A billionaire made by his wife

I HAVE heard so many people talking about how Kuda Tagwirei was enriched by corrupt deals with government.

But from what I have gathered, if there is anything that made Kuda, credit must go to his wife Sandra and their religious faith that inspired them to focus on growing each other.

Businessman, Kuda Tagwirei

The story of Kuda’s business life starts with his retrenchment from one of Zimbabwe’s biggest banks, and one day sitting in a fuel queue for hours, the two realized that sanctions were driving out the leading western fuel companies and this had left a huge gap in the market for the supply of fuel.

After Kuda got his retrenchment package, he combined with his wife to create Sakunda which is a neologism of Sandra and Kuda. They then went on to apply for a fuel trading license and sadly, that year (2002), only 149 fuel licenses where issued by government and Sakunda missed out.

Instead of despairing, Sandra and Kuda leased a fuel license from one of the connected people who had been awarded a license. In their first six months, they got a contract to supply US$500 000 worth of fuel per month to some entity, but they didn’t have the money.

They subsequently approached Sandra’s former boss, John Mangundya (then commercial head at a leading bank), and were advised to mortgage their house for the loan. They did just that, and after getting the loan, they began pushing half a million dollars worth of fuel every month.

With growing fuel shortages in the country and money in hand, they grew their business rapidly and in 10 years they owned numerous service stations, a fleet of trucks and were doing over 20 million liters of fuel per month.

By 2012, Sakunda was the biggest fuel supplier in Zimbabwe and this attracted the attention of the intelligence services, who wanted to know the owner of this monumental business.

By now, only a few of the 149 license holders, had built proper, flourishing fuel businesses.  The biggest of the players were Sakunda, Chugumba and Shingai Mutasa’s ZUVA.

Most others had made money, externalized it, spend it or divested from fuel to other industries; but the top three had made money, reinvested their profits back into Zimbabwe, stuck with the industry, built world class black businesses and eliminated fuel queues.

President Robert Mugabe and businessman Kuda Tagwirei

After some background checks by the intelligence, the government approached Sakunda and offered them a share of the Beira pipeline because the government had no money or capacity to carry the 60 million liters of fuel they were contracted to carry, thus they were losing money in fees for unused pipeline capacity.

The other companies didn’t have the risk appetite, capacity or money required for the contract, so they declined the offer. Sakunda then undertook to move the 60 million liter concession offered to them, plus the utilization of the storage capacity at Beira. This also meant keeping 23 million liters dormant in the pipeline to facilitate siphonage.

As fortune would have it, ever since 2002, Kuda had gone on to study fuel and commodity trading in Europe where he forged valuable relationships with executives from commodity traders such as Trafigura, Glencore and others.

In the process, he appraised them on the latent opportunity in the Zimbabwe fuel market which led to them joining him in growing the storage and throughput to 120 million liters per month of the total 165 million liter capacity of the pipeline.

So, while Sakunda was making money selling fuel as many Zimbabweans did in the early 2000s, the executives improved their competencies by learning international commodity trading. Consequently, Kuda was invited to be one of the few Africans in the World Economic Forum.

Here he created relationships with the biggest commodity brokerage executives, bankers and captains of global industry, which developed his international credit rating, enabling him to get millions of liters of fuel on loan for Zimbabwe.

Sandra and Kuda took a gamble by investing in sending fuel down a pipeline, even though they had dozens of trucks. This drastically reduced their fuel costs and increased their margins exponentially over competitors.

Soon after, Sandra and Kuda paid a substantial amount of money to Glencore, to amortize ZUVA’s debt. This gave Sakunda ownership of ZUVA’s 40 odd service stations, infrastructure and the former owners rode into the sunset with a generous settlement on their initial investment.

By innovating, learning, creating global relationships, taking risks, outsmarting the competition, keeping cash in hand to integrate (vertically and horizontally) the value chain, being willing to invest their money in projects like the pipeline and reinvesting their profits in the same country for years without splashing out on luxuries; Sandra and Kuda made lots of money and grew wealthy.

To increase their chances of making money, instead of externalizing their profits, they kept it in Zimbabwe to take advantage of high margin opportunities in the money minting industries of insurance, banking, investment banking, mining, transport, energy and agriculture.

The fact that Sakunda was in a high cashflow business with huge margins generated from a low depreciation pipeline; they grew their business quickly without stealing money from NSSA, evading taxes or registering irregularly on the Zimbabwe Stock Exchange as other unpatriotic entities did before them.

Meanwhile, less visionary entrepreneurs made their money in Zimbabwe and erroneously externalized their money from high growth Zimbabwe, to invest in saturated and low growth markets like Europe and South Africa.

As a result, the likes of James Makamba, Mawere and Wingirai steadily eroded their wealth on women and booze. Nigel was swindled by Mocxon, Kamushinda was linked to fraud and other such activities in Namibia.

Meanwhile Sandra and Kuda keep sowing their money back in hyper growth Zimbabwe and reaping big. And now that they have made more money than most, by remaining in Zimbabwe and consolidating the market, they are demonized and called a monopoly for being smart, patriotic and innovative.

What many of their detractors forget is that when many were favored members of empowerment vehicles, Sandra and Kuda were mere employees and outsiders looking in. They were only recognized by government because of their huge investment in Zimbabwe, consistency and immense contribution in stabilizing the fuel crisis in Zimbabwe.

It was while on a trip to Equatorial Guinea in 2017, that Kuda penned a proposal designed to save Zimbabwe from forecasted La Niña droughts.  This proposal turned into the Presidential input scheme and pfumbvudza projects that have since filled Zimbabwe’s silos through a string of bumper harvests that have beat all previous output numbers set by white farmers.

All these amazing contributions to their country have earned Sandra and Kuda scorn and sanctions, because the west expected Zimbabwe to collapse without white investors. But these two patriots who could have been rewarded for leaving Zimbabwe with their money to live anywhere in the world, chose to stay and use sanctions to grow Zimbabwe as a means to prove that ordinary black Zimbabweans (vene veZimbabwe) can build a country better than colonizers, against all odds.

My advice to Zimbabweans, is learn from the example set by Sandra and her man. See the opportunities that these sanctions have presented indigenous people, like they did, and make money before we [ZASM] remove these sanctions and western competition floods Zimbabwe.

There will never be another goldrush in Zimbabwe like the one we are currently seeing now, so learn from the biggest investors in Zimbabwe, create relationships with those in the know, solve Zimbabwean problems and make money instead of complaining and calling smart entrepreneurs corrupt. – www.iamrutendo.online