Zimbabwe: If Mugabe Was CEO
March 14, 2007
Posted to the web March 15, 2007
Rangarirai Mberi, Harare
Warren Buffet is some terribly rich white guy who lives in some place called Omaha in the United States. Robert Mugabe is the President of Zimbabwe.
The two are poles apart. One is an avowed capitalist who has made his fortune on the stock market, that great pillar of capitalism. The other hankers for a return to the glory days of socialism; you know, you have two cows, the government takes both, and gives you the milk, sort of thing?
But one thing that ties them together is that both have, over recent days, laid out their succession plans.
Buffet is the world's second richest man, worth some US$52 billion according to Forbes' latest rich list. His company, Berkshire Hathaway, is one of the most profitable in the world, managing a US$61.5 billion portfolio, with US$40 billion in the bank. Buffet has made his fortune -- and a glittering legacy as perhaps the smartest investor of all time -- by knowing when to get in and when to get out. Now, at age 76, he is walking away.
"I intend to hire a younger man or woman with the potential to manage a very large portfolio," said Buffett in his annual letter to shareholders.
Fade scene to Zimbabwe, the fastest shrinking economy in the world, according to the World Bank. Its people are among the poorest in the world, and the country has no foreign reserves; possibly not even a tenth of the portfolio of Hathaway, a single company. President Mugabe had made his name as an unbending nationalist, but now, already one of the world's longest serving leaders, he is known more having missed a chance to cash in on his legacy and walk away.
"There are no vacancies because I am still here ko, pane (is there a) vacancy? Iwe urikuona vacancy yacho (Do you see a vacancy)? Ko, handiti ndakavhara musuwo (Didn't I shut the door)?"
And in an interview published by The Southern Times at the weekend, President Mugabe really did shut the door: "If the party says so, I will stand."
So, now, imagine if Zimbabwe Incorporated was a company quoted on the Zimbabwe Stock Exchange, and President Mugabe was its long serving Executive Chairman, seeking re-election by shareholders at an Annual General Meeting. Where Buffet would show his shareholders that Berkshire Hathaway had an extra US$40 billion in cash to spend, Zimbabwe would show it had massive debts of US$4 billion and $200 billion.
The Zimbabwe Inc Executive Chairman would show that company costs were rising at a rate of 1729 percent per year, and that 30 percent of all the company's spending was going into staff salaries (according to latest stats from the Finance Ministry).
The shareholders would look at other companies around them, and find that Zambia Inc costs are rising only 7 percent over the same period, that South Africa Corp saw its own costs only rising 6 percent, and that shareholders at Botswana Limited are up in arms after their own CEO told them that costs last year grew 10.5 percent.
They would wonder why it is that the value of their company has fallen over 50 percent in just over five years, when a relatively new company like South Africa Corp has scored 32 straight quarters of growth.
Or why investors seeking exposure to the commodity boom are buying Zambia Inc shares when it is Zimbabwe Inc that has by far the better mining assets. Or even why Zimbabwe Inc is losing its most talented staff to other companies at an alarming rate, and why the Executive Chairman is leaving the financial management of the company in the hands of the likes of Sam Mumbengegwi.
Then they then would wonder why their Executive Chairman, being eligible, is putting himself up for re-election, at a time when Buffet, running a profitable company and still returning plum dividends to shareholders, is walking away.
Maybe it is because, as Buffet himself told the media last week, "picking the right person (to succeed him) will not be an easy task."
That's one other thing he has in common with President Mugabe, who says possible candidates for his post "are like witches waiting outside the door". Whoever steps into either gentleman's shoes has a tough act to follow, but for very different reasons.
--------------------------------------------------------------------------------
Copyright © 2007 Financial Gazette.
allafrica.com |
