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WILLIAM MZIMBA

CEO OF ACCENTURE S.A. Nigeria's undergraduate 'Yahoo' boys Nonku Ntshona and Associates Zimbabwe's blanket import ban GLH Architects - X. Huyberechts New kids on the African "payground"

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Issue 24

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TABLE OF CONTENTS

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Editorial

10 William Mzimba CEO of Accenture S.A. 14 Nigeria's undergraduate 'Yahoo' boys 17 Moneygram – Green thumbs project in Diepsloot 18 Nonku Ntshona and Associates 22 Zimbabwe's blanket import ban 6

25 The new kids on the payground 28 Why we are not a nation 30 GLH Architects – Xavier Huyberechts 34 Leveraging the energy sector: Arerce 36 Africa, staying the course 38 Green paper released on international migration 40 The good, the bad and the ugly of African Capital Markets 44 Ten start-up pitfalls entrepreneurs can avoid 47 Brexit shows economic costs of pursuing populist policies like Trump's 51 Black on black racism: The black elephant in the room www.theafricanpro.com


EDITOR'S NOTE

PROFESSIONAL SERVICES LEADERSHIP impressive buildings including Standard Bank’s new offices in Rosebank. Xavier’s perspective is that a leader should leave the ship better than he/she found it.

S

pring is here and in this edition we provide you with insights from leaders working in a variety of professional services.

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Accenture has just completed its crucial and continued involvement in the SA municipal elections whose success has seen markets and the local currency respond positively. Their local CEO – William Mzimba - is our cover story in this edition. Mzimba has made it his life’s mission to find a way of solving the problems around him which is the same position taken by Accenture. Accordingly, the company believes that innovation can solve any problem.

Further afield on the continent we check out Nigeria’s undergraduate ‘yahoo’ boys. These are the many undergraduates in Africa’s largest economy who have taken to internet fraud as a lucrative source of income. We also venture into Zimbabwe, a country that is facing unrest and disruption following the growth of the #ThisFlag movement which protests the poor economic conditions that the citizenry is facing. Zimbabwe is a complicated problem and our contributor examines the recent ban on the importation of goods from South Africa.

Our second profile interview is with Nonku Ntshona, a quantity surveyor who honed her skills in large organisations before branching out on her own. Her philosophy is to teach entrepreneurship to the aspiring quantity surveyors who come through her door and beams with pride when they leave to set up their own businesses.

Check out the new kids on the ‘payground’ – an article that discusses the threat traditional banks are facing from alternative payment services providers. KPMG’s Robbie Cheadle also gives us the Good, the Bad and the Ugly of Africa’s Capital Markets. Other articles we have in store include ten start-up pitfalls to avoid, Africa’s performance in the global economic slow-down and our regular contributors – Immigration (A. Krensel), Bookreview (W. Njogu) and Last Word (C. Mamoyo).

Another interview worth your time is with renowned architect Xavier Huyberechts who is the managing member of GLH Architects. The firm has within its portfolio a number of

KC ROTTOK Managing Editor of African Pro Twitter: @africankc www.theafricanpro.com

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INNOVATION

"

CAN SOLVE ANY PROBLEM"

W

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hat does it mean to be entrusted with a role of being CEO for Accenture? “This is my tenth year in the position, and I must say, it is a daunting task because of the huge responsibility. Our mission is basically to change the way people work and live. We want to make an impact on communities, governments and the private sector by leveraging technology. As CEO of Accenture in the Sub-Saharan context, I am tasked with the responsibility of ensuring that we make a significant contribution to the way people live. When I assumed the position, there was a lot of scepticism about the continent, but at Accenture, we believed we could do something great in the African market. And we didn’t just talk about it; we went ahead and deployed significant human and financial resources to make change in Africa possible.” What would you like to have achieved once the time comes to call it quits from the position of CEO? “Impact is everything for Accenture, hence impact and significance are everything for me. I want to ensure that I leave the company in a better state than I found it, and that it is well set up for the next generation. This will be seen in the areas we have invested in and the relationships we choose to foster. You will also see this in the governments we choose to work with and the role we play in creating jobs and contributing to national dialogue. By using innovation, and deliberately choosing engagements which make a bigger and broader impact, we enable economies to compete competitively..”

What would you say is your management or leadership style? “It is to lead with a lot of humility and always know there are people you are going to depend on entirely to make things happen. As a leader you will never be able to get things done on your own, so you need to pick the right team and give them the authority. But you still need to lead by creating a movement, which means creating the right environment for your people to thrive. They need to feel they have the space and support to make things happen. Leading by humility speaks to the essence of what I think - we should all have respect for each other. You need to be firm, and occasionally tough, but still leave people with dignity at the end of the day.” What keeps you awake at night with respect to this position? “The calibre of talent and the type of work we do is very exciting and groundbreaking. We work with the most creative, innovative and intellectual individuals. No day is the same. Today I could be solving problems in the banking sector, tomorrow insurance, and the following day, issues of power. On another occasion I could be solving issues around service provision with local government and so forth. Grappling with all this on a daily basis while continuing to leverage digital technologies and innovation to solve our clients’ challenges is what keeps me awake at night, because our job is fundamentally to solve problems. “ Do you take part in mentoring others? “Yes, I have a lot of mentees who www.theafricanpro.com

comprise people both within Accenture and outside of the organisation. Before I joined Accenture, I was an entrepreneur who ran my own business. As a result, many people running start-ups are seeking assistance at different phases of their businesses.“ What would you mention as the high and the low of your career? “At times you have to make very tough decisions which are not necessarily aligned with what you want to do. For example, taking a decision to stop working on a project or with a client because it goes against an intrinsic belief. Terminating relationships with clients or ceasing to be involved in certain aspects can be a low point for me. The high for me is that on its best day, Accenture delivers really exciting things. For example, what we succeeded in doing with elections while working/ partnering with the IEC. I think the power of technology and collaboration helped South Africa’s image as a country that embraces technology and will be remembered for eternity. I took part in the first democratic elections and the organisation of the voters roll and counting of votes were painful processes. Another example of a successful project is the phenomenal success of tax collection. Our impact has extended to other areas too i.e. reduction of queues in banks, improving the efficiency of municipalities, border control and so on.” What accolades have you received recently? “In 2010, I was recognized by the CRF Institute as one of the leading CEOs


Picture courtesy of Accenture S.A.

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WILLIAM MZIMBA CEO OF ACCENTURE www.theafricanpro.com


"INNOVATION CAN SOLVE ANY PROBLEM" ~ WILLIAM MZIMBA ~

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in the country. This accolade links all the processes, teams and people I work with. Accenture has won many local and international awards. We have been certified as a Top Employer by the Top Employers Institute for the seventh consecutive year and ranked fourth in South Africa for our excellent employee offering, which includes our working conditions and the way we look after our employees. This recognition reinforces the value we place on our people and their personal and professional growth. We have also received awards from various partners including SAP, Oracle and Microsoft. Some of our projects have won awards such as one recently received from the prestigious Smithsonian institute in America.” How has Accenture fared in terms of its business growth objectives? “In the context of the current state of the market, and looking at our performance pegged against our peers, I can say that we have done extremely well. We have grown this business from a very small base in numbers of employees as well as from a turnover perspective. We have over 2500 employees; when we started we didn’t have any practice around areas, such as business processing, which now has over 1000 employees. Additionally, we have an industrial technology delivery capability centre in Centurion and a sub central business outsourcing centre in Braamfontein. Accenture has managed to entrench itself in very meaningful places and boasts a diversified portfolio of clients.” In terms of ethics and professionalism how do you maintain those two?

“In 2015, the Ethisphere Institute designated Accenture as one of the world’s most ethical companies for the 8th time. When you look at our value system, we are very strong. Integrity and Respect are paramount. We strive to ensure that our people understand the importance of working in the most ethical way and provide mandatory training in this area which every employee has to complete, regardless of position. There are about five compulsory courses on dealing with difficult situations. If this training is incomplete, annual performance reviews and salaries are impacted.” Is transformation a key objective at Accenture? “We made transformation a key business requirement even before government mandated businesses to address transformation. One of our key principles is to be demographically representative and to ensure that ownership is in the hands of locals. We ensure there is a diverse and representative management team. In 2005, we established a trust comprising previously disadvantaged individuals who now own 30% of our business. Transformation is tantamount to what we do every day; it is not just driven by compliance requirements, but is taken seriously all the way up to the Accenture global board. “ What type of professionals does Accenture hire and how do you contribute to the various professions? “Accenture hires diverse professionals including engineers, actuaries, artists, economists, accountants, medical doctors, accountants, scientists and www.theafricanpro.com

accounting professionals. Our day to day business is solving problems, hence we require a diversity of thought and skills. Every employee is allocated an annual training budget and is at liberty to choose how to use it to facilitate their continued professional development. “ What makes you confident that the firm is rendering good customer service? “We have an independent unnamed customer service satisfaction review done on every project that scores quality of our performance on a 10-point basis. If it falls below a certain threshold, there is an intervention. Thus far, such interventions are rare, meaning our clients are happy and we have met or exceeded their expectations. However, the biggest measure of our success today is the fact that we have about 10 key clients who have retained us for over a decade.” What are you passionate about? “I believe that education is a key to many challenges on this continent. I am an example of how education can transform a person’s life. Coming from a rural area to preside over an organisation the size of Accenture is the result of the privilege of education. I therefore invest in the education of others. I also have a passion for solving our big problems through innovation. I subscribe to the abundance theory which intimates that we have all the resources at our disposal to solve all the problems we see around us.”

KC ROTTOK Managing Editor of African Pro


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MEET NIGERIA'S UNDERGRADUATE

"YAHOO" BOYS M

any undergraduates in Nigerian universities dabble in internet fraud. Nicknamed “yahoo-yahoo” after the international web portal and search engine, this perfidy has become a way of life for the young conartists. Many of these fraudsters – dubbed “yahoo-boys” – have become filthy rich. Some have been caught by the law. In April 2012, Olasaidi Dare, an undergraduate of the Olabisi Onabanjo University in Ago-Iwoye, was sentenced to five years’ imprisonment for an attempt to obtain money under false pretences in a cyber-café.

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On June 5 2012, a Federal High Court in Kaduna State sentenced Imonina Kingsley, of the University of Ilorin, to 20 years’ imprisonment. He defrauded an Australian of US$1,000 by presenting himself as a gay person from the Republic of Benin. He was charged for impersonation, possession of fraudulent documents and attempting to obtain money by false pretences. These cases attest to the pervasive nature of internet fraud in Nigerian universities. My own research was conducted at Nigeria’s premier University of Ibadan. My aim was to determine how this subculture is organised among students in tertiary institutions. For this I spoke to a number of these “yahoo-boys”. Areas of specialisation Internet fraud is organised along areas of specialisation to make a success of the deviant behaviour. Fraudsters study the security network of online transactions to decide where to pitch their tents. Quick monetary reward is

what “yahoo-boys” have in mind. They use different schemes. Sending fraudulent messages to online dating websites and social network sites were reported to be low-risk – but highprofit – areas of specialisation. A third-year student said to me: I started online fraud in my second semester of 100 level [a session comprised of two academic semesters in Nigerian universities] as an impostor via online dating. Then I looked for the profile of people that live in developed countries. But if it is in Nigeria, I look for people who live in places like Port Harcourt, Abuja [luxury suburbs]. I always posed to them as a big man who needed a wife. Sometimes I posed to them on how my wife disappointed me and took away my property and children. All this is polished in a pitiable way with some pictures to convince them when I’m chatting with them. However, what I do mainly now is to transmit misleading information online for people to send their bank accounts [details]. Another scam that is popular with the “yahoo boys” is phishing, a technique used to acquire sensitive information such as usernames, passwords and credit card details. Third, the “yahoo boys” are also big on ATM fraud. They may stand at ATM galleries to feign assistance to vulnerable users – illiterates, the old and the physically challenged – and later swap cards to defraud them. www.theafricanpro.com

The fraudsters carry out their attacks mostly on weekends and mostly outside the state where the account is domiciled. Banks are mostly non-functional on weekends. This means victims will be unable to ask their banks to stop illegal transactions on their accounts until Monday morning, when the banks open for business, even though they receive debit alerts over the weekend. Informal networks and the insider factor Informal networks are vital to the young scamsters’ success. These networks revolve around banks, security agencies, co-fraudsters and, sometimes, families. The common means of collecting fraud money in Nigeria is through the banks, mostly through the Western Union money transfer. Through compromised banking staff, fraudsters use fake identity to access funds. This is because the fraudster would have used a foreign name and would not have a recognised identity card in that name. For successful execution of fraud, an insider within the bank is important: the banker facilitates payment without attracting the attention of security agencies. They also get their share of the loot. The instability in the Nigerian banking sector may have created an uncommitted workforce. Working in an insecure establishment makes workers vulnerable. More than 2,000 bankers have lost their jobs due to economic recession in the country. A large numbers of casual workers are deployed to man key positions in the banks. This makes way for criminal opportunities.


© Shutterstock

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Therefore the “yahoo-boys” find easy allies in banking staff, who are mostly youths too, because of their socioeconomic nightmare. The fear of unemployment has been identified as a push factor for undergraduates’ involvement in internet fraud. A fifth-year student stated that the fear of the unknown may have attracted a number of students to “yahoo-yahoo” rather than waiting for after-school unemployment. They see internet fraud as a creative outlet in a country like Nigeria. The influence of corruption Hitherto, internet fraud was carried out at public cafés. However, with regular raids on these internet cafés and the arrest of suspected fraudsters by the police, the “yahoo boys” have simply moved their bases.

Plus, the proliferation of internet service providers in Nigeria has made it even easier for scamsters to commit internet fraud. It is now as simple as buying modems and surfing the internet within the confines of their privately rented apartments on campus. The “yahoo boys” stay in physical communes of like-minded individuals and use this network to launch internet attacks. They share information on a particular target and find new ways of making prospective targets yield to their deceit. They are able to get help, share internet costs and jointly pay for fuel for generators, which are used to power their computers. They come to school during the day, and go to social clubs in the evenings and to celebrate their successes.

It is no surprise that there is a proliferation of “yahoo boys”. The celebration of wealth, particularly among politicians, serves to motivate the involvement of the youths in cybercrime. Nigerian society celebrates wealth without questioning the source of the money. So what do these young, undergraduate Nigerians do under these circumstances? They see a leadership that doesn’t care about their future. And they use their education to follow the example set by their elders that shows crime pays.

OLUYADO TADE – The Conversation

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MONEYGRAM

SUPPORTS THE GREEN THUMBS PROJECT

IN DIEPSLOOT ON MANDELA DAY

N

elson Mandela International Day - dubbed Mandela Day was launched on 18 July 2009 in recognition of Nelson Mandela’s birthday via a unanimous decision of the UN General Assembly. It was inspired by a call Nelson Mandela made in 2008 for the next generation to take on the burden of leadership in addressing the world’s social injustices when he said “it is in your hands now”. The Mandela Foundation introduced four themes that people can participate in on Mandela Day namely Food Security, Education & Literacy, Environment, Shelter and Infrastructure. Mandela Day’s call to action is to donate resources, expertise, time or finances to any needy or deserving fellow citizens. In terms of donating time or expertise, citizens are asked to donate 67 minutes of their time – one minute for each of the 67 years that Nelson Mandela dedicated his life to Public Service.

The MoneyGram team spent their 67 Minutes at Reshomile Primary School’s Green Thumb Project which addresses the food security theme of Mandela Day. The Green Thumb Project is the brainchild of Gift of Joy, a non-profit organisation founded by Nicky Coleman and Lois Webber in November 2014. Reshomile Primary is situated in Diepsloot where most children go to school hungry as a result of little or no income at home. The school runs a feeding program which provides the children with a meal for the day. This year’s drive was to create sustainable vegetable garden initiative to which the MoneyGram team donated a Jojo water tank for the garden as well as their time preparing the land and planting vegetable seeds. “We are excited to take part in this project as it is expected to create a sustainable impact rather than many other Mandela Day [initiatives] which end up being once off activities with

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limited longevity. At MoneyGram, supporting communities is a very important objective and we wish to convey our thanks to the Gift of Joy team, the people of Diepsloot and the children here at Reshomile Primary for allowing us to spend our 67 minutes here,” said Anton Luttig, MoneyGram’s Regional Director for Southern Africa. The project aims to introduce a modern method of growing vegetables by using recycled soda or other plastic bottles. Minimum equipment is needed. This method of growing vegetables is very cost effective and the best part is that one does not need a sizeable farm to pull it off. Beyond Reshomile Primary, The Green Thumbs Project will help other schools, families, shelters and homes in rural areas to grow their own vegetables. This will be done by educating them on this new method of planting and regrowing vegetables thereby providing a sustainable food source.

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Article images courtesy of N. Ntshona

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onku Ntshona began her career with Rousseau Probert Elliot Quantity Surveyors in Port Elizabeth after which she joined Bham Tayob Khan Matunda in Johannesburg then Turner and Townsend as a Quantity Surveyor. Whilst at Turner and Townsend she worked her way to Associate Partner over a period of seven years to head up the retail and mixed use development sector within the cost management division. Her project experience includes infrastructure developments in the mining industry, roll out projects in the automotive sector, office developments, retail developments, housing developments, commercial mixed use developments and watching brief projects. Internationally, her experience includes leading and managing office and mixed use development projects in both the Republic of Tanzania and Zambia. In 2007, Nonku left Turner and Townsend to start Nonku Ntshona and Associates. She spoke to SAprofessionals.com in the winter of 2016. How do you view your role as the founding CEO of this company? I think being the founding CEO of a professional practice is different from any other company given that as a professional you need to be an allrounder – to manage both the people and the clients. It is like wearing two hats – that of a professional quantity surveyor and a human resources manager. At the end of the day you need to ensure that the vision and strategy are implemented whilst keeping the firm on target.


NONKU NTSHONA –

"I’M DRIVEN BY THE DESIRE TO

DIFFERENTIATE MYSELF" What do you want to achieve with your firm by the time you retire? I think that is still quite far away. I think in terms of the next decade and we have a ten-year plan in place which aims to make us a multi-disciplinary practice. We want to be visible in all areas in South Africa and also be able to work anywhere in Africa. Actually by 2020, we aim to have 80% of our revenue coming from the rest of Africa. Do you experience any additional challenges being a female professional from your male counterparts? There is a huge difference when you are a black female professional. This is an all-boys club dominated by white males who do business on the golf course. It is difficult to break into that circle. You constantly knock hoping someone will open but they all know each other. Potential clients remark that they are happy with their current service provider and ask us why they should change. I think the only way to change things is to have a critical mass of black business people then we can form our own club. What would you say are have been the highs and lows of your working career? I think the high has to be the courage to start my own business. I initially didn’t have faith in myself but I managed to push myself to this point where I have a firm that supports 15 families. I am particularly proud of having female quantity surveyors come through this firm supported by bursaries. Some have gone on and started their own firms. There haven’t been many lows other

than knocking on doors for business and frequently not breaking through. It is tiring but we have to keep going. What would you say is your management style? In the nine years of running my own company I have encountered different people and have had to manage them differently. I’m an open person and have adopted an open door policy allowing my staff to reach me whenever they need me. I have staff meetings every two weeks where I seek out their views and I also involve them in all our strategy meetings. But I do have a strong personality. I have my views which I believe in strongly and it takes a lot of convincing to change my mind. Sometimes people find this intimidating. Do you take part in mentoring? I get a lot of requests to mentor younger professionals. I ask them what they want to achieve and ask them to schedule time and drive the process. I am of the view that the initiative must come from them. Unfortunately, the request for them to drive the mentorship often results in them pulling out. I do mentor the people who work for me; I share my personal stories with them. I like to get involved with younger quantity surveyors and give talks such as a recent one I delivered at Wits University. What makes you tick or keeps you awake at night? Cash flow keeps me awake at night. I constantly think about how to make ends meet at the end of the month. I am driven by the desire to take the www.theafricanpro.com

company to the next level. I wonder how to set myself apart from the many black owned quantity surveying firms out there. What makes them decide on us rather than the many who are coming up and playing in the same field? I feel that I shouldn’t be playing in the same field as many of these firms and therefore I am driven by the desire to differentiate myself. What awards have you and your firm won? Over the last four years we have won awards from the PMR surveys. I was the winner of the 2010 Metropolitan Oliver award. In 2013, I travelled to Peru to receive an award for the International Women’s Entrepreneurial Challenge and I have also been honoured locally by the Women Property Network. How has your firm faired in terms of business growth? It has been up and down. This year it looks like we will not achieve our projections but that is only as a result of the state of the market and the economy. Our industry is unfortunately one of the first to take a knock when the economy is struggling. Although we do not replace staff when they resign as part of a strategy to cut costs, we have been lucky not to retrench. What has been your firm’s contribution to transformation? We are a BEE Level 1 company which is black female owned. It is how we sell ourselves and it is reflected in the people that we recruit. The white male professionals in our employ are aware of their responsibility to train younger

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black professionals. We also promote black talent and recently appointed one of our black QS’s as associate director in March this year. I am keen to teach people to be entrepreneurs and take pride in the number of black professionals who have been registered as quantity surveyors - some of who have started their own firms. What has been your contribution to the quantity surveying profession? I have served on the board of the Association of South African Quantity Surveyors and I currently sit on the South African Council for Quantity Surveyors. Additionally, I was a council member for the South African Property Owners Association up until June this year and was previously a member of the Executive Committee of the Women Property Network.

What is your company’s contribution to the community? We don’t have a planned CSI programme simply because we are not that big a company. Last year, we spent our 67 minutes serving at a home in Soweto. In addition to that, I contribute to churches in my personal capacity. Are ethics and integrity important objectives in the way you do business? You cannot be a quantity surveyor if you don’t have integrity. It is a challenge in the industry in general because sometimes you tender for a job but despite being the lowest priced bid, the rules are changed in favour of another provider for unexplained reasons. I personally have not had any major ethical dilemmas. On one occasion, I was approached to take part in a joint venture with another firm and it turned www.theafricanpro.com

out that they just wanted to front our black credentials. I walked away from that situation. How do you measure your customer service? We are an ISO accredited company and as a result we are required to get feedback from our clients as to the quality of our work. Our quality policy statement states that we will exceed our client’s expectations and we pledge not to exceed the agreed budget by more than 10 percent. Whenever we ask our clients to score our service it is always within the range of 4 out of 5 and 5 out of 5.

KEITH KUNDAI


ALI Media Fellowship Programme

Cultivating Excellence in Business and Financial Journalism

Celebrating 46 distinguished leaders in media and business from Kenya, Nigeria and South Africa who will influence and strengthen the future of financial journalism in Africa

Theophilus Abbah

Joseph Adeyeye

Kemi Ajumobi

Uduak Amimo

Issa Aremu, NPOM, mni

Michael Arunga

Mideno Bayagbon

Terryanne Chebet

KC Rottok Chesaina

Medina Dauda

Karl Gostner

Pheladi Gwangwa

Fatima Abbas Hassan

Ufrieda Ho

Charles Ike-Okoh

Wallace Kantai

Ekundayo Ezekiel Kayode

Lucy Nyasi Kilalo

Reuben Kyama

Chidi Henry Lemchi

Phathiswa Magopeni

Sikonathi Mantshantsha

Ingrid Martens

Teldah Mawarire

Ngiphiwe Mhlangu

Moshoeshoe Monare

Wayua Muli

Christine Mungai

Akeem Olabode Mustapha

Noel Kazungu Mwakughu

Juliet Nabwire

Nation Media Group, Kenya

SABC, South Africa

Peter Ndoro

Phakamisa Ndzamela

Ruth Nesoba

Andile Ntingi

Ramah Nyang

Oluwatoyosi Ogunseye

Olawunmi Ojo

Yvonne Buliba Okwara

Samson Omale

Adesuwa Onyenokwe

Lekan Otufodunrin

Kevin Ritchie

Antony Sguazzin

Jacqueline Waweru

Semeyi Zake

Sunday Trust, Nigeria

Citizen TV, Kenya

BusinessDay Media Ltd., Nigeria

Financial Mail, South Africa

Media Trust Limited, Nigeria

CCTV Africa, Kenya

Punch, Nigeria

The African Professional, South Africa

Nation Media Group, Kenya

I’M Original Productions, South Africa

CCTV-Africa, Kenya

Punch, Nigeria

@ALIMediaFellows •

Business Day, Nigeria

Freelance Journalist, Nigeria

EnergyTimes Newspaper, Nigeria

Mail & Guardian, South Africa

Guardian Newspapers Ltd., Nigeria

Citizen TV, Kenya

Primedia, South Africa

Nation Media Group, Kenya

eNCA, South Africa

Kenya Television Network, Kenya

Nigeria Labour Congress, Nigeria

Primedia Broadcasting, South Africa

Freelance Journalist, Kenya

The Times Media Group, South Africa

Financial Mail, South Africa

Silverbird Communications, Nigeria

World Vision, Kenya

Nigeria Television Authority, Nigeria

Businessday Media Ltd., Nigeria

Nation Media Group, Kenya

BBC, Kenya

The Media, Nigeria

The Vanguard, Nigeria

Freelance Journalist, South Africa

eNCA, South Africa

Mail & Guardian Africa, Kenya

GetBiz, South Africa

The Nation, Nigeria

ALI Media Fellowship

ALI Media Fellowship • www.alimediafellowship.org

The Star Newspaper, South Africa

Bloomberg News, South Africa

ALI Media Fellowship Programme is made possible through a partnership with Bloomberg Media Initiative Africa, underwritten by Bloomberg Philanthropies. The Bloomberg Media Initiative Africa is a pan-African programme to build media capacity, convene international leaders and improve access to information in order to advance transparency, accountability and governance on the continent. www.bmia.org

Anchorage Ltd., Kenya

Business Day TV, South Africa


LESSONS TO BE LEARNT FROM

ZIMBABWE'S

BLUNT USE OF AN IMPORT BAN

I

22

n the past few weeks protesters brought Beitbridge, the busiest inland border post in sub-Saharan Africa, to a standstill for several hours. The main concern was the banning of some goods from entering Zimbabwe. This was followed by calls for mass stayaways, culminating in further protests that soon escalated to other issues, including political concerns, the introduction of bond notes and the late payment of salaries by government.

the country’s informal economy.

Most of the banned goods are basic necessities for many poor Zimbabweans such as cereals, bottled water, baked beans and dairy products. The targeted products are also a lifeline for sustaining

The tendency of governments to address symptoms and not the actual problems is not unique to Zimbabwe. It is a common trend in many developing countries. In southern Africa we have seen

Beyond the potentially devastating implications for the informal sector, the other concern the ban raises is the tendency of government to address symptoms rather than causes. The control of imported goods will not resolve the fundamental problems of the Zimbabwean economy. What the country needs is a long-term strategy and not quick fixes.

inappropriate use of import and exports bans without any meaningful intent to address fundamentals. This pattern of policy misapplication is prevalent in food markets, where governments perversely interfere in markets for food security reasons, infant industry and supporting farmers’ incomes. The case of Zimbabwe Since the collapse of the formal economy in the mid- to late 2000s, Zimbabwe’s informal sector has become the lifeblood of the economy, providing livelihoods to many unemployed Zimbabweans who lost jobs in the formal sector.

Media Club South Africa

www.theafricanpro.com


23

Cross-border trade became prominent as the informal sector gave new growth impetus to border towns such as Musina in South Africa, and other regional capitals such as Lusaka (Zambia), Blantyre (Malawi) and Beira (Mozambique), which formed important trade routes. The ban on imports comes against the background of what many analysts deem to be stringent policy measures such as the expropriation of commercial farms and the indigenisation of targeted foreign-owned companies. Both measures led to capital flight and erosion of the formal economy tax base. Many view the new import controls as an attempt by the government to increase its tax base, as years of poor economic performance and inappropriate policies limit available options to fund the fiscus.

And while the government argued that the restrictions were imposed to support the domestic industry, the country does not, in fact, have sufficient capacity to produce or manufacture the specified goods. Without addressing the fundamentals new policies will only serve to reinforce the negative outcomes currently witnessed in the country. To calm the volatile political climate, the government must address the macroeconomic challenges and deal with monetary policies and industrial productivity. These would be some of the first steps to instil confidence and kick-start production and attract more foreign direct investment. Rebuilding confidence and trust are key. Bond notes, import controls or www.theafricanpro.com

indigenisation will not resolve the current economic crisis. South African policy-problem mismatch South Africa is another country in the region that has taken policy actions inconsistent with the problems it was seeking to address. Earlier this year it increased the wheat tariff by 34%. Prior to that it had imposed a 65,000 ton quota on poultry meat originating from the US. The decisions were defended on the grounds that they would address job losses, declining incomes for farmers and the destruction of the industry by imports. While there may be merits to these arguments, the root causes of the problems do not seem to have been fully appreciated.


South Africa currently consumes more wheat than it produces. Production has declined since the 1980s as farmers switched to other, more profitable crops. And consumption has risen.

production costs are high. The US can land a kilogram of chicken in Durban at R2 (about US$0.14) cheaper than South Africa’s cost of producing the same kilogram.

A tariff increase will not increase production. And while it may help improve farmers’ incomes, it will further hurt consumers by increasing prices for bread, a staple food product. South Africa has imposed anti-dumping duties on poultry meat products from a host of countries, including the UK and Brazil, since the year 2000. But anti-dumping duties are supposed to be a temporary measure until a particular problem has been resolved. They clearly haven’t been effective. This is because the root of South Africa’s problem is that its poultry

Different tools for different problems The point is that when you have a toolbox, you should not use the same tool for all and different repairs. In the same way, there are many policy options that must be considered, and thus using mainly trade instruments or tariffs is limiting its usefulness.

ARE

While the inappropriate use of policies in South Africa is unlikely to lead to the same unrest as in Zimbabwe, they still need to be applied correctly. One can argue that the two South African cases highlight a positive problem – that

domestic consumption demand exceeds local production. Surely the solution should have been to address production, expanding it to catch up with demand, rather than to penalise consumers for demanding more. So while border instruments can still be considered, they should be for temporary purposes and must be accompanied by programmes such as macroeconomic, agricultural and labour policies. The most important of them all is to immensely improve industrial development.

Mmatlou Kalaba – The Conversation

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THE NEW KIDS ON THE

PAYGROUND

How African banks are losing their hold on the payment space

© Shutterstock

T

raditional banks are poised to lose as much as 50% of their ownership of the payment space by the end of 2016. Their hold on the space began plummeting in 2014 from 100% to 75%, and will continue to fall in the coming year. And, according to CEO of mobile banking innovator WIZZIT International, Brian Richardson, they’re not losing to the players you’d expect. Banks focus Bankers seem to think that by adding internet banking functionality to a mobile device, they’re becoming

competitive. Not so, says Richardson. He goes on to explain that banks are, in fact, being disintermediated by consumers, who are choosing to transact with start-ups who’ve quickly adopted mobile-friendly payment processors. PayPal, as an example, is now the number one payment method in many countries. This is not just banking functionality on mobile – it’s a new way of paying. “Banks are losing their grip on daily customer interaction – customers www.theafricanpro.com

are doing more and buying more without them and this has never been more obvious than in mobile banking transactions,” says Richardson. According to a recent article in the Harvard Business Review, the risk for banks is that new competitors could consign them to a limited role as backoffice utilities, while non-banks become the new face of customers’ financial lives. Banks, it seems, must learn to play a greater role not just at the moment of financial transactions, but before and after as well.


The fall of the bank card Richardson suspects banks are hesitant to embrace mobile payment transactions because it could cannibalise their margins on card transactions. “African banks can’t maintain the model they’ve relied on in the past – relying on fees from card transactions field- the only difference between him – because this doesn’t match the and Cheslyn Kolbe/Gio Aplon purely intrinsic behaviour of the newis market opportunity. they’re hoping to serve,” explains Richardson. “A card and branch or To compound matters further, after even an e-commerce model only works

centre, come wing, at the expense of Down with cash highly capable and The benefit for talented Africanwings. banksBoth in ‘experiments’ backfired spectacularly. eradicating cash transactions as much as possible is also notable. “It’s Don’t getAfrican me wrong I amcan’t not saying that simple: banks capitalise

transactions to pay for purchases. Yet, in Richardson’s experience, only 60% of African banks have been willing to increase their spending on mobile payment technology. So what are banks waiting for? This is hard to understand, considering non-traditional players are swiftly How can it ever be right that a coach redefining an entire industry, using names first test side of 2015 which digital his technologies to deliver new and boasted 17 out of 22 Afrikaans/Bulls better ways of meeting the needs of the related African players market. (I left De Allende out, because who cares what he is, the boy

to the woman he is with financially?”

competition is on equal footing? Is it

agrees with the majority, I suppose

family? How is it being a good head of

it be that in empowering women, we

into whether or not he feels superior

Is it harder to be a man when the

the man is the head of the home.”

46

quickly adopt and implement a mobile payment processing model, or decide to gracefully exclude themselves from the mobile money market altogether and let non-traditional players like Google, Amazon and Starbucks take over. The latter would clearly be a major missed opportunity.

sure can play!) Nottomuch has changed, want to see 15 black/English speaking the team forwhere theyoufirst RWC match sit is at Ioff “It’s for now possible introduce in of cash – and harder in countries the majority men to adapt to a societya cloudIs transactions it not a greatermade showing strength “How can expect the manoftothe the squad for Saturday’s quarterfinal is players on the field. Not even remotely. named,home the has starting flank injured. scalable adaptable payments are predominant across hosted, population a bank cardgets and a bank cash in which a and woman can be mobile while you earn. Chai! banking solution a matter of Africa,” says Richardson. “They 18/22. again am saying give account. Thisofjust isn’t the reality in All I want is a situation where it does andOnce should beIwithin annotequal? Logic dictates that the bench warmer Women today. resign oooo!” “The minority agreed with my view African findgifts. the however, mobile Africa.” out Bokifjerseys likebanks Oprahcan gives not matter what offer you look like,payment or your weeks, - who needs some game time - should can, or not the guy was the Does the oft quoted biblical The minority agreed with my that whether rightjust partner. is ready and processing for have free, delivered, and makeyou money sayingThe thatmarket if a player who does if you have I’m naturally step up. But no, instead, he is heritage, view that whether or not the head of the home, the bills would still submission of the woman waiting – phones in hand – so now’s theI from other products and services that Act now or pay later not fit the ‘traditional Bok mould’ as every opportunity to play in the green replaced by a player out of position. If extend to holding back from guy was the head of the home, need to be paid and common sense time to do it,” concludes Richardson. go hand-in-hand with an accessible and In Richardson’s view, African banks puts up give and gold and you cannot tell me that this see it, he needed game timestill should outdoing thetheir man?hand, I may notthem a the bills would need you to not available mobile banking platform.” need decide whether they’re going would suggest that the one earning chance to be great too. has been happening. What makes this rathertoput Schalk on the bench because know the answers but I sincerely be paid and common sense to position themselves as serious not.you Perhaps, the question would less should maybe can ignore this for love hit home resign.” even harder is the fact that this Surehope we know whatsuggest a beast that that the manone is? Then playersearning in the less payment space, or let By 2019, it’s estimated that 1.9 I should be asking is Is society should resign. LOVE OF there was the time when the position of current coach has had the biggest pool of country, but I can’t, -FOR people use in-store conspiring to emasculate its men? Could to resign for will the greater good ofmobile the third parties can billion On thetake basisthe thatwheel. the manThey in question NICOLE FERGER wing - generally reserved for people of of talent to choose from, some of whom COUNTRY! happen to the have a higher melanin the higher concentration in of thisthis justhome forgot to empower men to deal with it? to make family survive on less the melanin question at the root of all than your others. countryfor- was fullback, cometied content YAW PEPRAH to protect manhood (read ego). me given is, “Is to a aman’s manhood CHAITWA MAMOYO

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TAP FINAL 20.11.2015.indd 46

www.theafricanpro.com

2015/11/23 11:25 AM


These are noT learners, They’re leaders. Welcome to Gauteng’s City Region’s Smart Classroom. Here we champion innovation and creativity. Teachers are trained in leadership and advanced teaching practices to prepare the children for a digital age. This is about skills development for all our teachers. It’s about South Africans standing shoulder to shoulder with our global counterparts. Welcome to our classroom, welcome to the future.

GAUTENG PROVINCE EDUCATION REPUBLIC Of SOUTH AfRICA

#Wiredfor Life


TAP Book-Review:

WHY WE ARE NOT A

T

28

NATION

he year is 2016 and South Africa is gearing up for municipal elections to be held in all nine provinces. Political parties are polishing up their promises and slogans. As part of their campaign, the Democratic Alliance (DA), a South African political party and the official opposition to the governing African National Congress (ANC), announced that they were the only party presently representing the vision of the freedom charter and advancing the values of Tata Nelson Mandela. The current DA leader, Mmusi Maimane and Tshwane mayoral candidate Solly Msimanga were spotted unveiling campaign posters with the words “Honour Madiba’s dream, vote DA.” They argued that they are the only party capable of delivering a nonracial South Africa. The ANC did not take kindly to these claims and described the move as “cheap.” They slammed the DA for using Mandela’s name in their campaigns, saying the DA lacked their own heroes.

The younger generation has creatively employed art and taken to social media to address the lack of social cohesion and expose malignant inequalities. So, what is the future of South Africa? Where is South Africa now? Why is the gap between the rich and poor still high in South Africa? Who holds economic power in South Africa, and why? How does this influence politics? These are the questions Christine Qunta attempts to address in her fifth and most recent book called Why we are not a Nation.

This war of words and scrum over Mandela’s legacy is very telling. More than twenty years down the road, South Africa’s social, political and economic conversations are understandably still influenced by the consequences of colonization and the apartheid regime. In 1994 the concept of a rainbow nation was encouraged and celebrated, but so far, the process has not been as colourful. There have been pockets of protests spread across the country, student strikes, workers’ strikes, miners’ strikes, and xenophobia – all of which expose institutional racism, exclusion and national disillusionment.

Black Consciousness and A Rainbow Nation Why we are not a Nation is a collection of essays that is broadly divided into three parts. The author starts by tracing the history of African culture. Qunta breaks down the annals of words like “civilization” in African context with the aim of reinstating power to African cultures that were once considered primitive. She then goes on to describe performances of racism in the 21st century, emphasizing the need for black consciousness now. She does this by highlighting how racism continues to influence the psychology of black people, and how black Africans (un)

Qunta makes a significant contribution to the discourses of nationalism and culture as an African female writer. With this book, she develops the theory of black consciousness building on the thoughts of earlier scholars like Franz Fanon, Steve Biko and Marcus Garvey. The book provides an excellent lesson in the history of African cultures and the beginnings of racism and disparity both locally and globally.

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consciously allow white supremacy to govern their everyday living and choices. The author further questions the sincerity and the obsession with the phrase “move-forward” in South Africa, highlighting how complicated the process of forgiving and dealing with the corollary of years of violent exclusion and discrimination can be. Granted, Tata Mandela’s politics and leadership style was progressive and farsighted. After twenty-seven years in prison under the apartheid regime, his example of forgiveness and reconciliation is a symbol of hope for South Africans and the world. However, Qunta warns of brewing uneasiness and anger. More importantly, she calls for introspection. Her arguments are passionate, but well informed, disciplined and calculated. There are two opposing groups with different histories: one full of violence and poverty, the other loaded with privilege and political and economic freedom and wealth. How can these two groups exist peacefully in a world where phrases such as #blacklivesmatter and #forblackgirlsonly are still trending and debated. Qunta calls for a decolonization of the mind and implementation of systematic and deliberate steps to address effects of institutionalized oppression. Nationalism and Pan Africanism Conversations of nationalism can be unsettling. For instance, Donald’s Trump presidential campaign promises to “restore” greatness to the United States


© Shutterstock

"Granted, Tata Mandela's politics and leadership style was progressive and farsighted. However, Qunta warns of brewing uneasiness and anger. More importantly she calls for introspection..."

of America by narrowing what it means to be American. Some have argued that this means re-defining “American” to mean exclusively white which suggests intolerance to broader definitions of nationalism, and movements between national boundaries. Taiye Selasi, a writer and photographer of Nigerian and Ghanaian origin makes a case against identities build exclusively on national boundaries. She suggests talking about where you are local as opposed to where you are from. “Don't ask where I'm from, ask where I'm a local. I am a local of Accra, Berlin, New York and Rome.” For administrative, geographical and logistical purposes

one can understand the need to still have national boundaries in Africa despite their history. Qunta’s text addresses South Africa and calls on its citizens to take pride in their language and identity, but there is a consistent Pan African theme that lends power to her ideas and arguments. Her experiences and examples are drawn from all over the globe, which suggests that although she is addressing South Africa as a nation, she is essentially calling on all people of colour to check, challenge and expose white privilege and supremacy. Sojourner Truth, an African-American abolitionist and activist, captured this well in her famous www.theafricanpro.com

1851 speech titled, Ain’t I A Woman. Truth asks a simple question, “If my cup won't hold but a pint, and yours holds a quart, wouldn't you be mean not to let me have my little half measure full?” This is the kind of inequality Qunta is unpacking. It is a bold book. The author is candid and unapologetic. Her experiences as an activist and lawyer - some of which she shares in the last part of the book - leave the imagined reader with a lot to reflect on.

Wanjiru Waichigo Njogu

29


"LEADERSHIP IS LEAVING THE SHIP BETTER THAN YOU FOUND IT"

X

avier qualified in Belgium at the ISA St Luc in Brussels. He joined GLH in 1994, became a partner in 1997, and the senior member in 2005. Xavier leads the practice as the principal designer where his meticulous eye for detail and design is critical in every project. His experience includes a range of commercial, residential, and mixed-use schemes, and his skill as an architect and urban planner are brought to bear in all his work.

30

How do you view your role as the senior member? I have been in this position for ten years. As senior member, I manage all aspects of the business working with people who are responsible for different areas such as the financial director who looks at issues like cash flow projections and the HR director who handles staff matters. My role is to provide guidance but not be hands on in matters such as administration. I assist in pointing people in the direction of what they should pay attention to. My input is important at the time of putting a structure in place. The only place where I have direct input is with client relations and design of projects which has always been my passion. I have delegated most of what relates to administration to focus on servicing the clients and I think it has been good for me personally and for the firm as a result. What would you like to have achieved by the time you retire? This is a big ship that has been sailing for 70 years. I am just a custodian of the ship at the moment. My aim is to get to the harbour and another captain

Article images courtesy of GLH

will take over from me. I want that ship to be just as good, if not better than when I took over. That is important for me. We aim to do better buildings and do even larger projects. Quality is very important at the end of the day as it is essential in the long term to protect your name and your firm more than anything else. Obviously client relationships are essential to your business but the buildings talk for themselves. They are the best way of advertising yourself and they are a legacy. Architecture is not like doing an advert on TV. You may lose a client but your building will still stand for very many years – if it is a good building it helps your profile, if it is a bad building it damages it. What is your leadership and management style? Management styles have changed over the years with various members. The founding duo of members were extremely close and made decisions by consulting each other. They had the company at heart but there was little consultation when a decision was made. When I took over, I had a different approach. I am someone who makes decisions with the rest of my partners. We have a collective decision making system. I like to hear what others views are before steering the decision to where I think it should go. As we grow, I believe we need to have a balanced decision making process amongst the partners. There are also areas I do not deal with seeing as each partner has their area of control. Day to day matters are handled by these partners and only rarely do we escalate issues up the reporting structure. www.theafricanpro.com

What makes you tick or keeps you awake at night with respect to your position as the senior member? Cash flow occasionally keeps me awake at night. Sometimes we are finishing a number of large jobs and there is a lag in our cash flow. When work is quiet, we are on occasion required to retrench staff although this rarely happens with respect to high level employees. We do have some leaving out of their own volition due to career aspirations. We do keep in contact with them and sometimes they do come back to us. I also deal a lot with aesthetic issues around projects that keep me awake at night. Sometimes I go to the client the following morning and say that I think we have thought of something better. The other thing that concerns me greatly is the problems you will undoubtedly encounter when carrying out a large project. It takes a lot of thought as to how to manage those issues and protect the client and ensure that a quality project is delivered. How do you take part in mentorship? I stay very close to our projects’ architects on the aesthetic side of projects. I work with them on the drawings showing them how to pay attention to detail and make corrections and when on site I will supervise quality. I believe I mentor the architects by staying involved. I am hands on when it comes to aesthetic aspects while other partners are hands on with respect to the technical side. What contribution has the company made to the architecture profession? As a company, we have a number of


XAVIER HUYBERECHTS – GLH ARCHITECTS –

31

programs in place to constantly help people improve including refresher courses. Friday afternoons are dedicated to training and includes courses for beginners. We have bursaries in support of students at various institutions such as Wits and take in interns who are still studying to give them practical experience. They spend 2 – 3weeks with us every year and quite often they join us afterwards. One of our members Andrew Wood started like that. Our Friday training programme ensures that our professionals meet their Continued Professional Development requirements. We also give lectures at institutions such as Wits and at conferences which count towards that.

What contribution has GLH made to the community? We frequently make donations to institutions such as orphanages but our main contribution is in the form of bursaries to students who do not have the means to pay for their studies. What could be your highlights and lowlights of your career? I believe that there is good in everything so it is difficult for me to pinpoint lowlights. I am an optimist - even when it bites I see a lesson in what we are doing. We pride ourselves in giving the same level and quality of service to both small corporate clients and more visible exciting projects with big budgets. We try to exceed our clients’ expectations.

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On the highs, there have been a few lately including the Standard Bank Rosebank project. The brief and the vision of the client was very interesting because he wanted to break boundaries. It was very close to my heart and I was actively involved. We were engaged from the beginning including the purchase of the land for the construction of about 70,000 square metres of rentable office space. The client wanted something timeless and I think the final product is a testimony of maturity. The property is integrated into the city and we managed to put parking space of about 125,000 square metres underground which was a plus from a commercial point of view. 32

What accolades would you like to speak of? In the past few years we have received a lot of recognition from the PMR Awards which is an industry survey that reflects how we are seen by both peers and clients. We were voted the best architectural firm this year. The other awards that we look at are the South African Property Owners Association Awards which we always do well in. Last year we won the Commercial Office Development category for 90 Grayston whilst this year we won in the best Corporate Office Development category for Multichoice City. I am also extremely proud of our achievement on the green side of what we are doing because we have been leaders in the commercial environment when it comes to sustainability. It all started with the Nedbank head office Phase II. We convinced our client to embark on a journey that would see this becoming the first 4 star rated commercial building in South Africa. Also with ABSA Towers West we managed to get the first 5 star

rated building and with Vodacom we produced the first 6 star rated building. How has GLH fared in terms of business growth? Our business has grown in the past 70 years. At the moment we have the highest number of employees since inception. From a financial point of view, we have done extremely well in the past 10 years but we are still looking at growing even more. It is not an easy thing to do in troubled times like now where there is less work and more risk. We need to carefully consider our options given that a presentation to try secure a project can cost more than R100 000 which is a big investment. How has your firm demonstrated a commitment to ethics and integrity? These principles have been applied in our company for years and are critical to a company of our size. We have never bribed and never will. We also don’t take commissions. Sometimes we have lost jobs because there was bribing involved and that is fine. We have a 70-year-old name to protect and bribing can affect the integrity of the whole company. We maintain integrity which is also important to the city councils and local authorities. Occasionally we get clients who are a bit pushy and we are tactful in sticking within the limits to what is required within the rules without displeasing and losing the client. Is transformation an important objective for your firm? It is a key objective for us. From as far back as 1994 we formed a sister company where we were shareholders for a few years before transitioning to make it completely black owned. They

are today called Terra Ether architects and we refer a certain amount of work to them, although it is not a situation where we just give away work but rather work together. An example is an engagement with Statistics SA where we both do a certain portion of the work. It is a long term partnership but they are not required to work exclusively with us, they also work with other architectural firms. Within our own firm we also have a black female partner and business owner and we strive to have more black partners. How do you measure your customer service? Most of our clients are repeat clients which shows that they are happy with the service we are providing. That is the best way of tracking our customer service. Many corporate clients try not to work with just one company as it is seen as a threat to their corporate governance rules. An example is Standard Bank where some of their large buildings are not done by us but where there are opportunities, they always include us which shows they value our work. When a client comes back to talk to you and invite you to participate, it shows you are doing something right. Additionally, we have done well in the PMR Awards which are based by industry surveys which again shows that our service is highly rated. We have a reputation on being tough with contractors and occasionally clients because of our insistence on quality, but at the end of the day we work well with everyone involved in any project.

KC ROTTOK Managing Editor of African Pro


33

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Leveraging the Energy Sector

Development Lessons Learned in South Africa: An African Renewable Energy

Regional Centre of Excellence

34

U

nder its seminal renewable energy sector development initiative, The African Renewable Energy Regional Centre of Excellence program (also known as ARERCE), on August 4, 2016, Johannesburg based African economic development firm, Africa Business Group, convened and coordinated a day long knowledge sharing and site visit program for members of the Pan-African Parliament (PAP) during their August Committee Session meetings in MidrandJohannesburg, South Africa. Roughly 45 members of the PAP Committee on Transport, Industry, Communications, Energy, Science and Technology and the Committee on Trade, Customs and Immigration, engaged in the three-part program which included: 1) Morning Panel Discussion A morning briefing session with various government and private sector colleagues who have been involved with the policy design and implementation of South Africa’s renewable energy program – which between 2012-2014

has led to nearly US$15 billion being invested in the renewable energy sector – mostly in solar and wind technology; 2) Technology Site Visits An afternoon site visit tour to the largest rooftop PV installation in Africa (1.5 MW) which was undertaken by local firm Solareff and installed at the Clearwater Mall in Roodeport-Johannesburg, and the first mini-concentrating solar power plant in the Southern Hemisphere that was installed by local mechanical engineering firm, Reach Renewable, at the headquarters of African continental cellular telephony giant, MTN, to cool the firm’s server room; and 3) Supplier Networking Dinner An evening dinner with local technology and services providers that are focused on expanding into the African continent. GAP Holdings, a Johannesburg based solar water heating system manufacturer; the PV Academy, a solar skills development and training provider; and I-log Systems, a pico lighting system designer and manufacture, presented their business cases to the Parliamentarians. www.theafricanpro.com

The morning briefing session was one of the key features of the overall program as it featured the Head of the SA Department of Energy’s Independent Power Production Office, the Director: Renewable Energy of the SA Department of Energy; the Centre Manager of the Renewable Energy Centre of Research and Development of the SA National Energy Development Institute, the Group Leader for Energy Market Design and Policy Analysis of the SA Council of Scientific and Industrial Research, the CEO of the South African Renewable Energy Council, and the Project Executive of the Western Cape’s Atlantis GreenTech Special Economic Zone. The success of this inaugural ARERCE program involving PAP led to calls for further and expanded collaboration – which Africa Business Group is looking forward to. ARERCE in brief The African Renewable Energy Regional Centre of Excellence program is a renewable energy and water conservation promotion program


© Shutterstock

that seeks to leverage the significant advances in these areas made in South Africa over the past five years for the greater benefit of the African continent. The initiative facilitates: • technology skills development, • enterprise development and technology diffusion, • policy design and development, • community of practice development program, and • renewable energy cluster development effort. The goals of ARERCE are to: 1. Promote economic development through the creation and growth in the region of Green skills, Green jobs, Green entrepreneurs, Green enterprises, and Green technology consumers at the residential, commercial and industrial levels; 2. Promote energy efficiency, electricity spend savings and carbon emissions reduction;

3. Promote the diffusion of renewable energy technologies – particularly mini/ micro-hydro; solar PV and solar thermal technologies (Solar heating and cooling), and biomass (for heating); 4. Promote the diffusion of water conservancy practices and technologies; 5. Promote the promulgation of renewable energy supporting policies and regulations; 6. Promote regional industry collaboration and value chain development for local, national, regional and export market development; and 7. Promote South Africa as a regional renewable energy Centre of Excellence where national, regional and continental stakeholders, project developers and policy makers can come to see how inclusive renewable energy value chains can be effectively developed and expanded. For more information on ARERCE contact: E-mail: info@abghq.com | www.abghq.com

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AFRICA, STAYING THE COURSE, DESPITE

A RELATIVE ECONOMIC SLOW DOWN

A

ccording to EY’s (www. EY.com) 2016 Africa attractiveness program 2016, Staying the course, despite a relative slow down, Sub-Saharan Africa remains one of the fastest growing regions in the world. This is reflected in the foreign direct investment (FDI) levels in 2015, where FDI project numbers increased by seven percent. Although, the capital value of projects was down year-on-year — from US$88.5b in 2014 to US$71.3b in 2015 — this was still higher than the 2010–2014 average of US$68b. Similarly, jobs created were down year-on-year, but, again ahead of the average for 2010–2014.

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Ajen Sita, Africa Chief Executive Officer at EY, comments, “Over the past year, global markets have experienced unprecedented volatility. We’ve witnessed the collapse of commodity prices and a number of currencies across Africa, and with reference to the two largest markets, starting with South Africa, we saw GDP growth decline sharply to below one percent and the country averting a credit ratings downgrade; in Nigeria, the slowdown in that economy was impacted further by the decline in the oil price and currency devaluation pressure.” Sita adds, “The reality is that economic growth across the region is likely to remain slower in coming years than it has been over the past 10 to 15 years, and the main reasons for a relative slowdown are not unique to Africa. In fact, Africa was one of the only two regions in the world in which there was growth in FDI project levels over the past year.”

East Africa closes the FDI gap, with Kenya a big gainer In 2015, East Africa recorded its highest share of FDI across Africa, achieving 26.3% of total projects. Southern Africa remained the largest investment region on the continent, although projects were down 11.6% from 2014 levels. The West Africa region saw a rebound in FDI projects by 16.2%, and interestingly in 2015, the region became the leading recipient of capital investment on the continent, outpacing Southern Africa. North Africa experienced 8.5% yearon-year growth in FDI projects. Furthermore, while projects are increasing in North Africa, they are increasing at a much faster rate in SubSaharan Africa. Michael Lalor, EY’s Africa Business Center Leader, adds, “In a context of heightened concerns about economic and political risk across the continent, FDI flows remain robust, and in line with levels we have seen over the past five years. A key factor here is the structural shift in FDI — from a high concentration of source countries and destination markets and sectors, to a far more diverse FDI landscape. As a result, risks and opportunities are being spread much wider, and there is no longer an overdependence on a limited group of investors or sectors to drive FDI performance.” Historical investors gain strength, new investors emerge The US retained its position in 2015, as the largest investor in the continent, with 96 investment projects valued at US$6.9b. During 2015, traditional www.theafricanpro.com

investors such as the UK and France, as well as the UAE and India, also showed renewed interest in Africa. Investors diversify focus across sectors Over the past decade, there has been a shift in sector focus in FDI from extractive to consumer-facing industries. Mining and metals, coal, oil and natural gas, which were previously the key sectors attracting major FDI flows, have given way to consumer products and retail (CPR), financial services and technology, media and telecommunications (TMT), accounting for 44.7% of FDI projects in 2015. In 2015, further evidence of sector diversification came through, with business services, automotive, cleantech and life sciences all rising in significance and becoming the likely “next wave” for investors. Striking a balance between growth, profitability and managing risk Sita concludes, “Given the growth potential in and relative underdevelopment of many African markets, the primary focus for many companies over the past few years has been on entering new markets, capturing market share and driving revenue growth. A combination of factors — including tightening economic conditions, increasingly well-informed consumers and citizens, intensifying competition, a heightened sense of global geopolitical uncertainty, and shifting priorities from global or regional HQ — is now driving a change in focus toward striking a greater balance between growth, profitability and risk management.” FATHIMA NAIDOO – EY


GREEN PAPER RELEASED ON

INTERNATIONAL

M I G R AT I O N I

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t comes as no surprise that the current immigration legislation in South Africa is under scrutiny. A new ‘Green Paper’ was released in mid-June 2016 to propose ways in which the immigration policy can be made more strategic and proactive. The objective is to enable South Africa – by adopting the right approach to international immigration - to embrace global opportunities and maintain national security.

of skilled workers, it needs to adapt its immigration policy accordingly, and fast!

Home Affairs’ current approach to immigration is protective and reactive. It considers immigrants more of a potential threat than an asset. This is a particularly sensitive issue with immigrants from other African countries - the xenophobic incidents speak for themselves. The 2016 “Green Paper” challenges the current view and explores the vital role that immigration plays in the acquisition of skills which are essential to South Africa’s economic development.

It is quite evident in the Green Paper, that there is a distinction between immigration from Africa and immigration from the rest of the world. The focus is on Africa: The African Union is working towards “Agenda 2063” which could result in a visa free continent; there is even talk of introducing an African passport for all African countries by 2018, which will de facto abolish the visa requirement for all African citizens. Whether this will happen remains to be seen. However, South Africa’s position on the free movement of African citizens indicates that we are moving in that direction: South Africa has already begun to offer a 10 years multiple-entry visa to Africans from Africa’s visa restricted countries for frequent travellers, business people and academics. Ghana recently made provision for all African travellers to be issued with a visa on arrival. This is a very significant change and is the start of a more liberal theme throughout Africa. Other countries will follow.

The old perception that South Africa is swamped with immigrants is wrong and it is time to move away from this mind set. This was corroborated by a 2012 analysis in the Quarterly Labour Force Survey which indicated that South Africans made up 90% of the workforce employed in every sector of the economy, including self-employment. Other studies conducted by the MGI (McKinsey Global Institute) and the TIPS (Trade & Industrial Policy Strategies) show that the South African economy has a severe shortage of skills and that, by 2020, the global economy may have 40 million fewer workers with University degrees than required. If South Africa wants to have its share

Should the key proposals of the Green Paper materialise, we could - in the coming years – see a significant shift in the current approach to immigration with a liberalisation of immigration policies ruling not only South Africa but the rest of the continent.

South Africa would also favour workers from the SADC (South African Development Community) region before considering granting a visa to a worker from other regions and www.theafricanpro.com

continents. This is particularly true for African skilled workers: applications for long-term work visas from skilled workers from neighbouring African countries would be fast tracked. Another category that would benefit from the new immigration policy would be international students who graduate in South Africa. These students would be granted work visas and permanent residence immediately after graduation, which would encourage this newly qualified workforce to remain in the country, instead of moving to countries offering more friendly migrating horizons. Retention of a qualified work force that is already in country makes common sense. Minister Gigaba has already made it public that the Department of Home Affairs will move in this direction. A strategy to engage South African expatriates has also been put in place with the GSA (Global South Africans) Programme, which enlists the talent, experience and credibility of South African living abroad to help realise South Africa’s development goals. Between 1989 and 2003, there were eight (8) times more professionals leaving South Africa than immigrating to South Africa, creating a significant void in the qualified workforce. South Africa needs to do something about this situation by adopting a national strategic plan defining sectorial priorities and publishing the required skills for the country for a given time period. Introducing a combination of a ‘points-based system’ and a ‘critical skills list’ or ‘quotas’ – which would


Media Club South Africa

be adapted as the economy changes – could be the way South Africa will go as it has worked very well in countries which use immigration as a controlled development tool. Another fundamental area where South Africa needs to adopt a more strategic approach, according to the Green Paper, is in its criteria for granting permanent residence or naturalisation. The current approach is automatically based on the ‘time criteria’ – period of time the applicant has legally spent in the country. Adopting a more strategic (and effective) criteria which identifies critical skills that would benefit the country’s economic, social or cultural development, would lead to fast-track permanent residence. In this respect, South Africa would be well inspired to learn from the ‘points-based system’ in place in countries like Australia and Canada, which have some of the most pro-active and strategic immigration policies. The new vision for an international immigration policy for South Africa implies an effective and strategic monitoring of the millions of people (citizens and foreigners) who cross the country’s borders. This starts with a more sophisticated and adapted technology – like the adoption of the biometric passport – and ultimately

requires extra-territorial jurisdiction between neighbouring countries. This is particularly important in relation to the sensitive issue of ‘asylum seekers’ and ‘refugees’. Although South Africa is amongst the top five (5) countries in the world for asylum seeker applications, 90% of applicants do not qualify for ‘refugee status’. There is talk of establishing “Asylum Seekers Processing Centres” – basically, refugee camps – close to borders where applicants would be held before entering the country to determine whether they qualify as refugees and fall under the Section 27 (c) of the Refugees Act which allows them to apply for permanent residence after 5 years. This would mean having appropriate agreements in place with neighbouring countries to avoid the logistical, security and humanitarian problems which we have recently seen in other parts of the world. In conclusion the following are in my view the major themes of the Green Paper: • Retention of international students – a good step to be more competitive • Move to the points based system in order to attract highly skilled labour • Emphasize on inter-governmental cooperation to establish who and which skills are needed www.theafricanpro.com

• Liberalisation of business travel (and tourism) within Africa • Decreasing the hurdles of attaining permanent residence and naturalisation for highly skilled immigrants • Different approach to refugees and asylum seekers with extra processing centres South Africa needs to adopt an integrated approach regarding its immigration policy, with various sectors of the Government and the population on board. This Green Paper aims to achieve just that. Whether the country’s lack of common vision on the value of international migration will allow South Africa to see its immigration policy evolve towards a clear and coherent policy, only time will tell.

ANDREAS KRENSEL

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THE GOOD, THE BAD AND THE UGLY OF

G

ross domestic product (“GDP”) growth in sub-Saharan Africa declined from 4.5% in 2014 to an estimated 3% in 2015. This decline is attributed to low commodity prices, particularly oil, rising borrowing costs and other domestic challenges such as power shortages, the Ebola epidemic, conflict and political and security issues. The decline is expected to continue in 2016 with GDP projected to reduce to 2.5%. This on-going decline is due to the issues mentioned above, compounded by tightening global financial conditions and drought in certain parts of the region.

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The recent decision by the United Kingdom to exit the European Community has taken place against this background and the impact on Africa as a continent is currently unknown, however, the expectation is that it will add to Africa’s woes. According to the Brookings Institute, the potential areas where Brexit could impact on African countries are through the impact of Brexit on the global economy, reduced British outwardness when it comes to global development issues and decreased bilateral development assistance and trade. It is not, however, all doom and gloom. According to the recently released World Investment Report, 2016 (“WIR 2016”), foreign direct investment (“FDI”) into Africa dropped only 7% to US$54 billion in 2015, which is significantly better than the estimated US$38 billion FDI inflows to Africa during 2015 that was published by the UNCTAD Global Investment Trend Monitor during January 2016. While FDI inflows to South Africa, Ghana

and Nigeria dropped by 30.3%, 4.9% and 11.1%, respectively, FDI inflows to Angola increased by 352% to US$8.7 billion and to Kenya by 42% to US$1.4 billion. The WIR 2016 states that FDI inflows to Africa could start to increase during 2016 due to the liberalisation of investment regimes and privatisation of state-owned commodity assets by a number of African countries. In recent years, many African countries have also implemented reforms facilitating the created private pension systems that are rapidly accumulating assets under management, largely as a result of Africa’s growing middle class, rise in consumption, increasing urbanisation and rising per capita incomes. Pension funds play an important role in deepening financial markets and making cheaper funding available to corporations thereby contributing to national economic development and growth as they are long-term investors. Historically and currently, African pension funds have invested heavily in domestic debt due to a combination of regulatory hurdles, risk adverse trustees and poor incentives. Many African governments are in the process of liberalising regulations in respect of the pension fund industry, thereby, allowing them to put money into certain alternative investments, including private equity, and to invest outside of their own countries. The rapid growth of the African pension fund industry is necessitating diversification of investment risk by trustees and fund managers, and this, together with more

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Photo courtesy Babak Fakhamzadeh - Flickr


AFRICAN

CAPITAL MARKETS

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favourable regulation, is resulting in an increase in funding available for investment into listed equities, bonds and also into private equity. According to the OECD Annual Survey of Investment Regulation of Pension Funds, the following regulations apply to selected African countries with regards to pension funds investing into listed equities: • Kenya: Pension funds may invest up to 70% of the value of their total assets under management (“TAUM”) into listed equities on any of the stock markets in Kenya, Uganda or Tanzania; • Malawi: Pension funds my invest up to 100% (direct investment limit) of the value of their TAUM into listed equities on the Malawian Stock Exchange; • Mauritius: Pension funds may invest up to 100% (total exposure of fund including investments through collective investment schemes) of the value of their TAUM into listed equities on the Stock Exchange of Mauritius (10% into foreign listed equities), however, investments into a single entity are limited to 20% of AUM; • Namibia: Pension funds may invest up to 75% (direct investment limit) of the value of their TAUM into listed equities. Namibian pension funds are subject to various restrictions regarding their equity investments including an investment limit of 30% into assets consisting of shares outside of Namibia; • Nigeria: Pension funds may only invest up to 25% (direct investment limit) of the value of their TAUM into listed equities and such investments are subject to further restrictions; • South Africa: Pension funds may invest up to 75% (same as main limit, look through principle applies) of the value of their TAUM into listed equities on the JSE Limited (Johannesburg Stock Exchange) and 25%, subject to further restrictions,

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into equities listed on a foreign exchange that is a member of the World Federation of Exchanges; • Tanzania: Pension funds may invest up to 15% (direct investment limited) of the value of their TAUM into listed equities of which 5% may be invested into private equity; • Uganda: Pension funds may invest up to 70% of the value of their TAUM into listed equities on any of the stock markets in Kenya, Uganda or Tanzania; and • Zambia: Pension funds may invest up to 70% (but not less than 5%) of the value of their TAUM into listed equities on the Zambian Stock Exchange, subject to certain

additional restrictions. Investments into foreign equities are limited to 30% of the fund’s size. The above indicates that African pension funds are growing rapidly and have the legislative ability to invest into listed equities, particularly, in their own jurisdictions. The increased availability of local capital for development should lead to an increase in the number of African initial public offerings (“IPO’s”) and listings, which in turn, should contribute to an increase in the liquidity of the African stock exchanges. What is needed, is more sizable local businesses coming to market in their local jurisdictions.

There have been 39 new primary listings in various African countries (including 22 primary listings in South Africa) during the past two years and many of these new listings have included an IPO which has been fully subscribed and in some cases oversubscribed. This supports the theory that capital is becoming available within Africa itself to invest into local businesses. If this is the case then Africa may be able to weather Brexit, and any potential negative effects thereof, better than expected. Robbie Cheadle (CA) SA Associate Director – JSE Advisory Services, Mergers & Acquisitions at KPMG

Hugi Olafsson Flickr

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TEN START-UP PITFALLS AND HOW

YOUNG ENTREPRENEURS

CAN AVOID THEM G

iven South Africa’s high youth unemployment rate, estimated to be around 60%1, starting and growing a business is a potentially enriching career path for a young person to choose, not only financially, but also mentally and socially. Anton Roelofse, regional general manager at Business Partners Limited (BUSINESS/PARTNERS), says that while entrepreneurship is an exciting career option with great future potential, entrepreneurs, particularly the youth, also need to be aware that it is a difficult path.

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“The business discontinuation rate in South Africa remains higher than the established business rate1 – which refers to a business that has been in operation for more than three and a half years. This means that businesses are closing at a faster rate than the rate at which new businesses are being established in the country. While this high rate of discontinuation affects all entrepreneurs, it puts younger entrepreneurs at greater risk as they may not have the industry experience or resources that older, more experienced entrepreneurs may have access to.” Roelofse provides ten common pitfalls of starting and growing a business, and what young entrepreneurs can do to avoid them:

ONE Over-thinking your idea: Planning is crucial in business development, but over-planning can be paralysing. Renowned South African entrepreneur, Anton Rupert, famously said it was fortunate that he did not know all the risks that he would face in building his empire, otherwise he would never have started. Many of the major risks involved in a new venture cannot be predicted and, as such, cannot be planned away. At some point, entrepreneurs have to confront risks directly by implementing their plans. TWO Getting stuck behind your desk: Once a business has launched, entrepreneurs are required to be in the office regularly to plan, think and re-evaluate; it is key to your business’ survival. However, be careful not to get stuck there, because some of the best business thinking is done on the job, informed by the practical experience of managing a growing business's operations, marketing and administration. Start-up entrepreneurs have to stay visible on the shop floor and in the market. THREE Over-thinking the timing: Timing is important and has to be carefully considered, but it is never as simple as waiting for the economy to improve. Starting a business in a difficult economic environment can create various opportunities, such as cutting start-up costs by, for example, buying second-hand equipment at auctions from businesses that have gone under.

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FOUR Same old, same old: Entrepreneurship is about doing things better, sometimes through a radical new idea, but other times by providing subtle differences in the customer's experience. The key is to differentiate from the competition, while also constantly improving business processes and operations over time. FIVE Neglecting your tech-savvy edge: There are many different ways in which technology can make business quicker, easier and more efficient – providing a definite advantage. Younger entrepreneurs must be aware of the natural edge they hold by being more in tune with technology and exploit it as much as possible. SIX Being an island: While many entrepreneurs may be the sole owners of their business, it’s very difficult to successfully grow a business completely on your own. Staff is needed, but just as important is having a support network of experts, professionals, mentors, advisors and friends. Professional expertise such as legal, labour and accounting services are expensive, and in the beginning, young entrepreneurs might have to rely on more informal forms of advice, but the important thing is to spend sufficient time and effort in seeking it out by networking in the business world.


SEVEN Neglecting training: Very few young businesses can afford to employ highly qualified individuals. In the beginning, most businesses employ people with minimal experience and train them up on the job. The monetary value of their pay package might be low, but an implicit part of the deal with such workers is that they will gain skills specifically in line with the business. Neglect this delicate understanding at your peril, as training staff is a crucial ingredient of a business’ success. EIGHT Trying to do everything yourself: At the start of your business you are probably going to have to do everything from watering the pot plant to doing deliveries. Not only does this save

scarce start-up capital, but it also provides a good sense of what the work entails before appointing a worker to do it or outsource it. However, it is very important that entrepreneurs move away from operational tasks by delegating or outsourcing the work as soon as you can, as this allows time to market, network and think strategically about the business. NINE Living out of the till: Entrepreneurs who fail to separate their business finances from their personal finances rarely last the distance. Budgeting and cost control is crucial for business survival, and an important part of the discipline is to pay yourself a fixed salary, based on what the business can comfortably afford, and to stick to that, even if it is low in the beginning.

TEN Underestimating the value of a few years' work experience: Young entrepreneurs might be so eager to get started in business that they forego work experience. There are some famous examples of entrepreneurs who have never worked for anyone else, but they are the exceptions. The majority of successful entrepreneurs start off by working for someone else, and using the opportunity to learn how an organisation works from the inside out, before they set out to build their own businesses. SOURCE: 1 Global Entrepreneurship Monitor South African Report 2015/16.

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BREXIT SHOWS ECONOMIC COSTS OF PURSUING POPULIST POLICIES LIKE TRUMP'S © Shutterstock

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P

opulism has become a defining feature of the political landscape on both sides of the Atlantic. And populists succeed by “instilling fear of various real or imagined dangers.” In the U.K., those in favor of Brexit cited European Union immigration policies to build support for the “leave” campaign. In the U.S., similar fears over immigration have been joined by heavy criticism of globalization as populists call for a greater focus on domestic interests. This populism comes at a steep cost, as the U.K. has learned in the aftermath of

Brexit. It shows the dangers of turning away from market institutions like the EU and of introducing political uncertainty into the marketplace. These results should send a powerful warning to those in the U.S. who want to pursue a similar strategy. Populism on the rise Both the Republican and Democratic 2016 platforms illustrate this shift away from support for globalization toward more populist ideas. For example, the Democratic platform criticizes American trade agreements more heavily than in past elections. This may www.theafricanpro.com

be a result of Bernie Sanders' success. Perhaps more telling, trade agreements were largely omitted from the Republican platform, which had made promoting globalization a key issue for decades. This omission is a direct result of disagreement among Republicans resulting from the party’s new focus on working-class labor interests. Polls suggest that such populist appeals that blame immigrants or globalization for domestic problems are an effective way to frame economic policy debates, even if the facts are wrong.


A growing number of voters face stagnating wages and greater job insecurity. The result is widespread economic disillusionment. It’s therefore no surprise when politicians promise to retreat from a global system that many think does more harm than good. But what are the economic costs of this populist upsurge? While economists have expressed skepticism, there was little tangible evidence until recently. Now, we need only look to the aftermath of Brexit for answers. Market responses to the EU referendum send a clear message. Specifically, these reactions show the dangers of prioritizing populism over political stability.

Brexit’s economic consequences The short-term impact of Brexit has been decidedly negative. The British pound tumbled close to 10 percent as referendum results were announced and has since steadied near a 30-year low. The morning after saw the FTSE 100 open 400 points lower. Similar losses were seen worldwide as US$2 trillion was lopped off the value of global markets.

funds with substantial U.K. holdings have seen downward revaluations of their portfolios, the pound continues its downward trajectory and U.K. government bond yields recently hit record lows.

Equity markets now show strong signs of recovery, but this is only one part of the overall picture.

The activity on bond markets may provide one of the principal warning signs moving forward. Demand for bonds has surged as a direct result of political uncertainty. Purchasing increased as investors shift toward greater safety in their portfolios, reducing yields and sending a signal that markets remain concerned.

More telling – and more significant – is the behavior of investors making longer-term commitments. Property

The timing of these market outcomes is not a coincidence. It’s telling that all of this occurred after a period of relative

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optimism. Prior to the referendum vote, many markets reached near-record highs, bolstered specifically by hopes of a “remain” victory. What we see now are the consequences of shattered market confidence and of increased uncertainty.

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What lessons can be learned? The reaction to Brexit reminds us of one fundamental fact about markets: They don’t like political uncertainty. Uncertainty over the policy environment leads market actors to be more cautious. Unfortunately, this is precisely the problem with the populism currently standing center stage in countries like the U.K. and U.S. Take, for instance, the aforementioned opposition to free trade prominent in the recent primary campaigns. In a curious case of cross-party alignment, Democratic and Republican candidates have been united in their opposition to trade liberalization. Trump stated that trade was “crushing American workers” and that it had “wiped out” the middle class. Both Sanders and Hillary Clinton (under pressure from her more populist rival) agreed, saying that the current global economy disadvantages American workers. Drawing the most ire have been free trade agreements, past and present. NAFTA – signed by Clinton’s husband in the 1990s – has been criticized for expediting the downfall of American manufacturing. Trump called it the “worst trade deal in history” and promised to remove the U.S. from its “unfair” rules. He does not stand alone among Republicans on this issue. Republican senators have expressed dismay about the pending Trans-Pacific Partnership, a deal that would join the U.S. with 11 Pacific Rim partners to govern roughly 40 percent of global trade. The language of U.S. trade opponents largely mirrors many of the arguments the “leave” campaign made about

the EU. For example, Brexit backers claimed that EU rules constrained U.K. enterprise and argued that leaving the bloc would lead to increased market opportunities abroad. Here’s the problem. The “constraints” that trade agreements place on members are precisely what makes them so valuable. The value of free trade Trade agreements do not just boost trade. A growing volume of political economy research, including my own, shows that they also stabilize economic partnerships. In particular, trade agreements include rules and regulations designed to limit governments’ policy discretion. One example is providing formal rules for interstate dispute settlement. Dispute settlement ties governments' hands, deterring them from introducing ad hoc policy changes. In this way, trade agreements take the global economy out of the Wild West. Viewed through a populist lens, forfeiting autonomy looks like a bad thing. But it isn’t. Trade law helps prevent states from pursing exactly the kinds of protectionist policies that introduce market risk. Consider Trump’s campaign promises. He has repeatedly threatened to raise tariffs against key U.S. trade partners by as much as 45 percent. He also welcomed the idea of a trade war, alienating markets like China in the process. These kinds of ad hoc policy shifts will only do harm to American firms and trigger greater volatility in global markets. Trade is just one issue, but it illustrates what the current populism gets wrong about economic policy. It is costly for countries to retreat from global markets or from the rules that govern those www.theafricanpro.com

markets. Brexit shows that such a retreat will not accomplish populists’ intended goals of greater job security and higher wages. U.K. job and growth forecasts have been revised downward and consumer confidence has evaporated. These effects are not arbitrary. They are a direct result of the political uncertainty. The same holds in the U.S., where it is estimated that the destabilizing effects of Trump’s policies would lead to another recession. One study puts the estimated opportunity cost of Trump’s policies at as high as 4 million lost jobs. Moving forward The danger now is that Brexit’s consequences will be ignored. Observers have drawn comparisons to other eras in which populism shaped economic policy. Most prominently, the SmootHawley tariffs of the 1930s illustrate the potential downside of widespread protectionism. For some, the current populism suggests a dangerous return to the kind of thinking that deepened the Great Depression. But we need not go back that far. More recent history shows just how important the health of markets is to retirement and savings accounts. It also reminds us how important stability is for consumer confidence, employment and overall growth. It is perhaps a small irony that echoes of 2008 are a key driving force behind the current push toward populism. If nothing else, the Great Recession should highlight the need for greater certainty in the political climate. But this means a deeper commitment to the kinds of market institutions populists want to abandon.

JEFFREY KUCIK – The Conversation


BLACK ON BLACK RACISM: THE BLACK

ELEPHANT IN THE ROOM

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'Racism is a refuge for the ignorant. It seeks to divide and to destroy. It’s the enemy of freedom, and deserves to be met head-on and stamped out.' – Pierre Berton www.theafricanpro.com


R

acism. It’s a very topical issue in South Africa at the moment. There is no denying that it’s a huge problem. What concerns me is the fact that most people seem to wholeheartedly believe that the only form of racism that requires attention and push-back is white-on-black racism. My personal experiences with racism tell a different story. I have experienced white-on-black racism but it is spectacularly matched and, in some instances dwarfed, by the racist vitriol I have heard some black people utter against white people. However, even greater than black/white racism in my eyes, is black-on-black racism. Although, I can count my encounters with black/white racism on my ten fingers and toes, I’ve lost count of the number of times I have personally experienced and/or witnessed black-onblack racism.

52

It manifests in the black people who think that when a white person does something out of the ordinary they’re quirky but and when a black person does it, it’s the ignorance of the race. Like that waiter who could not understand that I came into the restaurant with a hankering for something sweet so I wanted dessert wine before I had my meal. It’s his repeated attempts to tell me I shouldn’t have it because I’m not supposed to. According to who? I am the paying customer and I know what I want to drink and when I want to drink it. It's evident in my fiancé’s friend who subsequently told me - with genuine concern - “You shouldn’t do such things. You give black people a bad name.” Why are my idiosyncrasies perceived as a reflection of an entire race of people who are each unique in their own way? Is a quirky white/Indian/Chinese person a representation of all white/Indian/ Chinese people? It’s apparent in that moment when the car guard lets go of my trolley mid-push

and rushes off to help the white shopper who has just exited the store behind me. It’s noticeable in the way the new tea lady at my previous place of work who, finding herself without clean drinking glasses soon after I had walked out with the last one, chose to follow me to my desk and ask whether she can have the glass back because another manager (at the same level as me but white) wants water. I was the only black manager on her floor. “Sorry neh? I will bring you another one when I get more.” By this she meant when the other managers were done and returned the ones they had. What amused me was how genuinely apologetic she was. It’s clear in that moment when I stuck my hand out to tip the car guard for his assistance and I looked in the rear-view mirror to see that he had rushed off midassist to assist a white gentleman who had just walked into the parking lot. He wasn’t even at his car yet. The customer seemed genuinely embarrassed when I made eye contact with him as he tried to send the car guard back to finish assisting me. I didn’t wait. It’s tangible in the difference in the customer service afforded white people in contrast to that experienced by black people. A friend stood in a queue a Midas behind two white gentlemen and a black gentleman. The black shop assistant behind the counter greeted both white gentlemen with “Good morning sir. How can I help you?” As soon as they stated what they wanted, he went off to get it and completed the transaction. As one should. The black gentleman was met with a stony straight face and no greeting of any sort. Obviously accustomed to this treatment, he asked “do you have xxx?” Without moving a muscle to go anywhere, the shop assistant responded with a blunt “it’s R350. Do you still want it?” It’s palpable in that moment when I picked up strawberries with no price tag at my local Food Lover’s Market. The teller ringing up my groceries picked www.theafricanpro.com

them up and said “These are R49. Should I put them back?” I wonder why she thought I couldn’t, or maybe that I shouldn’t, afford them. It’s distinct in that moment when I asked a new manicurist to make my nails shorter because I play hockey and longer ones are more likely to break and damage my actual nail. Her response was, “This is the problem with black people. You make a little money and you want to run around doing things white people do. Why don’t you leave it to the white people who know how to do it? It’s like black people who play golf. Kutitambisira nguva (What a waste of time).” Tiger Woods are you listening? It’s conspicuous in the black colleague – my junior - who asked me to make him tea in the morning instead of asking his white clerk who is actually meant to make tea for him as part of the hazing ritual. Fear not, I refused. This last one is a mix of our subject here and sexism, though I couldn’t tell you in what proportions. In any event, I could go on and on. The examples are endless. How odd all this is. Yet, in the same breath, how normal it all is. Perhaps in the midst of pointing accusing fingers at “other” racists, each of us needs to interrogate our own perception of our own race first. After all, don’t they say you teach people how to treat you. Just a thought.

CHAITWA MAMOYO


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The African Professional Issue 24  

The African Professional Issue 24 featuring William Mzimba of Accenture, GLH Xavier, Nonku Ntshona among other articles on African professio...

The African Professional Issue 24  

The African Professional Issue 24 featuring William Mzimba of Accenture, GLH Xavier, Nonku Ntshona among other articles on African professio...