Squabbles and multinational appointments:Serving a lesson on Vodacom

03Nov 2018
Ani Jozen
Dar es Salaam
The Guardian
Squabbles and multinational appointments:Serving a lesson on Vodacom

AN implicit policy directive has lately been signaled by the labour authorities regarding the employment of foreign experts in the private sector, when an application by telecoms giant Vodacom for a Kenyan national as CEO for its country operations was rejected.

Sylvia Mulinge, a Kenyan national, was recently denied a work permit by Tanzanian authorities to take up the CEO position with Vodacom. PHOTO: File

In a sense that represented an escalation in the tit-for-tat trade spat between the two countries, as an act of protectionism, not by formally rescinding ability to employ a non-national or an EAC national in such a post, but using discretion on a specific individual. Permit refusal doesn’t usually need to be explained as to why.

Business watchers were left guessing as to what motivated this rejection of work permit request for the CEO designate, and few explanations abound, other than the ‘feel good’ aspect that it is possible a local appointee is nominated in her place, or an individual from company head offices.

From a strictly nationalist point of view, authorities can understand if the company selects one of its headquarter senior staff to manage its country operations here, but not appoint a similar fellow from a neighbouring country. It is similar to a UN post, as to which country is eligible for it first.

For starters, it isn’t a question really of bad blood between Kenya and Tanzania but vehemently expressed preferences, which are expressed even at the highest political level in the country, and thus the refusal was based on internal political habit rather than regional disagreements.

Legend has it that in 1985 then outgoing President Julius Nyerere was firm that the party should put across the name of then Prime Minister Salim Ahmed Salim to succeed him as head of state, but met with formidable opposition in the party central committee.

The issue wasn’t the suitability of the candidate but the primacy thereof, above then Isles president Ali Hassan Mwinyi, endeared.

This legend account has it that members of the party central committee – some narrators even pick out ex-African Union Parliament Speaker Gertrude Mongella as having fired that question, or perhaps asked by colleagues to float that question to the party chairman.

Nyerere was asked, in a plaintive manner, ‘what was the problem with our vice president,’ that he ought to exclude Mwinyi first by some reason, that ought to be articulated to the central committee members, not just come out with a brilliant fellow for the post. He failed; members opted for the Isles leader.

There are also scores of other issues that have not been overly experienced in the telecoms sector but in beverages, or specifically in the brewing industry, where interlocking shareholding has been around for around three decades, since Tanzania Breweries Ltd was privatized in 1993/4, thereabouts, followed closely by Tanzania Cigarette Co.

The latter doesn’t have big interlocking operations at marketing level with a Kenyan equivalent, but breweries are actively in contest for market turf, which means that authorities here can’t allow a local firm competing with Kenyan firms to be run like a branch of a Kenyan firm. That sort of strategy can be embedded in a CEO.

Arguments by some key stakeholders that Tanzania doesn’t have a managerial school that brings out material for a big company like Vodacom raised more questions than they answered in that assertion.

It would have been alright if the key issue was obtaining a CEO for Vodafone, its global mother company, hardly a CEO for its country operations as was the case at hand, as in the latter context we have legions of well placed professionals who have served in competitive jobs with multinationals or state owned major firms for the better part of 20 years.

Many of us were particularly surprised to hear the sort of work that Engineer Patrick Mfugale, recently honored with the TAZARA flyover, has done in designing and building bridges. Surely we have comparable professionals in accounting or marketing, unless a hidden strategy was in operation?

At the same time, Vodacom (Tanzania) Ltd is now a listed company at the Dar es Salaam Stock Exchange, whose listing came from pressure from public authorities, but the manner it was put into effect represented actual company strategy rather than regulatory fiat.

There are issues of interest groups within the company itself as to its regional inclination and country strategy, not to speak of selection of manpower and how it communicates with the shareholder components; a key or bigger component could be resident across the border. Localizing the chief executive post is an assurance that if there is an element of feeling in any of these issues, it operates positively.

It isn’t surprising that the local company’s board of directors was not capable of airing these issues as board members don’t always represent shareholders but are professionals in their own right, virtually sideline employees.

At the same time there is potential shareholder imbalance that may also work in favour of Kenyan shareholders to the quota of local company shares that were floated to the public here, so regulators may wish to add the CEO lever to minority shareholding to make the country or national interest as well represented as possible. It is merely a projection.



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