Getting Zim ready for meaningful FDI engagements

(Preparing for strategic partnerships & PPPs)

THE time will come for every institution to raise new capital to finance the next phase of its growth. For most Zimbabwean enterprises, that time has come, if not way overdue. The message in this article is simple - Prepare now, or you

will undersell your asset due to poor preparation. While the rationale for injecting new capital may be different from institution to institution, the core message to investors must address the same major issues:

1. Rationale for capital raising, and the key investment

actions required in order to create competitive advantage;

2. Strategy of the enterprise with emphasis on the impact it will have in respect of each stakeholder grouping;

3. Business model founded on efficiency, stakeholder relevance, and sustainability; 4. Key strategic milestones achieved by the firm in respect of:

◆ governance, taxation and legal status;

◆ financial accounting and planning revenue growth and cost management;

◆ financial forecasting and budgeting for capital &

operational expenditure;

◆ market size, customer service delivery channels, and competitiveness;

◆ alignment and automation of business procedures & internal systems;

◆ investment in human capital development. 5. Outlook for the next three to five years in light of growth and sustainability.

Before we can claim to be ready to engage with strategic partners and investors, serious work must be undertaken to identify value inhibitors hidden in the issues outlined above, and to systematically eliminate them.

All too often, institutional leaders take a rushed approach towards investor search and lose value by selling half-baked assets, when all it might have taken to preserve that value is a little effort towards:

◆ preparing and publishing (unqualified) annual financial statements;

◆ taking steps to “clean up the books” to eliminate any bases for their qualification;

◆ reviewing internal systems to modernise and automate business procedures and processes that are supportive of strategy; and

◆ undertaking skills audits, skills training & development interventions, organisational design and job evaluations among other direct investments in human capital development and capacity building. It may take a bit of time and effort to get your enterprise to a state of readiness for meaningful investor engagement, but it is a worthwhile investment. It should not be done hurriedly, but it can be done fairly quickly, with guidance. Start preparing now. As we approach the day of engagement, the enterprise must have in place all the information required by the typical investor.

Use our standard checklist below to guide the information required. A quick look at the list emphasises the need to start preparing well in advance, as some of the items will need considerable time to put in place:

◆ Strategic plan outlining vision, strategic priorities, implementation plan, as well as monitoring & evaluation plans.

◆ Business plan with five year forecasts (including competitor analysis, business development, marketing, capacity building and infrastructure development plans).

◆ Description of business model and unique selling points.

◆ Products and services.

◆ Shareholder information and founding documentation.

◆ Board and Management team, resumes, and organisational structure.

◆ Intellectual property.

◆ Material contracts.

◆ Historical financial statements (audited, with clean opinions).

◆ Information Technologies.

◆ Legal & compliance documentation including registration, licensing, taxation, and annual returns.

◆ Governance documentation including board charter, committee terms of reference; and minutes. Other supporting information depending on the nature of the engagement may include standard operating procedures, skills development plans and automation plans.

The world is getting ready to engage with Zimbabwe. Will our institutional leaders be prepared to transact (without giving away value) when their time comes to negotiate the next FDI deal in our markets. Stand advised.

This article was compiled by Felix Kumirai, a transformational strategist and resource mobilisation consultant at GENESIS GLOBAL FINANCE.

The contents herein are for information purposes only, and GGF does not accept responsibility for any loss arising from the use of materials or opinions contained in this article.

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