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Of Barclays and 'those Malawians' – Zimbabwe and investment xenophobia

17/06/2017 00:00:00
by Source.co.zw

HARARE: Tendai Biti, opposition doyen, top lawyer and former Finance Minister, and Kudzai Chipanga, a Zanu PF rabble rouser who believes his leader is an angel of God, have more in common than they would ever admit.

Last week, it was announced that Barclays plc had sold its Zimbabwe unit to FMB, a banking group with operations in Malawi and elsewhere. Biti and Chipanga reacted with vintage Zimbabwean exceptionalism.

Biti tweeted: “Malawi is one of Africa’s poorest countries. When one of its banks buys a major Zim bank something is not right in the motherland,” he said, adding the capitalised hashtag “#SHAME” for emphasis.

Soon after, Chipanga stood at a Zanu PF rally in Marondera, berating the government for allowing Barclays to be bought by “these foreigners”.

Chipanga shouted: “We are very saddened to read in the press that Barclays is being sold and the people buying it are Malawians.” Locals should have bought it, he said.

To Biti, a “bank from Malawi” should not be buying a Zimbabwean bank. It is a reflection of the country’s decline. And for Chipanga, we cannot have “the Malawians” buying our banks. We can do so ourselves.

Biti and Chipanga are from two extremes of Zimbabwe’s political divide, but their reaction to the Barclays-FMB transaction represents two cancerous views widely held in many influential circles.

The first is the idea that we are somehow special, exceptional, and that we can pick and choose from which part of the world we must get investment. Not all countries are worthy of giving us their money, we believe. The second is the belief that foreign investment, in 2017, still has a specific, favoured geographical location.


Both these views reveal how, after decades of crisis and isolation, many of our commentators and policymakers are still hanging on to an old-fashioned image of Zimbabwe, Africa, and how the world of mergers and acquisitions (M&A) work.


In his rush to use the transaction to feed the “Zimbabwe is finished” narrative, Biti suggests a “poor country” like Malawi cannot be home to a foreign investor who goes to a supposedly larger market.

In this world, the entire $39 billion in African M&A last year all flowed from wealthier markets to smaller ones. Also, he would have us believe, a businessman that happens to hail from a smaller economy cannot play in a larger market, because that means something is wrong with that bigger market.

If we are to use that logic, Tata Communications should not have sold Neotel to Strive Masiyiwa and his Liquid Telecom in that R6.5 billion deal. Tata should have found an investor out of Europe or America, lest South Africa be offended at its second fixed network operator being bought by a company owned by an African man originally from poor Zimbabwean.

Investment has long since ceased to have a colour and identity. The time when lazy bureaucrats would ply Western capitals hunting for FDI is long gone. We cannot demand FDI, and yet turn around and demand that it comes from preferred regions, or nationalities. A case of “we need foreign investment, just not from over there”.

It would have been enlightening had the reaction been about the suitability of FMB as a buyer itself – and there is much to be debated about that.

However, the reaction from Biti and Chipanga was nothing about the questionable record of banks owned by FMB shareholders in Uganda, Kenya and elsewhere. Instead, the gripe was not with the credibility of FMB, but simply that they were “those Malawians”.

Lawyer Fadzayi Mahere also pointed out that a Malawian bank had bought what was once “Zimbabwe’s most prestigious banks”.

It is a view not only tainted by Zimbabweans old xenophobic tendencies and exceptionalism, but a view fed by the mistaken belief that we still are in a position to pick and choose investors.

Diving into all this drama was the Affirmative Action Group (AAG), a club where the concepts of empowerment and asset stripping are taken as randomly interchangeable.

This week, AAG demanded to see President Mugabe over the Barclays sale to a foreign entity.

“The bank can’t go to a foreigner,” AAG head Chamu Chiwanza said to reporters. “Barclays plc can’t impose who can buy equity on us.”

However, Barclays plc is leaving Africa and is looking for the fastest, most profitable exists for itself. It had to sift through nearly two dozen bidders, including NSSA, whose chairman called the failure to sell to a local management consortium “a shame”. This is the same NSSA that failed to run Capital Bank!

It is not like Zimbabwe has any investment grade status in global markets, or that Barclays plc would have received proceeds quickly from a sale to a Zimbabwean-based investor.

Besides, why should a buyer be forced on Barclays? The entire point of investment is to ultimately sell to whoever gives you the best deal. Forcing Barclays to pick a buyer was going to send the message to other investors that, in Zimbabwe, you are not allowed to freely choose who to do business with.

Thankfully, central bank chief John Mangudya stated that “we don’t interfere in the sale of shares by shareholders”.

There is a lot about the Barclays-FMB deal to worry about, as with every acquisition; how FMB intends to position the bank, jobs, the meshing of vastly different corporate cultures, management changes that look inevitable after local executives resisted the sale, and FMB shareholders’ poor record with the likes of Crane Bank in Uganda.

There is also the matter of Zimbabwe not being a happy stomping yard for many pan-African bank investors, from AfrAsia to Atlas Mara.

And yet, with all this on the table, the best we could muster was that “our” bank was being sold to “those Malawians”?

By all means, question FMB as an investor. Just don’t question where the money is from. Capital is moving around the world, fast and free. Keep up; your old hang-ups are slowing you down.

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