JOHANNESBURG - A few weeks ago, Zimbabwe was in a celebratory mood.
For a week or so the nation forgot about the bad corporate results that were being released and turned its focus on the latest deal in town.
The deal in question was the one in which former Barclays Plc chief executive officer Robert Diamond was proposing to acquire ABC Holdings Limited for $210 million through his company Atlas Mara Co-Nvest Ltd.
This was Diamond’s first deal in his African venture, which he has continued by acquiring the Development Bank of Rwanda.
The entry of an investor with such a high banking profile was too good to be true for Zimbabwe, a country that has not seen much in terms of foreign direct investment.
For a few days, business pages in Zimbabwe carried stories talking about how important that deal was to Zimbabwe.
Editors across media houses went into overdrive as they tried to outdo each other with headlines about the deal; “ABCH deal has banking sector turning green with envy” said one headline, while another one questioned “Could the Atlas-Mara deal be a catalyst for Zimbabwe FDI?”
Unfortunately I could not join my countrymen in celebration.
My failure to celebrate was not because I was not going to benefit from the 90,70 percent premium from Atlas Mara’s offer price of 82 US cents against the last trading price of 43 cents.
I did not and still don’t hold any shares in ABCH.
My failure to celebrate was not because this is actually a Botswana deal.
There are a mere 71 million or 27 percent of the shares left on the ZSE register, while 73 percent is on the Botswana Stock Exchange.
Of the $210 million deal payment, only $40 million will go into Zimbabwe.
I am not by any means saying $40 million is too little.
It is certainly not small change for a country whose total revenue collection for February is only $248 million.
I am, however, still not going to celebrate the ABC/Atlas Mara deal.
In my view, the deal will blind us from the reality on the ground.
It will give us a false sense of hope that everything is okay.
*This opinion was written by Malcom Sharara for Fin24