KADOMA — Former banker, Nigel Chanakira, says some Zimbabwean chief executive officers (CEOs) are so greedy that their demands for featherbeddings are so unrealistic that they end up contributing to the eventual collapse of the very enterprises they would have been trusted to run.
Chanakira made the remarks a fortnight ago during the annual conference of indigenous building contractors.
This followed observations by some delegates who felt that shop-floor workers were almost always the first to be sacrificed when companies find themselves between the proverbial rock and a hard place.
Chanakira, who was the founder of Kingdom Financial Holdings Limited (KFHL), which ended up being AfrAsia Zimbabwe Limited, before it eventually closed shop early this year, said he was qualified to talk on labour-related matters on the strength that in his adult life, he has had the privilege of being a worker, a CEO and a shareholder.
He said his experience taught him that sometimes business executives make demands that are so unrealistic that businesses end up closing.
“Labour must accept the realities of the (economic) circumstances and then the CEOs and the executives must also accept these realities,” he said.
Chanakira said he ended up selling the bank in which he was the majority shareholder after the country’s monetary authorities removed him from the financial services group.
Having been removed from the bank, he was literally getting nothing from it because of heavy demands from executives working at the company.
“Let me say this concretely . . . because I was caught up (in a situation) where I was a CEO so I played that game, I wanted — you know — those high salaries and then (former Reserve Bank of Zimbabwe) governor Gideon) Gono came and you know what Gono said? Gono said if you own more than 10 percent, you can’t run your own bank and so I was chased out of executive employment and I sat as a shareholder. I was sitting at 50 percent as the shareholder of the bank and it pains me to know and watch that after a good start for seven years where I was a CEO, then I was shafted out of my own job and for 14 years I fought with management, who always wanted high wages . . . there was no dividend coming to the shareholder, and where is the bank today? That is why I sold; I could see that this was a losing game . . . the RBZ wanted US$100 million in minimum capital; executives wanted all the latest nice cars, and then they wanted high salaries ini shareholder ndakati puzungu (with me the shareholder just watching hopelessly). It is the shareholder who actually deserves to drive a nice car, not necessarily always the CEO and the executives. I have been a worker, I have been an employer — as a CEO — and I have been a shareholder, and now I am in government,” said Chanakira.
The former banker is now the chairman of the Zimbabwe Investment Authority, whose job as the country’s investment ambassador entails reassuring foreign investors that Zimbabwe is an ideal investment destination.
He is also a motivation coach and business consultant.
Chanakira formed Kingdom Bank in 1994 and for years it was one of the country’s indigenous businesses’ oft-quoted success stories.
KFHL was listed on the Zimbabwe Stock Exchange in 1999, through a reverse takeover of the Discount Company of Zimbabwe.
Back then, Chanakira made his dream of listing the group on the New York Stock Exchange an open secret.
In 2002, after running the group for just over seven years, new regulations by the RBZ outlawed shareholders with more than a 10 percent stake in a financial institution from holding any executive post, forcing Chanakira to step aside.
After going through hard times, in 2013 Chanakira was eventually forced to sell his remaining 30 percent stake in the group to Mauritanian group, AfrAsia Holdings Limited, the foreign investor he had courted in order to shore-up the group’s capital base in response to the new higher capital requirements set up by the RBZ.
AfrAsia has since folded up after failing to navigate the treacherous terrain of Zimbabwe’s unforgiving economic landscape.
Chanakira’s assertions come at a time Zimbabwe is yet to fully unravel a scandal involving top executives who are taking home obscene salaries.
In an economy where some workers eke an existence hopelessly below the global poverty line of US$1,25 per day, some executives are pocketing as much as US$500 000 per month in salaries and perks.