adminshareholding in TN Bank to Zimbabwe’s largest mobile phone operator and taxpayer respectively.
Sceptics doubt that the lawyer-turned- banker has totally pulled out of the board he loved so much, the empire he toiled for since the licence battle, and possibly one of the biggest clients for the new bank.
What the buyout deal implies is that Mr Nyambirai will become a minority shareholder in Econet Wireless while TN becomes a subsidiary of the Econet Empire, which also includes Liquid Telecoms and technically the Joshua Nkomo Foundation.
Before the deal was effected, Econet had a 45 percent stake in TN Bank while Mr Nyambirai owned the bulk of the remaining shareholding, that the TN founder has been offered a seat on the Econet Wireless Global board is no mean feat.
A devout Christian from the Apostolic Faith Mission of Zimbabwe, the lawyer is so revered that his rise to prominence was not a given, growing up in a farm where walking a long distance without shoes was part of everyday life, falling so sick as a young boy that it took God’s voice to reassure him that he would be fine.
He also had to make a choice either to be a lawyer or an accountant after high school.
Normally clad in designer suits without a tie, he has proved to be one of the toughest nuts to crack both in analyst briefings and AGMs; it seems he knows what troubles analysts before they dare question his business conduct.
The new lifeline offered by Econet is expected to make the bank a force to reckon with in the market. However, is yet to be convinced that the deal was literally a new one, not something which had been decided before the bank came into being.
Mr Strive Masiyiwa always wanted banking as part of his business empire which saw him buying into Kingdom Bank during the hey- days, whether that was a confirmation of approval for young Nigel as they hailed from the same Celebration Church is difficult to deny.
With the fallout, Tawanda could not be overlooked. What took Econet up to this hour to get into TN Bank officially boggles the mind, whether it is because of the impending capital requirements which the central bank has set or maybe a long period was needed so that it was not to appear like a direct walk out from KMAL to TN Bank.
Given Econet Wireless has a massive balance sheet and potentially cash rich business, the future of their banking arm cannot be overemphasised.
With a lean loan book, TN has nothing to worry about the current 13 percent non-performing loans within the Zimbabwean market, the economy is overborrowed and the threat of liquidity risk is still disturbing.
The upsurge in the uptake of EcoCash services in recent months will definitely impact positively on the balance sheet of the group.
The market perception towards TN Bank has been quite unimpressive with the issue of concentration risk leaving the counter as a threat to invest in.
That the banking arm didn’t fall under Zibawu was also a reputational risk knowing well that the bargaining power to negotiate working conditions will be curtailed. It is expected that Econet will bring its own footprints to the TN culture which they could not do with KMAL as Moxon and not Masiyiwa had a bigger muscle in the empire.
Zimbabwe is a very unpredictable market that is not integrated with the world markets, the cyclical nature of most markets is not traceable with ZSE as the move by Econet Wireless Holdings should have been reflected with massive relief by investors. Alas it is not so and it is just business as usual and the new injection of capital through the buyout transaction is yet to be felt.
This is the best opportunity for a revision of corporate governance worries at Econet Wireless as new money is expected to attract new board members. For the past years, Econet has not been exemplary in terms of adherence to corporate governance as this has set a wrong precedent in the entire market. The future of mobile banking is quite bright in Africa as compared to the developed world.
The penetration of Samsung and Apple is magnificent and this calls for the mobile telecoms to diversify to data from voice platforms considering that such international brands had brought a new wave of technological experience. What is the rationale of acquiring an Apple iPad or Samsung S 111 just for voice purposes?
Gone are the days when such gadgets appeared as if they have been made ahead of their time with WhatsApp applications being the only utilised platform in the country.
The future of EcoCash will deeply and certainly rely on the tech platforms gaining ground in Zimbabwe in the same vein M-Pesa had managed to defy all odds in the East African markets.
Elsewhere in Africa, investors are taking a breather with the ANC conference being held in Mangaung making major headlines in the richest African nation.
Mangaung which means “Place of Cheetahs” in their local language is expected to see victims of cheetah-land coming out bruised as the push to replace Zuma with his deputy Kgalema Mothanthe has failed.
Employment in South Africa’s formal, non- farm sector nudged up 0,1 percent in the third quarter of 2012, with a decrease in mining jobs offset by additions to the retail and financial sectors.
The share price of South Africa’s telecom giant, Telkom jumped more than 4 percent after it appointed five independent non-executive directors to fill posts vacant since December.
Up northwards in Zimbabwe, the snapping up of majority shareholding by Econet in TN bank continues portraying an indifferent picture to the lowly capitalised banking counter on ZSE.
It was supposed to be an early Christmas present for both Econet and the bank but it seems “January disease” is more threatening than the corporate move.
Christopher Takunda Mugaga is an economist. He is also the Head of Research at Econometer Global Capital, a regional finance and economics research firm. He can be contacted on [email protected] or 0772340 353 / 0776266062.
Online Reporter