Zim’s next billionaire

The nation’s goal to grow annual mining revenues to US$12 billion is very ambitious but also crystal clear, and if it is to be achieved consistently, then perhaps there be the emergence of new billionaires in that space.

Did you know that if you were to earn $1 000 per day since the birth of Christ, and you kept all your earnings, assuming that there is no interest earned by that money nor loss of value due to inflation, your accumulated earnings today would still be under a billion?

That’s just an illustration of how difficult it is to become a billionaire, in fact, according to Forbes in 2023 there were 2 640 billionaires in the entire world, 20 in Africa and only one in Zimbabwe.

The temptation to argue that Zimbabwe has many billionaires is very high. It may even have justifiable grounds, but we will stick to Forbes-accredited billionaires for this article.

For the avoidance of doubt, the currency used in this article is the United States Dollars only, with all necessary conversions made.

This writing was inspired by a social media post where I asked people which industry they thought the next Zimbabwean billionaire would come from, and will give my opinion of the various responses, grouping them into sectors.

Again, this article will treat corruption and politics as noise and will speak to genuine businesses, notwithstanding the fact that billionaires may come from corruption and politics.

This article will give an opinion on the industries that were most recurring from the comments that were posted on the social media post.

Mining industry

As a country endowed with almost all the natural resources, one might be justified to think that Zimbabwe’s next billionaire will emerge from the extractive and mining industry, especially when roughly seventy per cent of our exports are related to minerals.

The nation’s goal to grow annual mining revenues to US$12 billion is very ambitious but also crystal clear, and if it is to be achieved consistently, then perhaps there be the emergence of new billionaires in that space.

Currently, one of the biggest private companies in the country, which is the Australian Stock Exchange-listed Zimplats is valued at over a billion dollars and with an annual top line usually above the billion-dollar mark as well. However, it is owned by a South African parent company.

Other than that, Bindura Nickel Corporation is another mining listed company but neither its revenues nor market cap are near a billion dollars, the same could be said for the gold mining listed companies RioZim and Padenga.

Although I agree that the next billionaire could be from this sector, I also believe that it can only be done by extremely revolutionising how things are done in the sector because at the moment the companies which are considered giants in the space are not close it achieving that.

Agriculture industry

Although this sector is the backbone of the economy, due to its interlink from the primary agriculture to the secondary and up the value chain, I do not foresee any billionaire emerging from that sector anytime soon unless something drastic happens.

This does not mean that there are no opportunities for billion-dollar empires, but the approach to agriculture that current players use at the moment makes it very difficult, for example not integrating technology into agriculture and using ancient methods of agric.

Over-reliance on rain as the main source of water poses a challenge in this era of climate change and exposes the industry to the risk of drought. I opine that players in space can also not wait for the government to build dams for them if they aspire to build billion-dollar empires, they should play a pivotal role in ensuring water harvest.

This sector has been a darling of financial institutions, with banks overweighting their loan books towards it despite its high default rates.

Energy industry

The challenges that the energy sector not only in Zimbabwe face, is an opportunity for independent power producers to exploit. The on-boarding of Units 7 & 8 in Hwange has ameliorated the energy deficiency but as a country, we are nowhere near self-sufficiency.

The country's estimated daily requirements are 1 700 megawatts but producing less than 1 400 megawatts at best according to Reuters. The pricing of electricity has to be competitive, as opposed to the subsidised pricing currently paid by consumers before any serious business can be sustained.

Additional real estate stock is being built in the country and the power demand as well. With the proliferation of alternative energy like solar, there could also be a case for that space but I think no billion-dollar empire can emerge unless the solar panels and batteries are produced within not imported.

Technology sector

The technology sector is a very broad categorisation and, in this case, combines responses of E-commerce, payment solutions, fintech and artificial intelligence to mention a few. The current Forbes acknowledged billionaire has interests in this space with two listed giants in the space. I wouldn’t be surprised if the next billionaire also emerges from that space mainly because of scalability and the ability to reduce marginal costs.

There also have been numerous tech-related start-ups in Zimbabwe that have not managed to grow to become even multi-million-dollar empires. I am not sure if the government has made any determined efforts to provide the right incubation for tech start-ups to blossom.

The universities, which in my opinion play a critical role in terms of research and development haven’t been the best as far as nurturing tech entrepreneurs is concerned.

Real estate, construction sector.

I think that over the past half-decade, we have seen a paradigm shift in this sector, and resources have flowed significantly into brick and mortar.

The periods of hyperinflation have pushed economic agents to prefer real estate as a safe haven, albeit most of the residential construction is done by individuals and with little finance from financial institutions. With the new capital in Mt Hampden, I am of the view that companies that will be active in constructing industrial and commercial buildings might be able to create billionaires.

At the moment, there is Masimba Construction and West Prop which are listed and are fairly enjoying the construction frenzy but their values are nowhere near the ten figures. On the other hand, First Mutual Properties and Mashonaland Holding which are more of property-owning companies are also not close to a billion valuation.

Transport, logistics sector.

I am not sure that the current 16 million Zimbabwean population can support any billion-dollar logistics enterprise, be it road or air. Perhaps if the player comes up and revamps the rail network, but it looks like an impossible dream given how the state-owned NRZ currently owns and operates. I am of the view that the way Zimbabwe operates without an efficient rail network is not sustainable and sooner or later some investments will be needed to bring to life that sector.

Overall opinion

Predicting where the next billionaire will come from is a difficult task, just like predicting the next best-performing stock to invest in. Your analysis could be well on point but still miss it, but it’s a worthwhile discussion to have.

I opine that the person who comes up with a solution to reuse the ex-Japanese cars that we are importing at unprecedented magnitude might be the next billionaire, but who knows, I could be wrong.

Hozheri is an investment analyst with an interest in sharing opinions on capital markets performance, the economy and international trade, among other areas. He holds a B. Com in Finance and is progressing well with the CFA programme. — 0784 707 653 and Rufaro Hozheri is his username for all social media platforms.


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