HARARE – Zimbabwean billionaire Strive Masiyiwa has lost US$1.7 billion within a year, ENN reports. According to a Forbes 2020 report on Africa’s billionaires, the Telecoms mogul, who was valued at US$2.8 billion by Forbes in 2019, is now worth US$1.1 billion.
The 39% drop in Masiyiwa’s networth within a year is indicative of the impact of Zimbabwe’s economic policies on local investments. Masiyiwa, who is primarily invested in Zimbabwe, was not spared by Zimbabwe’s economic challenges and policy changes.
After the ouster of the former and late president of Zimbabwe Robert Mugabe in November 2017 through a military assisted operation, Zimbabwe has embarked on a raft of economic policy reforms, including statutory instrument 33 of February 22, 2019 which converted all United States dollar denominated local transactions to a local currency – the RTGS dollar. Before the enactment of this statute, Zimbabwe’s official currency was the United States dollar. The bond note, a surrogate currency introduced in 2016, was officially at par with the United States dollar before February 22, 2019. Today, the RTGS dollar, a blend of the surrogate currency and electronic values, is now 17 times weaker than the United States dollar. Individuals and corporates have lost significant values to this exchange rate legislation.
In his 2019 inflation report, renowned Zimbabwean Economist John Robertson, the Consumer price inflation saga for 2019 ended with prices an average of 521,15% higher than in December 2018. Consequently, the Consumer Price Index ended the year at 551,6 as illustrated on the graph below.
Between January 2019 and January 2020, the price of fuel in Zimbabwe has risen by a cumulative 1,284 percent. With a recurrent energy crisis that has dwindled productivity and eroded profitability across industries, Zimbabwean businesses lost significant values to economic challenges and policies in the year 2019.
Masiyiwa owns over 50% of mobile phone network Econet Wireless Zimbabwe, and is major shareholder of Africa’s largest fiber optic and satellite services company, Liquid Telecom. He is the 19th richest man in Africa. Econet Wireless Zimbabwe was founded in 1998 after a protracted legal battle with government over its licensing. Today, Econet Zimbabwe is a market leader across all product segments, with an 84% revenue market share; 78% voice tariff market share; 65% data traffic market share; 97% EcoCash subscriber market share and a 68% LTE network infrastructure market share, official reports confirm.
Masiyiwa is also invested in mobile phone networks in Burundi and Lesotho, and investments in fintech and power distribution firms in Africa. The Billionaire and his wife Tsitsi founded Higherlife Foundation, a philanthropic organisation that invests millions of dollars annually to support orphans and vulnerable children in Zimbabwe and Africa at large.
In October 2019, Zimbabwe’s local bourse, Zimbabwe Stock Exchange, lost over RTGS$2 billion in market value within two weeks to unrelenting inflation. The triple evils of monetary instability, fiscal instability and energy constraints continue to hamper Zimbabwe’s economic recovery. With foreign currency shortages, climate change and an impending drought, 2020 looks set to be another challenging year for Zimbabwe.
The United Nations has predicted a gloomy 2020 for Zimbabwe’s economy in the year 2020 by forecasting a 2.5% economic contraction in its World Economic Situation and Prospects report for 2020. On the contrary, Zimbabwean authorities are forecasting a 3% economic growth in 2020. Amid these contrasting views, Masiyiwa’s networth at the end of 2020 can be an alternative mirror on Zimbabwe’s economic performance for the year.