Government bemoans economic impact of fronting
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ZENZELE GROUP
Standard Bank, Mastercard and Google collaborate to help SME’s
PUBLISHING CREDITS CHIEF EDITOR Benito Mamaile editor@businessxposure.co.za EXPERT CONTRIBUTORS Frans Nel Dr. Travis Bradberry Morgen Moyo Madelain Roscher John Lombela Jacques Loots Thabiso Gama Elena Agaragimova South African Banking Risk Information Centre PICTURES Intellectual Media Cover Interview Pictures Credit: Tumi Phake DESIGNERS Intellectual Media and Communications LEGAL Loots Attorneys Gama Attorneys ACCOUNTS Istora Rapule accounts@businessxposure.co.za
TUMI PHAKE Group Chief Executive, Zenzele Group
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CHIEF EDITOR’S LETTER
IT IS POSSIBLE TO OVERCOME THE IMPOSSIBLE, KEEP GOING! ” The constraints we impose on our imagination, innovation, creativity, and vision are just that self-imposed.” – Thomas Kuhn - Stanford Encyclopedia of Philosophy (U.S)
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www.fico.com
COVER INTERVIEW
Tumi Phake ZENZELE GROUP
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COVER INTERVIEW
Exclusive CHAT
Tumi Phake
T
umi Phake is a South African based entrepreneur, business speaker, and mentor. He is the founder and Group Chief executive officer of Zenzele Group and was awarded the 2017 South African entrepreneur of the Year Award.
In 2019, he was ranked amongst the topmost influential, young South Africans in business. A former banker with seven years’ experience in investment and banking, Phake spent a lot of time learning and leveraging off industry experts. Since the inception of the company, Phake has managed to raise R50 million and created employment for 150 employees inclusive the contracted staff to date. In the future, he plans to expand not only in South Africa but to the rest of the African continent as a publicly listed company, dominating the industry as the first black player. Phake previously served as a junior board member for FNB Wealth. In 2015, he was recognized by the Mail & Guardian’s Top 200 Young South African’s list, an initiative that recognizes South Africans under the age of 35 who are groundbreakers in various industries. In 2016, Phake was selected as a South African ambassador for the prestigious Young African Leaders Initiative (YALI) in the United States of America, a leadership programme established by former President Barack Obama for young African Leaders. During the programme, he studied Business and Entrepreneurship at Virginia Commonwealth University and had the great honour of meeting former president of the USA, Barack Obama. He is now contributing to the entrepreneurial development journey of others as a business mentor at the Allan Gray Orbis Foundation.
Living your brand is simply being yourself and infusing that into the daily life of our work - TUMI PHAKE
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COVER INTERVIEW
Tumi Phake an award-winning entrepreneur, business speaker, mentor. Founder and Chief Executive Officer of Zenzele Group. A former banker with seven years’ experience in investment and banking, Tumi holds a Bachelor of Commerce Degree in Financial Management. Inspired by his passion for health, fitness and business, Tumi’s vision is to positively impact on the burgeoning Chronic Disease Burden facing South Africa using the power of physical activity as both a prevention and treatment modality.
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COVER INTERVIEW
Tumi Phake | Small Business Entrepreneur of the Year - 2017
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COVER INTERVIEW
Tumi Phake – Group Chief Executive © Zenzele Group
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Improve HEALTH & WELLBEING! Create a positive impact on overall productivity! Increase performance! Zenzele Fitness brings tech, health, joy to your modern, go-getting lifestyle.
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ENTREPRENEURSHIP
Standard Bank, Mastercard and Google collaborate to help SMEs Contributed by
Nelisiwe Zulu Head: Merchant Solutions
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ENTREPRENEUR OF THE MONTH
Kagiso Ashley Leshaba
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ENTREPRENEUR OF THE MONTH
Profit is not the legitimate purpose of business. The legitimate purpose of business is to provide a product or service that people need and do it so well that it’s profitable.
- James Rouse
Kagiso Ashley Leshaba
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ECONOMY INSIGHTS
Localisation: Supporting a strong recovery in SA manufacturing
Many people re-discovered their enthusiasm for local production during the disruptive, bewildering early days of the pandemic. The result is 'localisation', an emerging global trend that could revitalise local factories. Shannon Gernetzky, sector head of industrials at Standard Bank, and Sean Wegerhoff, lead, industrial advisory at Standard Bank, state that if we respond quickly and wisely, there are three obvious benefits: economic resilience, more balanced trade, and greater fixed investment. RE-SHORING PRODUCTION AN URGENT OPPORTUNITY All over the world, in April and May 2020, essential goods were unavailable or delayed. The next step was a tentative, anxious query: Can’t anyone make this locally? What happens if China’s factories remain closed for another month? 18
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What happens if there is another pandemic? These questions, and the complex answers to them, give new impetus to the idea that more of what we consume locally should be produced locally. “The argument in favour of reshoring and localisation is not new, but the pandemic, and South Africa’s weak industrial condition, makes this topic an urgent opportunity," explains Gernetzky.
The idea behind re-shoring sounds simple and sensible: future disruption of cross-border logistics seems inevitable. This time it was coronavirus but next time it might be something else - another US-China trade war, a tsunami, or even another disease. Therefore, companies and countries would be wise to act now to become more resilient and less dependent on imports.
The complexity and fragility of global industrial production is self-evident. To some extent, our health and national security are at the mercy of factories in faraway places. The reality is much more nuanced and complicated: localisation brings risks as well as benefits. SMALL SHIFT, BIG IMPACT Even a small shift could have a big, positive impact considering South Africa imported goods worth as much as R845bn in 2019. “We certainly have the capacity to do far more locally,” says Wegerhoff. "Factories in SA have lots of spare capacity at present and we have the expertise to produce a much larger share of the goods that we buy every day from retailers and wholesalers. An order of gloves or masks can, in theory, reach a hospital in
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ECONOMY INSIGHTS Tshwane more quickly and with fewer obstacles if the factory is in Germiston rather than Guangzhou," he says. We also have local spending power. Spending on durable goods in SA has risen by R43bn over the past seven years, to R221bn in 2019 from R178bn in 2012, according to SARB data. Much of that growth was recorded in our trade partners’ accounts. SA consumers spend approximately R148bn per year on clothing and footwear and R134bn on vehicles, for example. Local factories supply much less of those than they used to. Imported goods supply 38%, on average, of all domestic demand for manufactured products. As recently as 2005, that figure was a more comfortable 26%. For some subsectors, however, up to 90% of domestic demand is met by imported supply. For 'machinery and equipment', imports rose from 68% of domestic demand in 1993 to over 90% today. A few industrial subsectors (food & beverages, wood & paper) still hold their own against imports. If we respond quickly and wisely, there are three obvious benefits. Firstly, resilience. More local industrial capacity means that supply chains for essential goods will be shorter and more reliable than crossborder trade that is at the mercy of politics and panic about pandemics. Secondly, more balanced trade. If the gap between our imports and exports grows too wide, we face a dangerous trade imbalance. Manufactured goods make up just 35% of total exports but 64% of total imports.Thirdly, new local production means more local investment in long-term, productive assets that are inevitably more efficient and technologically advanced than existing ones.
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WHAT RISKS SHOULD WE AWARE OF?
BE
Extensive localisation can concentrate risk domestically. By bringing more production home, we place more eggs into a single basket. The net effect could be less resilience and more vulnerability. Diminishing scale is another risk. If all countries decide to make their own vaccines, for example, we lose the price benefits of large-scale production that makes products more affordable. If other countries start to re-shore production, South Africa stands to lose production after we have spent decades persuading multinationals to use SA as a foreign production platform. Our exports depend on our imports. South Africa’s great exporting industries are rightly praised for their ability to earn hard currency and find foreign markets for local production.
We export minerals, food, vehicles and machines but those factories all rely on imported equipment, feedstocks and intermediate goods. We do not know what the next 'essential' products will be. They could be memory chips, chemical products or a new kind of pesticide. What we do know is that the world now has a better appreciation of the importance of local manufacturing. A rejuvenated manufacturing sector would not only be good for industrial firms. The survival of local factories, based on local demand, would protect other parts of the South African economy from some of the most painful consequences of the current economic slump. Whatever happens, the best way to predict the future of local manufacturing is to agree that we will create it ourselves.
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CYBER SECURITY
What do you do if your business has been hacked? Presented by
The recent Experian data breach saw close to 800,000 businesses along with over 24 million South Africans' information left on the internet exposed to cybercriminals. After Experian's earlier announcement that the stolen data had been retrieved and accounted for, the data has surprisingly resurfaced again on the internet, now being shared via a Swedish Company - WeSendit.
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B-BBBEE | Government bemoans economic impact of FRONTING
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Digital payments holds the power to Africa's development Contributed by
Murray Gardiner Managing Director
Africa has undergone a remarkable journey over the past 30 years. It has not only leapfrogged legacy technology and systems into a more relevant future, but it has done so in spite of challenging circumstances. This is particularly relevant when it comes to mobile – the technology, the connectivity, and the financial inclusion.
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