African Leader October 2022 Edition

A BLACK MANAGEMENT FORUM PUBLICATION

ISSUE 57 | OCTOBER 2022

WWW.BMFONLINE.CO.ZA

UNDERSTANDING SA’S SOCIAL CONSTRUCT CONUNDRUM

MTETO NYATI BEING AN AFRICAN IN LEADERSHIP

AN ANALYSIS OF THE EMERGENCY ENERGY PLAN

FOR A SOCIETY IN TRANSITION

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ADVERTORIAL: WITS BUSINESS SCHOOL

LEADERSHIP IN TIMES OF CRISIS When facing a business crisis don’t give in and crumble under the devastating blows, rather find and exploit the opportunities, advises Maurice Radebe

Maurice Radebe

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usiness leaders are no strangers to crises, given the devastation wrought

by COVID-19. I firmly believe, however, that turbulence in business is an opportunity disguised as a crisis – it is not a time for panic or anxiety, but rather for decisiveness and growth.

There are three main perspectives from which to view a crisis: looking outward at the macro environment; looking internally within your organisation; and finally, from your personal vantage point as a leader.

LOOK FOR AND EMBRACE THE OPPORTUNITIES

IMAGE: SUPPLIED

Looking outwards, many in business would see around them only the dangers and pitfalls. I believe this is exactly the time to actively seek opportunities.

Scan what may seem to be a gloomy situation and find the next frontier for financial growth. If one area of business is in trouble, look for an alternate sector

for growth. When a business is in panic mode or distress, it is easy to miss opportunities, but it is precisely in those challenging times that opportunities lie hidden. It is up to us as leaders to look out for them.

From an internal organisational point of view – it is critical to ensure you have the capability and capacity to embrace opportunities that may emerge as a result of a crisis. Organisations that are versatile and flexible are the ones able to see and seize opportunities amid challenges.

RISE LIKE AN EAGLE AND KEEP FLYING

Finally, from the leadership perspective, it may feel natural to become inert and paralysed in crisis; what we really need is to maintain momentum.

As leaders, we need to fly like eagles in the face of a storm, not run for cover like chickens. An eagle faces the storm and uses its force to propel it upwards. As the storm hits, the eagle flies higher and higher until it cruises above the storm.

There, it can fly for ages effortlessly. As leaders, we have the potential to use turbulence to propel our organisations to their greatest heights.

But it is critical to ensure that we sustain that forward momentum, which is why, as leaders, we need to keep leading and making decisions, even if they are the wrong ones. If we freeze in indecision, it becomes

As leaders, we have the potential to use turbulence to propel our organisations to their greatest heights.

difficult to galvanise the organisation once again. I know of too many organisations in deep trouble because their leadership didn’t make decisions fast enough in times of ambiguity.

LEAD WITH INTEGRITY AND CONFIDENCE

One also needs to be very wary of those peddlers of “doom and gloom” in toxic times, those who thrive in toxic environments. Leaders need to deal with such people quickly before they undermine progress and create a culture of fear.

Situations change fast in uncertain environments, so leaders need to communicate frequently and directly to their entire team, not rely on anyone else.

And, as leaders, we need to be confident enough to admit mistakes. It is easy to make a decision we thought was right, but two days later, it becomes evident it was wrong. The only way to deal with this is to apologise and move on to the next decision. The staff will respect a leader far more for that than indecision and freezing in tough times.

Anxiety from the top will spread through the team like wildfire, but confident leadership during tough times will ensure that your organisation weathers the storm and emerges stronger than ever.

➔ Scan this QR code to go directly to the WITS website.

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CONTENTS A BLACK MANAGEMENT FORUM PUBLICATION

ISSUE 57 | OCTOBER 2022

WWW.BMFONLINE.CO.ZA

UNDERSTANDING SA’S SOCIAL CONSTRUCT CONUNDRUM

MTETO NYATI BEING AN AFRICAN IN LEADERSHIP

AN ANALYSIS OF THE EMERGENCY ENERGY PLAN

FOR A SOCIETY IN TRANSITION

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AFRICAN LEADER ISSUE 57 | OCTOBER 2022 | WWW.BMFONLINE.CO.ZA

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EDITORIAL COMMENT

We are in the grip of an energy crisis that could result in economic and unemployment fallout.

EDITORIAL COMMITTEE NOTE

We need meaningful change and servant leadership to deal with the challenges we face and secure the future of our country.

MD’S NOTE

The BMF remains committed to the socioeconomic advancement that will shape a better future for all South Africans.

ACTING PRESIDENT’S NOTE

We need a change in leadership culture to one that is inclusive, participative, values-based, and accountable.

14 EVENTS

The BMF and Bidvest’s Empowerment sessions; the 9th Lot Ndlovu lecture.

20 IN CONVERSATION WITH

Mteto Nyati shares his views on being an African in leadership.

23 THE ENERGY CHALLENGE

Fixing Eskom is the only way to end load shedding in the short term.

31 EMPLOYMENT EQUITY

Why is it taking so long to transform the workplace?

35 BLACK INDUSTRIALISTS

Will the Black Industrialists Programme revive South Africa’s collapsing manufacturing sector?

38 SOUTH AFRICA’S SOCIAL CONSTRUCT CONUNDRUM

Where is South Africa’s economic development plan and social compact?

40 POLITICAL LEADERSHIP

What is the outlook for the ANC ahead of its national conference and the 2024 election?

42 THE ROLE OF BLACK PROFESSIONAL LEADERS

Black professionals need to play an active role in driving economic, social and political recovery.

44 B-BBEE

The five elements of B-BBEE need deeper reflection and clearer resolutions

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EDITORIAL COMMENT

IN THE GRIP OF

AN ENERGY CRISIS

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t the time of writing (19 September), President Cyril Ramaphosa had announced that he would cut short a trip to the United States and the United Kingdom and return home after the funeral of Queen Elizabeth II to address the Eskom crisis.

At 4:16am on 18 September during a warm spring weekend, Eskom announced that there would be stage 6 load shedding.

The energy availability factor (EAF) had plunged to 56.07 per cent during the month until 17 September. Therefore, 43.93 per cent of capacity – almost 21 000 megawatts (MW) – was down due to unplanned breakdowns and planned maintenance.

Ramaphosa had two options. First, to listen to the growing calls of millions of South Africans for the Eskom board and CEO to be fired. Second, he could make another pointless announcement about accelerating the implementation of his energy plan that was announced on 25 July and the Renewable Energy Independent Power Producer Procurement Programme.

HEADING TOWARDS AN ECONOMIC WASTELAND South Africa had a “lost decade” from 2009 to 2019 during which gross domestic product (GDP) per capita did not grow. After a technical rebound in 2021 from the deepest recession in almost a century, the economy has returned to its pre-pandemic trend of low GDP growth.

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On this trajectory – a forecast average GDP growth rate of 1.8 per cent a year between 2020 and 2030, according to the Indlulamithi scenarios – the country will have a second lost decade. The number of unemployed people will increase to 17 million. Cycles of political and social instability will create an economic wasteland by 2030.

With an unemployment rate of 44.1 per cent and 12.3 million people without work during the second quarter of 2022, the country cannot afford another day, week, or month of load shedding. The country needs a short-term solution to the energy crisis. However, as the special feature in this magazine shows, Ramaphosa’s energy plan and independent power producers will not solve the energy crisis in the short term. The only way to solve the energy crisis in the short term is to fix Eskom power plants and increase the EAF back to 75 per cent, where it was in 2018.

This will provide an additional capacity of about 7 000MW. As former Eskom CEO Jacob Maroga, an engineer, says: “If you want to end load shedding you must focus on making sure that there is consistent performance of the current fleet. That does not need to take 24 months.” Ramaphosa appointed a new board. It must not waste any time and replace CEO Andre de Ruyter with an interim appointment – Maroga – with a mandate to stabilise the fleet within 12 months.

Duma Gqubule Editor

Acting president: Esethu Mancotywa BMF editorial committee Chairperson: Cuma Dube Members: Minty Makapela, Thulani Dube Acting managing director: Philippe Bakahoukoutela Head of communications, marketing and events: Khulukazi Mtebele Head of Thought Leadership, Research & Programmes: Xolile Kunene Address: The Eric Mafuna House, 12 Summer Street, Rivonia, Sandton, Gauteng, 2196 www.bmfonline.co.za letters@africanleader.co.za

PUBLISHED BY Picasso Headline, a proud division of Arena Holdings (Pty) Ltd Hill on Empire, 16 Empire Road (cnr Hillside Road), Parktown, Johannesburg, 2193 Postal Address: PO Box 12500, Mill Street, Cape Town, 8010 Tel: +27 21 469 2400 | Fax: +27 86 682 2926 www.businessmediamags.co.za EDITORIAL Editor: Duma Gqubule Co-Editor: Cuma Dube Content Manager: Raina Julies rainaj@picasso.co.za Contributors: Philippe Bakahoukoutela, Cuma Dube, Thulani Dube, Dineo Faku, Caiphus Kgosana, Matshela Koko, Esethu Mancotywa Copy Editor: Brenda Bryden Content Co-ordinator: Vanessa Payne Digital Editor: Stacey Visser vissers@businessmediamags.co.za DESIGN Head of Design: Jayne Macé-Ferguson Advert Designer: Bulelwa Sotashe Cover Image: Supplied SALES Project Manager: Jerome van der Merwe jeromem@picasso.co.za Tel: +27 21 469 2484 | 082 668 1496 Sales: Frank Simons PRODUCTION Production Editor: Shamiela Brenner Advertising Co-ordinator: Shamiela Brenner Subscriptions and Distribution: Fatima Dramat | fatimad@picasso.co.za Printer: CTP Printers, Cape Town MANAGEMENT Management Accountant: Deidre Musha Business Manager: Lodewyk van der Walt General Manager, Magazines: Jocelyne Bayer

Copyright: Picasso Headline. No portion of this magazine may be reproduced in any form without written consent of the publisher. The publisher is not responsible for unsolicited material.

African Leader is published by Picasso Headline. The opinions expressed are not necessarily those of Picasso Headline. All advertisements/advertorials have been paid for and therefore do not carry any endorsement by the publisher.

AFRICAN LEADER ISSUE 57 | OCTOBER 2022

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BMF EDITORIAL COMMITTEE

FINDING MEANINGFUL

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e seem increasingly incapable of dealing with complexity.

Many, if not all, of the issues debated in this issue are complicated.

They can’t fit in the ideological packages we have designed. The greatest obstacle with ideological packages is that you must accept them wholesale. You can’t just choose the most useful parts and discard the rest. It isn’t clear that a single ideological perspective can produce the sustainable solutions we need to the many challenges we face.

In South Africa, these perspectives range from populist revolutionism, bordering on the delusional, to the extreme “wokeness”, bordering on the ridiculous. Both ends of our political spectrum have simply gone too far. Many of the ideas on the table are tied too tightly to a single ideological perspective, where the answer may lie somewhere in the middle. Somewhere reasonable, where the data matters, and where the leadership is both responsible and capable.

Considering the themes we explore in this issue of African Leader, for instance, we can’t afford the debate around energy policy to simply be a choice between privatising Eskom or keeping it all under state control. The just transition isn’t quite as simple as a choice between mining jobs or no jobs at all. The debate around the political leadership needed to Cuma Dube address all the above can’t be reduced to a choice between the ANC and a DA-led coalition.

It’s more complicated than that.

CHANGE

We do our best to present the less heard side of the debate on the issues we face around our energy security, how we can manage an economy in transition and the political leadership we need to usher in a brighter future for all South Africans. We do so, appreciative of the fact that it may be difficult to debate these issues in our country without them being overpoliticised. At the root of these challenges was a deliberate political agenda to deprive the many and benefit the few. We still live with that in our everyday lives. We still carry the trauma of our past and an innate distrust for any solutions that do not promise rapid and sweeping changes in the lives of the black majority.

It will take courageous leadership to make the difficult choices we need to make to secure our future.

The success or failure of whatever path we choose to deal with our challenges will come down to the leadership challenge.

It will take courageous leadership to make the difficult choices we need to make to secure our future. The leadership culture in our country is not what we intended it to be at the dawn of our democracy.

It poses the single biggest threat to our sustainable development. Leaders are often in positions of great influence and power, which can be used for good and evil. We have great leaders, but

in too many instances, our leaders have exercised their power and influence in ways that have had negative consequences for all of us.

If we are to have any hope of dealing sustainably with load shedding and the economic infrastructure we need to grow our economy and create jobs, we will need outcomes-based leadership rooted in African servant leadership. Leadership obsessed with making meaningful change in the lives of the majority. It can only be this type of leadership that can hope to make the best possible policy and economic choices as we navigate an economy in transition. Courageous enough leaders to help us escape the ideological packages that have imprisoned us for so long and find the reasonable and sustainable middle.

We hope that this issue, under the stewardship of the Black Management Forum editorial committee, may begin to help us find that middle. It is somewhere in the middle where we can find meaningful change and the tools to manage that change properly for it to be sustainable. It may take us longer than expected to find the middle, but it begins by learning to listen to those who may hold opposing views to your own.

With this issue of African Leader, we would also love to hear from our readers on what they believe are the choices we need to make to overcome our many challenges. Write to us and weigh in on the ideas presented in this issue or present ideas of your own. You can reach us via email at letters@africanleader.co.za.

Cuma Dube, MBA Chairperson: Editorial Committee

Leaders are often in positions of great influence and power, which can be used for good and evil.

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WATER SCARCITY AND WOMEN’S ROLE IN PROTECTING AND PURIFYING IT Rand Water believes the answers to dealing with water scarcity and ageing infrastructure are digital transformation and more women joining the sector, writes Rodney Weidemann

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hile water is important for life and thus a fundamental human need, it is a scarce natural resource that is frequently taken for granted. South Africa is a water-scarce country that has been negatively impacted by climate change in recent years. Yet, private residents and commercial users expect water to be accessible at the turn of a tap.

As water is a finite resource, those in charge of our water supply security must be sufficiently organised to face the numerous challenges associated with abstracting, purifying, and transporting this life-sustaining liquid to consumers with minimal loss.

Nthabiseng Mosupye is the chief information officer (CIO) at Rand Water.

She notes that overcoming these challenges is a high priority for the organisation as it aims to meet its mandate of ensuring that bulk potable water can be provided to the people through municipalities at the turn of a tap.

“One of the key issues we face is ageing infrastructure, such as old pipelines and control systems. Due to

the age of these pipes, they are also more prone to leaking, so the best-of-breed technology solution is utilised to rapidly locate leaks and increase the repair turnaround time,” she explains.

“Changing weather patterns as a result of global warming have increased our water scarcity problem; in fact, it has intensified the challenges of water security and supply. Adding to this challenge are the cash flow difficulties caused by municipal payment defaults.

Municipalities are experiencing substantial cash flow issues and a constant downward spiral, which negatively undermines Rand Water’s efforts to enhance its operating efficiency and infrastructure.”

As a CIO, she is adamant that implementing digital technologies is the key to helping resolve these many challenges, noting that such solutions are ideal for automating previously manual processes and effectively identifying failures or problems within the system.

data, analytics and artificial intelligence (AI). Essentially, it entails employing robots to utilise the datasets from our automated processes and AI to parse the information, which enables us to calculate the age of certain infrastructure and when it requires replacement, enabling us to be proactive about maintenance.”

“Digital twinning is another technology that can really benefit us. This is a process similar to virtualisation, where

Nthabiseng Mosupye

DIGITAL DRIVE

“At Rand Water, we are looking at implementing what we refer to as ‘databotics’ – a combination of big

“Changing weather patterns as a result of global warming have increased our water scarcity problem; in fact, it has intensified the challenges of water security and supply.”

– Nthabiseng Mosupye 6

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ADVERTORIAL: RAND WATER

the operational environment of a plant is simulated virtually. This allows operators and engineers to be trained in its functionality and maintenance in a completely safe environment, without impacting the day-to-day operations.”

The internet of things (IoT), according to Mosupye, is an additional digital solution being implemented at Rand Water. Smart water meters are equipped with sensors that transmit real-time data that aids in understanding customer water consumption; this information is crucial for invoicing and makes the process less cumbersome.

IoT sensors are also useful for monitoring infrastructure, and are installed in new pipes, enabling leak monitoring and detection of other infrastructure failures. While this is done with new infrastructure, it is cost-prohibitive to implement this technology in older infrastructure and would at the very least demand a proper cost/benefit analysis,” she says.

“In addition, there are citizen-centric applications that allow users to notify Rand Water of identified leaks by taking a geotagged snapshot of the situation, which enables us to pinpoint the exact location and time the image was captured. Then, with good integration between ourselves and the

relevant municipality, we can swiftly ensure the situation is addressed by the appropriate personnel.”

Mosupye suggests that a key aspect of Rand Water’s digitisation is the move to a hybrid cloud environment. This, she adds, is the foundation of its digital transformation strategy and is essential if the organisation is to be future-proof in a technologically advancing world.

“From an organisational point of view, the benefits of digitisation will accrue in the form of management optimisation and enhanced efficiency, along with access to more relevant data for decision-making, which will be improved through such access. The more big data we gather from our customers, the more effective and efficient our capabilities will become.”

to catch up with their male counterparts in the technological space.

Since time immemorial women have always understood the vital role water plays in the general wellbeing of a society, for example, hygiene, gastronomy and sustenance farming. Levelling the STEM playing field will inevitably empower women to play more pertinent roles in the water technology space.

“Not only do women bring diversity to an organisation, but they also bring unique qualities that strengthen its fabric,” says Mosupye. “In a nutshell, we can consistently deliver synergy to an organisation. We strive to ensure that the whole is greater than the sum of its parts.

“We take pride in recruiting young female engineers and water practitioners.

Furthermore, we invest substantially in the youth in myriad ways, be it at the schooling level (primary and secondary), tertiary level, and those who have just entered the job market. The message we drive home at school level, is to encourage pupils to take interest in STEM subjects, which are the bedrock for the future development of our country.

Most importantly, it will provide our organisation with much-needed human capital and vital digital technology,” explains Mosupye.

“Women make up 42 per cent of the total population, and Rand Water’s objective is to increase the number of women who actively participate in the digital technology sphere so that we can jointly leave an indelible imprint on future generations,” concludes Mosupye.

GENDER DEVELOPMENT

Gender disparity in the technology space is cause for concern; to put it mildly, women are way behind. One of many reasons is that girls are not encouraged to pursue careers in science, technology, engineering and mathematics (STEM) fields, hence the gender disparity in the technology space. Social partners (government, business and labour) should make a concerted effort to overcome this STEM divide for women

IoT and

➔ Scan this QR code to go directly to the Rand Water website.

For more information: 0860 10 10 60 customerservice@randwater.co.za www.randwater.co.za

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MD’S NOTE

SHAPING OUR

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he release of the Zondo Commission Report Volumes 1–3, which highlighted serious governance and leadership deficiencies particularly in South Africa’s state-owned enterprises as represented in various testimonies made under oath, reflects some of the critical challenges we as the country face and must navigate within organisations as leaders and citizens. It is within this very charged context that the board of directors converged to craft and refine a strategy that seeks to shape the immediate future of the organisation in its quest to contribute towards improving the socioeconomic status of the country.

As we do so, we are mindful of the immense task before us as the advancement of socioeconomic transformation is marred by antitransformation sentiments from established business on the one hand and government’s blurring of direction and policy on the other. For this board, it is imperative that we reimagine South Africa in the Black Management Forum’s (BMF) image, reflective of a decisively transformed landscape with the next phase in championing socioeconomic and sustainable transformation as the primary focus to contribute to the improvement of the quality of lives of the black majority, in particular, and all South Africans, in general.

While our recent strategy has and continues to make significant progress in the pursuit of our mandate, more must be done to strengthen its focus and capabilities to carry out the aspirations of black professionals in South Africa in the main.

Addressing the developmental needs of our members where it matters the most and championing issues that must profoundly impact the BMF and the country at large is what the board is prioritising further.

The new strategy presents a BMF charged with creating inclusive societies

FUTURE

Philippe Bakahoukoutela, acting managing director of the Black Management Forum, shares that the BMF is still committed to socioeconomic advancement

Philippe Bakahoukoutela

underpinned by the principles of good governance and meaningful transformation as they relate to the values that have been foundational to the BMF. As we strive to redefine South Africa in our own image, one is reminded of Richard M. Kovacevich’s quote: “A vision and strategy aren’t enough.

The long-term key to success is execution.

Each day. Every day”.

A significant part of the strategy focuses on repurposing the Basotho Hat model introduced nearly three decades ago by the BMF before the dawn of the democratic dispensation we now enjoy. It champions good corporate governance and seeks to ensure that the much spoken of critical

mass of black managers and professionals is realised through training and active lobbying for the advancement of these managers into key positions both in the public and private sectors. The Basotho Hat Model was developed to unlock managerial structures and prepare the environment for new talent in the system. The hat’s triangular shape was used to set affirmative action targets at each level of employment, using the Paterson grading system. This may also be used to set developmental targets for our managers as they grow in their careers and within the programmes we offer as an organisation. The model is intrinsically a tool that can be used to monitor human capital development and upward mobility in business and can be adopted by corporate South Africa as a tool to drive transformation in business.

As we champion significant growth of the country’s economy enabled by various key players, another important aspect of this plan is to be deliberate in ensuring our financial sustainability as the organisation, which is core to our continued existence, relevance, reach and longer-term impact.

We seek to achieve this by growing our membership base by providing high-value development programmes and being responsive to the needs of our members from a public policy perspective.

We seek to deepen our relationships with our stakeholders and enter into meaningful partnerships for socioeconomic transformation and the development of knowledge on how we can grow our economy more inclusively.

The execution of this plan will require the involvement of all relevant structures of the organisation, our corporate sponsors, and broader stakeholders at large. This will happen through the collective efforts that must be made to promote, co-ordinate, and execute the strategic objectives outlined in the plan.

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ACTING PRESIDENT’S NOTE

LEADERSHIP FOR A

SOCIETY IN TRANSITION

Esethu Mancotywa CA(SA), acting president of the Black Management Forum, shares that we can change leaders, or the organisation trusted to lead our nation, but very little will change if the leadership culture in South Africa is not transformed

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commitment to transformation of the prevailing leadership culture in our society is needed to deal with the many challenges we face. This should be at the heart of the gender agenda and the political leadership debate.

My prayer is that a debate on the leadership we need for a society in transition on so many fronts revolves around developing more inclusive theories of management practice and leader behaviour. Theories that are inclusive of women, to be more specific.

The inclusion of women may be the catalyst we need to transform African leadership to be more responsive to the complex issues we must contend with to be successful.

According to Dr Isaac Wanasika et al., so much of how we have tried to understand the type of leadership we need has been based on western theories and commentaries on political leadership, pre- and post-colonial leadership dynamics and current leaders. The answers we seek may lie closer to home. How we go about solving our issues and redefining the future may lie in theories that do not ignore cultural differences based on the assumption that people are always individualistic, looking only to benefit themselves, and transaction-oriented.

For all its faults, and particularly its treatment of women in some instances, African culture places a higher premium for social wealth to be realised in a way that does not limit individual motivation to pursue your dreams.

Esethu Mancotywa

CHANGE IN LEADERSHIP CULTURE REQUIRED

Our current leadership culture in South Africa has become a breeding ground for corruption, poverty, tribalism, and violence.

Violence against the poor in the way their needs are unmet, and violence against women in their continued exclusion and exploitation.

It can be argued that our leadership culture is selfish, lacks accountability, is short-sighted, shaped by insecure cliques, and has a general disdain for competence and new ideas. It is a culture that is suspicious of emerging talent with new ways of doing things; and it comes across as unsupportive of women.

Before we can define the leadership needed, we need our transitioning society to work hard to ensure that any leaders we choose do not perpetuate all that is unproductive about our leadership culture as a nation. For many, these comments may not be fair. We are a nation that has produced some of the most inspirational leaders over more than a single generation, both in the public and private sectors. But these are not comments on the characteristics of a single leader, or maybe even a few, but rather a comment on what “leadership” in general has become in South Africa.

As the Black Management Forum, our objective of creating managerial leadership through the many programmes we offer is our attempt to create leaders who are action-oriented and decisive in implementing programmes for change and economic development. Leaders who can transform the leadership culture and be champions of a leadership culture that is inclusive, participative, values-based, accountable, responsible, and that places the long-term interests of the organisations they serve over their own short-term interests.

The foundational competencies of this type of leader, best placed to thrive in a new leadership culture, will be our contribution to the debate. All our efforts to achieve that leadership to overcome many of the challenges are presented in this issue of African Leader.

It can be argued that our leadership culture is selfish, lacks accountability, is short-sighted, shaped by insecure cliques, and has a general disdain for competence and new ideas.

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ADVERTORIAL: NAACAM

ACCELERATING SKILLS DEVELOPMENT A new partnership is driving skills development in dynamic automotive value chains.

By Taryn Marcus Group HR Executive at Metair Investments Limited

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he arrival of the fourth industrial revolution (4IR) has accelerated technological trends and changed the way automotive components and vehicles are manufactured and assembled.

Capitalising on these trends and the opportunities they will unlock for productivity gains, streamlining processes, enhanced customer service, unearthing new market opportunities, and managing climate change, requires the right set of skills within the workforce.

These skills are necessary to support the growth and development of the automotive components manufacturing sector and to safeguard its sustainability for decades to come.

Impactfully upskilling graduates, job seekers and the youth in key skill sets relevant to supporting the incorporation of 4IR production methodologies and shifting the needle to enhance technological advancement and competitiveness on a global stage requires more attention, investment and effort from all industry participants.

PARTNERING TO EFFECT GREATER SECTOR-WIDE SKILLS DEVELOPMENT FOR FUTURE-READINESS

skills advancement programme that aims to create a new industry standard in developing manufacturing skills to support the automotive component sector’s growth and sustainability.

Metair is a leading international portfolio of companies that manufacture, distribute and retail automotive component and energy storage products and solutions for South Africa as well as for export to approximately 46 countries. NAACAM is recognised as the voice of the South African automotive component industry and is a member-driven organisation at the forefront of industry leadership, representation and stakeholder engagement for automotive component manufacturers. merSETA is a Sector Education and Training Authority tasked with increasing access to high-quality and relevant skills development and training opportunities within manufacturing, engineering and related services to reduce

inequalities and unemployment while promoting employability and participation in the economy.

Over the next four years, 145 bursaries, 65 skills development programmes and 22 apprenticeships will be awarded to successful candidates to lay a foundation of skills development for the current and future requirements of the sector.

These programmes will give preference to youth, people with disabilities, and female applicants, particularly African females, who are greatly under-represented across this historically male-dominated industry.

This public-private partnership represents the ideal type of collaboration between key industry stakeholders who come together to find precise solutions to realise specific targets. The programme directly addresses a number of the objectives of South Africa’s Automotive Master Plan to 2035, including a doubling of employment and increasing local content to 60 per cent by 2035.

Metair Investments Limited (Metair), the National Association of Automotive Component and Allied Manufacturers (NAACAM), and Manufacturing, Engineering and Related Services SETA (merSETA) recognised this need and have collectively initiated a bursary and 12

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ADVERTORIAL: NAACAM

REVVING UP TECHNICAL SKILLS High Gear – a collaborative public-private partnership – is positioning the South African automotive component manufacturing industry as a leader in strengthening the country’s technical skills development ecosystem. By Khalil Patel International Youth Foundation (IYF) Programme Manager, South Africa

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CURRICULA ALIGNMENT

Aligning South Africa’s public TVET college system to better meet the needs of employers has historically been hampered by limited industry involvement in curriculum design and delivery. However, with NAACAM as an anchor partner, High Gear draws on the knowledge and expertise of the association’s membership base – more than 130 automotive component manufacturers – and translates that into actionable partnerships with the TVET system.

Ongoing curricula alignment and lecturing capacity strengthening activities, including lecturer training and industry exposure opportunities, both of which are built into the High Gear model, position TVET qualifications as flexible frameworks for regular and dynamic updates as industry needs evolve.

A strong TVET system is key to supporting economic development

and addressing youth employment challenges. High Gear creates a skills innovation culture within the industry that will yield long-term benefits for South Africa. High Gear is designed to be a sustainable, scalable initiative owned and led by industry and government partners to ensure that demand-led course delivery consistently rejuvenates TVET qualifications, strengthens a skills ecosystem, and supports the growth of public TVET colleges into recognised centres of learning excellence.

As a critical component of High Gear’s development of sustainable employment opportunities, NAACAM and IYF have launched a digital career experience platform (www.yakhifuture. org.za). The platform provides TVET students and other young people with the opportunities to explore career pathways in automotive component manufacturing, develop industry-relevant skills through interactive mini games and online engineering study aids, and search for entry-level jobs through linkages to the Office of the Presidency’s SAYouth. mobi platform.

Introducing Yakh’iFuture, an online career experience platform for TVET college students. Scan the QR code to get going

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igh Gear – a partnership of educational institutions, associations, and government departments led by global nongovernmental organisatiom International Youth Foundation (IYF) – was conceptualised and implemented as a skills development initiative to bring about the actualisation of the South African Automotive Masterplan: Vision 2035. The master plan aims to increase local vehicle assembly from 540 000 cars in 2019 to 1.4 million cars (one per cent of global vehicle production) by 2035 while increasing local content in South African assembled vehicles from 40 to 60 per cent, The High Gear programme partners with the country’s public technical, vocational education and training (TVET) colleges to develop an industry-aligned skills pipeline to bridge the gap between TVET colleges, industry players, employers, and government and to ensure students receive marketrelevant and work-ready training.

IYF, in partnership with the National Association of Automotive Component and Allied Manufacturers (NAACAM), the Department of Higher Education and Training (DHET), the Quality Council for Trades and Occupations (QCTO), and international funders, established High Gear, through which it acts as a convenor to provide a blueprint for greater industry involvement in TVET course design and delivery. It aims to yield positive returns for young people and employers.

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BIDVEST AND BMF HOST EMPOWERMENT SESSIONS

From left: Phumzile Mlambo-Ngcuka and Esethu Mancotywa.

The attendees of the 60 minutes with Busi Mabuza..

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he BMF Women Empowerment Desk has partnered with Bidvest to build a community of informed and empowered women leaders who will act as change agents in support of the BMF Women Empowerment Desk’s mandate to make a meaningful difference in transforming corporate South Africa. True to this objective, the partnership was inaugurated through several key initiatives.

60-MINUTE CONVERSATION WITH WOMEN IN LEADERSHIP

The 60-minute conversations were launched to create safe spaces for female leaders to meet with like-minded individuals and discuss issues they face in their arduous leadership journeys without the inhibitions

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From left: Tsakane Maqayiya, Gugu Dube, Esethu Mancotywa, Nozizwe Somngesi, Busi Mabuza (IDC CEO), Shumani Khwashaba, and Thulisile Simelane.

of being judged. The conversations host a limited number of women in each session who draw from the experiences, insights, and learnings of female executives, professionals, and CEOs to help guide and support them as they move up into leadership positions.

FIRESIDE CHAT WITH DR PHUMZILE MLAMBO-NGCUKA

The Women as Agents of Change event was a fireside chat hosting Dr Phumzile Mlambo-Ngcuka in conversation with BMF deputy president Esethu Mancotywa. This women’s month celebration aimed to highlight the empowerment of women as key to socioeconomic transformation. The critical highlights below summarise the main discussions for the evening.

Legal reforms and constitutions relating to women

Several laws and constitutions have been changed to ensure gender equality and the inclusion of women. Dr MlamboNgcuka unpacked how just changing the laws is not sufficient; societal norms also need to change. Countries such as South Africa have problems where patriarchy, traditional leaders and cultural customs undermine constitutions and laws enacted to empower women.

And in as much as there are regressive and stubborn societal norms against women, it is possible, although difficult, to bring about the necessary change with enough time and the correct change agents within these societies/ communities. Dr Mlambo-Ngcuka added that biological differences

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EVENTS

between men and women do not define gender, but determine sex and physiological differences.

Gender, on the other hand, is learned. It is a societal shaping of you as a human being and can be changed at any time in one’s life.

Building alliances in the women’s emancipation agenda

BMF Western Cape Executive Committee

Building a solid support base for the women’s agenda cannot only be up to the government and civil society. Dr Mlambo-Ngcuka explained that gender inequality is not a “women’s problem” as men foster it and, as such, they must take on the responsibility of bringing about the needed change. And once they have come on board and done the work, we need to ensure that we do not put them on a pedestal because – “you cannot praise a fish for swimming”. To achieve a significant step change, women must have strategic alliances with men and continuously expand the number of people fighting for gender equality.

Balancing empowering self and empowering society

From left: Jackie Khumalo, Esethu Mancotywa, Buhle Hanise, and Lusanda Ncoliwe.

Women place much focus on self-empowerment, and rightfully so because it is with that power that they gain the necessary influence and authority to empower other women.

However, the opportunity cost at times becomes the lack of focus on the more significant societal challenges. Dr Mlambo-Ngcuka emphasised that a true feminist is not focused just on herself and women, but on all the minorities and the people whose rights are not respected in society. “You cannot be a true feminist and be homophobic, ageist or a climate denialist,” she said.

The benefit of thinking about women is the ability to bring into the fold all the issues that impact the society one lives in and works for.

To ensure that as you fight for gender equality, you fight to address all the other issues and their collective contribution to the oppression of women. “Those who focus solely on empowering women tend not to understand that we are not building a women’s colony, but a healthy society in which both men and women can thrive,” Dr Mlambo-Ngcuka said.

From left: Khulukazi Mtebele and Jackie Khumalo

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THE 9TH LOT NDLOVU LECTURE

Terry Hlatshwayo, Nondima Nkuhlu, Prof Nkuhlu, Zanele Ndlovu, and Connie Kent.

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osibudi Mangena delivered the 9th Annual Lot Ndlovu Lecture in Midrand on 25 August. He gave a challenging lecture, aimed directly at the petite bourgeoisie who, he argues, are fully in charge of the state. He stood before all as a towering father figure, unearthing the trappings of wrong foundational education principles that have created a gap in the black mind. He said: “Education is the greatest leveller of them all. Look no further than Lot Ndlovu. With his education, this son of farm workers became indistinguishable from the sons and daughters of teachers, Mosibudi Mangena, Shirley Machaba, and Prof Wiseman Nkuhlu.

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lawyers, priests, doctors and business people. Lot Ndlovu is a study in perseverance, grit and determination.

Through sheer doggedness combined with brilliance, he rose from dust to a decent life.”

Mangena further challenged black people to emulate Lot Ndlovu and work towards transforming our country. The challenges we face are a result of the petite bourgeoisie, and this class of leaders must change the status quo. He stressed that we must advance the economic, educational and social upliftment of the black community.

Mncane Mthunzi, Mosibudi Mangena, and Monde Ndlovu.

Prof Wiseman Nkuhlu, Esethu Mancotywa, and Mzolisi Diliza.

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ADVERTORIAL: DUKE CORPORATE EDUCATION

RETHINKING LEADERSHIP IN AN ESG WORLD The pace of change taking place in the world is exponentially greater than at any time in human history.

By Sharmla Chetty, CEO Duke Corporate Education

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he highly respected neuroscientist, Vivienne Ming, once said “the world has never been this fast and will never be this slow again”.

As we reflect on the challenges ahead, it is clear that all aspects of leadership will be put to the test if we are to effect change. Make no mistake, the rise of ESG (environment, social and governance) is here to stay.

The skills and mindsets of yesterday will require a dramatic shift at scale and speed if organisations are to survive and thrive.

In South Africa, achieving a “just energy transition” will be essential in ensuring that the lives and communities that are tied to high-emitting energy industries are not left behind in the shift towards a low-emissions economy.

We must explore how this can be a driver of new jobs, social justice, and poverty eradication.

NEW IDEAS, NEW SOLUTIONS, NEW LEADERSHIP

IMAGE: SUPPLIED

Only new forms of leadership can deliver the ideas and solutions to save a troubled world. That was the clear outtake of Duke Corporate Education’s (CE) recent global virtual summit, attended by over 1 600 delegates from more than 70 countries.

According to the Edelman Trust Barometer, trust in business rose sharply during the COVID pandemic. However, this gain may be squandered unless

companies are authentic in their actions, warned Dean Bill Boulding of Duke University’s Fuqua School of Business.

The answer? Build purpose into the very core of your business.

Chief People, Policy and Purpose officer Fran Katsoudas cautioned against “false choices”, telling Duke CE delegates that there is “a belief that you can be good for business, or you can be good for the world; but you just can’t do both. And here’s the thing – you can”.

This was echoed by Anglo American’s Seara Mkhabela, executive head of Corporate Affairs, who told guests at a separate Duke CE event that their commitment to purpose over the past decade has yielded positive results for both society and their bottom line.

“It starts with the leadership at the top, but it must cascade throughout the organisation to the men and women who go underground,” she told our guests.

CEO of Fortune Media and author of Tomorrow’s Capitalist Alan Murray revealed three key shifts in business today.

1. Generational change: employees and customers are forcing businesses to adapt.

2. Value creation: over the past 50 years, the value on the balance sheets of Fortune 500 companies shifted from being 80 per cent physical stuff to 85 per cent intangibles, such as intellectual property, brand connection and customer loyalty.

The skills and mindsets of yesterday will require a dramatic shift at scale and speed if organisations are to survive and thrive.

Sharmla Chetty

3. Leadership change: the C-suite command-and-control model of leadership is obsolete, requiring leaders to empower employees and inspire action. “It’s much less about telling people what to do and far more about setting the North Star, setting the purpose,” said Murray.

DUKE CE’S ESG LEADERSHIP ACADEMY

In light of these increasing leadership challenges, Duke CE established the ESG Leadership Academy, headed

by Andrés Saint-Jean. “The academy helps leaders shift mindsets and deliver impact at scale through our learning journeys,” he says. “However, research has shown that to facilitate change, leaders must shift the behaviours of at least 30 per cent of the organisation.”

This initiative aligns with Duke CE’s purpose of empowering leaders to change organisations that change the world. We dare not delay. The world is getting faster by the second.

➔ Scan this QR code to go directly to the Duke website.

For more information: www.DukeCE.com

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AN AFRICAN LEADERSHIP STORY Mteto Nyati, executive chairperson, Wazo Investments, shares what it means to be an African in leadership. By Cuma Dube, chairperson of the BMF editorial committee

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he transformation from the Organisation of African Unity to the African Union in 2002 represented a shift from Pan-Africanism to a strong emphasis on economic growth and social development in which regional communities would be the foundation for continental integration. This called for an African corporate leader who could create value for all stakeholders and inspire and drive societal transformation. Mteto Nyathi is one of those leaders.

Nyati’s corporate leadership story has inspired many. He has made an invaluable contribution to what can be called Africa’s leadership culture. A uniquely African leadership paradigm that places people and community at the centre of how leadership is exercised.

Nyati advises that leadership in Africa should be built by leveraging our strengths and learning from those who practise leadership differently to find what will work best for overcoming our leadership challenges in pursuing our long-term vision for the continent.

He says: “We seem to be effective at mobilising people and getting them to do things. That is a good quality. In some areas though, like holding others accountable, we are not the best. So it is a mixture – you need to take the best out of all these qualities and see what works in your environment.”

NYATI’S LEADERSHIP STYLE

At the centre of Nyati’s leadership philosophy is the principle of Ubuntu.

“You are there because of other people.

They are there because of you … you can see the interconnectedness of people,” he says.

While reluctant to generalise, he believes this foundation is what sets us apart and

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Mteto Nyati

what could be the source of our competitive advantage. Our interconnectedness is an aspect that has not been explored fully in African leadership. “ For me, its critical to be an African in leadership.”

Nyati has demonstrated this philosophy in his own leadership story.

His time at Microsoft South Africa (SA), MTN-SA, and ALTRON, to mention a few, reveal a self-aware leader who embraces who he is and is driven by his core values of family, fairness, excellence, and integrity. He says: “If I don’t bring

aspects of my African identity into leadership, I won’t be able to differentiate myself. So, I have always tried to bring my full self and my blackness into any job. Coming from the rural areas of the Eastern Cape makes me different.

Bringing that difference means people experience me in different ways.”

His leadership style has led to his recognition as a master strategist and a reputation as a turnaround specialist and ethical leader. In an interview with Forbes Africa, Nyati puts this down to

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IN CONVERSATION WITH …

simply surrounding yourself with the best people and learning how to build a capable team of people.

Consistent with his leadership philosophy, Nyati’s focus on people, teams, and community is central to his leadership story. He speaks passionately about the lessons learned from his mother and about respect for the people with whom you work. He explains how that inspires teams to go the extra mile, “to give you the discretionary effort” to achieve the bigger picture because they feel heard and their ideas are implemented. This is a simple aspect of leadership we may not be tapping into enough in the African context, he says.

“You need to see people; maybe many of us don’t quite see them, we don’t recognise them. We don’t even know where they come from. You need to just trust people – of course, some will disappoint you, but generally, people will go all the way in executing and doing exceptional work. So, the people side of the equation has been the thing that sets me apart, I think.”

Nyati’s focus on people extends to how he thinks about customers. He credits his leadership successes in his various roles to understanding what customers really need, not just selling them what you have produced.

IMAGE: SUPPLIED

THE CULTURAL INFLUENCE

While African culture and, particularly, the principle of Ubuntu can be a source of competitive advantage for the African corporate leader, Nyati warns that some aspects of our culture could arguably be at the root of some of our leadership failures and challenges. “Generally, our culture does not hold people or leaders accountable. If you go to our chiefs, there are no platforms where we say, ‘Hey Chief, come and account to us’.”

But these challenges presents opportunities for growth. “We need African leaders who are capable of turning our challenges into opportunities for economic growth and social transformation. The African leader we need is one that can build a

“We need leaders who care enough to give us the tools to do things, not do them on our behalf. We are a proud people. We need to be woken up to our potential.” – Mteto Nyati business around helping our people.

There is economic opportunity in solving black problems.”

There is social transformation in empowering our people to exploit these opportunities themselves.

“What is required today is leadership that is not just about feeding people and giving and making them dependent. It is leadership that wakes people up and makes them independent, makes people go and solve the problems around them. We need people who care enough to tell us the truth. We need leaders who care enough to give us the tools to do things, not do them on our behalf. We are a proud people. We need to be woken up to our potential, that is what is required right now.”

IN SERVICE OF PEOPLE AND THE COUNTRY

Nyati’s leadership is about people and in service of people. His views on the many challenges we face are punctuated by his values and what is in the best interests of people and society at large. His leadership journey teaches us that a leader must be self-aware. While we may find the leaders to empower us to do things for ourselves and better serve our communities, we must do so knowing what we are and aren’t good at.

This is also his approach to whether black professionals should get more involved in public service. While he can serve as a director in a troubled stateowned company, where his skills as a master strategist and turnaround genius may be perfect for the job, it isn’t for everyone, he says. In his view, how the black middle class can serve is not limited to working in government or getting involved in politics.

Our most pressing issues are poverty, unemployment, and inequality. And, Nyati adds that the solutions to these problems

may not lie exclusively in the political space or state-owned companies. “Jobs are created by enterprises, by entrepreneurs...

We must be introspective and ask ourselves where our individual gifts lie and where they are best placed to serve and help fight for these pressing issues.”

It is this type of introspecton that saw Nyati accept the invitation to take up a board seat at the embattled Eskom.

He feels he now has the experience and the skills to contribute. “I’ve always been driven by looking for challenges.

Where there is a mess, that’s where I will go. When people are running away, I’m going there. That’s me. This fits the profile of the kind of thing that I can do.

I have got the time to dedicate myself to supporting the leadership of Eskom to get us out of this challenge.”

On the issues facing Eskom and the debate around just transition, his approach is both practical and reasonable.

“We’ve made significant investments in coal and coal-powered generation in Medupi and Kusile. We cannot afford to write those investments off.

Ninety per cent of our generation capacity depends on coal. However, we have also made commitments as a country that the new investments we make must consider sustainability and green energy. We need to make responsible decisions based on what we have, how we can best overcome the environmental challenges and be prepared to invest in green energy for new generation capacity. This green energy will create new industries we have not even thought of; that’s where we’ll see a lot of employment.”

While Nyati speaks for himself here and not in any way for the entire Eskom board, what is encouraging is his clarity and commitment to finding reasonable solutions to our challenges that will benefit society at large and open us up to new opportunities.

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ADVERTORIAL: MPUMALANGA ECONOMIC GROWTH AGENCY

FUNDING FOR A MORE EQUITABLE FUTURE The Mpumalanga Economic Growth Agency is aware of the funding required to address the developmental challenges in Mpumalanga province. How it approaches these tasks is informed by the global and national contexts. By Isaac Mahlangu chief executive officer, Mpumalanga Economic Growth

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he global economy is in a deep recession exacerbated by the COVID-19 pandemic, which not only affected dayto-day life, but slowed down the economy and disrupted world trade and movements.

When 2022 began there was hope that widespread vaccination roll-out would assist in addressing challenges posed by this pandemic. However, evidence suggests this is not the case. The conflict in Ukraine, surging inflation, and rising interest rates have led to the World Bank and other global institutions revising their outlook for global economic growth for the year.

Unfortunately, South Africa’s economy remains weak with structural challenges such as the crippling energy crisis, transport and logistic inefficiencies and the impact of natural disasters such as the floods that rocked South Africa’s third-largest regional economy, KwaZulu-Natal.

On a positive note, the first quarter of 2022 witnessed economic growth that surpassed the pre-COVID-19 levels of 2019. Nevertheless, COVID-19 intensified the country’s intractable socioeconomic challenges, and, by extension, those confronting Mpumalanga province.

Unemployment in the province remains stubbornly high and income inequality levels are also high as a result of the pandemic – the losses in labour and business income exacerbated poverty and economic and social inequality.

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Isaac Mahlangu

MEGA TO HELP ECONOMIC RECOVERY

It is within this context that the Mpumalanga Economic Growth Agency (MEGA) is enjoined to be at the centre of provincial post-COVID-19 economic reconstruction and recovery efforts focused on boosting demand, providing replacement income, and facilitating new investments.

In providing funding mainly for formerly disadvantaged individuals, MEGA is fulfilling its mandate to provide funding in respect of property development, approved enterprise and agricultural development.

Providing funding for an equitable future is one of MEGA’s obligations, made more necessary by the glaring inequalities in the province in terms of access to opportunities and finance for budding entrepreneurs.

Through its adopted programmes and strategies for youth, women and the most vulnerable, MEGA seeks to “democratise” entrepreneurship by overcoming the barriers to business creation that entrepreneurs from under-represented backgrounds typically face.

However, MEGA is unable to meet all its funding needs or attain its desired targets considering the pandemic and the country’s weak fiscal outlook.

A NEW FUNDING PARADIGM

Funding for a more equitable future calls for thinking outside the box and leveraging to attract financially strong institutions and organisations that also attach value to a prosperous, inclusive and environmentally resilient province.

Going forward, MEGA will prioritise a “funding and financing” rather than a “funding” paradigm. This will be to support the structuring of different financial flows to achieve a common result.

Supporting entrepreneurship development in the province to promote a more equitable future calls for collaboration with the financial sector in the province. MEGA will strengthen ties with commercial banks and development financial institutions.

Commercial finance can and should play a large part in funding a more equitable future. Research has shown that the country’s small, medium, macro and micro enterprises provide a compelling, largely untapped market opportunity for innovative funders who are able to develop new lending models and risk assessment tools tailored to address the challenges of this complex and burgeoning market.

New innovative funding solutions include sustainable investing, such as environmental, social, and government bonds. MEGA is ideally placed to ensure these are harnessed to maximise impact in our province.

➔ Scan this QR code to go directly to the Mega website.

For more information: www.mega.gov.za

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THE ENERGY CHALLENGE

AN ANALYSIS OF THE EMERGENCY ENERGY PLAN Duma Gqubule argues that government must consider implementing a power engineering (or technical) version of business rescue for the energy sector

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n 1998, the government published an energy white paper, which said: “Although growth in electricity demand is only projected to exceed generation capacity by 2007, long capacity expansion lead times require strategies to be in place in the mid-term, in order to meet the needs of the growing economy.”

But the government decided that Eskom should not build new capacity because it wanted to invite independent power producers (IPPs). The IPPs did not materialise because the cost of electricity was too low for companies to make a profit. As predicted, the power blackouts started in 2007.

Almost a quarter of a century after making this disastrous decision, the government is repeating the same mistake and has gone back to the 1998 playbook. At the end of July, President Cyril Ramaphosa responded to a month of severe power blackouts, announcing an emergency plan that again pinned its hopes on IPPs and an improbable surge in private sector investment to generate new capacity.

This was within the context of a deep economic crisis. Gross domestic product per capita has not grown for 15 years. Eskom is South Africa’s most important macroeconomic policy issue.

National Union of Metal Workers of South Africa general secretary Irvin Jim says: “From 2018 to 2022, the cost of load shedding to the economy has not been less than R500-billion. Eskom’s rolling blackouts constitute the most dangerous threat to existing jobs in the manufacturing sector – and across all other sectors of the economy.”

Irvin Jim

FINANCIAL MESS

There are three reasons why Eskom is in such a financial and operational mess. First, Eskom had an inadequately capitalised balance sheet to finance its capital expenditure programme, which cost R661-billion from 2007 to 2021. In December 2005, Eskom’s board decided to build the Medupi power station and construction started in May 2007.

Construction at Kusile power station began in April 2008.

In the 2009 annual report, former Eskom chairperson Bobby Godsell wrote: “It is not possible to fund the first major expansion of our electricity grid for several decades from revenues generated from tariffs alone. The growth of a business is usually funded by a sensible balance between the

“From 2018 to 2022, the cost of load shedding to the economy has not been less than R500-billion. Eskom’s rolling blackouts constitute the most dangerous threat to existing jobs in the manufacturing sector – and across all other sectors of the economy.” – Irvin Jim 4

owner’s equity, accumulated reserves, and debt. We need to mobilise greater equity resources to fund the build programme.” Eskom had no reserves to fund the huge investments to increase capacity.

The lack of a plan on how to finance Eskom’s capital expenditure programme – not the hijacked contract given to the Gupta family in 2015 – and soaring primary energy (coal and renewable energy) costs are what bust the company’s balance sheet. The Gupta contract was two per cent of revenues in 2016. By February 2018, eight Gupta companies had filed for business rescue.

During the 2006–2007 financial year that ended in March, Eskom reported a profit of R6.5-billion on revenues of R40.1-billion. Its total costs were 87.4 per cent of revenues. From 2007 to 2021, the average selling price of electricity increased by 514.8 per cent to 111.04c per kilowatt hour. Revenues increased by 409.9 per cent to R204.3-billion. Primary energy costs soared by 788.9 per cent to R115.9-billion (56.7 per cent of revenues) from R13-billion (32.5 per cent of revenues).

From 2007 to 2021, Eskom spent 34.5 per cent of its revenue on its capital expenditure programme. In 2009, the figure was a staggering 82.4 per cent and was above 50 per cent every year between 2008 and 2012. As a result, Eskom’s debt increased by 892.3 per cent to R401.8-billion from R40.5-billion.

The net finance cost increased by 1677.6 per cent to R27.5-billion (15.3 per cent of revenues) from R1.5-billion (3.9 per cent of revenues).

In 2021, Eskom’s total costs were 115.6 per cent of revenues. The company made a loss of R18.9-billion.

Eskom says it can only carry a debt of R200-billion. Finance Minister Enoch Godongwana will announce measures to reduce at least 50 per cent of its debt when he delivers his medium-term budget policy statement at the end of October. Eskom probably needs 75 per cent of its debt taken off its balance sheet so that it can invest in

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THE ENERGY CHALLENGE

new capacity. The Public Investment Corporation can write off Eskom debt of about R80-billion or convert it into shares. The rest can be lifted to the national balance sheet.

INSUFFICIENT PLANNING AND CAPACITY

Second, Eskom started a massive project of building two of the largest power stations in the world at the same time in a rush and without going through the required planning processes. Energy expert Mike Roussouw told eNCA: “Eskom was under pressure to bring these projects into operation as soon as possible.

But such projects require five to seven years of upfront work before putting contracts in place. As a result, there was insufficient design work done before construction started. This created an ongoing problem with contracts that were not sufficiently specified.”

Former Eskom CEO Jacob Maroga says it had been many years since the company built anything. “The internal capacity to manage complex engineering projects was no longer available.”

MAINTENANCE AND MANAGEMENT WOES

Third, there has been a dramatic decline in plant performance since Ramaphosa appointed a new board in 2018, especially after Andre de Ruyter became CEO in January 2020.

The energy availability factor (EAF) has collapsed from 78 per cent during the 2018 financial year to 57 per cent in April 2022. This year, Eskom has regularly had 20 000MW down and between 15 000MW and 18 000MW of unplanned breakdowns.

According to the Council for Scientific and Industrial Research (CSIR) statistics, South Africa shed 10 319GWh of energy from 2007 to June 2022. The energy shed since 2018, when the new board was appointed, accounted for 78.8 per cent of all energy shed since 2007. The period since

Andre de Ruyter

Eskom probably needs 75 per cent of its debt taken off its balance sheet so that it can invest in new capacity. de Ruyter became CEO accounts for 63.9 per cent of all energy shed since 2007. There have been increasing calls from black business organisations and trade unions for the board and the CEO to step down.

At the end of March 2021, Eskom had nominal capacity of 46 366MW. Eskom says there is a shortfall of between 4 000 and 6 000MW. It appears to have given up on fixing the current fleet of power stations and repeatedly says the only option is to connect new capacity from IPPs to the grid. However, the company itself has created this capacity shortfall.

There would be no shortfall if it fixed the existing plants and increased the EAF to about 75 per cent.

Eskom’s excuses make no sense.

It says the power stations are old.

But the average calendar age of its 14 coal power stations is 28 years – and 32 years if one excludes Medupi

and Kusile. Coal power stations are designed to operate for 50–60 years.

A 2019 report by Primaresearch said: “While the ageing of Eskom’s fleet of power stations may seem worrying, the situation is not uncommon. In the United States, 51 per cent of the country’s electricity generating capacity was built before 1980. Multinational energy company Enel discloses its useful life for depreciating coal plants is up to 62 years. Globally, the average age of retired coal power stations is 54 years.”

Eskom says the company’s previous leadership neglected maintenance, and ran the plants too hard. But Primaresearch disagrees: “Maintenance spend as a percentage of revenues has mostly been stable at eight per cent. We do not think Eskom has underspent or neglected maintenance by this measure.” In 2021, Eskom spent R16.6-billion on maintenance, which was equivalent to 8.1 per cent of revenues. The National Society of Black Engineers (NSBE) notes that Eskom set targets of 80 per cent (EAF), 10 per cent (planned capacity loss factor or PCLF) and 10 per cent (unplanned capacity loss factor or UCLF) in 2009.

The NSBE’s analysis of technical performance indicators in previous annual reports shows no evidence to support the Eskom view. From 2012 to 2021, there was an average PCLF, a measure of planned maintenance, of 10.5. From 2016 to 2018, when the previous leadership was in charge, the average PCLF was 11.8. The Energy Utilisation Factor (EUF), a measure of how hard plants are run, declined dramatically from 82.7 per cent – above an 80 per cent ideal benchmark – to 71.6 per cent during the same period.

The plants were run at above 80 per cent from 2013 to 2016. But the NSBE says there is nothing wrong with running the plants harder if the PCLF threshold of 10 per cent is met.

This happened in 2013 when the PCLF was 0.9 percentage points below the threshold. From 2014 to 2016, the

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THE ENERGY CHALLENGE

PCLF threshold was met. “The fact that in 2021 the PCLF was 12.3 per cent without translation to improved performance is concerning. It probably means that the quality of maintenance was not up to standard,” the organisation says.

THE PLAN AND ALL ITS FLAWS

In his speech on 25 July, Ramaphosa repeated the urban legend that “Eskom deferred essential maintenance to keep the lights on, which is causing breakdowns and failures now” and rejected calls to fire the board and CEO. “After years of state capture and mismanagement, a capable and effective management team is working hard to turn the utility around and reverse years of decay”. However, the worst decay in Eskom’s plant performance has happened since he became president in 2018.

The Black Business Council (BBC) said: “The BBC notes with disappointment that the president has not addressed the big elephant in the room, the leadership and governance of Eskom. We have, on numerous occasions raised, very sharply, the capability of the Eskom executives and the board to lead and manage such a critical national institution. The board members do not have the requisite industry stature, qualifications and experience to provide proper oversight on the management of Eskom and have been virtually absent as this crisis is unfolding.”

Ramaphosa said the plan was to improve the performance of the existing fleet and increase the maintenance budget. The government would cut the red tape that made it difficult for Eskom to purchase spares required for maintenance. Eskom was also recruiting

skilled people to reinstate world-class operating and maintenance procedures.

In a later briefing, Minister of Public Enterprises Pravin Gordhan provided more details and said Eskom had identified the top six most troublesome power stations – Tutuka, Kendall, Duvha, Majuba, Kusile and Matla – that would receive more attention.

OTHER PROPOSALS AND THEIR PROS AND CONS

The rest of the emergency power plan resembled a paper written in June by Meridian Economics, a research company that lobbies for the renewable energy industry, and Eskom proposals. It involved short-and medium-term measures to add new generation capacity to the grid. In terms of immediate power, Gordhan said purchases from the Southern African Power Pool would add between 100MW and 200MW. Eskom would buy power from existing IPPs that have surplus capacity of 1 000MW. In the medium term, the government would relax localisation requirements for the fifth bid window of the Renewable Energy Independent Power Producer Procurement Programme and double procurement for the sixth bid window to 5 200MW. However, the fifth bid window appears to have collapsed after bidders submitted low prices far below what was required for them to break even. There have also been dramatic changes in the global economy, including rising inflation and interest rates and a depreciating rand on the back of a strong dollar. The bids are deeply under the water. Adjustments to localisation requirements are unlikely to make them viable.

“If you want to end load shedding you must focus on making sure that there is consistent performance of the current fleet. That does not need to take 24 months.”

– Jacob Maroga

Ramaphosa also eliminated the licensing threshold for embedded generation projects. Since the government increased the threshold to 100MW in June 2021, the National Energy Regulator of South Africa has registered 626 generation facilities that have a capacity of 714MW. Industry experts do not expect many further investments in this segment of the market. There are very few companies that can afford to pay US$1-million per MW to invest in solar projects. The same applies to measures to incentivise businesses and households to invest in rooftop solar. The two measures will only increase energy inequality. A few large businesses and rich households that have access bonds will have 24/7 power, while the majority of South Africans will continue to depend on Eskom.

BEST POSSIBLE SCENARIO FOR NOW?

South Africa is in its worst post-apartheid economic crisis with an expanded unemployment rate of 44.1 per cent and 12.3 million unemployed people, according to StatsSA’s Quarterly Labour Force Survey for the second quarter of 2022.

The economy cannot afford another day, week, or month of power blackouts.

At best, the sixth bid window will deliver capacity in 2025. Considering the capacity factors of intermittent sources of renewable energy, this will be too little too late.

IPPs will not address the immediate crisis. As Maroga has pointed out: “If you want to end load shedding you must focus on making sure that there is consistent performance of the current fleet. That does not need to take 24 months.”

The country needs a short-term solution to its never-ending power crisis. The government must consider implementing a power engineering (or technical) version of business rescue and appoint engineers (local and international) to stabilise the existing fleet as soon as possible.

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ADVERTORIAL: SERITI

MOVING TOWARDS A JUST TRANSITION Combining coal and renewables to ensure a diversified energy mix. By Mike Teke, CEO Seriti Resources

Mike Teke

COAL TO REMAIN A LARGE ENERGY SOURCE

SOME FACTS ABOUT COAL

IMAGE: SUPPLIED

• • •

➔ Scan this QR code to go directly to the Seriti website.

For more information: www.seritiza.com

ISSUE 57 | OCTOBER 2022 AFRICAN LEADER

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ADVERTORIAL: FP&M SETA

FOR THE FP&M SETA, EVERY DAY IS AN AUDIT DAY The Fibre Processing and Manufacturing SETA has recorded its sixth clean audit in eight years, reports Dr Felleng Yende, CEO

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hy are public service executives filled with dread, trepidation and panic when they receive a report from the Auditor-General of South Africa?

These reports contain opinion on whether their organisation’s strategy, performance, financial statements, and governance processes have complied with statutory requirements for public organisations?

Audits offer big-picture insights and often reveal opportunities for increasing efficiencies and improving organisational operations. Also, the fight against fraud, an attitude of zero tolerance towards corruption, a focus on compliance, excellent service, and professional business conduct all call for constant vigilance.

It is with pride and honour to report that for the sixth time in eight years, the Fibre Processing and Manufacturing (FP&M) SETA has obtained a clean audit opinion from the AGSA for the 2021/22 financial year. This is the fourth consecutive clean audit opinion.

FP&M SETA AUDIT SUCCESS

A clean audit opinion is a remarkable accomplishment. It principally indicates that our governance and financial records did not contain any significant material misstatements and that those who relied on them to make decisions were confident that they had been reasonably accurate.

Noteworthy audit success areas identified d by the AGSA for this financial year include: • Reported performance information for learning programmes and projects was found to be useful and reliable, and in accordance with the applicable criteria as developed from the performance management and reporting framework; 30

• Overall presentation of the performance information in the annual performance report is comparable and understandable; • No material findings were identified; • No instances of material noncompliance with selected specific requirements of applicable legislation; • The accounting authority has maintained effective, efficient financial and risk management systems, transparent financial and risk management systems and internal control; and • No fraud factors were identified during the current year’s audit.

HIGH LEVEL AND STRATEGIC BUSINESS MODEL

For me, achieving a clean audit opinion is not an event, but a process to ensure full compliance with generally recognised accounting practice standards.

An organisational strategy determines the deliverables by identifying the what, where, when and why of an organisation’s existence.

When I was appointed chief executive officer of the FP&M SETA, at the top of my first to-do list was designing a high-level and strategic business model detailing

and streamlining the organisation’s business processes to ensure quicker turnaround, customer-oriented practices and a high level of compliance to set performance standards.

We strive for an organisation with an effective institutional capacity delivering on innovation, efficiencies, improved productivity, and ameliorated financial management with an eye for cost reduction, an efficient business model and credible processes.

WORKPLACE CULTURE MATTERS

At the FP&M SETA, we have proved that an organisation cannot lose the ability to achieve a clean audit if it has certain measures in place. These include a clear and implementable strategy that addresses critical and scarce skills and consistently develops effective financial management, strong financial management controls, efficient supply chain management systems, good corporate governance infrastructure with embedded performance information controls, and clinical project protocols.

Additionally, workplace culture matters.

We continuously look for ways to cultivate the perfect culture because a toxic workplace culture and unethical rules can negate all the investment into attaining a clean audit.

As the late President Nelson Mandela once said: “A winner is a dreamer who never gives up”. Never give up striving to one day achieve a clean audit.

Dr Felleng Yende

➔ Scan this QR code to go directly to the FP & M SETA website.

For more information: 011 403 1700 www.fpmseta.org.za

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EMPLOYMENT EQUITY

TRANSFORMATION

EMPLOYMENT EQUITY Analysing the 22nd CEE annual report, Dineo Faku questions why it is taking so long to transform the workplace

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ittle has changed in South Africa’s private sector workplaces in the 24 years since the enactment of the Employment Equity Act of 1998 to promote equal opportunity and fair treatment in the workplace.

This is according to the latest report by the Commission of Employment Equity (CEE) released in June. The 22nd CEE annual report for 2021/22 found a lack of transformation in private sector workplaces with few having succession plans to promote particularly black people, women and people with disabilities.

The report said that at top management level, white and Indian population groups were over-represented between 2019 and 2021 when compared to their coloured and African counterparts. At top management level, the white population group accounted for 63.2 per cent, from 64.7 per cent in 2020 and 65.6 per cent in 2019. The Indian population accounted for 10.9 per cent in 2021, from 10.6 per cent in 2020 and 10.3 per cent in 2019. The African population group made up 17 per cent of top management in 2021, from 15.8 per cent (2020) and 15.2 per cent (2019), while the coloured population had a 5.9 per cent representation at top management level in 2021, from 5.7 per cent in 2020 and 5.6 per cent in 2019.

However, there was slight progress in gender representation at the top management level, driven by appointments in the public sector, resulting in an increase from 24.9 per cent in 2020 to 25.8 per cent in 2021. At top management level, female representation in the public service stood at 41.4 per cent. The private sector has a long way to go, the report stated, with only

Tabea Kabinde

employers seem to only define disability in terms of physical disability, and are not creating awareness among their employees of the true definition according to the Employment Equity Act. “Some people with disabilities are not declaring their disabilities because they are not aware it is a disability.” Invisible physical disabilities include autism, diabetes, and long-term depression requiring medication.

Kabinde says employers must have awareness campaigns about the true meaning of disabilities and assure their disabled employees that they will not be discriminated against because of their disability.

FOCUS NEEDED ON SUCCESSION PLANNING 24.6 per cent representation. Commission chair Tabea Kabinde says it was the first time that the commission had conducted a comparison of female representation in the private and public service. “In terms of transformation, the public sector has done very well regarding race. We challenged them to start looking at gender, and I think they have embraced that challenge,” Kabinde says.

DISABILITY TARGETS MOSTLY UNMET When it comes to people living with disabilities, very few companies in the private and public sectors have met the targets. People with disabilities remained poorly represented in top management at 1.6 per cent in both 2021 and 2020, from 1.5 per cent in 2019, the report stated.

Kabinde says this is because disabilities are not well understood in the workplace –

For Kabinde, it was disappointing that more than 20 per cent of employers were without clear succession and experience plans, and over 25 per cent of employers were not focused on training and development.

She says succession planning is not taken seriously by the private sector to ensure black people, black women and people with disabilities are trained and developed to occupy higher posts.

FAST FACT The public service employs more females (41.4 per cent) than the private sector (24.6 per cent) at top management level, according to the 22nd CEE annual report for 2021/22.

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“If we are serious about transformation, we should not be begging now. The time has come to get hard on noncompliance.”

– Thulas Nxesi “When it comes to race and gender, more white males and females are prioritised for training. So, when we talk about succession planning, they would be the first people in line because they are already being developed within the organisation,” she says.

The report analysed six occupational levels of the workforce profile and movements according to population group, gender and disability. Reacting to the report, Employment and Labour Minister Thulas Nxesi described it as reflecting a sorry state of affairs. “If we are serious about transformation, we should not be begging now. The time has come to get hard on noncompliance,” Nxesi said.

FEAR OF LOSING CONTROL Kabinde says the lack of buy-in by employers and fear of losing power was a big stumbling block.

“One article about affirmative action says ‘one cannot expect turkeys to vote for Christmas’; I think many businesses hold that perception of affirmative action.

They see it as something that will take their power away, giving power of their businesses to black people, black women and people with disabilities. The fear is that if there are more black people at a particular level, the entry of other black people is likely to be easier. The other fear is that if women, black people and people with disabilities are given decisionmaking roles, then the future of our children is at stake because Thulas Nxesi their opportunities

of entering the labour force and having In terms of the amendment bill, she says decision-making powers are limited.”

Minister Thulas Nxesi needs to set a fiveKabinde says the law and the proposed year time frame for sector targets to be met.

Employment Equity Amendment Terry Oakley-Smith, founder and Bill currently before Parliament aim CEO at Diversi-T, who has been studying to, among other things, ensure that employment equity for the last 30 years, transformed organisations stand better called for the removal of white women chances of sustaining their businesses by from the designated group referring to doing business with the historically disadvantaged government. people, including black “If I were in their position, people, women, or people I would move quickly to with disabilities. ensure business equity in “I think white women my organisation. That way, I should be dropped from can ensure my organisation’s the designated group. If sustainability and the you look at the numbers, ability to bring in the next you can see that white generation of white people, women have benefitted far for example, as targets will more from the Employment be met.”

Equity Act than even black Under the amendment bill, people for whom the act Terry Oakley-Smith businesses that do business was intended. By removing with the state will have to meet sector white women, I think there will be a targets, Kabinde says. Failure to meet those significant difference. Black women must targets means they cannot do business with stay, but removing white women from the the government. designated group is important because there “I do not believe that employment is no reason for them to be there.” equity suggests that there is no place for Oakley-Smith also says there needs to recognising potential and performance. be far better monitoring in the private When these white people afraid of losing sector. Unless businesses are monitored and control earn their place at the table, they evaluated, and suitable sanctions enforced, will get it. If you are performing, there is companies in the private sector will nothing that can hold you down. The fear continue to lag. may be irrational, but based on our history, “Not only are there not enough the fear does exist.’’ monitors and evaluators, but many of them are not sufficiently trained and knowledgeable about the act. They should DEMOGRAPHICS AND REPRESENTATION be looking not just at the numbers of top, Black Management Forum (BMF) acting senior or middle management, but also president Esethu Mancotywa says the at things like, does the company have BMF would like the representation of a succession plan and how will the African professionals in executive and succession plan impact the targets in the senior management positions to mirror the coming years?” demographics of the population.

“We need to reach the percentage levels COMMISSION OF EMPLOYMENT as a bare minimum. Our main agenda is EQUITY (CEE) REPORT that our economy must be reflective of the demographics of our society.”

Mancotywa says that failure to comply with employment equity targets should be criminalised. “We don’t accept fines anymore. Companies, boards and executives that are responsible must be prosecuted for breaking the law.”

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EMPLOYMENT EQUITY

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ADVERTORIAL: FINANCIAL SECTOR TRANSFORMATION COUNCIL

THE IMPORTANCE OF THE FINANCIAL SECTOR’S TRANSFORMATION TOWARDS THE BETTERMENT OF THE BROADER ECONOMY

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iven the significant role the financial services sector plays in the wealth of the country, transformation is no longer a matter to be confined to the boardroom, but a necessity for radical economic progress.

The push for structural change is an increasingly vital feature for the economy to address the social injustice of inequality and the current unemployment rate of 33.9 per cent, as reported by Stats SA in its Quarterly Labour Force Survey for the second quarter of 2022, which gives rise to persistent poverty and the social exclusion of black people in the mainstream economy.

For this reason, it is prudent to level the playing field for economic participants to achieve the envisaged objectives of transformation, including the intended goals of the Financial Sector Code.

IMAGE: SUPPLIED

TRANSFORMATION CAN REDRESS PAST INEQUALITIES

To transition into an economically liberated country, empowerment legislations have undergone voluminous phases of development over the past decades, enacting policies intended to redress inequality, of which the Broad-Based Black Economic Empowerment (B-BBEE) Scorecard serves as a framework to gauge the pace and impact of transformation imperatives.

The transition can correct the inequalities of the past and improve our economic position by redistributing the country’s wealth across its population spectrum to stimulate the participation of those previously disadvantaged through: • Improving black peoples’ economic interests and voting rights; • Addressing decision-making in managerial positions for black people; • Providing avenues to bridge the skills gap;

Pumla Ncapayi, CEO of the Financial Sector Transformation Council, discusses economic development

Pumla Ncapayi

• Promoting support of large and small black suppliers, black women-owned suppliers and designated groups across all value chains; • Advancing monetary and non-monetary contributions for social and economic development initiatives; • Availing financial and investment support towards funding black-owned enterprises; and • Empowering the reach of financial access.

Although there appears to be notable shifts in the sector that continue to reshape the financial landscape of the country, glaring challenges remain.

Realising the democratic principles of human dignity, equality, and freedom while interactively addressing the goals of the amended Financial Sector Code in achieving the B-BBEE Scorecard, requires intensified execution of strategic policy. This will help to realise economic transformation as a continuous and long-term process that requires market participants to demonstrate their commitment and compliance with the B-BBEE Act. Against this, there remains a need to fast-track the architecture of inclusivity

for the broader society, more so under the circumstances of economic recovery, improvement, and development, as the sector’s involvement is important in playing a prominent role in promoting sustainable economic development.

Hence, it is essential to determine the right balance between financial sector liberation and the opportunities B-BBEE carries to address South Africa’s socioeconomic challenges. Furthermore, it is fundamental to acknowledge transformation as intertwined with several factors requiring engagement at all levels as a cornerstone to dispose of the resistance associated with the legacy of apartheid and give flight to the broader mandate of bettering the economy of South Africa.

DIRECTION IS NEEDED

There is a clarion call for a clear sense of direction from both private and public sectors to self-reflect on the vision and goals of the 1994 democratic elections and take the crucial strides to place citizens at the centre of transformation to influence the social and economic spheres of the country.

As the future of this country is depended on and engraved by-andthrough our present-day actions, it is only then that the country will be able to overcome history and reimagine brighter prospects that enable the various industry leaders to seize transitional opportunities to achieve economic inclusivity, diversity, and equality.

➔ Scan this QR code to go directly to the FSTC website.

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POLITICAL LEADERSHIP

THE BLACK INDUSTRIALIST PROGRAMME Kick-starting the industrial sector is key to absorbing low-skilled labour and black industrialists, and can make a valuable contribution to job creation, writes Dineo Faku

IMAGES: SUPPLIED

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of Trade Industry and Competition (the hen President Cyril allow strategic assets to die, you are left with dtic), around R55-billion has gone towards Ramaphosa told no choice but to sell your concentrate to helping black industrialists over the past delegates of the other people.’’

12 years, resulting in the creation of 55 000 Black Industrialists However, he says, all is not lost. jobs and more than R160-billion added to and Exporters “Thankfully, countries such as South the gross domestic product (GDP). conference in Johannesburg in July of the Africa, that once boasted sizeable Gwen Mahuma-Madida, a director at need for frank conversations about barriers vertically integrated minerals mining Remkor Manufacturing in Johannesburg, is to the expansion of black business, the and processing can still leverage that one of the success stories of the programme. deindustrialisation of processing infrastructure with significant Remkor has been in the steel industry the economy should have capital investments.” since 2015 and employs 123 people with an topped the list of constraints.

Despite the annual turnover of over R140-million.

In the last 30 years as the deindustrialisation of the Mahuma-Madida says the programme economy deindustrialised economy, South Africa has opened opportunities for previously (where South Africa was not at the “point of disadvantaged people to become part of allowed companies to no return”, Mojapelo says, industries that were traditionally white migrate processing to and he believes the trend and male. “It has gone further in assisting other parts of the world), can be reversed. “For local businesses to produce goods, which resulting in margins and me, this is a generational previously had to be imported from various profits being squeezed in opportunity to revive all countries, here in South Africa, helping to the downstream market, this primary processing create much-needed local jobs”. industries were mothballed. capacity, develop Fortune Mojapelo Finance Minister Enoch Godongwana Mining is a case in point. downstream beneficiation last year flagged that, as a result of the capacity that is targeted deindustrialisation of the economy, at the energy transition and set up THE COST OF DEINDUSTRIALISATION manufacturing’s contribution to GDP had South Africa as a global champion Fortune Mojapelo, co-founder and CEO fallen to around 12 per cent from around in this space.” of Bushveld Minerals, a vertically integrated 22 per cent in the late 1980s to the early mining and processing vanadium company says mines went from mining BLACK INDUSTRIALIST DEVELOPMENT 1990s. He highlighted the dive in the manufacturing sector’s capital base to and processing their steel, chrome and Nedbank economist Isaac Matshego says the current R545.9-billion from vanadium to mainly mining and shipping South Africa needs programmes that R677.7-billion. ore for processing in Chinese mills where will help revive the industrial With the country’s high the cost of electricity and labour was sector. He is adamant the Black unemployment rates, cheaper. But today, says Mojapelo, the gap Industrialists Programme plays kick-starting the industrial in energy costs and labour costs with China a significant role and is aligned sector and absorbing has significantly shrunk. with the Industrial Policy Action low-skilled labour and The deindustrialisation resulted in the Plan, “so will go a long way in black industrialists unbundling of Iscor into ArcelorMittal, helping to boost the industrial will contribute Anglo American selling out of Highveld sector and the overall economy, to the creation of Steel and Vanadium, and the country’s particularly in terms of much-needed jobs. foundries decimated. Mojapelo says job creation”. deindustrialisation threatens strategic assets According to that are very expensive to build. “If you the Department Gwen Mahuma-Madida

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ADVERTORIAL: BONITAS

BONITAS 2022 CONTRIBUTIONS CONTINUED FOR 2023 Lee Callakoppen

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he average increase from Bonitas for 2023 would have been 5.9 per cent – well below the current inflation rate of 7.6 per cent. However, we’ve frozen contribution increases for the first quarter of 2023, which effectively means an increase of 4.8 per cent over the 12 months. We have also shared what members can expect to pay from 1 April 2023.

It’s a balancing act between keeping increases as low as possible while maintaining sustainability. By applying low contribution increases since December 2020, the Scheme has effectively passed R1.4-billion in savings to members.

The Scheme is financially stable with over R7.4-billion in reserves and has signed up over 190 000 new members in the last 36 months.

The future of healthcare is around primary and preventative care. There is a rise in non-communicable or lifestyle diseases, such as diabetes, high blood pressure and cancer, 80 per cent of which are caused by lifestyle risk factors. We offer a range of managed care programmes to help members understand and manage their conditions.

CANCER CARE

IMAGE: SUPPLIED

Last year, we announced our partnership with the South African Oncology Consortium to enhance our cancer programme, including screening for early detection, treatment and palliative care.

For 2023, we have restructured benefits to be unlimited for Prescribed Minimum Benefit (PMB) cancers.

DIABETES

Data from the South African Health Quality Assessment shows that Bonitas

Bonitas Medical Fund has announced its 2023 product line-up and a prize freeze on contributions for the first quarter of 2023, writes Lee Callakoppen, principal officer of Bonitas. has an effective disease management programme and better outcomes than the industry standard for diabetic members.

In 2023, we introduce an annual family benefit of R51 000 for an insulin pump or continuous glucose monitor for type 1 diabetics under 18 years of age.

MENTAL HEALTH

Effective October 2022, our Panda digital solution will support members in managing their mental wellness. The free app offers everything from audio sessions with peers and mental health experts to one-on-one virtual consultations with professionals.

Members are encouraged to complete an online mental health questionnaire to assess their mental health status.

BENEFIT BOOSTER

Launched last year, the Benefit Booster aims to support our preventative care strategy.

It unlocked R446-million in additional benefits for members to extend their dayto-day benefits. For 2023, we are adjusting the benefit limits in line with utilisation with enhancements seen on several plans.

DESIGNATED SERVICE PROVIDERS

We implement networks to negotiate favourable tariffs for our members, so they can avoid out-of-pocket expenses and get more value. This includes: • A GP network of over 4 400 practices.

• A pharmacy network, with around 2 500 practices to dispense chronic, acute and over-the-counter medicine, through Scriptpharm.

• DENIS, our dental network, provides access to around 3 000 practices.

• An optical network of over 2 300 practices, through PPN.

MEDICINE FORMULARY

Our medicines formulary is aligned to the WHO’s Essential Medicines List to promote affordability and accessibility to clinically approved medicines.

HOSPITAL-AT-HOME

This service brings all the essential elements of in-hospital care to a patient’s home. In 2023, we include a programme for re-admissions, screening and disease prevention, an alternative to stepdown facilities and kidney dialysis at home.

SAVINGS

We’ve amended our rules to allow members to use their savings as they deem fit for the new year and have increased savings by up to 9.4 per cent, depending on the plan selected.

EXCLUSIVE OFFERS AND DISCOUNTS

For 2023, we’ve partnered with top providers for exclusive offers across several categories, including lifestyle, wellness, gap cover, short-term insurance, life insurance, and credit solutions.

We remain committed to providing quality healthcare at affordable prices while ensuring the sustainability of the Scheme. ▪

➔ Scan this QR code to go directly to the Bonitas website.

For more information: 0860 002 108 www.bonitas.co.za @BonitasMedical

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SA’S SOCIAL

CONSTRUCT CONUNDRUM

F

Caiphus Kgosana finds out just what’s happening with South Africa’s much-touted social compact

ormer president Thabo Mbeki pulled no punches at the memorial of late ANC deputy secretary-general Jessie Duarte when he criticised the lack of action on a mooted social compact.

“President Cyril Ramaphosa when he delivered the State of the Nation address said in a hundred days there must be an agreed social compact to address these matters. Nothing has happened, nothing,” Mbeki scolded the administration.

Ramaphosa, stung by the criticism, fired off a Monday newsletter four days later under the heading: “Work to develop social compact framework underway”.

He wrote that a team led by the ministers of employment and labour; trade, industry and competition; and the minister of finance had been meeting social partners to map out priorities that must be reflected in a new social compact.

“A framework for a social compact has been developed. It identifies priority actions to achieve higher levels of investment and growth, increase employment, unleash the dynamism of the private sector, protect the rights of workers, expand support for the unemployed and tackle extreme poverty,” wrote the president.

The proposed social compact, Ramaphosa continued, builds on the key tenets of the Economic Reconstruction and Recovery Plan (ERRP), such as accelerating structural reforms to the economy, job creation, expanding mass public employment, social protection and driving economic inclusion through entrepreneurial activity.

IT MUST BE A JOINT EFFORT

Matthew Parks

While the state is responsible for improving the climate for private sector investment and must implement social support measures to protect the vulnerable; there must be complementary actions by business and labour.

“There must be a willingness from both organised business and labour to discuss the trade-offs needed to implement growth-enhancing measures in such a constrained economic environment.

There needs to be greater alignment between government and civil society organisations in our communities on poverty alleviation programmes,” he continued.

But why is there no social compact yet, and when one does finally emerge out of the consultative process, what is likely to stay?

Matthew Parks, Cosatu parliamentary co-ordinator and the federation’s representative at Nedlac, says they have always supported a social compact because government doesn’t have enough resources to manage our social challenges, but business doesn’t have the levers government has.

“We’ve been doing what we can as labour. We pushed for the compact on Eskom to help end load shedding and reduce its debt. There’s a huge need for all social partners to play their roles. When the economy bleeds, it’s the workers who lose their jobs. When companies close down, it’s the workers that ultimately suffer.”

For labour, the ideal social compact is one based on progressive principles, where workers’ rights are protected, state-owned entities are rebuilt, and there’s a reduction in poverty and creation of jobs.

But drawing up a social compact is just the first step. Once it has been agreed to and signed by all parties, the document must guide the actions of its signatory parties going forward.

“There’s a huge need for all social partners to play their roles. When the economy bleeds, it’s the workers who lose their jobs. When companies close down, it’s the workers that ultimately suffer.” – Matthew Parks

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POLITICAL LEADERSHIP

So, who will ultimately be responsible for enforcing it?

Parks acknowledges that the document will not be worth the paper it is printed on if the social partners do not abide by it. He cites the Presidential Jobs Summit of 2018, where a framework agreement was adopted outlining the best routes to unlocking new jobs and securing agreement on protecting existing ones. Business agreed with the other social partners at the summit that everything would be done to avoid retrenchments at struggling companies.

Those commitments fell flat, Parks noted, because the framework agreement was not adhered to.

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CLEAR TARGETS AND TIMELINES

This time round, the agreed social compact needs to have clear identifiable targets that can be measured.

“We want commitments with clear timeframes so we can have access to information as to who has not honoured those commitments.”

Parks says Cosatu and the rest of labour want to see much faster movement towards an agreed compact, but the social partners must also be wary not to cut corners in the haste to complete one.

Martin Kingston, who represents Business4SA at Nedlac, says a concrete social compact must underpin those areas business has identified as a priority for intervention, which can improve the investment environment and create a platform for sustainable inclusive growth.

“We must have clearly defined objectives with appropriate accountability where existing processes are reinforced rather than duplicated. The social compact can play a role in setting out those responsibilities clearly.”

Once a social compact is adopted, whose responsibility is it to ensure that all parties abide by it and stick to the commitments they signed for?

Kingston says each of Martin Kingston the social partners and

“We must have clearly defined objectives with appropriate accountability where existing processes are reinforced rather than duplicated. The social compact can play a role in setting out those responsibilities clearly.” – Martin Kingston their constituencies must pursue those areas within their competency that help advance the compact’s objectives. Nedlac can play a convening role where appropriate.

“There must be full transparency and regular communication on the work being performed and how we can move forward,” he adds.

But Mathekga is still adamant that when dealing with a crisis of credibility brought about by government failure at policy implementation and weaknesses in economic management, a social compact will not get you far.

“Anyone who wakes up in the morning and says our problem is the lack of a social compact … they have a bigger IS A SOCIAL COMPACT A CURE-ALL? problem coming.”

Nedlac executive director Lisa Seftel Political commentator Ralph Mathekga agrees that the sooner an is not convinced a social agreement is reached the compact can nurse to health better it is for the country, an ailing economy. but she says the work cannot “I’m always careful not be rushed. “There is speed to be excited by things but not haste.” that have no meaning. We Ramaphosa was adamant are talking about a social in his newsletter of 25 July compact because business that the implementation of has lost confidence. It would the ERRP was continuing be investing a lot if it had despite there being no social confidence. We need a more compact in place. practical approach to the “The work to grow challenges of the economy.

Ralph Mathekga the economy and create Look at trade policy, real jobs is going ahead with the support of tangible instruments.” all economic stakeholders. There has He argues that for a compact to work, all been significant progress since SONA parties must be willing to make significant in implementing economic reforms, compromises. Mathekga points to the strike expanding public and social employment over wages at Eskom when the National programmes in an unprecedented Union of Mineworkers and the National manner, working to bring new electricity Union of Metalworkers of SA embarked generation capacity online and mobilising on an illegal strike that shut down power new investment. stations, precipitating crippling stage six “There is agreement among social load shedding. partners that the social compact cannot If labour is serious about compromising, be a vague set of commitments, but a it should in future call out its members clear pathway to achieve higher levels of when they opt for industrial action that is equality, jobs and common prosperity. counterproductive to economic growth and What we now need is to work together job creation, he says. “Look at labour, they with greater urgency and purpose, to went on a strike at Eskom. Are we saying complete that work, rather than to these are people that are moving towards a point fingers at one another,” the social compact? No, they are going in the president concluded. opposite direction.”

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THE FUTURE

OF THE ANC Caiphus Kgosana weighs in on what the future holds for President Cyril Ramaphosa and the ANC after the 2022 national conference in December and the elections in 2024

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an the ANC and President Cyril Ramaphosa continue to get the public’s vote in the wake of the Phala Phala scandal, the party’s 2022 provincial and policy conferences, the energy crises, the collapsing economy and the deteriorating national security situation?

At the ANC policy conference in July, former North West strongman Supra Mahumapelo was reminded embarrassingly just how tightly the faction that supports Ramaphosa still controls the ANC. Just after the president had concluded his 39-page opening address, Mahumapelo tried to reach out for the microphone, presumably to address his faction.

National chairman Gwede Mantashe – a staunch Ramaphosa backer – quickly called him to order, forcing him off stage before the delegates retired to lunch. A policy conference is different from an elective one in that that no voting takes place, so you cannot use it as a barometer to measure victors or losers. But even the most sceptical of political observers would have to agree that Ramaphosa left the Nasrec conference centre firmly in control of the ANC. The question, however, is whether he can carry this momentum through to the crucial elective conference in December. Should he get re-elected, can the waning tide of Ramaphoria still prop the ANC beyond the 50 per cent majority hurdle? Things

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Ramaphosa has been trying to tame the beast that is the ANC from inflicting further self-harm, but that is easier when you are a scandal-free leader.

Cyril Ramaphosa

have changed since he swept a spent Jacob Zuma aside in 2018 to take the helm of a government party hurtling towards a cliff.

BRAND RAMAPHOSA SLIGHTLY TARNISHED

For the past four years, Ramaphosa has been trying to tame the beast that is the ANC from inflicting further self-harm, but that is easier when you are a scandalfree leader. His personal brand has been damaged by allegations he was involved in covering up the theft of millions of dollars at his Phala Phala game farm, the proceeds of the sale of exotic animals.

The president has not covered himself in glory when it comes to accounting for this theft. Despite acknowledging that a

theft did take place, and disputing that up to US$4-million was stolen, he has refused to answer direct questions posed by the media, members of parliament and others. His standard answer is that law enforcement agencies are investigating the matter.

Many have dubbed Phala Phala his Nkandla moment. But how much damage has it inflicted on brand Ramaphosa?

Will he be able to shrug it off and bag party re-election in December? If he does get a second bite at ANC leadership, can he help convince over 50 per cent of the electorate to give his party another chance in 2024? He swept to power on the reformist ticket, promising to clean up a party rotten to the core. In a letter drafted to ANC members in August 2020, Ramaphosa told them that the ANC was corruption accused number one.

“How did we get here? For more than 26 years, the ANC has been in government at a national level and in most provinces and municipalities. This has meant that leadership positions in the ANC have been seen by some as the most direct route to, in the first

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POLITICAL LEADERSHIP

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“It’s one thing to be approved for a second term, the most important thing is under what conditions? Are you having your agenda betrayed? Do people support you or are they just positioning themselves for key positions in the party beyond your leadership?” – Ralph Mathekga instance, employment and, in the second instance, influence in the award of tenders and the distribution of other government resources.

“The people see how organisational principles and processes are corrupted for personal gain. They see how this deviant behaviour goes unchecked and allows unscrupulous and sometimes criminal elements to flourish. We cannot then blame the people if they stay away from our branches, programmes and initiatives,” he wrote.

He has championed the step aside rule that has claimed some big scalps, top of its casualties being the secretary-general of the party. But Ramaphosa will not be able to reform the ANC; it’s too far gone. He has faced open hostility from the radical economic transformation group from the moment he was hoisted up on stage in Nasrec in December 2017 to this day.

As president of the Republic, he inherited a weak economy crippled by rolling blackouts; high unemployment; a weak investment climate; and a soaring crime rate. The government he leads has drawn up an economic and recovery plan with ambitious goals of ending load shedding by liberalising the markets, targeting network industries for growth, and rolling out the largest infrastructure spend. But running an ineffective bloated bureaucracy means implementation will remain the Achilles heel of successive ANC administrations.

For Ramaphosa, though, the only thing standing between himself and re-election to the ANC is himself. Three provincial executive committees have pronounced in his favour, including the significant Eastern Cape. More are expected to follow. KwaZulu-Natal could find itself the odd one out if its provincial executive

council does not endorse him for another term. Branches are generally known to take marching orders from their provinces.

This seemingly unstoppable procession to victory could be interrupted by the Phala Phala question. Public Protector Busisiwe Mkhwebane might have followed Ace Magashule into the dog box, but before her suspension, she set Ramaphosa a set of specific questions requiring a response.

She wants to know whether there was US$4-million in cash stashed at his game farm in Limpopo; the source of the cash, the purpose, the receipts, how long the cash was there and not in a bank, who he was trading with, the purpose of the trade, and if he pays tax for trading in wild animals. The president has thus far refused to answer these questions publicly, insisting he will only account to investigative authorities on his game farm activities.

Political commentator Ralph Mathekga says the Phala Phala scandal has diverted the president’s attention from the job of running the country.

“The most basic thing is that it’s an opportunity cost. While you are busy responding to the Public Protector you are not applying your mind to the electricity crisis, to the economic crisis. It has taken the president’s attention during a time when the country needs him to focus on

Social discontent is increasing globally, pushed by inflationary pressures, and the country has not been spared. An unhappy population equals an unhappy electorate.

substantive issues. It has no substantive return for South Africans. It has thrown government into a serious crisis of confidence,” he says.

Mathekga notes Ramaphosa tends to make things difficult for himself, starting with the confusion at the beginning of his presidency around the R1-billion his campaign for ANC presidency was said to have collected and now the Phala Phala saga.

He says while some provinces have thrown their weight behind him, they have in their own leadership a mix-bag of dodgy leaders who might want protection in return for support. Some of those supporting his second-term ambitions are already looking beyond him.

“It’s one thing to be approved for a second term, the most important thing is under what conditions? Are you having your agenda betrayed? Do people support you or are they just positioning themselves for key positions in the party beyond your leadership? The biggest problem is will he have a legacy, or will it be reversed immediately?”

SOCIAL DISCONTENT A HUGE FACTOR

Even if Ramaphosa were to extricate himself from the Phala Phala mess and secure ANC re-election, his presence at the helm no longer guarantees the party a majority in 2024. Social discontent is increasing globally, pushed by inflationary pressures, and the country has not been spared. An unhappy population equals an unhappy electorate.

“Many democracies are struggling, there is no way ANC can pull up better under this. The extent he (Ramaphosa) can arrest the decline is itself on the decline,” Mathekga says.

The next three months will see intensive lobbying and jockeying for plum posts in the governing party.

Depending on how he navigates the burning questions on Phala Phala, Ramaphosa is already a shoo-in.

However, his charm has waned, and the ANC is no longer guaranteed the country. It must work for it.

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POLITICAL LEADERSHIP

THE ROLE OF BLACK PROFESSIONALS What is the role of black professionals in defining the characteristics of the political leadership required to deliver and make the most of an energy-secure, growing and sustainable economy in transition? Asks Thulani Dube, member of the BMF editorial committee

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BLACK PROFESSIONALS HAVE GREAT VALUE

Professional bodies that house black professionals are in a prime position to create spaces where black professionals can aid in the strategic and implementation processes on various levels in the country.

It may be argued that of greater value is the need for young black professionals to occupy these spaces as they bring new ideas and tend to adapt more easily to the changes in the workspace. The pandemic revealed that agility in the workspace is no longer a theoretical concept, but a glaring reality. With young black professionals operating as the tip of the spear, it becomes important for the older generation to operate as support and mentorship to help plug the gaps that may be unseen at the time. There is a Zulu proverb Indlela ibuzwa kwabaphambili, which translates to “one must ask about the road ahead from those who have travelled it”.

By using this simple system, black professionals can create an intricate and effective ecosystem from which talent, knowledge and resources can be pulled to support these professionals in offering quality services in various economic and political circles.

There are many black professionals who are celebrated for excellence in various sectors. Great value can be gained by drawing from them and their contributions to the spaces they occupy. This excellence can be used to drive the agenda of being

uncompromising when it comes to political high standards, as well as excellence in both social and economic zones. South Africa can draw from those hailed for black excellence to challenge political placements that are not based on personality, but are performance-based. A leadership based on excellence when it comes to performance.

A leadership based on competence.

Through such political and economic leadership, sustainable improvement may be realised at socioeconomic levels. This excellence in leadership is crucial, especially in political spaces that eventually drive the sectors where state-owned entities are meant to deliver services that impact all walks of life and which everyone sees as problem areas, taking into consideration the Gini coefficient of the country.

Challenges in the energy sector impact vulnerable societies in ways that have not been fully documented. For instance, the correlation between a power outage and muggings in the early hours of the morning in informal townships is a regular occurrence. However, the severity and need to attend to this seems not to be a priority as many of these cases go unreported, further compounding the social ills of the country.

Considering the Gini Coefficient in South Africa, it goes without saying that apartheid had a major role to play in the inequality state, but we cannot discount the role that the government has played through its governance style.

Black professionals can create an intricate and effective ecosystem from which talent, knowledge and resources can be pulled.

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ith the need to reimagine the political and economic state in the country and subsequently in the region, the black professional will need to play an active role in driving the vehicle of economic, social and political recovery.

South Africa prides itself on having several reputable and effective organisations, such as the Black Management Forum, and the resources to rebuild and further develop the nation are available within its borders.

The country’s political terrain has been marred by scandal and corruption, painting a picture of a zero accountability zone. Patronage and cadre deployment are seemingly at the centre of this, with issues of mismatched job and skill scenarios. It is without Thulani Dube a doubt that cadre deployment is and will always be a natural occurrence in the field of politics. Black professionals will need to occupy this space by being not only the moral compass on issues of accountability, but also by providing the right skills to the right portfolios in political leadership and government spheres.

By occupying these spaces, black professionals can drive political and economic development that will impact and transform areas that need revitalisation, such as the energy space, which is currently undergoing challenging times with dire impacts on the population and business alike.

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B-BBEE

REALISING A B-BBEE EMPOWERMENT FUTURE Monde Ndlovu, consultant, African Leadership Development, discusses the B-BBEE policy

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he Black Management Forum (BMF) has entered a phase where it needs to harness its thinking and recalibrate in this post-COVID-19 and current corruption era. The annual conference presents the opportunity to sharpen policy positions and lobby for them within the corridors of power. In 2021 at the BMF Corporate Update Dinner, President Ramaphosa tasked the BMF to look at two issues specifically: the Broad-based Black Economic Empowerment (B-BBEE) framework and how it can be improved, and how the country can break the back of oligopolists in the system.

The BMF’s thought leadership department embarked on a series of engagements with key leaders and institutions, including the B-BBEE Commission. It quickly became obvious that B-BBEE faces serious challenges and continued resistance. The true champions of transformation have not kept their fingers on the dial, instead, the transformation trajectory has been left to chance and luck.

ISSUES RAISED

In the engagements, the following issues came up: • Lack of understanding of the B-BBEE Act in business; • No proper co-ordination between the B-BBEE Commission and key stakeholders; • No proper implementation, especially in government, which has a much lower compliance figure in comparison to the JSE; • Lack of integrity in the verification space, which is predominantly white.

This undermines our collective efforts to create black businesses; • Lack of consequences for noncompliance with the act outside of the criminal procedures when fronting occurs; and • No clear governance on B-BBEE issues.

There are no administrative tools to demand information and no specialised B-BBEE court in the country.

The question of economic empowerment remains a highly contested matter in South Africa. Business has not fully embraced transformation as a system on its own. If it did, everything would be viewed from the prism of transformation and the B-BBEE framework.

As it stands, B-BBEE compliance remains voluntary for business unless they seek to do business with the state.

Outside of this voluntary space, business sees no need to drive B-BBEE and does not regard transformation as a key lever for economic growth and sustainability.

The detractors of B-BBEE highlight the elitist argument and the high cost of this process. The lack of clear understanding of B-BBEE flows from the worldview of the principal shareholder and the CEO. The strategic direction on transformation of companies is influenced by the thought process of its top leadership and shareholders.

WHAT IS THE SOLUTION?

The five elements of B-BBEE need deeper reflection and clearer resolutions. The ownership element has question marks around the principles underpinning it. The government introduced “equity equivalents” and the “flow-through” principle, as some of the issues needing attention. Direct ownership needs to be the focus, and businesses cannot be

allowed to find loopholes in accounting for direct black ownership.

Empowerment finance needs a fresh look, along with the development finance institutions that haven’t delivered fundamental results in this regard.

Management control must be about executive power in the hands of black professionals, not just a few blacks in top leadership. The new Employment Equity Amendments seek to give the minister more powers to set sector targets for employment equity, which will ensure business continues to open its ranks to black people.

Skills development in the country should follow the key economic drivers and not invest in skills that do not drive the economy. Enterprise and supplier development has not taken off, mainly because businesses tend to keep their preferred suppliers and build long-term relationships. Enterprise development is dismal because businesses invest capital in spaces that have little impact on the economy. Finance, engineering, and ICT sectors and their downstream industries should be the focus of both skills development and enterprise development.

And lastly, socioeconomic development should include the question of land reform. As yet, this last element has no fundamental impact on turning black communities around.

The BMF Conference needs to take these elements, discuss them, and come up with resolutions to strengthen the framework, as tasked by President Ramaphosa. In the words of Lot Ndlovu, “through BEE implementation, it is possible to enhance capacity, competence, competition and a new business culture, which leads to belonging and social cohesion”.

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