Business Day Local Government October 2023 Edition

OCTOBER 2023

LOCAL GOVERNMENT WWW.BUSINESSMEDIAMAGS.CO.ZA

Better management of road infrastructure is critical

Wetlands can act as natural water filters

Food banks are an integral cog in food redistribution

Solar PV is currently the world’s cheapest source of energy production

MOVING BEYOND STRATEGY Better service delivery systems and leadership are key to creating sustainable infrastructure

INSIDE: IS GOVERNMENT’S ENERGY ACTION PLAN WORKING?

• UNPACKING THE AGRICULTURE FUNDING CONUNDRUM • KEEPING OUR FOOD SECURE

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LOCAL GOVERNMENT PUBLISHED BY

Picasso Headline, A proud division of Arena Holdings (Pty) Ltd, Hill on Empire, 16 Empire Road (cnr Hillside Road), Parktown, Johannesburg, 2193 PO Box 12500, Mill Street, Cape Town, 8010 www.businessmediamags.co.za EDITORIAL Content Manager: Raina Julies rainaj@picasso.co.za Contributors: Lindi Botha, Trevor Crighton, Rodney Weidemann Copy Editor: Brenda Bryden Content Co-ordinator: Natasha Maneveldt Digital Editor: Stacey Visser vissers@businessmediamags.co.za

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South Africa has a resourceful network of organisations working towards reducing hunger in South Africa. Where there are challenges, there are opportunities and none are as ready to capitalise on them as those seeking to fight hunger.

ENERGY Is government’s Energy Action Plan making inroads in solving South Africa’s power generation and transmission problems?

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FOOD SECURITY

11 AGRI FUNDING

INFRASTRUCTURE South Africa’s transport and water infrastructure is no longer what it once was. We uncover possible fixes for the problem.

Small-scale farmers play an integral role in ensuring food security, but need solid business plans if they wish to obtain financing and prosper.

12 DIGITAL SKILLS DEVELOPMENT South African tech start-ups raised R6.1-billion in 2022 – and although that was two per cent down year on year, the future of tech in the country is looking bright.

DESIGN Head of Design: Jayne Macé-Ferguson Senior Designer: Mfundo Archie Ndzo Advert Designer: Bulelwa Sotashe SALES Project Manager: Jerome van der Merwe jeromem@picasso.co.za Sales: Frank Simons

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PRODUCTION Production Editor: Shamiela Brenner Advertising Co-ordinator: Shamiela Brenner Subscriptions and Distribution: Fatima Dramat, fatimad@picasso.co.za MANAGEMENT Management Accountant: Deidre Musha Business Manager: Lodewyk van der Walt General Manager, Magazines: Jocelyne Bayer

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LOCAL GOVERNMENT AT WORK

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COPYRIGHT: 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. Business Day Local Government 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.

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Making a difference SAICA is a committed partner in making a positive difference in local government

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he South African Institute of Chartered Accountants (SAICA) and its members are #DifferenceMakers, contributing to the economic and social development of South Africa through our work in local government. SAICA is committed to making a positive difference in the public sector through a focus on professionalisation, strategic municipal finance management, and supporting transparency, accountability, governance and service delivery.

PROFESSIONALISING PUBLIC FINANCE MANAGEMENT IN LOCAL GOVERNMENT Poor public finance management has been highlighted as a significant risk threatening the prosperity of South Africa. With challenges that include inadequate skills, high vacancy levels, staff turnover, poor leadership and a lack of suitable skills development, the public sector continues to struggle to create sustainable value for citizens.

SAICA, South Africa’s pre-eminent accountancy body, is widely recognised as one of the world’s leading accounting institutes. The institute provides a wide range of support services to more than 57 000 members and associates who are chartered accountants (CAs(SA)), as well as associate general accountants (AGAs(SA)) and accounting technicians (ATs(SA)), committed to making a difference in the various industries they serve. Many of SAICA’s members and associates provide much-needed support and capacity in the country’s local government sector, working in the public interest and supporting financial management, reporting, transparency, accountability, governance, and the delivery of services.

UNDERSTANDING SAICA’S PROFESSIONAL DESIGNATIONS SAICA qualifications allow professionals exposure and proficiency to various environments, contexts, and laws, such as the Municipal Finance Management Act (MFMA), and many private, public and local government sector reporting frameworks. These homegrown qualifications strike the right balance of local relevance, globally renowned standards, and best practices, which makes our professionals sought-after. The robust qualification process develops competence that enables professionals to be flexible and agile, which is why our professionals can adjust to different environments, deliver sustainable value and make a difference.

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Members of the panel following discussions on “the role of the accountancy profession in professionalising the public sector” at the recently held SAICA Public Sector Summit. From left: Khaya Sithole (moderator of the summit), Prof Somadoda Fikeni (chairperson of the Public Service Commission), Dr Emmanuel Ngcobo (president elect of CIGFARO), Natashia Soopal (SAICA executive: Ethics Standards and Public Sector), Jan van Schalkwyk (Executive in the office of the Auditor General), and Darren Issacs (founder and chief executive officer at Makosi).

The chartered accountancy profession strives to make a meaningful contribution to society by serving and protecting the public interest.

CAs(SA) are responsible leaders who behave ethically and create sustainable value for a wide range of stakeholders within organisations such as municipalities and municipal entities. They prepare meaningful financial and nonfinancial information that has integrity, is relevant and accurate to stakeholders, and interpret, analyse and evaluate such information for impactful decision-making.

Given the challenges faced by the public sector, chartered accounting skills can go a long way in supporting accountability and rebuilding public trust in government.

The education and training of AGAs(SA) produces well-rounded accountants with a highly proficient technical background. An AGA(SA) at the entry point into the profession possesses the relevant skill set to balance operational implementation and strategic contribution within the relevant division. Their all-round ability to drive accountancy and financial excellence in

THROUGH ITS VARIOUS DIVISIONS, SAICA PROVIDES SUPPORT, TRAINING, ADVOCACY AND THOUGHT LEADERSHIP TO ITS MEMBERS AND GOVERNMENT STAKEHOLDERS

organisations enables them to deliver on key strategic objectives from policies and annual plans while ensuring operational efficiency and quality. The AGA(SA) holder is well suited to contribute to the professionalisation of the public sector, particularly as it relates to finance and accountancy roles.

The Local Government and Public Sector Accounting Technician qualifications were developed in collaboration with the Local Government SETA, municipalities and National Treasury. Extensive consultations with leadership teams within government and alignment with the National Treasury Technical Competency Dictionary ensured fit-for-purpose qualifications.

There are three different accounting technician qualification routes: • Accounting Technician: mainstream accounting technician qualifications pitched at levels 3, 4 and 5 (entry to mid-level) on the National Qualifications Framework.

• Local Government Accounting Technician: accounting technician qualifications designed for municipalities and municipal agencies pitched at levels 3, 4 and 5 (entry to mid-level) on the National Qualifications Framework • Public Sector Accounting Technician: accounting technician qualifications designed for national and provincial departments, pitched at levels 3, 4 and 5 (entry to mid-level) on the National Qualifications Framework.

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SAICA ADVERTORIAL

performance reporting, relational acumen, and other nuances in the sector.

Local government is also able to source the expertise of professionals trained by other public sector organisations, the Auditor-General of South Africa and the private sector. There remains a lot of work to be done to make the local government environment conducive for professionals and for the sector to become an employer of choice. SAICA calls on all stakeholders to continue working towards achieving this objective.

SAICA celebrates and continues to showcase the work of members and other professionals committed to making a difference in local government, often under challenging circumstances.

These professionals use their skills and knowledge to support the sustainability of local government finances and positively impact the delivery of services.

THE INAUGURAL SAICA PUBLIC SECTOR SUMMIT

SAICA Public Sector team (from left to right): Odwa Benxa (project director: Public Sector), Natashia Soopal (SAICA executive: Ethics Standards and Public Sector) and Msizi Gwala (project director: Public Sector)

Images: Supplied

ACHIEVING PROFESSIONALISATION AT SOUTH AFRICAN MUNICIPALITIES Ethical conduct is at the core of the accountancy profession, a much-needed attribute in the local government sector. SAICA safeguards the professional standards of the designations by regulating members’ professional conduct against the internationally aligned SAICA Code of Conduct. Members of SAICA act in the public interest and are required to adhere to internationally recognised professional and ethical standards.

Under the leadership of a highly qualified finance leader, such as an experienced chartered accountant, and with the support of skilled finance professionals, local government finance divisions could be professionalised, stabilised and capacitated, and strategically support the sustainable delivery of services to communities.

South African local government can achieve professionalisation by increasing the number and capacity of skilled finance staff with appropriate training, such as the three-year SAICAaccredited training programme, and recognised accountancy qualifications. Public finance staff members should be subject to regulation by a professional accountancy body such as SAICA. Municipalities should work to create an environment that enables finance professionals to thrive, consider their learning and development, career mobility and pathways within the public sector and work towards attracting the best available finance talent by becoming an employer of choice.

The chartered accountancy profession strives to make a meaningful contribution to society by serving and protecting the public interest.

COMMITTED TO SUSTAINABLE DEVELOPMENT THAT BENEFITS SOUTH AFRICA As a committed partner in making a difference in the public sector, SAICA recognises the important role that local government needs to play for the prosperity of communities, society, and the economy.

Through its various divisions, SAICA provides support, training, advocacy and thought leadership to its members and government stakeholders, working towards an effective, sustainable and professionalised sector. Professionals in the sector work under challenging circumstances to deliver value and financial stability. SAICA is committed to partnering with stakeholders and government to transform the local government environment to one that is conducive and delivers sustainably.

As part of SAICA’s longstanding partnership with the public sector, there are several training offices (including municipalities), providing SAICA-accredited training and work experience, developing competence for aspiring CAs(SA) in the public sector context and unique exposure to areas, such as purpose-driven national service, compliance, service delivery orientation,

Held in August 2023 under the theme “Nurturing Change for a Better Society,” SAICA’s first-ever Public Sector Summit provided a platform for impassioned discussions, knowledge-sharing, and strategic collaborations aimed at fostering transformation within the public sector.

The summit represents SAICA’s commitment to its public interest mandate, ensuring that world-class accountancy professionals qualifying through SAICA’s rigorous and trusted processes are available to serve local government and the South African public sector as a whole and contribute to the prosperity of our country. Some of the key messages the profession is taking from the summit include increasing focus on implementation in the sector (not only legislation and policy), more support for the sector and less reflection on the negative, the importance of a collaborative response among the broad stakeholders in the ecosystem, advocating for strategic reforms, and the need for the profession to also be held accountable where there are shortcomings.

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LOCAL GOVERNMENT

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Serving government and state-owned entities Cliffe Dekker Hofmeyr has a wealth of experience in public sector matters, writes joint sector heads, THABILE FUHRMANN and AADIL PATEL

Aadil Patel

Thabile Fuhrmann

Public sector entities continue to face escalating scrutiny and demand for services and infrastructure development in an uncertain economic climate. We understand that complex government projects, privatisations and procurements require in-depth experience across multiple areas of law and business expertise, as well as the ability to quickly apply this in a public law context. Our service offering cuts across many of our firm’s practice areas, including dispute resolution, employment law, regulatory, competition and technology law, and is comprehensive and tailored to all aspects of public law. Our firm draws on the wealth of experience in all related practice areas to advise our clients on: • dealing with local authorities; • submissions of tenders; • drafting and negotiating; • sitting on tender committees; • challenging administrative decisions; • public sector litigation; • representing clients in proceedings before quasi-judicial bodies and representation before parliamentary sub-comittees; • property acquisitions and sales; • privatisation and public private partnership transactions; • company acquisitions and sales; • opinions on all aspects relating to the public sector; • drafting and commenting on national, provincial and local government legislation; • public procurement, the tender process and access to information; • employment advice; • administration decision-making process and structures; • drafting and negotiating outsourcing agreements; and • advising on the Public Finance Management Act and Municipal Systems Act. Our experts have been advising on public sector matters for decades, resulting in our vast understanding of the regulatory requirements. We provide clear, concise and actionable advice to arm our clients with the confidence to make defensible decisions that achieve their objectives while minimising legal, reputational and political risk. We have the experience and practical capability to deliver the required legal services on time and on budget. We understand the issues and can assist in your decision-making.

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For more information: Thabile Fuhrmann: Director, Joint Sector Head

+27 83 626 2588

Aadil Patel: Director, Joint Sector Head

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thabile.fuhrmann@cdhlegal.com

+27 83 463 3449

aadil.patel@cdhlegal.com

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ENERGY Eskom data shows that 4.4GW of rooftop solar installations had been installed by June 2023 – four times more than that installed in March 2022.

UNDERSTANDING THE ENERGY CONUNDRUM

A SHIFT IN POWER

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Is government’s Energy Action Plan making inroads in solving South Africa’s power generation and transmission problems?

By TREVOR CRIGHTON

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he Energy Action Plan (EAP) was released in July 2022, aiming to improve the performance of Eskom’s existing power stations and add as much new generation capacity to the grid as possible, and as quickly as possible.

The rather nebulous methodology for achieving this, according to the launch document, is “by removing barriers to new generation capacity and unlocking energy from many different sources – including Eskom, independent power producers, businesses and households – as part of a collective national effort”.

Images: Rhino Energy Solutions,

REPORT BACK Fourteen months down the road, how have things changed? The Minister in the Presidency responsible for electricity, Dr Kgosientsho Ramokgopa reported in August that his department had effectively achieved a 56 per cent aggregate in the completion of the 50 objectives laid out in the plan. Eight actions were completed at the time of reporting, twelve were delayed, eight were off track, and two are yet to be started. National Treasury approved a R254-billion bailout for Eskom – R16-billion of which was paid in August 2023 – alongside debt relief for municipalities.

In one of his weekly newsletters, President Cyril Ramaphosa commended the “sustained improvement” shown by Eskom’s generation fleet in the year since the EAP’s launch. In that time, Eskom unlocked close to 400MW from companies with additional available capacity, there is an additional 600MW in the contracting process, and 400MW has been added from Cahora Bassa.

Construction on plants accounting for 2 300MW of additional power, procured during the Independent Power Producer Procurement Programme (IPPPP), will begin later in 2023.

Regulatory changes aimed to boost private investment in new generation capacity have enabled private investment in electricity

4.4GW Eskom data of the number of rooftop solar GW installations done to date. generation, with a reported 10 000MW of new capacity coming online and being connected to the grid, later this year.

It all sounds positive, but what is the reality?

With stage 6 load shedding becoming a feature of everyday life early in 2023, huge numbers of South Africa’s businesses and homes have switched to solar PV power. Eskom data shows that 4.4GW of rooftop solar installations had been installed by June 2023 – four times more than in March 2022. By comparison, 6.2GW of renewable energy generation has been brought online since 2011 through the Renewable Energy Independent Power Producers Procurement Programme (REI4P).

SHIFT IN POWER Rogan Davies, Group CEO Rhino Energy Holdings, says there has been a massive shift away from Eskom by business and residential users – most of that into Solar PV. “Investec believes that the renewable energy market in South Africa could be as big as a R1-trillion over the next few years,” he says. “Solar PV can be viewed as a technology disruptor for coal energy in electricity generation.”

DID YOU KNOW?

Eskom data shows that by June this year, the total number of load-shedding hours for 2023 exceeded the number experienced during 2022.

However, Davies says, solar PV installations alone cannot solve the energy crisis. “A mix of energy – wind, hydro and storage – across a 24-hour period is critical. However, solar PV is currently the world’s cheapest source of energy production and so does need to play a leading role in the solution.” Rhino Energy Solutions specialises in large-scale commercial solutions, and Davies says he’s seeing clients in the commercial, industrial and agricultural sectors shifting into solar PV storage at a high rate.

Indeed, with the 6.2GW of REI4P capacity that’s already online and the promise of 2.5GW to come from the fifth and sixth bid windows, and 10GW set to be delivered by the next two windows, the country’s renewable energy capacity will top 30GW – when our current total installed generation capacity is 48GW. Eskom and municipalities are losing revenue as more users transition to renewables, presenting challenges in funding and maintaining the current system. Davies says it’s difficult to answer how they should be managing this reduced revenue, but “there is no doubt that municipalities have problems and will need to restructure their tariffs and operating structure accordingly”.

“SOLAR PV CAN BE VIEWED AS A TECHNOLOGY DISRUPTOR FOR COAL ENERGY IN ELECTRICITY GENERATION.” – ROGAN DAVIES

Solar PV is currently the world’s cheapest source of energy production.

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INF R A S T RUC T URE

Wetlands can act as additional, natural water filters for our man-made water systems.

TACKLING SA’S INFRASTRUCTURE CHALLENGES

Dr Mathetha Mokonyama

ROADS TO NOWHERE?

Dr Mathetha Mokonyama, impact area manager for transport systems and operations at the CSIR, indicates that in the 2020 South Africa’s transport and water infrastructure is no longer household travel survey from StatsSA, what it once was. RODNEY WEIDEMANN reports households rated their biggest transport problems. First was the nonavailability of buses, closely followed by the poor condition of roads. ustainable and efficient infrastructure is critical to South Africa’s “At national level, South Africa has attempts to improve economic growth and deliver a better life to policies, along with several multibillion citizens. However, the country is beset with infrastructure challenges, grants, to address both problems. However, most notably in the crucial road and water arenas. policy implementation, It should be noted, says Unathi Mntonintshi, infrastructure, roads especially in the local and transport specialist at the South African Local Government Association government sphere, is (SALGA), that infrastructure is not an end in itself – as indispensable as it is – not taking place at but rather something that forms an integral part of the value chain for the scale and pace service delivery. necessary to address “It is not sufficient to have a water purification plant, for example. The plant backlogs and requires input materials to be operational. Roads alone aren’t enough, as accommodate the traffic and congestion must still be managed,” he explains. demand created by “The real issue is a general lack of leadership in municipalities, both population growth. The political and administrative. Additionally, most municipalities – having only a same problem is seen five-year term – do not initiate long-term service delivery plans focusing on in many of the provinces, infrastructure. Furthermore, there is a general lack of appreciation of science especially regarding and the technical skills needed for both the service delivery value chain and Unathi Mntonintshi roads,” he adds. the infrastructure/project life cycle.”

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WHY NOT PPPs?

“POLICY IMPLEMENTATION, ESPECIALLY IN THE LOCAL GOVERNMENT SPHERE, IS NOT TAKING PLACE AT THE SCALE AND PACE NECESSARY TO ADDRESS BACKLOGS AND ACCOMMODATE THE DEMAND CREATED BY POPULATION GROWTH.” – Dr MATHETHA MOKONYAMA

Poor road infrastructure is hampering development in South Africa.

“It is critical to strengthen technical capacity in the public sector. Short term, secondment of professionals from the private to the public sector may be needed, while a longer-term intervention would be targeted upskilling in the public sector and the creation of an attractive environment for professionals.”

Dr Mokonyama believes there should be two levels to such a strategy. First, addressing backlogs, and second, leapfrogging. Backlogs are about safety and decent living. Leapfrogging, on the other hand, is about creating the right environment for innovation and risk-taking – within reason.

Images: istock.com/ Graham Montanari, Supplied

THE WAY OF WATER Poor water quality is also becoming a major crisis across many municipalities, putting people’s health and the economy at risk, suggests Bonga Ntuli, director: infrastructure at Royal HaskoningDHV Southern Africa.

The findings of this year’s Blue Drop report – that, 50 per cent of South Africa’s water treatment systems were classified poor or bad – are significantly worse than the 10 per cent considered bad or poor in the 2012 Blue Drop report.

Rapid urbanisation, income growth (resulting in higher demands) and increased levels of pollution in river systems are some of the reasons. Furthermore, there is a lack of funds or management expertise in many municipalities.

To start turning things around, Ntuli outlines several key measures that should be adopted: • High calibre engineers. To manage water effectively, we need to start creating an organisational culture of putting engineers at the centre of decision-making more than before.

• Reporting and consequence management. This provides a gauge of where there is underperformance and informs the government of where it must act swiftly. In instances of neglect, municipal managers should also face the consequences.

• Using wetlands and stopping leaks.

Wetlands can act as additional, natural water filters for our man-made water systems. Meanwhile, improved maintenance practices and new technology can help reduce water leaks.

• Greater attention to funding. Allocating funding for water projects is a long-term investment. Furthermore, robust infrastructure development can attract investment and boost economic growth, while providing better services to the population.

SALGA’s Unathi Mntonintshi notes that, currently, local government has the lowest uptake of public-private partnerships (PPPs) because of the complexity of these partnerships and the lack of capacity in municipalities to manage such complexity.

Mntonintshi adds that PPPs are likely to fail when there is a lack of strategic leadership in municipalities.

“However nontraditional partnerships, such as through donations and other relationships of mutual interest, can work. For example, there is a drive for private companies to ‘adopt’ some of the roads they use to deliver their products. This adoption means that they will contribute significantly (through their corporate social investment funds) to the maintenance of the road, as it plays an important role in their value chain,” he says.

enough that it can stretch over several years and potential changes in administrations.”

In the end, says SALGA’s Mntonintshi, whether road or water issues, it is less about strategy and more about leadership and having the right people.

“It should be the responsibility of both the leadership and the right people to develop a sustainable and efficient infrastructure strategy. As stated previously, the strategy should be built around delivering a product or service, rather than the infrastructure, even if infrastructure is indispensable to such delivery,” he concludes.

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BEYOND STRATEGY Better long-term planning is key, notes Ntuli.

“The planning and building of new wastewater infrastructure, for example, needs to be sound

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FOOD TO FUEL LEARNING Addressing another problem related to food security, The Lunchbox Fund provides meals to school children to encourage them to stay in school and also obtain higher grades due to better nutrition. The fund aims to fix hunger at grassroots level to equip children for a better future.

Collet says investment in South African childhood nutrition shows a return of 53 times for every initial R18 invested. “Pre-school registration figures increase by 33 per cent and sustained attendance by 30 per cent when meals are offered in pre-school.

“In primary and after-school programmes, punctuality increased by 50 per cent, regular attendance by 30 per cent, and the drop-out rate in winter decreased by 20 per cent when meals South Africa has a resourceful network of organisations working were provided.” towards reducing hunger in the country. Where there are challenges, The organisation has served 45.3 million meals to date at 6 000 schools countrywide. there are also opportunities and compassionate organisations ready Meals are fortified to address micronutrient to seize them and fight hunger, writes LINDI BOTHA deficiencies in children, boosting their overall health and development.

Both The Lunchbox Fund and FoodForward he increased cost of living in South Africa affects everyone, but the gap between the SA operate without financial assistance from cost of a basic food basket and the minimum wage is an acute problem as salary government. While private donors increases fail to keep up with global inflation. Compounded by the COVID-19 contribute, far more funding is needed pandemic hangover, food insecurity is believed to be nearly 50 per cent, to make a dent in food insecurity. rather than the official 38 per cent published by Stats SA in their 2021 Du Plessis has big ambitions General Household Survey. for FoodForward SA. “Around Load shedding, the Russian/Ukranian war and adverse climatic events over the ten million tonnes of food is lost past few years have also played a role, says Andy du Plessis, managing director of or wasted annually, while 50 per FoodForward SA, bringing the cost of a household food basket for a family of four to cent of our population suffers food over R5 000. This while the minimum wage hovers just below that. “Basic foods are insecurity and malnutrition. There is not affordable for most South Africans, least of all healthy and nutritious food.” ample food to go around. If we can Margot Collett, director of fundraising and communications at The Lunchbox streamline policies to make surplus Fund, points to another anomaly that makes food insecurity in South Africa so food donations easier, we have the exasperating: we are often viewed as a major economic hub in sub-Saharan Africa, Andy du Plessis opportunity to eliminate hunger.” yet South Africa experiences the highest levels of inequality in the world, according to the World Bank Gini index 202.

Food banks such as FoodForward SA collect surplus food from the food supply chain and distribute it to be used in meals for the hungry.

CARING NETWORKS TACKLE HUNGER

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Getting food into tummies is a particular frustration since a third of all food produced is wasted.

This is where FoodForward SA saw a prime opportunity to make the link between individuals and organisations with fridges of food nearing expiry date and people without food.

Established in 2009, the organisation connects a world of excess to a world of need by recovering quality, edible surplus food from the food supply chain and distributing it to community organisations serving the poor. Over the past year, FoodForward SA has distributed 88 million meals and reached nearly one million people daily through 2 750 beneficiary organisations, donors, partners and volunteers across South Africa. This makes them the largest food distribution nonprofit organisation in South Africa, with a footprint in all nine provinces.

READ MORE: TACKLING SUSTAINABILITY AND FOOD SECURITY

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USING SURPLUS TO STAVE OFF STARVATION

“BASIC FOODS ARE NOT AFFORDABLE FOR MOST SOUTH AFRICANS, LEAST OF ALL HEALTHY AND NUTRITIOUS FOOD.” – ANDY DU PLESSIS LOCAL GOVERNMENT

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LETHABO MAKGATO: NURTURED BY BOXFUSION Makgato’s journey is a testament to the growth potential at Boxfusion. Beginning as a junior business analyst and through our support and implementation programme, Makgato gained invaluable insights into our products and solutions. This strong foundation paved the way for her transition into the sales and marketing division, where she now excels as a sales development manager.

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Mathiba’s nine-year tenure at Microsoft gave him a wealth of industry contacts and invaluable insights into the dynamics of government and technology. His journey has now brought him to Boxfusion, where he is making a significant impact on the lives of South Africans.

Lethabo Makgato business development manager

For more information: MarComms@boxfusion.io

LOCAL GOVERNMENT

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AGRICULT URE

THE BATTLE FOR AGRI FUNDING Small-scale farmers play an integral role in ensuring food security, but they need solid business plans to obtain financing and prosper, writes LINDI BOTHA

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he South African agricultural landscape is following global trends: larger enterprises are buying out smaller farmers to consolidate the industry into a smaller pool of mega farmers. With the required expertise and resources, accessing finance to fund advancements is a less cumbersome task for those mega enterprises than those undertaking the laborious exercise for the first time.

Herein lies the catch-22 of small-scale farmers: those who need financing to get started don’t always have the know-how to navigate the world of funding applications. And without the funding, they will never be able to harness greater expertise.

“Without experience and expertise, many farmers are difficult to fund,” says Sydney Soundy, CEO of the Land Bank. Yet, financing is available, and many are willing to take up the task of providing food. The disconnect lies in the detail: poorly thought through business plans with insufficient projections on income and expenditure.

The Land Bank has had its own challenges over the last few years, struggling to fulfil its loan obligations

“THE MAIN REASON APPLICATIONS DON’T SUCCEED IS BECAUSE ENTREPRENEURIAL IDEAS ARE NOT ALWAYS FULLY TRANSLATED INTO A WORKABLE BUSINESS MODEL.” – SYDNEY SOUNDY

amid defaulting debtors. That the bank has become more stringent in providing funding is no surprise. North West farmer Alfred van Wyk notes that commercial banks are far easier to approach for financing than the Land Bank.

AVAILABLE BUT NOT EASILY ACCESSIBLE But Soundy is adamant that funding for bona fide farmers with solid business plans is available, not only from the bank, but also various other players in the industry. The introduction of blended finance through the Department of Agriculture, Rural Development and Land Reform in October last year has given the bank an added boost in funding farmers.

The scheme provides for greater affordability since only a portion of the loan needs to be repaid, while the rest is a goverment grant.

Farmers wanting to access these funds still need to get their affairs in order. Van Wyk has made several attempts to access the blended finance, unsuccessfully.

“The list of required documents is as long as my arm. Something else is always needed, which causes the whole application to be thrown out.”

Soundy maintains that the main reason applications don’t succeed is because entrepreneurial ideas are not always fully

Malapane Thamaga

translated into a workable business model.

“Farmers can’t be bullish. There must be a track record of production in the area, and those specific outcomes taken into account because production and inputs vary drastically from area to area.

“Furthermore, the farmer must have the required expertise to manage the farm, or show that there are partners to assist. There must also be a viable market for the products and, if possible, proof of an off-take agreement.”

For first-time farmers, the requirements can be daunting. Those already part of an existing programme to support small-scale farmers are more likely to succeed.

Malapane Thamaga, economist at the African Farmers’ Association of South Africa (AFASA), says commodity organisations and the private sector have successfully taken small-scale farmers from subsistence to commercial level. “The difference is that these institutions aim for quality – they want to see maximum impact for the help they provide, rather than counting the number of farmers given some sort of assistance as a ‘win’ regardless of how successful they are.”

Through support programmes that show farmers how to improve practices and advance to greater commercialisation, organisations such as Grain SA and Hortgro inadvertently remove much of the risk associated with financing small-scale farmers, as they provide the expert partners Soundy mentions.

An insurmountable problem in reducing risk for financing is land tenure. Malapane notes that without title deeds for farmers who form part of the land reform programme, land can’t be used as collateral. “Farmers have given up fighting and with it the hope of ever fully progressing on their land.”

He adds that while many banks state that land ownership is not a pre-requisite for loans, it does give farmers an advantage.

When it comes to funding farms, Soundy insists that size does not matter. Rather, farms need to be self-sufficient economic units that can generate a profit, no matter how small. And for those who can make a sound case for such a business, the funding is there for the taking.

Sydney Soundy

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SK IL L S PLAN FOR SUCCESS

The African tech industry is on the rise, but we have a long way to go in helping prepare our people for growing it exponentially.

By TREVOR CRIGHTON

S

outh African tech start-ups raised $329.7-million (R6.1-billion) in 2022, according to Disrupt Africa’s The African TechStartups Funding Report 2022.

Although that was two per cent down year on year, the future of tech in the country is looking bright.

Funding ideas is what venture capital is about, but investment in technology skills training in South Africa and continentwide is urgently needed to boost the sector further and help it realise the powerful ideas proposed to help solve some of Africa’s challenges.

Scarce Skills SAP Africa’s Africa’s Tech Skills Scarcity Revealed report, which drew data from companies in Kenya, Nigeria and South Africa in quarter four of 2022, found that a lack of skills negatively affected the continent’s digital transformation efforts. Four in five organisations reported a negative effect from a lack of tech skills, and nearly all organisations expected to experience a tech skills-related challenge this year.

The report showed that the most in-demand skills included cybersecurity and data analytics (63 per cent), developer and industry skills (49 per cent) and digital transformation skills (48 per cent).

In response to the ongoing tech skills challenges, organisations were taking bold steps to ensure they had access to the correct tech skills, with 41 per cent saying that upskilling of existing employees would be a top priority this year, while 40 per cent said the same about reskilling employees.

BRING TRAINING IN-HOUSE

Lyndy van den Barselaar

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ManpowerGroup SA managing director Lyndy van den Barselaar says that in-house training and upskilling programmes are making an impact in equipping young, tech-savvy individuals with the

IN-DEMAND SKILLS

63% Cybersecurity and data analytics

49%

Developer and industry skills

48% Digital transformation skills Source: SAP Africa’s Africa Tech Skills Scarcity Revealed report

necessary skills and knowledge required in the ever-evolving tech industry.

“Examples of programmes that corporates are running to upskill the youth include ManpowerGroup South Africa’s IT Academy; Shoprite’s Data Science Academy and SAP Retail Academy; and the Absa Cybersecurity Academy, founded to help address the worldwide cybersecurity skills shortage,” she says. “By offering such upskilling programmes, companies address the educational gap and nurture talent within their workforce. This approach allows them to tap into a pool of promising individuals naturally inclined towards technology.”

Van den Barselaar says that organisations are taking matters into their own hands because there is often a misalignment between educational institutions and the needs of industries. “This misalignment can be attributed to several factors that hinder the seamless transition of graduates into the workforce. One factor is the outdated educational curriculum and teaching methods. As technological advancements continue to reshape industries, traditional curricula struggle to keep pace with the changing demands of employers,” she says.

OLD SKILLS MEET NEW SKILLS Van den Barselaar says: “Despite the tech focus, soft skills continue to be important.

Collaboration, communication and teamwork are timeless skills that hold immense value. In a digital environment where remote work and virtual teams are becoming more prevalent, effectively collaborating with colleagues across different locations is crucial. Critical thinking and analysis are also vital in an era of information overload, where evaluating and interpreting data accurately becomes increasingly important.”

DOWNLOAD

RE

A D N OW

DISRUPT AFRICA: THE AFRICAN TECH START-UPS FUNDING REPORT

SAP RESEARCH REVEALS TOP TECH SKILLS CHALLENGES FOR AFRICAN ORGANISATIONS

Images: istock.com/ SeventyFour, Supplied

DIGITAL TRANSFORMATION

SAP Africa COO Tracy Bolton says South Africa’s vibrant, youthful population have big ideas and a great work ethic, but face consistent obstacles to preparing for working in such innovative and digitally-led spaces. “Some of these challenges include poor implementation of change management and larger enterprises Tracy Bolton having difficulty migrating on-premises business processes to a cloud environment,” she explains.

SAP Africa is working to help young people play a vital role in supporting the digital transformation efforts of organisations. “One successful way we work to address this is through the Young Professionals Programme (YPP), an initiative across the EMEA South region offered by SAP’s Digital Skills Centre,” says Bolton. “In this two-month training programme, recent graduates are equipped with SAP functional and/or technical knowledge, as well as world-class soft skills training. After completing the programme, participants get an opportunity to kick-start their software consulting career within the SAP ecosystem of customers and partners.”

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FOCUSED When insightful understanding combines with agile legal expertise and an instinct developed over generations has a singleminded focus, you want that focus to be collaborating on your business.

From vision to fruition

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