Oude Meester the alcoholic spirits brand once carried an advert many years ago that described the life trajectory of a successful businessman or businesswoman in a leading South African business weekly. In that advert was a picture of a bottle of brandy and its image was a timeline of the journey a businessperson takes starting right at the bottom when his or her entrepreneurial journey begins having started a business, grows that business, listing it on the Johannesburg Stock Exchange and then culminates in that individual running for president of the country.
The advert drew its context from the times. Back then Cyril Ramaphosa and Tokyo Sexwale, political stalwarts within the establishment of the African National Congress had taken sabbaticals from the political sphere and had gone on to achieve notable success in the private sector. Both men had expressed ambition for the presidency. Only one of these men succeed in realizing his ambition, Matamela Cyril Ramaphosa. However, does a venture into politics make sense for successful businesspeople?
And what kind of relationship do business and politics enjoy in Southern Africa?
For many contenders who have enjoyed success in private enterprise, a foray into the political realm proved to be tragic. The name that comes easily to mind internationally is Donald Trump, the now-disgraced former president of the United States of America. He ascended the throne and took up the mantle of the most powerful man in the world and leader of the free world in 2016 on the back of growing discontent with the political establishment. His political promise was a new way of doing things and a break from the past. Trump does not need any introduction, he is a brash, self-promoting New York city property developer and media personality. Despite the odds stacked against him, he won an election in which his rival Hillary Clinton was favored to win and took the United States and the rest of the world through a tumultuous 4 years during his presidency. He lost his bid for a second term in office to an elder statesman and epitome of the old political establishment, Joseph R. Biden.
In typical Trump fashion, he refused to accept the outcome and what transpired after that earned him the moniker of the worst president in US history. Though it is debatable, and the jury is still out on the matter, Donald Trump has enjoyed notable success in business and amassed a substantial personal fortune in the process. His venture into politics, however, did not pay off in the manner he had anticipated it would.
Businesspeople do not always make the best public servants generally. There are exceptions to this assertion like Michael Bloomberg the fintech billionaire whose tenure as mayor of the city of New York is widely regarded as successful. However, for the rest, any combination of business with politics is certain to produce a jinx of controversy, corruption, and tragedy.
The Zimbabwean Case
If you mention the name Kudakwashe Regimond Tagwirei to 10 different people in Zimbabwe, you would get 10 different answers and all of which would be a combination of admiration and scorn. His admirers will call him a savvy businessman who has acquired wealth from dealing in fuel and later diversified his portfolio of business interests to include mining of precious metals, logistics, agriculture, government contracts, and financial services. Those of a less kind disposition accuse the reticent businessman of having captured the state on account of how his Sakunda Holdings company manages to obtain sweetheart deals on government contracts and his access to high-level government officials. The United States Department of State called Tagwirei, “a notoriously corrupt Zimbabwean businessman, for materially assisting senior Zimbabwean government officials involved in public corruption.”
According to a report by Sentry published in July 2021, “Once a fuel retailer and trader, Tagwirei has emerged as one of the richest and most influential businessmen in post-Mugabe Zimbabwe. In the closing years of Robert Mugabe’s reign and just after Emmerson Mnangagwa’s ascent to the presidency, Tagwirei’s Sakunda Holdings received more than $1.6 billion in contracts and procurement deals from Zimbabwe’s government. The tycoon now presides over a sprawling network of more than 40 companies spanning the oil, mining, banking, logistics, transportation, and import/export sectors. His business empire is decidedly global, with business partners in South Africa, a bank account in Switzerland, deals with commodity traders in Singapore, holding companies in Mauritius, and offshore financial arrangements in the Cayman Islands. Now an advisor to Zimbabwe’s president, Tagwirei has been dogged by accusations of cronyism and corruption throughout his meteoric rise.”
Whatever side of the admiration/scorn divide readers may find themselves, what is clear is that Mr Tagwirei’s foray into politics albeit not at a public office or even party level, has indeed been lucrative but it has also come with bitter-sweet consequences. He and his company Sakunda Holdings were placed under sanctions by the United States government on the 5th of August 2020.
Five years ago, a person would have been at pains to even find a picture of this man, Kuda Tagwirei on the internet. He was then reputed for being media-shy and keeping a very low profile however from the time that President Emmerson D. Mnangagwa took office in November 2017 he has been brought to the fore and enjoyed a more prominent role as a presidential advisor. His businesses also grew exponentially during the same period and continue to grow. The designation by the US government will no doubt constrain his business activities.
The Russian connection
There have been attempts by Russian businessmen to effect political change in their motherland with varying degrees of success. The most notable of these is a man named Mikhail Khodorkovsky. He was at one point the wealthiest man in that country having made his money from investments in oil and financial services. He was also part of a breed of businessmen who got immensely rich by acquiring state assets at knock-down or bargain-basement prices and realizing their value over time. These men had helped Boris Yeltsin retain power at a time when it looked like the country could fall back into Soviet hands by funding his political campaign and when he took office he gave them free reign to do as they pleased which included cherry-picking state enterprises when they were privatized. Yeltsin then left office in 2000 and nominated Vladimir Putin as his successor, then a little-known former KGB lieutenant.
Mr. Khodorkovsky reckoning that a more open and transparent Russia would be more appealing to international and foreign investors publicly challenged the new leader Vladimir Putin on issues around graft and corruption. Not only did he challenge the Russian strong man he went as far as to fund opposition parties which in Putin’s eyes was the cardinal sin. He was asked to leave the country or risk criminal prosecution and when Khodorkovsky did not leave, he was arrested on what was trumped charges, quickly convicted, and spent 10 years in a Siberian prison. He was only released on the condition that he would leave the country after international pressure and outcries became too much for Putin to ignore.
Khodorkovsky is a classic case of success in business venturing into politics only for everything to go frightfully wrong with a heavy price to pay and devastating consequences. As a condition for his release, he was made to relinquish his financial interest in his companies. The shareholders of the main company in his portfolio Yukos were awarded a US$50 billion settlement by the Hague in 2020. He unfortunately will not receive any of those funds. He is no longer a billionaire despite that he still has significant assets.
The Nigerian Tragedy
The story of the life of Moshood Kashmawo Olawale Abiola popularly known during his life as MKO is truly the stuff of legend. It describes resilience, persistence, determination, and eventual success. He was born in Abeokuta, Nigeria after several stillbirths on the 24th of August 1937, and his mother not wanting to tempt faith had named him “Kashimawo” meaning “let’s wait and see” he was then named Moshood after he turned 15. He sold firewood as a young boy and studied accounting on a government scholarship at the University of Glasgow and returned home to a series of jobs the most notable being Chief Executive of International Telephone and Telegraph (ITT). Subsequently, MKO invested in a series of ventures and amassed a large personal fortune. He made a bid for the Nigerian presidency in an election that occurred on the 12th of June 1993 which was annulled by the ruling military government of that time led by General Ibrahim B. Babanginda leading to a legitimacy crisis. MKO was the presumed winner of the election that was regarded as the cleanest and fairest in that nation’s history but never took office. He died in prison under unclear circumstances after being held for 4 years by the authorities.
Would MKO Abiola have met the tragic demise that he did had he chosen to stay in his lane of business and avoided politics?
Would Mikhail Khodorkovsky lost it all if he had not made the fateful decision to challenge Vladimir Putin?
Is it possible that with a successful background in business an individual can then parlay that into success in the public arena?
Can the business sector and political establishment of any society create a symbiotic and synchronized relationship that ultimately benefits all participants in an economy?
The answers to these questions will serve not only as a guide map for all people in business who have political ambition but also as an indicator of the likelihood of the economic growth of a society. Therefore, the Ease of Doing Business Index is so important. This is an index published by the World Bank and an aggregate figure that includes different parameters which define the ease of doing business in a country. Where it is reasonably simple to set up a business and operate, it is also reasonable to expect economic progress to occur in that country.
Image courtesy of World Bank Group
Some of the countries with the highest Ease of Doing Business Indices include New Zealand, Singapore, Hong Kong, Denmark, South Korea, and the United States respectively. It is not a coincidence that these countries enjoy a high level of wealth and the politics in these countries is markedly not hostile to business. In the case of the US it is possibly the reason why a man whose sanity today is widely questioned won that country’s presidency in an election 4 years ago.
The personal accounts of the individuals described are by no means exhaustive. They are instructive in so far as to say that business still has little to no room in the political sphere where deeply entrenched interests hold all the sway as in the case of South Africa, Zimbabwe, and Russia.
In Africa by and large, where business and politics should enjoy a kind of symbiotic relationship, it is often viewed (whether correctly or incorrectly) as incestuous. In Zimbabwe and South Africa, a strong narrative of state capture has emerged where certain actors from the business sector exert undue influence on the day-to-day running of the state. What gave rise to this narrative is the perception that there is a lack of transparency and oversight by the authorities. In South Africa especially there is a narrative in political circles that capital has a certain complexion and can belong to a certain race. White monopoly capital is the epithet widely used to describe large businesses that are owned and run predominantly by white people. Nothing exemplifies the stark and marked hostility towards business by the political establishment like the term white monopoly capital. Business is thus, viewed as a nefarious and malevolent entity that prejudices society for its own gain.
Business is and will remain the engine room and catalyst for economic growth in any and every society. Politics has the responsibility to ensure that the conditions precedent to and necessary for business to thrive are in place. Business and politics, therefore, need each other and cannot do without one another. The political landscape should not be a minefield or a space rigged with booby traps for businesspeople and businesses.
The relationship between these two entities needs to be clear and transparent in its workings for it to achieve the goal of economic prosperity and growth. Where is it shrouded with secrecy outcomes like in South Africa and Zimbabwe will emerge where political elites and their associates accumulate disproportionate amounts of wealth and the broader population has no share or means of participation in the economy?