Foreign currency shortages force Kwese TV to shut Zimbabwe operation

Econet Wireless Zimbabwe CEO Douglas Mboweni

Kwese became the latest company to close in Zimbabwe as the country is facing acute shortages of foreign currency.

Kwese TV, which was awarded a licence to develop SA’s second free-to-air television service by the government in March, has hit the rocks, closing its pay-TV operation in Zimbabwe.

The broadcaster cited the acute foreign currency shortages afflicting Zimbabwe as the main reason for closing its doors.

Recently Zimbabwe ditched the multiple currency system, which was dominated by the US dollar and the rand, to adopt a local currency, which has been hit by runaway inflation.

Owned by Zimbabwe’s richest man Strive Masiyiwa’s Econet Wireless Group, Kwese has been operating in close to 20 African countries through its pan-African rights for several sporting events.

“We regret to end this service, which thousands of Zimbabweans had embraced and welcomed into their homes and offices as a viable alternative source of news, sport and entertainment,” Econet Wireless Group CEO Douglas Mboweni said on Sunday.

“The third-party content providers, on whose content we rely, require payment in foreign currency. With the prevailing economic conditions in Zimbabwe and the current business operating environment, characterised by an acute shortage of foreign currency, sustaining Kwese and the Kwese satellite service was no longer viable.”

Kwese became the latest company to close in Zimbabwe as the country is facing acute shortages of foreign currency. Presenting his mid-term budget statement last week, finance minister Mthuli Ncube said the economy is facing stiff challenges and will contract this year.

In addition, business have been hampered by severe power cuts of up to 18 hours a day as well as policy flip-flops, which have led to a lack of confidence among investors.

Media expert Hopewell Chingono said Kwese’s closure was testimony of the low investor confidence in Zimbabwe and would also put off foreign investors that may have an interest in investing in the country.

He said Masiyiwa had publicly called Zimbabwe President Emmerson  Mnangagwa sincere “when it was unfashionable to do so. But he has shut down his business, saying the economic environment is not good. How do you expect a foreigner to come?”

Kwese’s appointment in SA as an alternative to SABC channels and was heralded as a game changer by the Independent Communications Authority of SA (Icasa), which said then that awarding the licence would stimulate competition and increase the variety of television broadcasting services in the country. Kwese is awaiting the migration from analogue to digital TV before it starts broadcasting in SA.

Mboweni declined to comment on the implications for its SA operations of the weekend’s closure of its broadcasting business, saying he would do so at a later stage. “I am sure that at a later stage we will be in a position to explain,” he said.

In SA, Kwese will offer five free channels, including a dedicated 24-hour sports channel, in what is likely to increase competition in the television space. The awarding of the licence came after a round of public hearings by bidders in November 2018.

Kwese Free TV is 20% owned by Masiyiwa’s group. Royal Bafokeng Metix has a 45% stake and Mosong Equities, a subsidiary of Mosong Capital, an entity founded by entrepreneur Moss Mashishi, has a 35% shareholding. – Financial Mail