Magazine article African Business

Southern Africa: Botswana Up, Zimbabwe Down

Magazine article African Business

Southern Africa: Botswana Up, Zimbabwe Down

Article excerpt

Any survey of the leading companies in Southern Africa will always focus overwhelmingly on South Africa, so we have decided to strip the continental economic superpower out of the equation to give a more accurate reflection of the relative strengths and weaknesses of the largest firms in the rest of Southern Africa. Compared with the other African regions, there is a good spread of companies across different states but two countries stand out: Botswana and Zimbabwe.


The Zimbabwean economy may have been battered about from pillar to post in recent years and the shine may have worn off its leading companies but the country still boasts 18 firms in our top 50 regional table.

From mining and construction to banking and telecoms, a large number of sectors are represented but it is noteworthy that Zimbabwe's highest placed entrant is Meikles Africa Ltd in the entertainment and leisure industry, with market capitalisation of $303m and a ranking of just 10th. Given that this was once one of Africa's most developed economies and in a clear second place behind South African within the region, it is obvious just how far Zimbabwean firms have fallen.

In their place, Botswanan companies have more than prospered. The country's economic and political stability, sound fiscal policy and sensible reinvestment of its diamond revenues have all been well documented.

However, that economic success story is now represented by 17 companies in the Southern African top 50, up from just 13 twelve months ago. Indeed, the first four corporations in our table are First National Bank of Botswana, Barclays Bank of Botswana, Standard Chartered Bank Botswana and Botswana Insurance Holdings. Pride in the nation's achievements is certainly well recorded in the names of its biggest companies.


With market capitalisation of between $741m and $1.1bn, these four are well ahead of the field. In a country of just 1.6m people and no great natural wealth beyond its diamonds and natural beauty, it is remarkable that three Botswanan banks should head our list.

Although some of these companies are offshoots of British banks, such as Barclays and Standard Chartered, the others are real local success stories. Banking aside, there are brewing, fuel, mining, real estate and entertainment businesses listed in our table from the arid, landlocked Southern African state.

The next most successful country after Botswana and Zimbabwe is Zambia, with nine entrants, including Zambia Sugar and Standard Chartered Bank of Zambia in fifth and sixth positions respectively. Both have enjoyed excellent years, with Zambia Sugar's value up from $212m in 2007 to $584m in this year's survey and the local subsidiary of Standard Chartered rising from $142m to $459m over the same period.

Similar growth next year could see the Zambian companies challenge Botswana's lead at the top. The country's steady performance in recent years has been underpinned by a high copper price but our survey indicates that corporate strength is far from focused on a single sector. It is not beyond the bounds of possibility that the former Northern Rhodesia could outrank its hitherto more illustrious southern counterpart in our table within the next five years.

Namibia maintains its four companies in our top 50. FNB Namibia is best placed at 11th, followed by Namibian Breweries, Oryx Properties and Trustco Group Holdings. However, the country retains a fairly narrow economic base, so it will be interesting to see whether the expected emergence of a gas sector and much greater power generating capacity will enable other domestic companies to grow, rather than merely boost government coffers through exports to South Africa.

The only companies from outside these four countries in our table are Cervejas de Mocambique and Royal Swaziland Sugar Corporation.

Although Angola has become one of the largest economies in Africa in recent years, its wealth is almost entirely generated by the oil industry and is controlled by foreign firms and state owned Sonangol. …

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