How one entrepreneur beat corruption
Corruption has become somewhat of a clich in Africa. So, few Zimbabweans were surprised when a league of crooked cronies sought to destroy an honest businessman like Strive Masiyiwa.
What shocked people most was that the upstart entrepreneur repeatedly fought back - and won.
"There is a new way of doing business in Africa," declares the 30-something tycoon, letting out a boyish giggle as he swivels behind an expansive wooden desk at Econet Wireless.
Mr. Masiyiwa took on a state monopoly, corrupt bureaucrats, and politicians to launch his cellphone company in Zimbabwe. Even President Robert Mugabe once used emergency powers in a bid to stop him.
Today, Econet is the biggest corporation in the country. The aptly named Strive is a millionaire, as well as a household name.
Along the road to success, Masiyiwa inspired a new breed ofbusinessmen in Zimbabwe, who hold on tight to Christian ethics while they pursue profits in this emerging economy.
"Many people see Strive as a savior," says Tikirayi Deketeke, news editor at the local Sunday Mail. "He is not only a leading light in the Zimbabwean economy. He is someone who dared to fight for his principles."
Educated in Wales, Masiyiwa set out to launch Econet in 1993. As a telecommunications engineer, he knew cellphones could earn him money and promote development at the same time.
A mere 1.4 percent ofZimbabwe's 12 million people have a phone in their home - and even that dismal degree of phone coverage puts this country among the top five in sub-Saharan Africa. The UN says that a country has not achieved full industrialization until at least 30 percent of its population owns a phone.
"There is a direct relationship between telecommunications and empowerment," says Masiyiwa, noting that every dollar invested in phone networks creates an estimated $4 of investment elsewhere in the economy. "This is about poverty alleviation."
Masiyiwa asked Zimbabwe's state phone company to join him in starting a cellular network.
"They looked at me and said, 'We don't see a future in it.' "
Masiyiwa decided to go it alone. But the state company, PTC, immediately announced that no private entity could establish a cellular network. The state had a "water-tight" monopoly on telecommunications.
A less resolute capitalist might have given up up on the spot. But Masiyiwa hired an American lawyer instead and, for the next five years, waged one court battle after the other.
His first victory was to convince the country's constitutional court that the state's phone monopoly violated guaranteed rights to free speech. The extraordinary legal argument attracted international attention when phone companies throughout North America and Europe were still clinging to monopolies of their own. Astoundingly, Masiyiwa won.
President steps in
Econet spent millions setting up cellular base stations across the country, and was just days away from launching when the president himself stepped in to stop Masiyiwa.
Mr. Mugabe used special powers - intended to be employed in times of natural disaster or civil unrest - to pass a presidential decree, which made it illegal for any private business to build a cellular network. Offenders faced two years in jail.
"No one could believe it," recalls Masiyiwa. Econet was stopped dead in its tracks.
Again, he turned to the courts, and a judge finally ordered the government to put a cellphone license up for public tender. "Guess what?" Masiyiwa asks with a guffaw. "We didn't get it."
The winner was Telecel, a consortium backed by Leo Mugabe, the president's nephew who is also a member of Parliament and a close friend of the telecommunications minister.
Minister Joyce Mujuru threatened to jail Masiyiwa for having erected his equipment.
"They have to sell the equipment to the winning group or the government will confiscate," she told local newspapers.
The source of Masiyiwa's troubles was clear. He had refused to enlist business partners from the ruling elite. Even worse, he had refused to pay bribes.
A middleman for three government ministers once called Masiyiwa into an office and stated outright: "The price for a license is $400,000 US."
The middleman consulted with ministers in an adjoining office and returned to say, "OK. you can pay in installments."
Masiyiwa stands his ground
But Masiyiwa stood firm. "We will never stop corruption in Africa until people stand up and say no," he says. "I'm a Christian, and that is just not the way that I do business."
Econet's salvation came in a brown-paper envelope - documents that proved a corrupt official had docked 20 percent from Econet's score on the tender bid. Masiyiwa should have won in the first place.
The late vice president Joshua Nkomo condemned the "criminal" behavior of his cabinet colleagues and threatened to resign.
There were more court battles and a cabinet shuffle before Econet was finally awarded a license to operate in 1997.
Today, Econet is outperforming virtually every other cell operator in Eastern Europe, Asia, and Latin America.
Salomon Smith Barney, one of the world's biggest investment banks, declared last week that Econet is one of the "most exciting stories in Africa."
Masiyiwa credits his success to God. He invites staff members to pray with him each morning. He flies economy class, drives a second-hand car, and lives in the same modest house.
His Econet cellphones have become a common sight. For some black yuppies, it is an affordable status symbol.
For township businessmen like Eric Majiga, it is so much more. "I used to line up for more than an hour sometimes to use the public phone," says Mr. Majiga, who runs a small handyman service outside Harare.
Without a phone of his own, it was nearly impossible to talk to customers. Last year, he bought a mobile phone, and business has begun to boom. He now employs four people.
"My kids had never heard a phone ring before," Majiga says as his young daughter fingers the buttons "This has connected me to my family and made my business bigger."
(c) Copyright 2000. The Christian Science Publishing Society