Zimbabwe currency change halves Masiyiwa fortune

All it took was a new currency in Zimbabwe to wipe out half of Strive Masiyiwa’s net worth.

The country’s only billionaire, Masiyiwa built a fortune primarily in telecom. He owns large stakes in two companies that trade on Zimbabwe’s stock exchange. But his country’s decision in June to ban all foreign currencies and use only the Zimbabwe dollar accelerated inflation and sent the value of the newly instituted dollar plummeting.

That, in turn, caused Masiyiwa’s stakes in those companies—telecom firm Econet Wireless Zimbabwe and mobile banking firm Cassava Smartech—to tumble in US dollar terms.

The result: Masiyiwa’s fortune has fallen to US$1.1 billion, down from US$2.3 billion a year ago, making him the biggest loser in percentage terms among Africa’s 20 billionaires.

“Confidence evaporated from the market,” says Econet Global Limited CEO Hardy Pemhiwa.

Such are the challenges of running a business in a country with an unstable economy—and a long history of strife.

“Considering what has happened with the Zimbabwe dollar, which lost 95% of its value, (Masiyiwa) is doing better than most,” says John Robertson, an independent economic consultant in Harare, Zimbabwe.

While the problems in Zimbabwe are extreme, doing business in Africa is sometimes unpredictable and often volatile.

Take, for instance, the merger and subsequent new listing behind the year’s second-biggest gainer, Abdulsamad Rabiu, now worth US$3.1 billion, up from US$1.6 billion a year ago.

In January, Rabiu pulled off an public listing that seemed to defy logic. He already had a publicly traded cement outfit, Cement Company of Northern Nigeria (CCNN), which as of late December 2019 had a market capitalization of about US$600 million.

He then merged it with Obu Cement, another firm he owned, which Forbes valued at just under US$600 million a year ago. Through the magic of the markets, the combined entity, BUA Cement Plc, which listed on the Nigeria Stock Exchange on January 8, 2020, is worth nearly 3 times what the two companies were worth before the merger.

Continued next page

(161 VIEWS)