‘Zimbabwe has what it takes to grow’

the Zimbabwe Stock Exchange, Mr Ngwerume has experienced the ups and downs of the economy, carrying along the hopes of thousands of policyholders and others within his purview.
Is he leaving Old Mutual in better stead? Has he accomplished what he sought to when he was appointed to head the institution? It is to answer these questions and many more that Herald Managing Editor Victoria Ruzvidzo and Senior Business Reporter Martin Kadzere sat down with him yesterday. He was fired up as he went straight into responding to some of his critics:
“As Old Mutual we can’t have been in existence for this long without playing a transformational role. We have been involved in a lot or projects. In fact, we were involved in supporting most of the indigenous banks. We managed to convince the powers that be that these banks were being started by professional bankers.
“I felt Old Mutual had the (duty) to support these banks. There is hardly any that was not supported by us. We have also supported companies in the manufacturing sector. We have not really said much about what we do but there is a lot that we have done be it in mining, mobile phones, etc.”
Q: So big Brother Old Mutual has really been at work?
A: Yes, certainly. Dimaf (Distressed Industries and Marginalised Areas Fund)was our initiative and then we teamed up with Government so we could get an approved status . . . That’s when Government said it was working on a similar project and put in the other US$20 million. But I must say that we never meant to direct funds to failed companies but for those with a successful business model that can operate in a global village. Despite all the noise so far we have given out US$7 million to Bulawayo firms and national- ly we have disbursed US$14 million.
Q: I am sure through this you have noted that the desire for capital is there?
A: For a long time this country has been starved of capital. People focus on the hyperinflation period but even before then. Suddenly the world has moved dramatically over the years. So having suffered from long periods of capital starvation it’s not surprising that we require a huge flow of funds. This country has to do special things because on our own we can’t get enough. As Old Mutual we have had to go to the PTA Bank to try and ease the situation. It’s such a broad issue and policy makers must realise that capital will go where it is guaranteed of a return.
Q: Are you implying that Zimbabwe will not get much of this capital?
A: No, we have been getting some money but it’s not enough. We need to go out there and aggressively look for money. It’s more a game of consistency. If your policies are consistent and predictable capital will come.
Q: You sound so passionate about your work, so why leave Old Mutual now?
A: I have been with Old Mutual for 29 years and seven months and I have been at the helm as CEO since 2007 and I feel five years is enough. I always knew that I will leave before my final retirement and pass on to another leader. I am leaving extremely happy but that does not mean that I don’t have disappointments. The fallout of value post hyperinflation. We lost the cash that we had. Our asset base shrunk (when) we finally did conversions, that was a real tragedy. From having sextillions we woke up with zero balances in one day. About 30 percent of our portfolio disappeared and that is very big. That was very disastrous for the savings sector. But it was a wake-up call for everyone. Old Mutual tried as much as it could to protect that which it could. After dollarisation we put everything into real assets and that the business we could do.
Q: What is the size of your investments on the ZSE?
A: Our portfolio on the ZSE is around US$300 million and US$80 million in unlisted companies. But we are also looking at further investment in mining and agriculture.
You know agriculture is going to be the major driver of the economy. We will also look at the service sector, tourism and infrastructure. We are hoping that at least US$100 million will be invested in private equity next year. We would also want US$100 million per year in infrastructure. We really like infrastructure. It is a very good way of stimulation. We were the major source of funding for Zesa, Hwange , Ziscosteel (now NewZimsteel) and municipalities. It is not that we have money in our bank (account) but we have realised that we have potential to raise capital. (But) the insurance pension funds are ideal vehicles for doing a lot of infrastructure.
Q: What is your perception on indigenisation?
A: I tend to put emphasis on empowerment rather that indigenisation
Q: And the difference being?
A: I choose empowerment for a simple reason. It is a broad-based approach. I have not seen any country which would like to see marginalisation of its people. (The broad-based approach) makes our businesses more relevant to the economy, to the society. It’s a way of securing the future. At Old Mutual, we came up with a solution that is broad based. We have talked about how pensioners lost. So we gave them 10 percent of the company. Some will sell their shares, some will hang on to them so that they may have dividend in future. That is broad based for me.
Again when it came to us to comply, we had the constituency we could now reward. We said thank you for continuing with us. That was broad based. And then the  young people. They don’t have employment opportunities . . . but we have got to empower the young people. So two and half percent (of the company’s shareholding) was donated to a trust and that is now being used as security to CABS. The youngsters do not have collateral so their (businesses) idea is the collateral.
We are seeing some amazing things right from fisheries in Binga to horticultural projects in Headlands. Those that are not ready we taker them for training to build their capacity..
Q. So how do you intend to comply fully with the indigenisation laws?
A: We have until 2015. We are thinking but I can assure that the solution that we will come up with will be broad based. In the process, instead of making the cake smaller, we will make it larger.
Q: How have you managed the politics around the issue?
A: Our basic tenets that guide us are that if you are operating in a country you comply with the laws of that country.
There are no two ways when it comes to compliance. It’s either, we pack our bags but as long as we are here we will comply and we are forever. We had a frank and honest discussion with Minister Kasukuwere and and our starting point was to comply with country’s laws. In Namibia, they have complied and in South Africa, they have complied too.
Q: So how much has been disbursed under the youth fund?
A: About US$1,6 million. We now have a team of 10 professionals whose focus is on the youth fund. We don’t give cash. If you are into fishery, we buy you the nets.
We are really excited about this youth fund.
Q: You do not operate in a vacuum, how have you handled the country’s politics?
A: My simple approach, I pay simple attention to the laws. We also don’t make donations to any political party. There are templates that we have to complete every six months to that effect. We don’t really involve ourselves in politics. But that is not to say we don’t have views. We have always had that ability to make (political) views and observations. There are structures in existence at Government level though which we can say out our views on any policy. Of course, with politics some people get annoyed but we explain our views. We have never gotten into trouble.
Q: And your perception on the state of the insurance industry?
A: It was so highly advanced and the levels of penetration relative to  GDP was the highest in Africa. But hyperinflation shook that confidence that people had and you cannot really blame people. Now the level of penetration is low but it is an opportunity (for insurance companies) to grow. They should invest a lot more money to provide financial education to the sector. The case for serious financial education is very strong.
Q: After Old Mutual, what are your future plans?
A: There are always things to do . . . but to say I will divorce myself from the financial sector will be wrong. Some say it is payback time and I must be prepared to render that assistance. It’s payback time to the society as well. I will still have some relations with Old Mutual. I also would like to share experiences with young people.
Q: What advice can you give to other companies considering that you have remained on top as a company in challenging times?
A: World over, you will face challenges. But in any challenging situation there is always a way out. It is all about possibilities.
As a leader you do not operate in a vacuum . . .  You have to lead teams and look for solution to the challenges. Diversity was part of my strategy to build a team . . . That for me was the secret towards success. That is my advice to other companies. You need other people to help. Don’t give up but look beyond that problem and there lies the solution.
Q. What is your perception on the future on Zimbabwe economy.
A: I would classify myself as bullish. We have everything going for us as a country. We have the resources and above all we have the skills. These are the right sort of ingredients for growth of the economy. We have been on recovery and the country is set for growth. What we need is consistency be it policies or in the way we do things. The economy is set for an incredible trajectory for as long as policy is fixed and were are consistent with our policies and we are more predictable. I know it has been difficult to be consistent given the challenges as we tried this and that in search for solutions but even the sky is not the limit for this economy. (However), it is not the politicians who can market this country. It is the business . . . business to business..