Interview with Joseph Hundah, COO at Masawara Group

Could you provide a concise overview of the origins and establishment of Masawara Group?

Masawara Group, formerly known as TA Holdings, has a long-standing presence in Zimbabwe. Initially, it operated under the name TA Holdings many years ago. In the early 90s, Shingai Mutasa acquired a significant stake in TA Group and eventually became the majority stakeholder. Shingai Mutasa, an entrepreneur with a background primarily in trading, sought to diversify his business interests. TA Group served as an ideal platform for this diversification, given its extensive portfolio of companies spanning various sectors of the Zimbabwean economy.

Let’s delve into your business portfolio. We are aware of your diverse array of subsidiaries. Could you spotlight the most notable ones, particularly those in their nascent stages of development?

We have recently ventured into several intriguing businesses. One notable addition is our business process outsourcing (BPO) enterprise, still in its infancy at less than a year old. Although it is a relatively small venture, our objective is to reshape the employment landscape in Zimbabwe. Given the prevalent high unemployment rates across the continent, particularly among the youth, we saw an opportunity to make a positive impact. Zimbabwe, with its abundant pool of smart graduates struggling to secure jobs, became a focal point for us.

Our vision is to expand our clientele gradually, providing employment opportunities for the youth. Industry-wide, we believe that this sector has the potential to significantly alter Zimbabwe’s employment scenario, offering jobs to around 500,000 young individuals across the continent. While we do not aim to control the entire industry, we are open to holding a modest stake, emphasizing the broader goal of addressing youth unemployment in Zimbabwe.

Apart from this venture, our group encompasses a diverse range of industries, with the largest segment being financial services. Within this cluster, our expertise lies in insurance. We operate two short-term insurance businesses, BIC in Botswana and Zimnat General Insurance in Zimbabwe. Additionally, we have a reinsurance business spanning Zimbabwe, Tanzania, Botswana, and Cameroon, serving the ECOWAS region. This covers pure reinsurance and life insurance exclusively in Zimbabwe. Our asset management and micro-lending businesses are also confined to Zimbabwe, collectively forming the primary focus of our group.

We engage in insurance brokerage, offering services in the Zimbabwean market, and have recently expanded to Zambia, Uganda, and Tanzania. Although not part of the financial services cluster, it contributes to our Pan-African expansion strategy.

Hospitality is another significant segment, with five hotels in Zimbabwe, one in Cape Town, and ownership in Cresta Marakanelo, an eight-hotel business in Botswana and neighbouring regions. This constitutes our second-largest group of businesses.

Beyond that, we have an ISP named Dandemutande, catering mainly to corporate clients with broadband services. In the property sector, we own and manage Joina City, the tallest building in Harare. Minerva, our insurance broking business, is also part of this cluster. We have taken a minority stake in Tatanga Energy, an alternative energy venture, and initiated business process outsourcing.

Healthcare is a recent addition, featuring a facility specializing in laboratory services, pathology, diagnostics, and other services through partnerships. Our businesses are registered in Jersey, and some holding companies within our clusters are registered in Mauritius, providing the overall structure of our operations.

Could you share the names of specific businesses within categories like insurance, micro-lending, asset management, and hospitality?

Our hospitality group operates under the Cresta Hotels brand. In Zimbabwe, it is known as Cresta Zimbabwe, while in Botswana, it operates under the name Cresta Marakanelo. Now, moving to financial services, our life insurance business is named Zimnat Life in Zimbabwe. For micro-lending, we have Zimnat Financial Services, and our asset management business goes by the name Zimnat Asset Management. The general insurance sector is represented by Zimnat General Insurance. In Botswana, our short-term insurance entity is the Botswana Insurance Company, and our reinsurance business is known as Grand Reinsurance.

On the industrial side, I omitted a crucial asset earlier. Sable Chemical, which manufactures fertilizer, specifically Ammonium nitrate, is a significant and important business for us. Given the importance of the agricultural sector in the Zimbabwean economy, Sable Chemical plays a vital role in our portfolio.

In terms of investment, how do you see the current state of the Zimbabwean economy and its relationship with investments, based on your perspective?

Well, quantifying that precisely can be challenging. Our chairman and founder have always aimed to play a significant role in the Zimbabwean economy. Considering the importance of the agricultural sector to Zimbabwe’s economy, we have established a strong presence in it. Additionally, the hospitality and tourism sector is vital for Zimbabwe, given its beautiful landscapes and tourist destinations. We take pride in the fact that we have invested hundreds of millions of dollars over the past few decades in Zimbabwe, contributing both to the growth of our business and directly enhancing the sectors in which we operate.

We are proud to be a Zimbabwean company, rooted in the country’s history. However, we also harbour ambitions to leverage the skills we have acquired over the years and extend our footprint across the continent. Our goal is to develop some of our businesses into Pan African entities, and this ambition will be a focus for us in the coming years.

In terms of calling on investors, which areas within the Zimbabwean economy do you believe present opportunities for increased investment?

Given our diverse portfolio, we welcome investors across all our businesses. The reason being, in most of the sectors we operate in, there is untapped potential for growth. Whether it is our broadband ISP business, hospitality, or financial services, we see additional capacity for expansion across the board. Unlocking this potential often requires access to capital. It could be for investing in a new hotel, expanding our fibre backhaul infrastructure in the ISP, increasing ammonium nitrate production for the region, delving deeper into healthcare, or expanding our business process outsourcing operations to create remote employment opportunities for Zimbabweans, particularly the youth. Across the spectrum, we have the capacity and potential to raise funds and grow these businesses, promising excellent returns for investors.

Can you provide insights into your ongoing projects as a holding company? Are there any notable ventures in the pipeline or currently underway? What are the latest news?

In various segments of our business, we are exploring different initiatives. For instance, in the hospitality sector, we are partnering with a prominent institution in Zimbabwe to manage the construction of a significant hotel in Victoria Falls. This sizable project involves the development of an approximately 180-room hotel, contributing to the growing demand for accommodations in the region. We are also eyeing opportunities to expand our hospitality investments in South Africa.

Another ongoing project involves our ISP and broadband business, where we have recently expanded and established a dedicated fibre backhaul infrastructure from Beitbridge to Harare. We plan to further extend this network to enhance redundancy, representing a substantial investment in our ISP.

On the financial services front, some of our businesses are actively pursuing growth across the continent. This may involve initiating greenfield projects or acquisitions in new markets to transfer the skills we have acquired over the years. The reinsurance business, for instance, is exploring expansion beyond its current presence in four countries.

Additionally, our micro-lending business is a crucial part of our portfolio, addressing the funding needs of small to medium enterprises and the informal sector. As most African economies heavily rely on these businesses, our micro-lending venture plays a vital role in supporting Zimbabwe’s economic landscape.

In the fertilizer manufacturing sector, we aim to produce 240,000 tons of ammonium nitrate for the Zimbabwean market and the region. However, such production levels necessitate substantial working capital for ammonia procurement and conversion into ammonium nitrate. Currently, we are in the fundraising phase for this project, intending to start with 100,000 tons, gradually increasing to 150,000 tons, and eventually reaching 200,000 tons within the next three to four years. This project holds immense significance as Sable Chemical could potentially become the largest business within our group. It stands as a crucial asset that we are actively developing.

Over the next five years, what achievements would you like to see for Masawara Group?

In the coming five years, I am quite optimistic about our business prospects. I envision doubling our revenue during this period and expanding our influence in the modern economy. It is my goal to establish a more robust African presence, particularly in markets like Namibia and Angola, which hold significant interest for us. Additionally, I see potential in entering new markets such as Mozambique, Tanzania, Uganda, and Kenya. Our diverse collection of companies has the capability to explore and thrive in these markets. We aim to solidify our standing as a strong Pan African business.

Another key focus is maximizing production from the Sable Chemical plant, considering the pivotal role agriculture plays in our country and the broader region. Given the pressing issue of food security across the African continent, I believe we can make a substantial impact in this sector. Overall, I am highly optimistic about our business trajectory and welcome the opportunity to collaborate with partners who can assist us in achieving these ambitious targets.

In your role as COO responsible for overseeing operations across diverse businesses within Masawara Group, what motivates and inspires you?

My personal philosophy revolves around a strong work ethic. However, as a group, our collective ethos is cantered around making a meaningful impact. We ask ourselves, what kind of impact we can create, primarily for our country, and secondarily, for the continent as a whole. Careful consideration went into selecting the sectors we operate in, driven by the potential impact these sectors can have on both the continent and our nation. Ultimately, impact stands as the overarching theme and guiding principle for our investment ethos.