via Chinamasa raps business leaders | The Herald January 26, 2015 by Golden Sibanda
FINANCE Minister Patrick Chinamasa last week took a swipe at industrialists, rapping them for lavish lifestyles while lacking initiatives of growing businesses.
Minister Chinamasa said he had encounters with several potential investors that left him wondering whether local business leaders were “industrialists in the truest sense of the word”.
He also said instead of adapting business costs to realities of the environment, executives preferred lavish lifestyles while they lacked innovation to start or grow companies.
Minister Chinamasa said most of the business leaders, especially in the manufacturing industry, were mere managers as opposed to entrepreneurs determined to become masters.
Addressing a one day economic outlook symposium, Minister Chinamasa said most captains of industry were “not entrepreneurial enough” and were happy maintaining the status quo.
“Are we industrialists in the true sense of the word? I would like to distinguish between managers and entrepreneurs. Do we have intentions to be masters?” he queried.
Ostensibly, the minister was peeved by the fact that while the economy was in the mire, limitless opportunities existed yet businesses lacked entrepreneurial acumen to seize them.
Having realised this, Minister Chinamasa said he declined a meeting with a manager of an unnamed big company but instead demanded to meet the company’s overseas owners.
In the meeting, Minister Chinamasa said, he explained to the owners that he felt that the company was “punching below its weight” to which the shareholders strongly agreed.
He said in the meeting, the manager then tried to justify projects the company was undertaking, which were valued at $30 million, yet his point was that he expected about $200 million.
To that end, Minister Chinamasa said that despite the myriad of challenges facing the economy, sustainable growth demanded business leaders “with ambition to be masters”
“As Minister of Finance (and Economic Development), I would rather have conversation with a “small master” (entrepreneur) than the manager of a big firm,” he said, adding.
“Because, we can decide for our country and take decisions we can implement.”
“We (industrialists) are not entrepreneurial enough. An economy where you only have foreign firms cannot sustain itself.
“It is the local firms, which go out to look for foreign capital, seek technology and to seek markets,” Minister Chinamasa told delegates.
Minister Chinamasa also lamented lack of entrepreneurial qualities among industrialists saying visiting officials from the Norwegian Investment Fund were looking for serious business people, but struggled to identify good assets to put their money in.
Norfund, a State-owned company with limited liability, which normally invests to a maximum of 40 percent equity, had a portfolio of about $1,6 billion at the end of 2013.
In April last year, the minister also had meetings with about 45 fund managers from the US and EU looking for well managed profitable companies listed on the Zimbabwe Stock Exchange.
The fund managers complained that they were too few well run entities on ZSE to invest in, adding that prospects for new listings looked dim; signalling bankruptcy of new business ideas.
In another instance that exposed lack of enterprise among businesses, a $5 million facility arranged with BADEA had only $1,8 million drawn down by expiry of its 3 month window. The minister had to frantically negotiate for its extension for more draw downs.
He also blamed businesses in Zimbabwe for the high cost of operations characterising the economy, saying it was because they did not give the US dollar its real weight.
“We are unable to cope in the global arena because of the distortions that arose after that migration (from the use of the Zim dollar to multicurrency dominated by US greenback)”.
And faced with a situation that demanded financial discipline to conserve liquidity needed to support operations, firms still went on a borrowing spree “for consumptive purposes”.
In many instances, the minister said, managers with an “insatiable” penchant for expensive lifestyles would rather have firms collapse at the expense of savings and productivity.
Minister Chinamasa said under the difficult circumstances, firms should be resourceful, work with what is at their disposal and stop “mourning and blaming everybody”.