Zimbabwe, Uganda, South Africa, and Botswana, told the Confederation of Zimbabwe Industries (CZI) annual congress in Harare yesterday that Zimbabwean businesses need to find partners in foreign markets and develop strong relationships with them. He also stressed the importance of choosing the right partners, as he learned from a failed partnership in Ghana.
“My view is that you have to build models in Zimbabwe that work and then take them out into the region. If I can give you an example of Innscor, they first of all became a very strong food outlet with different brands in Zimbabwe then they went out to Kenya, Ghana…and they came very well,” said Mr Mutasa.
“So, it’s important to use Zimbabwe as a platform of collaboration (and), if that is successful then, we go out into the region.
“When I look at some of the experiences we have had in the region, the first and most important one, we have got to find partners…people who can represent you, who can help you in the chosen market.”
Mr Mutasa said to expand into regional markets, businesses need strong relationships with foreign counterparts.
“It is okay because you are getting somebody who is going to look after your interest on the ground. So, partnerships for me are a very important part of the equation . . . and you need to find the right partners to attract the banks in those countries to give us capital. Banks are desperate to give capital to good entrepreneurship and adventures.
“What I have obviously failed more often than I have succeeded, I remember when we were expanding in Ghana with our hotel business and we thought we had a good partner, we thought we had a good product and we sent one of our best managers to manage an asset that we had been given custodianship of.
“The partner we had identified was a father and unfortunately he passed on during the early stages of our partnership. When we came to the sons, they didn’t see value in what we were doing and we quickly had to abandon the relationship.”
Mr Chinamo
“We learnt something from that adventure; first of all, if we had not been strong in Zimbabwe we would have collapsed completely. Secondly, if we do not choose and think very deeply about the partnership we will lose.”
Mr Mutasa said he sees a lot of potential for Zimbabwean businesses in the region, but they need to be well-prepared before expanding.
Speaking during a plenary session, the Zimbabwe Investment and Development Agency (ZIDA) chief executive Mr Tafadzwa Chinamo said that if local companies were considering expanding beyond the country’s borders, they should do so with the intention of growing the business and not abandoning local operations.
“I think you hear sometimes that an investor has left the country; you can only leave if you are going back to somewhere.
“If you’re not set up here properly, you have nowhere to go back to, so it should be an expansion and I get a sense that a lot of businesses here are trying to leave Zimbabwe and not leave anything behind here.” Meanwhile, the CZI annual congress, which ends tomorrow, is centred on strengthening value chains in the context of the African Continental Free Trade Agreement (AfCFTA).Countries in the continent began officially trading under the AfCFTA in January 2021, following delays induced by the Covid-19 pandemic.
Zimbabwe ratified the AfCFTA in 2021 paving way for the country’s full participation in the bloc.
The AfCFTA aims to eliminate tariffs on 90 percent of goods traded between member States over a period of 10 years.
This entails that industries across the continent need to brace for stiff competition and the consolidation of value chains is critical in ensuring Zimbabwean businesses shrug off competition.