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South Africa

the living document Unpacking South Africa’s

blueprint into the future

South Africa and Mining After Marikana!

Creative Responses to Youth Unemployment Fertile Ground for Finding Strategies that Work

western cape A model of excellence

issue 2/2013

R35.00 (Incl. VAT)

ISSN 2307-7697

9 772307 769409


About Brand South Africa Brand South Africa has a mandate to build South Africa’s reputation to improve international competitiveness. While this has an internationally focussed element – to promote trade, tourism and particularly investment - it also works domestically to encourage pride, patriotism and active citizenship to achieve greater social cohesion. Brand South Africa’s goal is to be acknowledged as a Top 20 Nation Brand, and to make South Africa a Top 30 Nation in the World Economic Forum’s Global Competitive Index, by 2020. To find out more visit www.brandsouthafrica.com and www.southafrica.info


South Africa: Inspiring New Ways as a partner and participant in the African growth story A decade ago, The Economist spoke of Africa as “The Hopeless Continent”. But in its 2011 December issue, the cover story of the magazine spoke of Africa as “The Hopeful Continent”. With a new world order characterised by stagnant European economies, constrained American growth and the growing power of the developing world, South Africa is uniquely positioned to service and connect these global markets. As the global economy changes so too are South Africa’s trade patterns with increasing imports and exports amongst BRICS members and the African continent. According to IMF projections seven of the ten fastest growing economies in the world between 2010 and 2015 will be African. And, the average growth for Sub-Saharan Africa for the next five years is expected to be 5.5% – second only to Asia. As a partner for growing African economies and those wishing to invest and trade with them, South Africa’s competitive advantages include the quality of our institutions; strong intellectual property protection and accountability of private institutions; and a stable and well-regulated financial sector. While confidence in the integrity of global markets is reeling, South Africa’s financial market development was ranked 4th globally in the 2011/12 World Economic Forum’s (WEF) Global Competitiveness Index, indicating a high level of confidence. The Johannesburg Stock Exchange is by far the largest exchange in Africa and the regulation of the JSE is rated number 1 in the world by the WEF. Likewise the WEF rate’s South Africa 1st for the strength of its auditing and

reporting standards; 2nd in soundness of banks and for the efficacy of corporate boards; and 3rd in protection of minority shareholders’ interests and for the availability of financial services. The list of excellent rankings in these areas goes on, but collectively they make one powerful statement: our professionals are some of the most respected in the world. We have lawyers, bankers, regulators, management consultants, engineers, managers and chartered accountants who support investment into South Africa and the continent. South Africa offers investors well-established infrastructure to support imports, exports and business transactions. The recently announced massive investments into new rail, road, ports and water capacity will not only improve access to South Africa’s mineral resources and industrial heartland, but also enhance the links with the rest of the continent to both generate and benefit from the region’s growth potential. In this regard we have taken responsibility for developing continental north-south rail and road links, and have been championing infrastructure investment, skills development and the enabling regulatory environment – a single free-trade zone. Negotiations are currently underway to establish a 26 country, $1 trillion African Free Trade Area for Eastern, Southern and Central Africa by 2014. This will effectively expand South Africa’s market from 50 million to 600 million people – placing us in the same ball park as our BRICS partners in terms of market size and access.


contents

Editor’s note

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The living document: National Development Plan

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Creative response to youth unemployment

16

The day after Marikana

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BRICS and African resources

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Inspire South Africa Issue 3


participants, thus creating a sense of awe and wonder in Southern African history. It allows visitors to become part of the history that we leave for our children.

While Freedom Park takes visitors on our painful struggle journey that shaped the history of our beautiful land, the destination offers an impassionate, exuberant and unparalled breath-taking heritage experience that tells a story of our motherland from an African perspective. Hailed as the most ambitious heritage project of our democratic government, Freedom Park is located on a 52-hectare site on Salvokop in Pretoria. The Park offers a unique and exceptional opportunity to experience and appreciate South Africa’s history. As a national and international icon of humanity and freedom, it weaves the story of where we come from and the historical and cultural events that shaped what South Africa is today. Freedom Park is the heartbeat of all that is South African – the hub through which to know this land of promise in all its diversity. With the recently opened //hapo interactive museum fully operational and navigating visitors on a journey dating back 3.6 billion years, visitors can’t leave the destination untouched. //hapo showcases South Africa’s rich and colorful history, from creation to the issues of reconciliation and nation building that we face today. What makes //hapo so unique is its interactivity in that it transports visitors from mere spectators to active

As with the other elements in Freedom Park, //hapo was designed to blend into the landscape, rather than impose on it. By sculpting the building frames using steel structures and overlaying them with copper, //hapo was shaped to resemble boulders. Each of the seven epochs or eras will be depicted in a separate boulder. Over time, the copper will fade and turn the color of the boulders in the area. Surrounded by large trees and other vegetation, //hapo will thus resemble a series of boulders on the side of Salvokop. Within //hapo, the history of our region is brought to life as visitors are transported beyond a mere taking in of facts but are encouraged to live and experience the bygone ages. Each story is revealed in layers, creating a sense of wonderment and curiosity. Instead of simply stating the facts, //hapo equips visitors with clues and tools that allow each and every one to paint a picture of “what might it have been like for me”. By giving voice to histories that have been previously marginalised, //hapo emphasises a people’s history that reveals the creativity, inventiveness, resilience and spirit of our people. //Hapo aims to foreground indigenous knowledge as a paradigm, thereby emancipating the African voice. The following seven epochs or eras form the basis of the Southern African story: Epoch 1: Earth Epoch 2: Ancestors Epoch 3: Peopling Epoch 4: Resistance and Colonisation Epoch 5: Industrialisation and Urbanisation Epoch 6: Nationalisms and Struggle Epoch 7: Nation Building and Continent Building

Guided tours daily at 9am, 12pm & 3pm. Entrance fee: R45 - adults (age 16 years and above) R25 - children (age 3 - 16 years) and pensioners Self-guided tours are also possible - maps available! Emergency (after hours) bookings: +27 (0)79 873 8988 Tel: +27 12 336 4000 E-mail: info@freedompark.co.za Web: www.freedompark.co.za


Publisher: All Media Africa International The Avenues Office Park Media House,unit 3b2/3b1 1 Village Walk, Parklands Cape Town, 7441 Tel: + 27 21 0100 936 Website: www.amafrica.net

contents

All MediA Afr icA international EDITOR Grivin Ngongula editor@amafrica.net COPY EDITOR Pam Makati pm_makati@yahoo.com CONTRIBUTORS Sibonelo Radebe Rob Harris Evans Manyoga Dave Fair design and layout Indio Design indiodesign@mweb.co.za Sales Director Julian Moffat julian@amafrica.net Advertising Sales: Leroy Muguti Michelle Gouws Managing Director Graeme Mather graeme@amafrica.net

A busy 2014 ..heck, yes!

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Its all about change - Cape Tourism

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Investing in the Western Cape

48

Building the future for entreprneurial development

50

The Lightie: replacing paraffin

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Inspire South Africa Issue 3

associate publisher Mark Poonan DISCLAIMER: INSPIRE SOUTH AFRICA is published by ALL MEDIA AFRICA INTERNATIONAL. All work published herein is protected by copyright. No part, editorial or images may be reproduced or adapted in whatever format without the express permission of the publishers and / or their contributors. Information and opinions expressed and published in INSPIRE SOUTH AFRICA, do not necessarily express opinions of this magazine. The magazine, publisher or editor cannot be held liable for damages of any nature, directly or indirectly from any facts or information that has been provided or omitted in these pages. The same applies to any statements made or withheld by this magazine.


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THE LIVING DOCUMENT UNPACKING SOUTH AFRICA’S

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SOUTH AFRICA AND MINING AFTER MARIKANA!

CREATIVE RESPONSES TO YOUTH UNEMPLOYMENT FERTILE GROUND FOR FINDING STRATEGIES THAT WORK

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from the editor

H

ow time flies! It seems like yesterday when the nation mourned the passing away of former President Nelson Rolihlahla Mandela. The world came to South Africa and mourned with the nation. South Africa played host to President Barack Obama including past American presidents GW Bush, Bill Clinton and Jimmy Carter. The UK was represented by David Cameron and former prime ministers who included Gordon Brown, Tony Blair and John Major. One would say that the world came to our shores. Interestingly, CNN, Al Jazeera and many other television broadcasting networks including other media such as radio and the internet and BBC rescheduled their programming to broadcast news on Mandela! This South African leader’s influence, strength and humility have helped transform the continent, if not the world. Indeed, we miss his presence, but his ideals and legacy of selfless service for mankind live on. Once again, the Western Cape Province plays host to international business leaders as the City of Cape Town hosts the Invest in Mining Indaba at the Cape Town International Convention Centre. The event brings together all the players in the mining and related industries. It is clear that the country keeps making positive progress in many aspects. The Western Cape Province is home to the City of Cape Town, awarded the city with the cleanest water in the country. We take a look beyond the obvious and explore the opportunities in the province. Known for its beautiful scenery, the province is also home to the acclaimed Rooibos tea and the Protea flower. This issue focuses on the National Development Plan. We explore how relevant the plan is to addressing the challenges in South Africa and how the document can work as the blue print for development for the next two decades. Inspire South Africa magazine took time to talk to the Chairman of the National Planning Commission, Khulekhani Mathe. We take a look at what JSE-listed corporations are doing to assist the unemployed youth beyond publishing impressive statements of the performance of the companies. We would love to hear from you. Send an email to editor@amafrica.net and share with us your experiences in this inspiring nation of South Africa. Happy reading!

Grivin

Inspire South Africa Issue 3

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The National Development Plan

the

living document

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Inspire South Africa Issue 3


The National Development Plan

Our future — make it work, is the opening statement and title of the National Development Plan (NDP) 2030. It is considered one of the most important documents since the birth of the democracy in South Africa, and puts into perspective the concepts and plans that will help to alleviate poverty and reduce inequality. By kerry dimmer

Inspire South Africa Issue 3

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The National Development Plan

T

The real beauty of the NDP is that it is a living document in here has been a narrative since 1994 that that its concepts, approaches and ideas, can be reviewed and in one form or another, speaks to how adjusted according to the lessons learnt during implementation. South Africans can collectively embrace For example, through processes like the Medium Term Strategic transformation. The Reconstruction and Framework (MTSF), the government will be guided by the Development Plan (RDP) is one such strategic direction presented in the NDP, to identify the example. Formulated in the early days of democracy, the priorities for provincial development, within a five-year plan, RDP was set to address an imbalance of socio-economic and such decisions will be guided by the social and economic issues brought about by decades of apartheid governance. conditions being experienced at the time. ‘This proves that The achievements of the RDP were numerous but like so nothing in the NDP is cast in stone,’ confirms Mathe, ‘We many plans in the same vein, it had a short horizon. While cannot anticipate the effects of global economics, or what there are physical examples of transformation, the burden of opportunities or disasters may occur in the next 20 plus years. apartheid, even in 2013 as we hail our first born-free citizens, There will be good and bad years but it doesn’t mean that still weighs heavily on almost every sector of development. everything has to fall apart, or that we need to follow a straight To make meaningful progress, and ensure that all South line. And even more importantly, we must use a language to Africans experience transformation equally, the government which people can relate and appointed, in 2010, the understand. National Planning ‘Development is about Commission, tasked to draft a people, not things,’ continues vision and plan that would see Development is about Mathe. ‘When we talk about the country through to 2030. people, not things,’ development, infrastructure for The two most crucial criteria that drove the Commission in continues Mathe. ‘When we example, it means nothing to people unless we can show formulating the NDP, was to them how it affects them. eliminate poverty and reduce talk about development, Similarly we can’t talk about inequality; noble causes that if infrastructure for example, how the economy is growing embraced by every sector and individual, will ultimately unite it means nothing to people unless we talk about the impact of a growing economy on the the country economically and unless we can show them life of an individual and their socially, and thereby bring ability to improve their about the true essence of how it affects them circumstances. This is the transformation. underlying message of the NDP The NDP, since its adoption and it needs to be translated by Cabinet in 2012, has, like into language not figures.’ any legislation or governmentHowever some figures are important in order to reach the endorsed bill, been picked over like an old bone. Academics, 2030 targets presented in the plan: eliminating income poverty economists, sector and industry leaders, even unions, have (reducing the proportion of households with a monthly income found points to ponder and even criticise, but this was below R419 per person (in 2009 prices) from 39% to zero); anticipated, says Head of the Commission, Khulekani Mathe. reducing inequality (Gini Coefficient from 0.69 to 0.6); ‘It would have been naïve to think that everyone would agree increasing employment from 13 million in 2010 to 24 million with everything in the NDP given that we all come from in 2030; increasing the quality of education so that all children different ideological positions,’ he says. have at least two years of preschool education and all children ‘However differences of opinion often derive from living in Grade 3 can read and write; and to ensure that all South in an unequal society so it will always be difficult to have Africans have access to clean running water in their homes. consensus on all issues. Where we are all united however, is ‘At the heart of achieving our two major goals, we really that the two core drivers – to eliminate poverty and reduce need to fix our education system,’ says Mathe. ‘Ultimately this inequality – are good for all. The differences in opinion are is what will change the fortunes of our people irrespective of simply about the methods and actions recommended in the where they live, and enable them to find employment and earn NDP that will achieve those goals.’

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Inspire South Africa Issue 3


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The National Development Plan

higher incomes. Currently we have a huge wealth distribution problem with a large number of people earning at the bottom end of a scale that favours the few that have large incomes. We need to close that gap. ‘Another aspect that is crucial is to build the capacity of the state in the public sector environment,’ elaborates Mathe. ‘Consider that currently 95% of those attending school do so in the public sector. Whether we talk about the health sector, mining, environmental or power, the state is not working as effectively as it could, which in turn has a huge impact on the private sector, and why the NDP, in great detail, outlines how to overcome problems and challenges in a number of key areas.’ Those areas include: policy-making; demographics; economy and employment; economic infrastructure; environmental sustainability; rural economies; the positioning of South Africa globally; the transformation of human settlements; education; health; social protection; safer communities; building of a capable developmental state; corruption; and the transformation of society.

It is a vast range and at first glance requires deep pockets. Mathe puts this into perspective: ‘The big ticket items are infrastructure, no doubt about it, but in many other aspects the NDP talks to the better utilization of what we currently spend. Let’s again use education as an example. We spend a large proportion of GDP on education, but the outcomes don’t reflect that. ‘Similarly, in the health sector where we see inefficiencies, and even more worryingly, inequalities. A big part of the GDP spend goes to medical aid leaving a scramble for the smaller share that is available for public health care. It’s therefore obvious that we need to find ways to effectively use what we already have, while simultaneously grooming those who have confidence in our economy, to invest.’ On this point the Commission has determined that South Africa does not have a strong enough culture of ‘savings’, and is therefore dependent on foreign investment to fund the mega infrastructure projects that enable full embracement of the NDP. So, it is important that the necessary conditions

It matters that miners are isolated away from urban infrastructure and need to support two households. Their incomes are under tremendous pressure but let me be clear that while we sympathise with their plight, the Commission does not condone violence.

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Inspire South Africa Issue 3


The National Development Plan

be created for foreign investors. Mining, which has always attracted FDI, remains the single largest foreign currency earner for South Africa but what is now required is diversification of investment into, particularly, manufacturing and agro-industries, because as Mathe says, ‘if we don’t diversify and something goes wrong, we will be unable to sustain development from our own coffers.’ It does not help that in the past 12 months, both the mining and automotive sectors have been plagued by problems. The Marikana tragedy and the automotive strikes have, alongside other issues, created a sense of instability resulting in global investor’s questioning the risk of investment. The Commission, as Mathe explains, was couched with an understanding that there is the present that has to be dealt with, so that the NDP can advance the goals for 2030. ‘This is our reality, but we cannot allow the present to prevent us from becoming the great nation that we can be. Where challenges exist, the NDP addresses those with the goal of building stronger foundations. If we all work for a South Africa where greater equity exists, by 2030, we hope that such trouble and strife will no longer exist.’ Marikana, as Mathe points out, is a classic example of how we need to heal the deeper rifts that exist. ‘The mining sector has been extremely slow to transform when you consider the living conditions related to the migratory aspects of the miners. There is a train of thought that believes that transformation is

about ownership, but in mining that is not enough. ‘It matters that we haven’t changed existing migratory working conditions as we should have. It matters that miners are isolated away from urban infrastructure and need to support two households. Their incomes are under tremendous pressure but let me be clear that while we sympathise with their plight, the Commission does not condone violence. While there are measures that have been, and will be, taken to address concerns and solve disputes, it is obvious that these do not progress fast enough for the miners to feel a big enough difference,’ says Mathe. ‘The point is, be that corruption or lawlessness, if we do not address issues now they will lead to a future that is in opposition to what the NDP is designed to achieve. No nation in the world plans to be second best or content to pick up crumbs. South Africa is striving to be the destination for investment, private, public or foreign. With a focused plan and all the different sectors working together, we are facilitating collaborations that enable us to use our resources effectively.’ Summing up, Mathe reiterates that while it may be that there will be different approaches taken in applying the actions laid out in the NDP, the ultimate goals must remain in the hearts of every citizen: eradicate poverty and eliminate inequality. ‘The NDP is a call to action, and we are all stakeholders in a joint project for the building of a great nation.’

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IN FOCUS:TACKLING YOUTH UNEMPLOYMENT

creative

responses to youth unemployment in South Africa The response to the youth unemployment crisis in South Africa has seen innovative and successful solutions emerge through government and private sector engagement.

Y

By David Fair

outh unemployment is a global crisis, affecting 73 million young adults. In South Africa, the problem is particularly urgent where approximately 1.3 million 20 to 29-year olds are unemployed, constituting 54% of total unemployment in the country. In fact, South Africa has the highest long-term youth unemployment rate among medium-income nations. The situation has been referred to as a ‘ticking time bomb’ as the economic and social costs of unemployment, discouragement and waste of human potential continue to rise, undermining the growth potential of the economy, and

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threatening the long-term stability of the country. Finding a solution begins with understanding the core of the problem, where the mismatch between labour demand and supply exists. Candidates looking for first-time employment typically lack the right skills or necessary previous experience and do not have access to networks where suitable work opportunities are made available. Additionally, they suffer the psycho-social consequences of poverty and long-term unemployment which undermines their effectiveness in seeking work. Employers, in turn, should hire first-time job entrants; however, they are reluctant to do so. Candidates are often excluded by screening methods that prioritise previous

Inspire South Africa Issue 3


IN FOCUS:TACKLING YOUTH UNEMPLOYMENT

performance over innate potential, and interview performance is often poor. The risks and challenges of recruiting and integrating such candidates and the costs of redressing educational and behavioural challenges are daunting to most employers to take on.

Harambee model. ‘There is tremendous relevance and exportability in the Harambee model. Internationally, global foundations and governments are dealing with similar youth employment challenges; Harambee’s approach is applicable in both the UK and Africa,’ she said.

Bridging the gap

Graduates also need bridging

Addressing this gap has seen some innovative solutions emerge, with fruitful partnerships being formed between government and the private sector. One such initiative is Harambee, a youth employment accelerator that partners with businesses to meet their entrylevel job recruitment needs by sourcing and training disadvantaged and unemployed matriculants and graduates. Founded by Yellowwoods Investments in 2011, and now supported by the National Jobs Fund, Harambee views youth unemployment primarily as a business problem, through which social concerns can be addressed. Maryana Iskander, CEO, says that ‘The ethos informing our actions is one of dual empowerment: by absorbing much of the risk and administration work involved in sourcing, interviewing and retaining entry level staff, we empower business with the right people; by identifying, training and mentoring candidates we empower previously marginalised young adults to launch sustainable and successful careers.’ Harambee is proving successful; they have placed over 4 500 candidates with 30 major employers including Hollard, Direct Axis, Discovery Health, Nando’s, Standard Bank, FNB, and Pick n Pay. Ten thousand recruits will be placed at various companies. Retention rates measured at the one -year mark significantly exceed industry averages, and around 25% of candidates achieve promotion within one year. ‘Our employers typically find Harambee recruits to be positively engaged, exceptionally disciplined and powerfully motivated to perform,’ Iskander notes. The success of Harambee with employers rests on their ability to identify suitable potential, and then to develop it through a work-readiness training programme that remediates a tier of functional skills including numeracy, literacy, typing, and voice, as well as interpersonal (team work, conflict management) and intrapersonal (resilience, personal mastery, self-discipline) dynamics. Training bridges last from one month to three months, depending on the sector. The training involves exposure to a work environment so that candidates experience the intensity of a performance culture and are coached to display the discipline and professional behaviours required to survive and thrive in the modern work place. Once placed, Harambee engages with both candidates and employers to support them in integrating, retaining and performing in their first job. Nicola Galombik, Executive Director of Yellowwoods Investments, notes significant international interest in the

The mismatch between industry and candidates is also present with many tertiary education graduates. Fetola, an enterprise development agency, has launched the Graduate Asset Programme (GAP) to bring together businesses and graduates in a mutually beneficial partnership. Founder Catherine Wijnberg plans for GAP to place 24 000 graduates with SMEs and anticipates that 30% of these internships will translate into longer-term jobs. ‘The ethos of GAP is to boost growth in the host business with the assistance of these young, energetic graduates, whilst providing grads with much-needed work exposure. The initiative is very much business-needs driven, and seeks to create a genuine win-win for the business, the graduate and the country as a whole,’ says Wijnberg.

Lessons from learnerships Another large-scale solution to combat youth unemployment is the learnership model, driven by the SETAs (Sector Education and Training Authorities) whereby businesses are incentivised to provide temporary work experiences to unemployed youth in the hope that they will acquire the skills and experience needed to secure permanent employment. One of the most successful initiatives is the Monyetla Work Readiness Programme, an employer-government partnership designed to prepare and place young adults for work in the call centre industry. So far, they have trained over 7 000 youths nationwide, with a claimed 70% being absorbed into formal employment within this fast growing sector. According to a detailed review by the Centre for Development and Enterprise (CDE), not all programmes produce meaningful results: ‘SETAs provide some people with valuable training and access to job opportunities, but what evidence there is suggests that they may be of most benefit to people who are most likely to find employment, even without any assistance.’ The CDE is similarly reserved about the success of the Expanded Public Works Programme (EPWP) by some measure the most extensive job creation scheme in South Africa, having generated over 1 million work opportunities since 2004. The CDC analysis states, ‘It is widely recognised, however, that the EPWP has done very little to increase the employability of beneficiaries, and, therefore, has not improved their future job prospects significantly.’ A further critic of the learnership model is Vivien Schultz of training company A2B Movement. She claims learnerships often perpetuate dependency and entrench a hand-out model that ultimately undermines the goal of equipping the young

Inspire South Africa Issue 3

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IN FOCUS:TACKLING YOUTH UNEMPLOYMENT

person with the right motivation and attitude to succeed. ‘The learnership system is heavily flawed. Learners are just doing it for the stipend, while many companies simply pay the candidate just to come to work so they in turn are paid out.’ Schultz believes that a transformed mindset is needed to reengineer young people’s relationship to work and employer. ‘Effective learning most often occurs from successful experiences rather than simply knowledge transfer. The goal must be to instill an “I can do it” attitude based on a significant number of positive but out-of-comfort zone experiences.’

Don’t get a job — create a job While big business has a vital role to play in job creation, the highest volume of job growth is likely to come from new SMEs. Clem Sunter, in his 2013 John Orr Memorial Lecture, states that ‘the only way you’re going to create five million jobs is through one million new enterprises. Education will also need to change by including entrepreneurship training if job market entrants are to be adequately prepared. They’re not teaching kids to create a job, which is very different to finding a job,’ he said. A range of innovative programmes are stimulating and incubating such entrepreneurship, with the hope of seeding new companies and thereby organically driving authentic job creation. Fred Swaniker, Founder and CEO of the African Leadership Academy in Johannesburg, believes that entrepreneurship must be an integral part of every young person’s education. ‘We need to impart not only the technical skills of entrepreneurship, but also the mindset of the entrepreneur, through our formal and informal education systems.’ The Academy accepts 100 young leaders annually onto its programme and hopes to seed a new generation of ethical, energised African job creators. In December 2013, Dr Rob Davies, Minister of Trade and Industry, launched the Youth Enterprise Development Strategy (YEDS) which aims to drive youth self-employment and youth-owned and managed enterprises. ‘What we have learned is that two-thirds of our youth entrepreneurs are self-taught and are informal. For our strategy to be effective, we need youth targets set aside in priority sectors, and what’s important is for us to strengthen the capabilities of these informal businesses.’ According to Davies, the goal is to increase the percentage of total start-ups managed by youth from 5% to 50%. Further afield the Youth Investment Trust of Zambia (YAPYA) is an integrated mentorship and technical and financial support initiative driving youth microenterprise. Last year it helped generate 147 youth enterprises leading to 750 sustainable jobs. The Kazi Kwa Vijana (Youth for Work) programme in Kenya, similarly tackles unemployment by financing youth businesses and driving entrepreneurship.

Think global, act local An area that receives little attention in the fight against unemployment is that of small business owners’ actions in

Thandi has just matriculated, along with 562 000 other young South Africans. She joins 4.5 million people seeking work or meaningful further education — and is likely to be denied both. The challenges she faces are substantial; she lacks the right skills or necessary previous experience to land a job, and does not have access to networks where suitable work opportunities are made available. Her schooling has equipped her with poor vocational knowledge and numeracy levels, thus resulting in her failing many employment screening tests. She wants to succeed in the workplace but does not understand its demands as she has had limited exposure to role models who demonstrate punctuality, stress resilience and other career skills. The historical legacy of poverty and apartheid has produced a deeply entrenched lack of the confidence and self-belief that is so vital in facing the challenges of the workplace during the early stages of one’s career,

mentoring and integrating individuals into their business. A typical example of this relationship was related by entrepreneur Albie Heigers, who owned a chain of Curves Fitness centres. ‘A young lady started with us in a junior capacity and we liked her attitude.’ For a year, he allocated regular time to work on areas of improvement and development with her. ‘It is an investment that might only show business benefits later, but building into someone is always extremely rewarding — for both parties.’ Heiger’s approach, and that of many SME owners, holds the promise of significant scalability. There are approximately 550 000 businesses registered in South Africa — if each one were to commit to a single employee relationship where mentoring and talent development were given as much priority as productivity, the impact may well exceed all the government and NGO sector initiatives combined. Such a scenario is more likely now that the Employment Tax Incentive Act, or Youth Wage Subsidy, has come into effect. A new survey by the South African Chamber of Commerce and Industry (Sacci) shows that 88% of 35 big and small companies surveyed said they would use the benefit to employ youth.

The good news Significantly, more than 90% of candidates who are employed are likely to stay employed, according to StatsSA. So, once a young person gains access to the job market, he/she has a high chance of remaining there, thereafter becoming a tax payer, a role model, and a driver of growth in his/her own right. After all, every crisis has within it the seeds of opportunity. And if there is a positive side to the story of youth unemployment it is that it provides fertile ground where truly innovative South African solutions for a global problem are taking root.

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movers and shakers

movers New beginnings, New challenges. Inspiring South Africans make moves. Take a look at select few.

and shakers

By Staff Reporter

Former Auditor-General, Terence Nombembe, appointed CEO of SAICA Former Auditor-General, Terence Nombembe, resumed duties as the new Chief Executive Officer of the South African Institute for Chartered Accountants (SAICA) on 15 January 2014. Nombembe, the outgoing AuditorGeneral of South Africa, qualified as a Chartered Accountant (CA [SA]) in 1990. Before his role as Auditor-General, a position he held for the last seven years, his experience included partnership in public practice, a stint in internal audit and finance in the energy sector, as well as working as an accountant in the retail industry. Mr Nombembe’s most notable recent achievements as the Auditor-General include the way his office has communicated audit outcomes of government entities in a factual, independent and a balanced manner; an interface that required an absolute commitment to integrity. Another plausible achievement has been his approach to creating dialogue on governance in government, as illustrated by his move of personally visiting all 283 municipalities in South Africa. In addition, his appointment as Chairman of the International Organisation of Supreme Audit Institutions (INTOSAI) is worth mentioning. Furthermore, not to be forgotten is the increased number of CAs (SA) currently employed by the office of the AuditorGeneral to improve the skills capacity of the organisation. Lastly, the continued enhancement of the public/private

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partnership between the office of the Auditor-General and the firms in public practice for the purpose of auditing government entities is another worthy achievement. Transformation of the accounting profession is a strategic focus area for SAICA. Sizwe Nxasana, the Chief Executive Officer of FirstRand Limited and Chairman of the Thuthuka Bursary Fund, which spearheads the transformation initiatives of SAICA, welcomed the appointment of Mr Nombembe saying: ‘Terence Nombembe has an excellent track record that will enhance the role of the chartered accountancy profession and SAICA in the South African economy.’

Mercedes-Benz South Africa (MBSA) will, in March, welcome its first South Africa-born Chief Executive Officer (CEO) since the company became a wholly-owned subsidiary of Daimler. Arno van der Merwe will take over the reins at the local arm of the German auto giant when current CEO Dr Martin Zimmermann returns to Daimler’s Stuttgart offices as Head of Global Service and Parts for the Mercedes-Benz and smart brands. Van der Merwe will retain his current role as manufacturing VP at the MBSA production plant, in addition to his responsibilities as CEO of the company. Van der Merwe will join a growing club of South African CEOs of local manufacturing operations within multinational car companies, namely Mike Whitfield of Nissan South Africa,

Inspire South Africa Issue 3


movers and shakers

Dr Johan van Zyl of Toyota Motors South Africa and Dave Powels of Volkswagen Group South Africa. Mercedes-Benz South Africa board member Dr Schmidt said ‘We thank Dr Zimmermann for his tireless efforts during his tenure at MBSA, setting the company up in a new strategic direction with an exceptional growth trajectory,’ said Schmidt. ‘We are also confident that Mr Van der Merwe’s strong track record of leadership and performance will further enhance the management team and the company’s goals for the future.’ ‘I am proud of Arno taking over from me,’ added Zimmermann. ‘He has been groomed systematically during the past years to take over this senior leadership role, and his experience, passion, dedication and people-oriented leadership style will allow MBSA to continue its drive towards becoming the undisputed leader in all segments where it competes, as well as to remain a passionate contributor to the socio-economic development and transformation of South Africa.’ Dr Schmidt is no stranger to South Africa, having served MBSA as member of the board, while heading up Daimler’s global sales organisation. Towards the end of 2013, MBSA announced the appointment of Naeem Hassim as co-CEO of its retail arm, Sandown Motor Holdings, effective also from January. Hassim will lead Sandown jointly with its current CEO, Roy McAllister, until taking over the role from McAllister in January 2015.

Pan African Resources named Ron Holding as new CEO Interim joint Chief Executive Ron Holding took over as CEO in September, while Cobus Loots will take over from Busi Sitole. South Africa’s Pan African Resources said on Monday it had named a new chief executive and financial director. The company said interim joint Chief Executive Ron Holding will take over as CEO

‘He has been groomed systematically during the past years to take over this senior leadership role, and his experience, passion, dedication and people-oriented leadership style will allow MBSA to continue its drive towards becoming the undisputed leader in all segments where it competes.’

with immediate effect. It also named Cobus Loots, Managing Director at Shanduka Resources, as its next financial director. Loots will replace Busi Sitole who stepped down the same month.

Spies appointed new CEO of Pinnacle Africa Arnold Fourie, CEO of Pinnacle Technology Holdings, has announced that Pierre Spies, one of the IT Channel’s most respected executives, will be joining the group as CEO of Pinnacle Africa and will report directly to Henry Ferreira, Group Head of Distribution. Spies will take over from current Pinnacle Africa CEO Louis Fourie in June 2014. Fourie will be moving into the role of group operations director. Tim HumphreysDavies will remain MD of Pinnacle Africa, the position to which he was appointed in May this year. ‘We are really excited about Pierre joining Pinnacle Africa,’ said Humphreys-Davis. ‘He has a wealth of experience and a proven track record in distribution which will help us to grow the business and execute our future strategies.’ He added that ‘Pierre is a huge asset to the group and brings with him a great deal of value to the business’. ‘I am really looking forward to the new challenge presented to me at Pinnacle Africa. And I’m relishing the prospect of working with a formidable team that has built up a fantastic track record over the past five years,’ Spies said.

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Joburg Property Company turns 13 in 2013 As an agent of the City of Johannesburg (CoJ) Metropolitan Municipality, JPC is contributing to the objectives of the Growth and Development Strategy articulated by the Mayor and by utilising council-owned land assets to leverage private sector investment in public infrastructure.

The City of Joburg Property Company (JPC) services include: • Management of council property portfolio • Selling and buying of property • Facilities management • Property planning and advise • Property management • Property development and facilitation • Property maintenance • Property register maintenance • Letting/leasing of council property portfolio, including • Outdoor advertising • Servitudes, encroachments and access rights control

JPC objectives The JPC objectives are to harness the City’s property portfolio transactions to increase economic growth and Broad-Based Black Economic Empowerment

(BBBEE), while creating jobs and economic opportunities for the disadvantaged communities and businesses. JPC does not use agents or brokers when leasing or selling property as legal requirements directs for an open tender system that allows all interested parties an opportunity to participate in the economic development of the World Class African City.

JPC Background The Joburg Property Company was established in 2000 and as the only mandated agency of the City of Johannesburg to manage and develop land and property on behalf of the City. It currently manages a property portfolio worth over R8, 8 billion with 64 000 properties covering at least 39 000 hectares. Since the 1st of November 2012, JPC has merged with the Facilities Management Unit and Metro Trading Company, in effort to consolidate key functionalities in providing excellent service delivery to our stakeholders

Achievements Since its inception JPC has been responsible for iconic developments such as the Orlando Towers in Soweto, Soweto Theatre, the Newtown development, Huddle Park Golf Course in Linksfield and most recently the Jabulani Precinct in the Jabulani CBD in Soweto.


The award winning Soweto Theatre in Jabulani

Key projects

Other key projects

The Land Regularisation Programme is the first of its kind in City history and unique to any major City in South Africa where the long term/ leaseholders of property are given title to their homes and business places that were council owned.

• Property Academy • Rissik Street Post Office • Orlando ekhaya

• Property Bulletin • Newtown Potato shed • Holocaust museum

“The Land Regularisation Programme is unique to the City of Johannesburg, forming the basis of a sustainable property economy through expediting the transfer of properties to beneficiaries, as well as releasing vacant sites on public tender,” says Ms Helen Botes, Managing Director of JPC. “Over the next three to five years, the program seeks to transfer and/or release approximately 3700 properties in Alexandra, the Greater Soweto Area, the Greater Orange Farm Area, Ivory Park and surrounds.”

Property Incubation The programme is aimed at transforming the property industry through accelerating the entrants of new players, especially SMME’s and BEE companies. JPC will identify, allocate and make ready for development a number of commercial properties that will be used to fast track the entrants of SMME’s and BEE in acquiring and sustaining property.

For more information contact Telephone: 010 219 9000 | Email: clientservicingunit@jhbproperty.co.za Website: www.jhbproperty.co.za


mining

South African mining industry: the day after the Marikana Massacre The South African mining industry was never going to be the same again after the Marikana Massacre. It has been one and half years since the blood of 34 workers was spilled from the hill of mining protest. By Sibonelo Radebe

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Inspire South Africa Issue 3


mining

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he act shook to the core the fortunes of the nation in the southern tip of the African continent. South Africa remains very much a nation with large mining fortunes. The mineral reserves of the country are estimated at about $2.5 trillion. Mining accounts for about 8.6% of the gross domestic product (GDP) of the country, close to 1 million jobs and 50% of the foreign currency earnings. With history in view, almost everything in that economy sprung out of mining. As such, the Marikana Massacre can be said to have spilt blood directly out of the main socio-economic artery of the country. There are various theories regarding the cause of the volatile labour relations which left about 50 people dead on and around 16 August 2012. The findings of the Farlam commission of enquiry will add to these theories. While the thinking goes on, life continues in the industry and all that goes with it. From the actual living experiences of the past 650 days or so, some conclusions can be drawn. After all, social relations do not wait for theories to shape up. Instead theories are shaped from living experience. A newish socio-political rhythm in and around the mining sector has been setting in, since the day after the Marikana Massacre. The event has become the primary reference point of the past and the future of the mining sector. Most importantly, there is shaping up of a post Marikana Massacre discourse. It is promising a better and fairer future. That is if talk by industry leaders is anything to go by. But the fundamental challenges which played part in triggering the events of 16 August 2012 still persist. The Marikana Massacre occurred amid signs of a highly challenged industry, specifically, the platinum sector of the country, which accounts for more than 80% of world platinum reserves. While a lot of work has gone into addressing the gaps, some of those fundamental challenges remain. The platinum mining sector in South Africa was pushed into a crisis around 2011 when the price of the metal collapsed from levels close to $2000/oz to track and settle around the $1400 mark. This reflected persistence of weakness in the world economy and mainly automotive sector which gobbles a large chunk of platinum output. Meanwhile, operating costs were rising, pushing platinum miners into loss-making positions. Platinum majors like Anglo American Platinum, Lonmin and Aquarius Platinum ordered major rationalisation programmes. Jobs were on the line and uncertainty was rife. The platinum price remained just above the $1400/oz mark at the time of writing in the middle of January. The latest 2013 review by refiner Johnson Matthey forecast that the deficit in the platinum market would increase in 2013 to 605 000 oz,

from 340 000 oz in 2012. The review said supplies of platinum would rise by 1.6% to 5.74 million ounces. Higher output from Zimbabwe would account for most of the gains. ‘Platinum supplies from South Africa are forecast to rise by less than 1% to reach 4.12 million ounces in 2013. Production losses due to one-off factors such as strikes and safety stoppages totalled around 100 000 oz in the first half.’ Johnson Matthey’s review added that auto catalyst demand will fall by 2% to 3.13 million ounces. This reflects weakness in the world’s auto markets. However, said Johnson Matthey, the use of platinum in heavy duty applications will rise, with a greater number of diesel trucks meeting strict Euro VI limits. The review forecasts that primary platinum supplies are

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mining

unlikely to grow significantly in 2014. Thus a third consecutive year of deficit is likely. South African platinum companies have done some shaping up. A major restructuring is underway at Amplats. Aquarius which moved into a surgical bed first is more positive about the future than in the past though it remains highly cautious. Commenting about results for the first quarter ended September 2013, Jean Nel, CEO of Aquarius said it was yet another challenging quarter on all fronts. ‘Despite the challenges we faced, all operations delivered improved safety performances, and all operations delivered production results in line or above forecast.’ Nel added that the business remains marginal at prevailing prices. ‘Against this backdrop management will remain resolute in its focus on improved safety, cost and operational performance.’ Conditions in the gold sector have also been challenging and called for rationalisation initiatives. Once the gold-mining supremo of the world, this sector in South Africa has been declining in world rankings. The country is now positioned as the fifth largest gold producer after China, Australia, United States and Russia. Locally, the gold mining sector is still significant albeit challenging. The price of the yellow metal has also come under significant pressure lately. After flirting with the $2000/oz level in 2011, gold was trading just above $1200/oz mark in January 2013. Over the years, a gloomy picture seemed to be dominating the gold-mining landscape. Gold-mining should be tougher at these levels in South Africa because the gold mines in South Africa are mainly old and deep and as such high-cost operations. But then a weaker rand, prevailing for much of 2013, has offered a reprieve. In rand terms, the gold price of the past

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‘Whilst our hard work has begun to rebuild trust, we still have much more to do in this regard.’ Ben Magara, CEO of Lonmin.

few years is still well above the costs of mining. Some gold mining executives, entrepreneurial operators, are challenging the scene. One of these is Neal Froneman who leads Sibanye Gold which was unbundled out of Harmony Gold. Sibanye was given little chance by many observers because it inherited old mines from Harmony. Froneman has entered 2014 with a bullish view. He has been quoted saying ‘Perceptions that South Africa has second-rate assets and workers are nonsense. I have worked all over the world and we have top-grade gold and skills, and we are blessed with simple geology.’ Froneman adds ‘I am not suggesting there are not challenges like the labour issues but there are challenges mining in North America too.’ Froneman is leading a wave of rationalisation where struggling junior miners are being gobbled by major operators. In this way South African gold miners stand to benefit from economies of scale. In his latest review, for Harmony Gold’s first quarter ended in September, CEO Graham Briggs said ‘Despite short-term gold price volatility, long-term fundamentals remain in place for continued growth in commodity demand. Since the financial crash of 2008, investment demand has been among the gold market’s principal drivers. The R/kg gold price has been static in the past two quarters and we are expecting this trend to continue in the short term.’ Briggs further added ‘As gold prices have weakened, gold mines world-wide remain under pressure with their rising costs. Our only means of remaining profitable is to reduce costs, improve our productivity and produce more gold. We believe that Harmony is well placed to meet these challenges.’ While industry leaders are talking cost reduction which spooks trade unions and the government, it is worth noting that companies are threading more careful in this venture in the post-Marikana era. That is partly because the balance of forces in the industry has shifted away from unfettered pursuit of profits. The experience of Amplats in rolling out its restructuring is telling. The company announced its restructuring with an

Inspire South Africa Issue 3


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mining

intention of cutting its workforce by about 14 000. The decreasing of its workforce was revised downwards to about 6 000 following objections mainly from government and labour. Mainstream mining industry leaders are talking a newish language in the post-Marikana Massacre era. The hawkish business leadership view has been pushed back. A friendlier and more inclusive leadership talk has a chance to form. Statements from Ben Magara, the CEO of Lonmin support this view. Remember that Lonmin was at the centre of the crisis which led to the Marikana Massacre. Magara who took over as CEO of Lonmin in July 2013 has a duty to lead the healing of the Marikana wound. Some will consider it fortuitous that a new leader of Magara’s calibre took over Lonmin in the post-Marikana era. As a new leader with less baggage, he has an opportunity to chat a new course. That is exactly what he is promising. Presenting Lonmin financial results for the year ended September 2013, Magara seemed to be speaking from the heart in promising a new course. ‘My priority on joining the business was to meet as many employees and stakeholders as possible to begin the task of winning back hearts and minds in the wake of last year’s events at Marikana. ‘To this end I visited our shafts, plants and the communities around them and went to the areas of South Africa from which most of our employees come. I also visited the families of those who lost their lives during the terrible events at Marikana last year. All these groups of people expressed to me the shared wish of wanting Lonmin to succeed. This is important and encouraging, given that we regard the support of all our stakeholders as crucial in stripping uncertainty from our business and driving higher performance,’ he added. Magara further said ‘Whilst our hard work has begun to rebuild trust, demonstrated by the fact that we were able to sign a union recognition agreement and attend the Marikana commemoration, we still have much more to do in this regard.’ He also made the installation which supports the view that the hawkish approach is being pushed back. ‘Our stakeholder relationships are business critical. I reject any contention that these are “soft” issues, set against the “hard” issues of operations and finances.’ In looking ahead, Magara said ‘I have set out four management pillars for the future which will drive delivery of value to all of our shareholders and stakeholders.’ There is another aspect to the shift in the balance of forces in the mining industry as represented in Magara’s statements. In highlighting the recognition of a new trade union, Magara captures a significant development with far reaching consequences for the country, being the emergence of the Association of Mining and Construction Union (AMCU). Initially dismissed as a ‘reactionary force’ by the incumbent the National Union of Mineworkers (NUM), AMCU can no longer be ignored. It is giving NUM a run for its money and in the

process disturbing a broader hegemony. In challenging the dominance of NUM, AMCU is also indirectly shaking tripartite alliance, made of the ruling party ANC, the Congress of South African Trade Unions (Cosatu) and the South African Communist Party (SACP). To some and mainly those inside the tripartite alliance, the broad ideological church represents harmonisation of forces for democracy. A significant number of people, many of whom come out of the congress movement, the Mass Democratic Movement, are questioning the harmony theory. They are seeing pacification of grassroots interests for the benefit of the new elite. This view is well represented by the Bench Marks Foundation, a non-profit entity that monitors corporate social impact and is backed by South African churches. The aggressively opinionated research papers produced by the Foundation have problematised relations between corporations and some leaders in the tripartite alliance. John Capel, Executive Director of the Foundation and Chairperson Jo Seoka have been forceful in arguing that business deals between senior politicians and corporations organised via black economic empowerment (BEE) is compromising the regulatory role in the state. Government will obviously disagree with this view and might point to the swift action taken towards normalisation of the industry in the post Marikana Massacre era. A government-led blue print titled ‘Framework Agreement for Sustainable Mining Industry’ has been put in place and promises a better future. There is also in play the Mineral and Petroleum Resources Development Amendment Bill. Addressing investors in Australia last year, Minister of Mineral Resources, said these initiatives were designed to ‘augment and substantially increase the socio-economic development impact through mining and enhance the provision relating to beneficiation of minerals.’ The recent challenges facing the mining industry in South Africa must be appositely characterised as short term in nature, said Shabangu.

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brics

needs to avoid exploitative trade with Africa The sharpest critique, around the BRICS formation and in particular the role of South Africa, appears to be the argument that for Africa, this bloc of nations represents nothing more than trading one brand of extractors of natural resources for another. By Sibonelo Radebe

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his worries many stakeholders. Key among these is the Congress of South African Trade Unions (Cosatu) which maintains that the BRICS formation must be subjected to an equally robust test of principles of equity. S’dumo Dlamini, President of Cosatu, recently noted that ‘trade within the Brics countries relied heavily on commodities.’ This was not ideal and must be diluted through industrialisation. Dlamini was reiterating a position taken by Cosatu after attending the BRICS Trade Union Forum. Cosatu is of the opinion that the BRICS members should adopt the principle of mutually beneficial trade. ‘From the balance sheet of prevailing evidence, we have identified that trade among BRICS members is still characterised by the colonial justification of extraction use of cheap labour and exports and imports of manufactured products, which reproduces the old patterns of unequal development and disadvantage the smaller economies,’ Cosatu noted.

In 2012, South Africa joined the bloc which consists of Brazil, Russia, India and China, with the aim of redefining the world order and in particular challenging the economic domination of Western powers. Extraction of raw materials from across the African continent for processing in the West is very much the main pillar of this domination. The diagnosis of the problem is age old. For decades, the essence of global inequality has been the extraction of mineral resources from Africa which are then beneficiated elsewhere and returned to Africa as value-added products. In promising to displace this domination, the BRICS formation should not engage in similar exploitative extraction. South Africa is prone to this weakness and its politicians have spoken at length of the need to improve not only the quantity of intra BRICS trade and BRICS/Africa trade but also the quality of trade. Rod Davies, Minister of Trade and Industry in South Africa, has been the most vociferous on this matter. Patrice Motsepe, the South African Chairman of the BRICS

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brics

Leaders of BRICS from left: President Dilma Rousseff- Brazil, President Vladimir Putin – Russia, Prime Minister Manmohan Singh – India, Former Premier Wen Jiabao - China, President Jacob Zuma – South Africa

Business Council, has also expressed similar sentiments. In launching the BRICS Business Council first meeting held in Johannesburg in 2013, Motsepe said it was business to business relations within the BRICS formation to focus on improving the quality of trade. He said that specific measures and initiatives were needed to increase trade, business, manufacturing and investment ties among the BRICS countries and between the BRICS countries and Africa. Realistically, the presence of BRICS in Africa is largely about extraction of natural resources. This should change if BRICS is to defeat its main enemy, the intra BRICS contradictions. BRICS is dominated by resource-hungry economies, especially India and China; and, to a certain extent Brazil and Russia, dominate BRICS. China and India have huge needs for commodities to cater for their massive industrialisation programmes. The bias towards extraction is visible in the South African trade with the BRIC countries. A paper produced recently by the Industrial Corporation (IDC) in South Africa clearly indicates this. The IDC paper stated that ‘South Africa’s

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trade with other BRICS is expanding and, in the case of China (and to a lesser extent India) has reached substantial levels. Nevertheless, South Africa’s export baskets destined for these two Asian countries is highly concentrated and dominated by a few mineral commodities, principally iron ores and concentrates.’ Trade figures between BRICS and the African continent which reflect a remarkable growing trend, also highlight the same. According to papers written by Jeremy Stevens and Simon Freemantle, analysts at Standard Bank, BRICS/Africa trade reached $301 billion in 2012. This indicates immense growth over the past 10 years — more than ten-fold between 2002 and 2012. ‘Since 2007 (to 2012) during a period of relatively slow trade growth (for Africa, the BRICS and globally), BRICS Africa has more than doubled,’ observed the Standard Bank analysts. This trend is worth celebrating in showing convergence of trade between emerging markets. It shows a decline in the reliance on the Western economic giants. This is a key objective of the BRICS formation.

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brics

BRICS promoters are of the view that institutionalisation of the BRICS formation, through avenues like the BRICS Development Bank, is the answer.

Freemantle and Stevens have argued that ‘Sluggish global growth and weak demand amongst the world’s advanced economies has turned the BRICS towards each other, as well as a broad range of emerging markets, for commercial nutrition. Linked to this, recent trade figures suggest that BRICS-Africa commercial ties are increasingly vibrant and, crucially, robust.’ Writing early last year, the Standard Bank analysts concluded that ‘Looking ahead, we hold firm to our widely-cited projection that BRICS-Africa trade will eclipse USD500bn by 2015, roughly 60% of which (USD300bn) will consist of ChinaAfrica trade.’ However, it must be noted that the West dominates the world economy. Emerging markets cannot delink from the fortunes of the rest of the world. As such, even intra BRICS and BRICS Africa trade has suffered over the past few years, the post global economic crisis era. In their latest instalment, Freemantle and Stevens observed that ‘While still impressive, seen in the context of the general rise in BRICS-Africa trade since 2003, last year’s lift is fairly modest (3.8% up to $301 billion from 290bn in 2011). ‘With the exception of the generalised trade retreat in 2009, is the lowest annual increase in BRICS-Africa trade since 2000.’ The slowdown in growth can be partly attributed to the commodities factor. ‘A slight, but not yet alarming dip in BRICS imports from Africa, from $158bn in 2011 to $153bn in 2012 was accounted for mostly by a drop in the amount and value of base and precious metal exports from the continent to BRICS counterparts,’ Freemantle and Stevens noted.

What is to be done? The IDC paper noted that ‘BRICS membership does present a wide array of opportunities in terms of global positioning; developmental collaboration; market access; inward and outward investment; financial capital flows; technology transfer and technical cooperation; skills development; tourism flows, etc. The various challenges currently preventing this potential from being fully realised could be effectively overcome through robust intent and commensurate endeavours by all BRICS members.’ BRICS promoters are of the view that institutionalisation of the BRICS formation, through avenues like the BRICS Development Bank, is the answer. The objective is to come up with a dedicated drive to roll out infrastructure development programmes throughout the African continent. Addressing the BRICS Business Council last year, South African President Jacob Zuma said ‘We created two new structures to assist us in formulating a long-term strategic vision for the BRICS grouping, namely the BRICS Business Council and the BRICS Think Tanks Council. Our intention with the BRICS Business Council is to provide a platform to explore new models and approaches towards more equitable development and inclusive growth in the world. I, therefore urge you to optimally utilize this platform to consider and advance key issues in the following sectors within the BRICS economies — Infrastructure, Mining and Minerals Beneficiation, the Services sector, Manufacturing, Energy and Financial Services amongst others.’

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business

a busy

2014... heck, yes!

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Inspire South Africa Issue 3


There can be little doubt that 2014 is going to be a hectic year for Cape business. Activity in the last quarter of 2013 certainly confirm the big segments of the Western Cape economy are buzzing with activity. By cape business news

o

ur opinion is that are a number of economic segments will definitely be worth monitoring closely during 2014. At the time of going to press, the agricultural sector looked to be on a firm footing, despite some fruit and grape growing areas hit by frost and hail. The wheat crop looks to be slightly down – but an acceptable yield looks on the cards considering that last year’s crop was outstanding. Recently, farmers’ retailer Kaap Agri reported reassuringly recently that production and crop prospects across the whole operational area ‘are as normal as can be expected in a variable industry such as agriculture.’ Apart from the crop consideration, CBN reckons it should be worth looking out for potential agri-business deals. Late in 2013, the Stellenbosch-based investment giant signalled its intention to track down quality agri-business assets. Remgro’s associate company Grindrod bought into former co-operative businesses, Senwes and NWK. Whether Remgro intends scouting around for other agribusiness assets should be interesting to gauge. PSG-controlled Zeder could also be an active player in new agri-business ventures in 2014 – having just completed the merger of its highly profitable seed businesses in Zaad. Zeder is amajor shareholder instaple foods giant Pioneer, and will play a key role when that company splits off its poultry business held under Quantum Foods. Another small agribusiness operation to watch in 2014 is Bellville-based pesticides, herbicides and irrigation services business Ububele Holdings, which is now controlled by the same entity that controls farming equipment supplier Rovic & Leers. Admittedly the new controlling shareholder will need some time to clean up

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business

the Ububele business, but there could be some exciting expansion plans later in 2014. On the liquor industry front, readers should keep close tabs on both Stellenbosch-based Distell and smaller Paarl-based rival KWV in 2014. Distell is now under the leadership of former SABMiller executive Richard Rushton (who replaced the long serving MD Jan Scannel in December 2013.) Rushton has extensive overseas experience, and could hasten Distell’s efforts to market its Savanna and Hunters cider ranges internationally. KWV bears watching from the perspective of its strenuous efforts to diversify away from the traditional brand cocktail in brandy and wine. KWV has in recent years started to market a few ready-to-drink (RTD) ranges in a bid to push up volumes and mobilise its large holdings of brandy stock (through the brand ‘KWV & Cola.’) Liquor industry observers also feel there’s a good chance KWV – which has the ultimate backing of

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investment giant HCI – could look to acquiring specialist liquor businesses this year. The official launch of the Saldanha IDZ (or industrial development zone) will hopefully provide a muchneeded boost to the West Coast economy. While it will be a few years before the IDZ makes its mark on the economy, it might be worth watching the share price of Trematon Capital Investments. Trematon owns Club Mykonos Langebaan, a company that owns great swathes of leisure property near Saldanha Bay. The Saldanha Bay Industrial Development Zone was officially launched by President Jacob Zuma at the end of October. Feasibility studies conducted prior to the launch, suggested the zone had the potential to create 12,000 new jobs in the area and could attract foreign direct investment of R9,3bn. Trematon has noted that Saldanha Bay area is already developing rapidly, arguing that the ‘excellent road infrastructure and ancillary commercial activity should

Inspire South Africa Issue 3


Roof Garden

Geothermal heat pumps

Greywater system for toilet flushing

YOUR FIRST STOP IN CAPE TOWN

Photvoltaic Panels on the north façade and roof

Wind Turbines

UNIQUE SELLING POINTS Complimentary shuttle service between the hotel and airport Twice daily complimentary shuttle to the V&A Waterfront

Cobiax Void Formers

Complimentary Wifi Located 400m from Cape Town International Airport, Africa’s greenest hotel showcases some of the most advanced, environmentally conscious technological installations, construction methods, procurement and operational practices in the world. Offering 145 rooms, conference facilities, restaurant, bar, indoor gym, outdoor jogging trail and gym equipment, with an eco-pool and 24 hour deli it not only offers every luxury but also the added element of extensive green features.

Tel: +27 (0) 21 380 5500 Email: info@hotelverde.com www.hotelverde.com

Motion activated lighting in all public areas

Regenerative elevator

Double-glazed windows


business

While it will be a few years before the IDZ makes its mark on the economy, it might be worth watching the share price of Trematon Capital Investments ...... owners of Club Mykonos Langebaan, a company that owns great swathes of leisure property near Saldanha Bay.

provide opportunities for Club Mykonos over the next decade.’ Speaking of the West Coast, all eyes will also be on the Tsogo Sun controlled casino at Mykonos – which remains a firm favourite to have its casino licence transferred to Cape Town. Cape Town has for a while been mulling the possibility of a second casino in addition to the existing facility at GrandWest. GrandWest’s exclusivity arrangement has already run out, but so far no decision has been taken on the second casino license award (which, effectively, requires transferring an existing license from one of the other four smaller casinos in the Western Cape.) Perhaps the year ahead will see some authoritative pronouncement on the second casino? On the construction side, it is heartening to see that two Cape Townbased stalwarts Afrimat and Mazor have pulled through a tough few years with their respective balance sheets still in good shape – even after accommodating selected acquisitions. Could the year ahead be a period in which both of these companies accelerate their acquisition efforts? Plenty of opportunities at reasonable prices abound… On the docks, there will be plenty of intrigue around whether Africa’s biggest fishing enterprise Oceana Group manages to land Foodcorp’s fishing business. Competition authorities have approved the deal, but on condition that the pelagic quota does not pass from Foodcorp to Oceana. This looks like a deal-breaker unless the competition authorities are successfully petitioned. Should the deal go ahead, there will be further fascination as to which entity will snap up the Glenryck canned pilchard brand, which Oceana

has agreed to sell as part of the Foodcorp deal. Sekunjalo’s Premier Fishing also bears watching in 2014. At the time of writing there were increasingly audible rumours that Premier Fishing – which earns the bulk of its profit catch in west and south coast lobster - was looking at bulking up its pelagic side. In the local health care industry it seems a prescription for rapid growth has been written by Steenbergbased Ascendis Health. The company listed on the JSE in November, and has since already announced one acquisition (the R336m takeover of Surgical Innovations.) From what CBN understands, Ascendis has a strong pipeline of acquisitions that it could bring to book in 2014. The business currently has a market capitalisation of R2,4bn on the JSE, but CBN would not be surprised to see this growing to around R4bn at the end of 2014. The other major health care issue for 2014 is whether Litha Health Care will finally get its much vaunted vaccine plant in Pinelands churning out product this year. Initially the Biovac plant was due to start producing vaccines at the end of 2013. The latest Biovac manufacturing facility update suggested the facility continues to work with the regulatory authority for its license, which is now likely in 2014. The facility is currently manufacturing stability batches for regulatory filing next year. On the industrial side, the Parow-based Invicta (aligned to retail tycoon Christo Wiese) and Steenberg-based Torre Holdings will almost certainly be active of the deal-making front. Invicta is likely to look at African and international opportunities, while Torre (under cautionary at the time of going to press) could look to accumulating more local assets.

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investment

investing in the western cAPE Economic development in the Western Cape is characterised by a broad sector base, with good growth potential in several major sectors, a range of significant niche sectors and a number of large new investment projects.

R

By SA INFO

apidly decreasing communication cost levels mean the disadvantages of Cape Town’s distance of 1 500 kilometres south of the economic hub of Gauteng and several thousand kilometres from European, American and Asian centres is less and less significant. In line with worldwide trends, South Africa’s export-oriented industries tend to shift towards port cities and coastal industrial belts - the drop in import duties and the establishment of Saldanha Steel as a basis for Western Cape heavy industry add more momentum to this shift. The Western Cape has an open economy with foreign trade making up close to 30% of the gross regional product. The province’s exports have traditionally been dominated by primary products such as fruit, fish and vegetables, but with beneficiation adding increasingly higher value.

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Wesgro is the official investment and trade promotion agency for the Western Cape, the first point of contact for foreign importers, local exporters and investors wanting to take advantage of the business potential of Cape Town and the province as a whole. The agency works closely with key players such as the South African government, business, labour, the City of Cape Town, district municipalities and rural local authorities. Its key objectives are: Key projects: In the regional development of the Western Cape a number of large investment projects have lately played an important role in maintaining growth and employment momentum. Some major projects are currently in the process of implementation, with ample opportunities for further investments in each of these cases. These include the Cape Town International airport, Cape Town central station, Jewellery Emporium, Kudu Gas (Cape Power Project), Perlemoen

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(abalone) project, Philippi East town centre, refrigerated container plant, Robben Island gateway centre, Roggebaai canal, Sandy Cove and the Zeconi optical fibre plant. Tourism: The Western Cape’s beauty is unsurpassed and it is a top international tourist destination. Some 50% of international tourists arriving in South Africa visit the Western Cape, while the overall share of the region in South Africa’s tourism market is approximately 24% by gross expenditure. Estimates for the different components of the Western Cape’s 8-million annual tourists clearly show the dominance of local tourists – 46% from other provinces and 39% from inside the Western Cape - as compared to 14.3% foreign tourists. In the latter category, tourists from elsewhere in Africa have reached about half the number of foreign arrivals. The tourism industry is a major growth sector in terms of investment, employment and the diversification of services. Less directly, tourism stimulates the property market - especially prime residential and cluster projects – and strengthens business contacts, often are the forerunners of trade, joint ventures and immigration plans. Agriculture and fishing: The sheltered valleys between mountains are ideal for the cultivation of export-grade fruit such as apples, table grapes, olives, peaches and oranges. A variety of vegetables is cultivated in the eastern part of the Western Cape, while the wheat-growing Swartland and Overberg districts are the country’s breadbasket. The agricultural sector is critical for the Western Cape economy, accounting for 60% of regional exports. Since the 1990s the sector has steadily expanded, with only moderate fluctuations due to late winter rains, shifting world market prices and other unforeseeable factors related to specific product segments. South Africa’s 300-year-old wine industry is based in the south of the province. The region produces 3.1% of the world’s wine and ranks as number nine in overall volume production, with 100 200 hectares under vines for wine production. Some 75% of all South African fishing taking place along the Western Cape coastline. The rich fishing grounds on the west coast are protected from exploitation by a 200km commercial fishing zone and a strict quota system. Snoek, Cape lobster, abalone, calamari, octopus, oysters and mussels are among the delicacies produced in these waters. Key exports are also fruit, wine, wool and ostrich. The high quality of exports, combined with the relative weakness of the local currency, makes the products some of the most affordable high quality exports in the world. Manufacturing: In the past the strength of Cape manufacturing largely depended on the performance of the food processing sector as well as clothing and textile industries. Several other segments made relatively small, yet significant contributions to the sector, like the petrochemical and plastics industry, furniture, printing and publishing. The establishment of the R9-billion Saldanha Steel Project (SSP) is expected to gradually expand the base of Western Cape industry, helping create downstream processing plants. The rise of information

technology, telecommunications, medical and research equipment and other hi-tech processes will further broaden the industrial core of the Western Cape. The Capricorn Science and Industrial Park in the beach town of Muizenberg one of a number of catalysts. Financial services: Cape Town is the second largest financial centre in the country. The province has in the past relied largely on the insurance industry as the backbone of this sector. While this sector still expands, a stronger momentum seems to come from the establishment of new, specialised financial service suppliers in the area, either as branches of Gauteng head office, or as a shift of certain of the activities to the more attractive working environment of the Cape. This trend includes foreign firms, and new investment groups focusing on the local investment scene. Parallel to the steady expansion of financial

The province’s exports have traditionally been dominated by primary products such as fruit, fish and vegetables, but with beneficiation adding increasingly higher value services and retailing, dominated by the expansion of a few retail mega-centres, there is also a boom in professional, business, property and personal services. In particular the property services sector has experienced dramatic growth. Business process outsourcing: A rapidly expanding sector showing good potential in the Western Cape in particular is business process outsourcing, which includes the processing of accounts and claims, as well as front office activities such as call centres. This growth is fuelled by world- class service levels of call centre staff, time-zone compatibility with Europe, high rates of fluency in English coupled with neutral English accents, a favourable exchange rate and an advanced telecommunications industry. Investment agency Calling the Cape has facilitated call centre deals in the Western Cape worth R933-million since the beginning of 2004, with investments in 2005 up by 19% over 2004. Some 79% of this investment originated from the UK, with companies from Canada, Germany, the Netherlands and the US also represented. Companies running call centres in the Western Cape include Barclays, JP Morgan, Lufthansa, the Budget Group, Merchants/Asda, Dialogue and STA Travel. Research published in November 2004 by independent analysts Datamonitor predicted that South African call centre numbers would double by 2008 - and rated Cape Town ahead of India for quality of service.

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tourism

To really recharge and mentally prepare yourself for the challenges of the year ahead the Western Cape offers so much more than the “same old” things people have been doing on their holiday for years – explore the different options you probably never thought the Cape could possibly furnish … step out of theusual, and open the doors to the spectacular variety it offers. By Rob Haris

Ditch the routine – THIS year is all about

change! Going where no routine-holiday-maker has gone before – and liking it!

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tourism

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or the business owner and executive the pursuit of “maintaining an edge” is a vital exercise needed in order to stay ahead of competition. For many, the solution to staying sharp is to take a holiday. The thinking being that the change of scenery and routine will be sufficient, but if that break reverts to the “same old, same old” type of formula, when the same old venues are re-visited and even the same faces are seen, then the effectiveness of maintaining that edge will be like trying to sharpen a chef ’s knife on a smooth steel! Here are some suggestions that will get you in precisely the right mind-space you will want to be in as you enter the next phase of the year ahead. This is not going to deal with all the usual minutiae of planning. It is going to assume that you know about servicing your vehicle or planning your hire-car

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ahead of time and that you have made arrangements for call-forwarding and all those businessey type things. But it is also going to assume that you want to experience new or unique pursuits that will get those creative juices flowing. Things that will stimulate you to think outside that box you feel you might be trapped in. What you need is a holiday that will make you more dynamic and innovative than you thought you would be. How does that sound? South Africa has been described as “the world in one country” and the Western Cape can claim this description too. From the arid Karoo with its isolated towns, to windswept West Coast fishing villages, and from the lush forests of the Garden Route with the myriad of hideaways for residents and visitors to the beach front playgrounds of the southern coastal resorts of Struisbaai, Hermanus, Kleinmond, Strand, and the

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Cape Town seaboard. From quaint towns with quaint names like Darling, Picketberg, Aurora, Genadendal, or Witsand to the large cities and towns like Cape Town, George, Somerset West and Beaufort West, the Western Cape is one of the most varied regions in Africa. Are you a hiker? For some, that is the perfect getaway. That combination of exercise and energy-sapping effort that magically revives the body and mind while simultaneously stimulates the senses with sights, sounds and smells only a remote trail can deliver. And the Cape can offer so much. Easy day-hikes above Cape Town with spectacular views over the city or sea, or gruelling challenges like the Otter Trail along the Garden Route coast. Then there are the stunning trails in the Cedarberg and Boland ranges, or the McGregor trail, or the Franschhoek mountains, not to mention all the walks in and around the Paarl and Stellenbosch ranges. The hikers and ramblers are spoiled for choice. Cape Nature administer the hiking routes and the accommodation available. There are very rustic and basic facilities at some venues with pure luxury at others. But armed with a camera and a Robert’s Book of Birds, the hiker will enjoy the perfect holiday and recharge in the mountains of the Cape (occasionally, there will even be a cell-phone signal available, more’s the pity). Are you a tourer? Whether by car or motor cycle, the network of roads and routes will lead you to the most isolated places where you and your companions can drink in the beauty of the destination, like the empty beaches near Velddrift or Lambert’s Bay. Or to the vantage points overlooking towns like Franschhoek, Hermanus, Strand, Vredenberg and others. The “tourer” has the added advantage of being able to change their aspect at each turn of the journey – Cape Town at eight, breakfast in Darling, lunch in Citrusdal, dinner and sleep in Vanrhynsdorp. From urban congestion, through the wheat fields to the hot springs to the wild flowers! What a journey! Or rent-a-Harley. Shove a pot-helmet on and growl your way round the Peninsula. Through the winelands of Constantia to lunch at Hout Bay and then to Cape Point and back via Muizenberg and the Blue Route. An easy day’s run with pleasant stops on the way. The more adventurous “tourer” will explore the smaller roads around Stellenbosch, or Grabouw and Elgin and sample the fruit and wine far away from the main N2 route. They will meet the shy farmer’s wives manning the stalls at the side of the road and discover the bargain prices the N2-speedsters will miss. They will sample the fresh-fromthe-oven mosbolletjies that weren’t even destined for sale! These are the “tourers” who will venture onto the farm roads and stop the guy on the tractor to ask directions and end up having to switch the car off as the conversation will develop into a long story that might even end up in an invitation to “come for tea.” Some “tourers” will emerge onto a road with a faded sign inviting them to taste some wine or produce and they will

discover food a Michelin-starred chef would gnaw his arm off for. Others will discover the cheese factories with familiarlynamed brands they thought originated only in supermarkets. They will be given the tour and tasters while the family relax in the garden and eat and drink from picnic baskets the “factory” also supplies. Are you a connoisseur? The Western Cape caters for all wine and food lovers in a way no other province can. From the fine-dining restaurants that are scattered throughout the region to the bistros, pubs and farm stalls, each establishment will be an experience. Go really up-market at any of the internationally acclaimed hotels and restaurants in Cape Town, Paarl, Stellenbosch, Hermanus and other smaller towns and luxuriate in the delicate dishes with complex flavours immaculately served to you. Or you could eat the variety of

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tourism

seafood dishes the way they were meant to be eaten – with your hands, out of the shells (smothered in herbs and butter) or off the braaigrids in Yzerfontein, at Bientiengs Cave or near the lighthouse in Cape Agulhas. The many farm stalls that grace the roadsides of the Cape and the Overberg will thrill the food-lover with the range of traditional Boerekos fare and other local produce. How good is it to sit at a neat table being served a venison stew or a springbok burger and wedges together with a glass of cool local wine? Or to contemplate the fresh scones, jam and cream (would you also like some cheese with that, sir?) and Rooibos tea that doesn’t come out of a mass-produced bag, the real stuff that you need a strainer to pour it through! Picture yourself sitting on the cool, wide stoep of a wine estate, looking out over the rows of vines stretching to the mountains on the horizon while a Mediterranean platter is served along with a selection of signature wines. Or, when you least expect it, as you dine and indulge in award winning wines of the Overberg – you will have views of buffalo, hippo or Bontebok from your table. For those who want to source their own produce, this area will delight any connoisseur. From all types of fish, poultry and meat to the fruit and vegetables: such a rich cornucopia is hard to surpass. The entire region is interspersed with operations that boast organic and natural produce, many of them off the beaten track but easily accessible and with enthusiastic entrepreneurs in charge who love to share their passion for their product with real food lovers. In this area you will find locals making monthly pilgrimages to their favourite suppliers of meat and pork, fresh berries or even vegetables that come in mud-encrusted boxes but with a freshness you can smell. They consider it worth the time and expense to get what they enjoy the most. Why not join them in their quest for perfection?

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“If you’re not innovating, you’re going backwards ...” so do a ‘Sir Richard Branson’ and initiate your explorer-holiday, it will move you forward!

Are you a sportsman? Does the prospect of mountain biking or off-road trailing appeal to you? What about running? Apart from these seemingly ordinary activities, the Cape offers unique venues to partake in all these ventures in settings that are truly unsurpassed. No jogging down a suburban street here! There are regular runs through vineyards and farmlands where the beauty will ensure you stay breathless – not the gradient! Events that cater for the whole family see the serious runners disappear among the vines while the children are treated to walks and jogs with educational talks as they complete their course. There will always be those who want more adrenalin coursing through their system – and the shark-cage dives will easily accommodate them. But there are also off-road tracks and competitions for those who need to put their 4x4s through their paces or who want to experience the thrills of quad-biking over challenging trails together with paintball marker in hand to exercise their skills as part the hunt in the game to find the opposing team. Those who like to use Google Maps can indulge in their own form of cartography from microlights over the coastal towns around Cape Agulhas (the Cape where the Two-Oceans, Atlantic & Indian, really DO meet) and Struisbaai, or Hermanus or Betty’s Bay. Go skydiving near Citrusdal, Stellenbosch, or Swellendam. Kite surfing is making its presence felt around the Cape coast too, with sand-boarding still very popular at Arniston (Waenhuiskrans). The friendliness of the people in Struisbaai makes it easy to befriend a local “visserman” and many are only too willing to have “new blood” on their boats as they speed off over the bank to look for the yellowtail, kob or romans. Inland, near Grabouw and Hermanus there are even trout farms with rivers that will have the fly-fisherman drooling.

Inspire South Africa Issue 3


Welcome to “The Mother City”

Are you stuck in a rut? To revisit the initial thoughts of this article, “what are you going to do to keep your edge?” Fresh creative juices don’t flow down old channels. What new channels will you make for a revitalised process of refreshing and creativity? The Western Cape has such a variety of places and activities to probe it would be virtually incomprehensible to suggest that it’s possible to do and see it all. The hospitality of the Cape is calling – it is drawing those who care to accept the challenge to explore. The reward for those who do come to experience what they previously have not, will be a freshness and rejuvenated perspective. Those who have already accepted the challenge testify of a different, more enhanced vision. They have affirmed the value of digging out their own new channel, that having forgone the expensive “cab.sav” at the Waterfront for the rustic katemba next to the banks of the Breerivier in Robertson has brought. Others have asserted that the blisters on soft feetfrom the gentle day-hike on the slopes of Silvermine has focused their strategies in a way that no amount of sauntering along in Century City could have done. The Western Cape is vibrant and rich in so many ways. Scenery, activities, culture, cuisine, lifestyle, hospitality, personalities – all working together to create the atmosphere that each and every taste demands but at the same time, it issues in an unscripted and spontaneous ongoing challenge to participate in the new, the different, the unusual. That which has never completed by you before. The challenge to create your own channel for creativity and focus continues. The Cape just wants to be a part of the process, and is waiting to cultivate your interest.

Cape Town is the provincial capital of the Western Cape, as well as the legislative capital of South Africa and is referred to as the “Mother City”. Famous for its harbour and well-known tourism landmarks such as Table Mountain and Cape Point. Often been regarded as one of the most beautiful cities in the world, Cape Town is a popular South African destination for tourism. Originally developed as a refreshing by the Dutch with the arrival of Jan van Riebeeck on 6 April 1652, making it the first permanent European settlement in South Africa. Cape Town quickly outgrew its original purpose and was the largest city in South Africa until the growth of Johannesburg and Durban. Tourists come to Cape Town due to its good climate, natural setting, and rich historical value. The city has several well-known natural features that attract tourists, most notably Table Mountain forming a large part of the Table Mountain National Park. One can get to the top of the mountain either by hiking up, or by taking the Table Mountain Cableway. Many tourists drive along Chapman’s Peak Drive, a narrow road that links Noordhoek with Hout Bay, for the views of the Atlantic Ocean and nearby mountains. It is possible to either drive or hike up Signal Hill for closer views of the City Bowl and Table Mountain. Cape Town’s beaches are a big tourist attraction, and due to the unique geography of the city, it is possible to visit several different beaches in the same day, each with a different setting and atmosphere. The beaches on the Atlantic Coast are better developed with restaurants and cafés, with Camps Bay offering a vibrant strip of restaurants and bars accessible from the beach. Cape Town has several cultural tourist attractions, including The Victoria & Alfred Waterfront, which is one of the city’s most popular shopping venues. One will also find the Two Oceans Aquarium here. An attraction of the V&A Waterfront is that it continues to operate as a Port, allowing visitors to watch ships, enter and leave. The V&A also hosts the Nelson Mandela Gateway, through which ferries depart for Robben Island. Cape Town is noted for its architectural heritage, with the highest density of Cape Dutch style buildings in the world and is most visible in Constantia, the old government buildings in the Central Business District, and along Long Street. Night life in the city caters for all tastes and sexual preferences, with a range of restaurants and cafes that are generally recognised as including some of the finest eateries in South Africa (both in food quality and decor terms). Cape Town has a variety to offer tourists with large range of accommodation to suit ones needs and budgets. It promises to offer an unforgettable holiday to anyone who visits.

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building the future through entrepreneurial development


business

Self employment and entrepreneurship are the buzzwords on the African continent today. When thinking of these ideas we visualise massive corporate buildings and the grey suits streaming in and out of them, driving the engine of our economies. However, what we all forget that the small-time vendor and the spaza shop owner are as crucial to our economy as the corporate giant. By Evans Manyonga

t

hey may be operating in different playing fields but ultimately they work hand-in-hand to drive the economy and improve the services of any nation. Therefore it is absolutely essential for the upcoming entrepreneurs in the township to be mentored and learn the basics of doing good and sustainable business. It is in this vein that township entrepreneurs had the opportunity to mingle with and bounce ideas off the best in the business at the Shape eKasi Entrepreneurship Conference, which was held from 21 to 22 November 2013 at The Look-Out Hill in Khayelitsha, Cape Town, South Africa. Also termed #ShapeeKasi Entrepreneurship Conference, this unique event attracted a plethora of diverse niche entrepreneurs from IT to manufacturing, young and old and various races. Guests included representatives from business developers, government departments, agencies and institutions, the private sector, executives from big companies, buyers and procurement managers, investors, incubators, academia, business advisers, mentors, start-up businesses and established businesses. Organised by The eKasi Entrepreneurship Movement, the conference brought aspiring entrepreneurs together with industry leaders with the aim of highlighting social challenges and coming up with socially innovative ideas to solve township challenges. The event also aimed to create an ecosystem of entrepreneurship support within the townships and give entrepreneurs and institutions access to the markets of their interests. The main objective of the conference was to bring together citizens, the state and the private sector to work on the common goal of developing entrepreneurs in the townships in order to solve social challenges through innovation. Speakers at the conference included founder of Re-Kindle Learning Rapelang Rabana, the Rani Brothers of Silulo Ulutho Technologies and founder of Iyeza Express and Sizwe Nzima among many others. Sir Richard Branson of the Virgin Group was also scheduled to speak via live-streaming.

Core elements of the conference • N  ew solutions to enterprise development, procurement and supply chain management • N  ew solutions to access to finance, mentorship and resources for entrepreneurs • Designing our eKasi and the business of entertainment • Showcasing the real eKasi entrepreneurs and their stories • G  lobal networks – Global Shapers/Power of Youth/Kairos Society/Start-up Bus Africa/Forbes Under 30 Entrepreneurs/ eKasi Entrepreneurs • The learning journeys into the township businesses • P  itches from the STARTUP BUS AFRICA – eKasi Entrepreneurs • Hook-up dinner with five surprise speakers

Business development Vuyo Mabandla noted that the township businesses of South Africa would continue to fail if small business owners failed to satisfy their customers’ needs and expectations. ‘The need to satisfy customers’ needs cannot be overstated as it is very crucial to the success of any business,’ he said. Speaking to dozens of participants, Sibusiso Khumalo, Head of Corporate Development at Capitec Bank, lauded up-andcoming enterprisers for ‘sometimes being neglectful of their customers.’ He further noted that ‘in business, there are winners and losers. To achieve success, a business must always seek to satisfy its buyers.’ Khumalo encouraged entrepreneurs to follow trends and find new ways of improving their services to meet the customers’ needs. ‘The view that a customer is always right must not be taken lightly,’ he said. Noticing a rising growth in the number of start-up enterprises in places like Khayelitsha, Philippi and Gugulethu, major-league players in the business sector, such as Capitec and Shanduka Black Umbrellas, came in to exchange practical ideas to help eKasi traders grow their own business.

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Spaza shops and vendor businesses, which are some of the main source of income for families in townships, still have the potential to grow even bigger; unfortunately, some small-scale traders often struggle to grow their businesses simply because they avoid new and popular trends that have the capability of evolving and growing their businesses. Elvis Sekhaolelo, founder of the conference, said it was ‘paramount’ for township traders to adopt new ways of doing business. Without this, he said, the general development of townships, which heavily relied on the business sector, could also be affected. ‘In order to shape our township neighbourhood into prospering areas of business and living, start-up traders must

We asked the innovative and upcoming township entrepreneur Lufefe Majola a few questions about his business and what has helped it thrive. Majola runs a business called Espinaca Innovations. Espinaca basically means spinach in Spanish. The innovation comes in through how the versatile entrepreneur has made use of Spinach in his products. Can you tell us more about what you do and your business? The name of my business is Espinaca Innovations. We bake a range of innovative, healthy and convenient products such as spinach bread, spinach muffins, spinach rolls and spinach juices. We incorporate the multi-nutritious vegetable called spinach in daily consumed products. In essence, we have innovated our business through providing a healthy product that is in high demand. What motivated you to get in this business? There are two aspects that motivated me to get in this business. The first one was the health crisis which I have personally witnessed in Khayelitsha due to unhealthy eating habits. And secondly, the fact that 90% of the food we eat comes from outside the township and that is due to lack of local food manufacturers within the township. This results in severe food shortages at times which strain the day-to-day lives of people. I therefore felt that by introducing a strong innovative product, I would improve the health of my clients in the township and also ensure availability of the product to those who may otherwise have not had access to it. How did you find out about the eKasi business conference? I first attended the eKasi Conference when I was completing an entrepreneurship development course at The Raymond Ackerman Academy in 2012. We attended it as a class and I was then invited by Lonwabo Rhani and Elvis Sekgoalela to be one of the panelists this year and talk about innovation.

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launch themselves into reaching higher goals and that begins with ensuring their customers get what they want.’ He noted that a bigger mindset to drive the money-making mood by entrepreneurs was needed. Lufefe Majola, Khayelitsha’s thriving young business minds whose innovative Spinach bread creation has won him praise from across the business field, was cited as a fledging prime example. ‘We must bring convenience in production and also health and innovation. On-time delivery of products, for instance, qualifies as this. Without this, sincere efforts by the Khayelitsha Business Forum and similar bodies to achieve economic growth will often fall short of success.’

And I felt it was a great honour and privilege to share my experiences in the industry and also pass down some of the lessons I learnt. What did you benefit from the experience? I benefited immensely from the knowledge I got from the first conference because there were different individuals who have a lot of knowledge about running businesses in the township. So, I was motivated and learnt quite a lot from it. And this year I was a panelist and also got the privilege of showcasing some of my products at the conference through catering our healthy muffins and spinach bread sandwiches for breakfast at the event. How do you think this conference will help other Kasi entrepreneurs? The eKasi entrepreneurs always have an amazing experience as they can exhibit their products and services, have priceless networking opportunities, business opportunities and a strong platform to learn from other entrepreneurs. A lot of the attendees are motivated and go on to develop their businesses with much more energy and conviction. Events like this conference are a big necessity if we want to make sure township entrepreneurs have enough support to develop their businesses for the right reasons. Ultimately this develops townships as a whole. Paul Hobden, who heads the small business division, pointed out the importance of communication. ‘If they are to succeed, modern businesses need to take advantage of technology and use all media and social platforms and communicate with people to find out what they want. All one needs is a proper gadget.’ The conference was highly successful and such events must be commended as they seek to develop the African economy from the grass-roots level.

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the city for all reasons. George, the city with the heartbeat of a town and the charm of the countryside.George is widely regarded as the hub of the Southern Cape and Little Karoo. A good road network and the George airport link the Southern Cape and Little Karoo hinterland to the major centres of South Africa. 15 kilometres east of George on the N2 between the Kaaimans River and the Goukamma Nature Reserve, you will discover Wilderness with its stretches of seemingly endless beach; in the distance hints of inland lakes, rare in South Africa; to the left wooded hills tumbling down to the village and further inland faraway glimpses of the Outeniqua Mountains.

ADVENTURE ACTIVITIES

OUTDOOR ATTRACTIONS

KIDS PLAYGROUNDS

BEACHES

• Wilderness National Park • Abseiling • Black Horse Trails • Paragliding • Paintball • Quad Adventures • Ten pin bowling • Canoeing

• Audrey Moriaty Herbarium • Put-Put at Three Chameleon • Silverlily Cheese Farm • Utopia farm • Map of Africa • Hiking trails • Outeniqua Power Van

• The Redberry Farm • Three chameleons • Valcor • Kidbuddie Adventure Park • Timberlake Village • Victoria Heights Reptile and Bird Park

• Wilderness • Touw River Mouth • Leentjies Klip • Kleinkrantz • Herold’s Bay • Victoria Bay • Gwaing River Mouth

GEORGE TOURISM OFFICE Tel +27 44 801 9295 Fax +27 44 873 5228 reservations@george.org.za

WILDERNESS TOURISM OFFICE Wilderness House George Road, Wilderness Tel/fax +27 44 877 0045 wilderness@george.org.za

www.visitgeorge.co.za


the lightie

the lightie: replacing paraffin as a lighting source Michael Suttner’s eureka moment was sparked by a water filter screwed into a water bottle, now his Lightie offers not only South Africa, but also Africa, a cheap solar-lighting source. by Sulaiman Philip

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nnovative products and ideas from South Africa have transformed lives; South African inventors have made pool cleaning simpler with the Kreepy Krauly. South African doctors (including Dr Chris Barnard) have made heart transplants possible, and a young South African, Ludwick Marishane, has made it possible to bathe without water. Innovation proposes novel solutions to everyday needs, and helps grow the economy; business plays an important role in fostering conditions for people with these ideas or simple solutions to build viable enterprises, growing the South African economy and creating meaningful employment. This is the rationale behind the ‘Ideas Can Help’ competition initiated by the First National Bank (FNB). The winner, announced on November 28, walked away with R500 000 and a year of business services help from the Vumela Enterprise Development Fund sponsored by the bank. The incubation fund helps small businesses grow from the idea stage to

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job-creating viable businesses. The inaugural ‘Ideas Can Help’ competition winner is Michael Suttner whose inventive test tube shaped solar-light bulb, the Lightie, is designed to replace paraffin, the most common fuel used for lighting in Africa, as a light source. Speaking at the awards, Suttner said that two million deaths annually — caused by fire, inhaling the fumes from the chemical, or children drinking the toxic liquid — are linked to paraffin use. Across Africa, 600 million people spend up to 25% of their income to light their homes with paraffin. Once in full production, the Lightie should cost between R80 and R90 per unit, which is the cost of an hour’s worth of paraffin. Solar power is a possible solution to the power shortages in the continent. So, Suttner’s invention is not entirely unique; the genius lies in his distribution idea. In Africa, the Coca-Cola Company has the most efficient and widespread distribution system and the design of the Lightie allows Suttner to piggyback

Inspire South Africa Issue 3


the lightie

on their channels. The test tube shaped light bulb is designed to fit into the neck of a two-litre plastic Coke bottle, using the container as a sturdy stand-up lamp. An eight-hour charge provides 40 hours of light at 120 lumens, enough to brighten a 120m² room. A lumen is a measure of the total amount of light issued by a light source.

An innovative entrepreneur Suttner is a serial entrepreneur whose mother would not let him near the family’s washing machine for fear that he would dismantle it to find out how it worked. His prize allows him the freedom to concentrate on refining the Lightie and bringing it to the market. ‘I want to be that person, that South African that lights up Africa,’ he said. Research shows that children exposed to entrepreneurs are more likely to become one in later life. This is true of Wayne MacMillan whose HAMBA website idea earned him a runner-up spot. His entrepreneur father’s successes and failures ignited a commercial spirit in the data analyst.

‘Two million deaths annually — caused by fire, inhaling the chemical’s fumes, or children drinking the toxic liquid — are linked to paraffin use.’

On the deadline of the competition, Macmillan stayed up until 4am to refine his idea for an online database of casual workers such as electricians, plumbers and domestic

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0 6 3 R E T N SE partner in irrigation

Africa’s pivot of success

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pivot r u o Y –

Company profile SENTER 360 is a South African company. We have a simple policy of doing business with the highest standards of integrity. We therefore pride ourselves on not merely selling a product, but building long term relationships. Designed and built in South Africa in 1994, SENTER 360 centre pivots are known for their superior construction quality and strength – above industry standards, and we as a company are renowned for excellent sales and after-sales service. We have been in the irrigation industry for more than 20 years, specialising in surveying, system design, installation and commissioning of irrigation systems. We have growing business interests in South Africa, Africa and internationally and offer a turn-key project development service from feasibility study phase to implementation and project management. One of our recent achievements has been the allocation of an international tender for the supply of more than 50 centre pivots to the South African Government for the Taung irrigation scheme.

Tel: +27 (18) 469–1331 Email: info@senter360.co.za www.senter360.co.za

Key aDVanTaGeS of SenTer 360 • The most effective way of irrigating large areas • Ensures constant high yields • More than 96% water distribution accuracy • Manufactured with high quality materials to very high standards of accuracy • Only the best quality heavy-duty drive train components are used to cope with terrain and ensuring years of reliable service • Senter 360 has the strongest centre pivot span structure available today • We carry high levels of stock to be able to supply when you need it

Africa’s pivot of success Since 1994


the lightie

workers. His prize, R175 000 plus six months of help from Vumela, will give him the opportunity to develop his idea into a functional website. HAMBA was born out of MacMillan’s need to find a competent electrician to do minor work in a home he had just bought. He felt there had to be a way to vet the service provided by the men offering their skills outside the Builders Warehouse store he visited. Between his requirements and their need to earn a living, Macmillan identified an opportunity. He said that South Africa, and Africa, were rich with opportunity for an entrepreneur. ‘In a developed economy you just plug into the machine. Here there is a need to find solutions to our many problems. You can build your own empire,’ he said. Runner-up Robert Hofmeyr said that South Africa is a nation of tinkerers and innovators. His Solar Switch is a simpler replacement for traditional solar geyser timers that required constant adjustment. He said ‘I had a very expensive timer but no hot water at four in the morning.’ This is what inspired him to come up with the idea of the Solar Switch. Hofmeyr added that his innovation compensates for

weather conditions by automatically switching to electrical power. At the moment, the Solar Switch is just an idea but his prize money will allow Hofmeyr to build a prototype and apply for a South African patent. He said South African investors are conservative and risk averse; as a result, he has struggled to move forward with his idea. The prize money and business assistance allows him an opportunity to grow his idea into a viable business. The final three prize winners were whittled down from a pool of 111 entries that an internal FNB judging panel deemed the most innovative or simple solution to a pressing need. The winning ideas were all judged to offer solutions that would or could make a big difference in the lives of the population. ‘Innovation drives the economy and is seen as a contributor to the success of any company or country,’ said Bernice Samuels, Chief Marketing Officer at FNB, adding that the idea behind ‘Ideas Can Help’ is to provide a platform for thinkers and tinkerers of South Africa to make a difference.

Inspire South Africa Issue 3

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3-6 FEBRUARY, 2014

Cape Town, South Africa

When the world’s top macro-economic minds and the largest mining companies come together, what do you get…? Hear from Africa’s and the World’s Leading Experts:

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Professor of Economics and Public Policy, Blavatnik School of Government; Director of the Centre for the Study of African Economies

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