Circle of concern Magazine by Tshegofatso Golden Komane

ISSUE 001

Social|Economical|Political Minded Leaders

April 2014

The meaning of PRASAâ&#x20AC;&#x2122;s plan NSFAS: Funding for Liberation Why CA(SA) Spells success? Do we need black or African empowerment?

R19.50

ISSN 2310-8827

Youth wage subsidy

Acquiring for profit and resource intensification, or for competition elimination?

Issue 1| APRIL 2014

CONTENTS P35. NPA OPPORTUNITIES Editorial Letter

What PRASA’S Plan mean to the working class and entrepreneurs 6 Youth wage subsidy

Circle of debate

Funding for liberation

P18. YOUTH WAGE SUBSIDY

Acquiring for profit and resource intensification, or for competition elimination? 21 Why CA(SA) spells success?

Story of Vusi Nkabini

Film incentive

A new infrastructure projects in south Africa

NPA opportunities

P23. WHY CA(SA) SPELLS “SUCCESS”

What does PRASA’s new trains plan mean to working class and entrepreneurs? P 6 2

Issue 1| APRIL 2014

We are known by DOING it not dreaming By Circle of Concern’s Team

“I have been impressed with the urgency of doing. Knowing is not enough; we must apply. Being willing is not enough; we must do” Leonardo da Vinci 3

Issue 1| APRIL 2014

EDITORIAL

Editor-In-Chief

Editor-in-Chief Komane Golden

Our Potential Readers

golden@circleofconcern.co.za Contributors and Journalists

Never stop dreaming but do not spend the whole time fantasizing only, you have to give your dream a go .Every journey started with one step that is why you had to be a toddler in order to reach where you are now.

Lethukuthula Kubeka Molebogeng Mashobane

I hope that after reading this refined magazine, you will be mentally rich. We all need to be intellectually competitive in order to get what we want. This magazine will make you a better person than you were yesterday or before you paging through its leaves.

Donald Msiza Given Mbowane Simphiwe Nkosi Athi-Nkosi Majavu Bonolo Ramokhele

Reinhard Nell Sales sales@cathelgroup.co.za

Subscription subscription@cofc.co.za

Advertising Publisher CIRCLE OF CONCERN is published by CATHEL

You need current affairs, valuable and accurate information, motivation, a friend and a reference that is why we are bring a magazine of its own to the people. Owing a copy of this magazine is like having a half million worth of investment that is yields more than any offer in the financial markets

elieve it or not, I am writing this editorial letter with my eyes closed. I cannot stop smiling and giggling alone and I wish you feel what is in me. Presenting the first issue of CIRCLE OF CONCERN is viewed as success to the strong team that embarked in the journey with- Spread the word all over the place about this out proper shoes. great magazine then we will blowout accurate I still believe that if something cannot be done, information timely. We are everyone‘s ladder, we would not have thought about it at the first never be afraid to climb through us and with us. place. Never allow people to seduce your mind Do not forget to get a next month copy of the by introducing you to the world of doubters. magazine or you can simply subscribe and it All I can tell you is that, just go beyond the will be delivered to you. community‘s benchmark then you will achieve I am sending best of luck to all our readers. greatness.

Write to the Editor

Quotes

Express yourself by writing a letter to the editor. The editor reserves the right to edit and make changes where necessary. The opinion expressed by readers is not that of Circle of Concern and printers of the magazine. Please write in a language that is free from racism, sexism and does not promote hatred. Letters are not published on first come first serve basis. All the letters must be directed to the following email:

LIFE: ―Life is the art of drawing without an eraser.‖ John W. Gardner SUCCESS: ―All successful people, men and women, are big dreamers. They imagine what their future could be, ideal in every respect, and then they work every day toward their distant vision, that a goal or purpose.‖ Brian Tracy LOVE: ―Love and kindness are never wasted. They always make a difference. They bless the ones who receives them, and they bless you, the Issue 1| APRIL 2014

Issue 1| APRIL 2014

What does PRASAâ&#x20AC;&#x2122;s plan mean to working Class and entrepreneur? BY Komane Tshegofatso

Issue 1| APRIL 2014

COVER STORY

What does PRASA’s new trains plan mean to working class and young entrepreneurs?

PRASA National Strategic Plan document 2013 outlines New Train

Source: PRASA

Current network issues

 Overcrowding is a serious issue on many cent changes. The technology systems corridors at peak periods the fifth of December 2012 of the current fleet is inherently outdat-  Timetables are variable, with few corridors the then minister of ed and this makes it hard for both comoperating trains at regular intervals Transport, Honorable Dikobe Ben muters and Metrorail to get along.  Poor integration with other modes Martins, MP announced the Gibela  Journey times are slow on most corridors, Consortium as the tender frontrunner. PRASA is a South African state owned compared with road transport The tender will be replacing old enterprise in the country that was Metrorail trains towards the end of founded in 1990 (as SARCC). It con-  Speeds are relatively slow by world standards 2015 by new ones (pictured above) sists of three divisions ( PRASA Tech-  Relatively few off peak services that are user-friendly and improved to nical, PRASA Rail Operations and  Train interiors do not meet modern standards for public transport provision better the lives of commuters and busi- PRASA CRES) and two subsidiaries ness people. On the last quarter of ( AUTOPAX and INTERSITE IN-  Ticketing is inflexible, prohibit variable pric2015 commuters will be saying good- VESTMENT MANAGEMENT). ing bye to lateness and sore emotions on  and flexible season tickets, Station facilities PRASA is at the forefront of governMonday mornings. need improvement ment efforts to transform public PRASA (Passenger Rail Agency of Transformational timetable changes transport in South Africa, with rail South African) owns 4 638 coaches for services forming the backbone of the  Strengthened off peak services Metrorail operations in Western Cape,  Revised stopping patterns network. The focus of the article is on Gauteng, Durban and Eastern Cape but the Rail operations which consist of  Higher speed services – 120kph to 160kph 90 per cent of the rolling stock is much two divisions Metrorail and Shosholo-  Improved station facilities older. They acknowledged the fact that za Meyl. PRASA owns 317 of the 468  Better focus on modal interchange old coaches cannot be upheld anymore stations Metrorail operates, with the  Replacement of Suburban Rolling Stock due to tear and being old enough. Al New Ticketing System most 2 per cent of their coaches were remainder belonging to Transnet bought in 1980s and the rest were pur- Freight Rail. Metrorail is responsible  Selective infrastructure enhancements chase in 1950s which indicates that for transporting up to 2 million com Potential network extensions where rail -most these trains can no longer adapt to re- muters daily in their area of operations. appropriate

Issue 1| APRIL 2014

COVER STORY The majority of these rail transport users are working class from South African well-known townships and one of their characteristics is poverty. These trains are widely used by scholars, workers, hawkers and other ordinary South Africans who cannot afford to use taxis or who are running away from weekday‘s morning and afternoon road traffic. Metrorail trains are reasonably priced compared to any means of transport in this country and that serves as the reason why the working class usually uses them. A single trip from Mabopane to Rissik station (Hatfield) cost R8.00 with a train but R30.00 with an ordinary taxi and that leaves an individual with R22.00 to do other things or save, then if you choose to buy a monthly ticket then you will save Pictured above: Old trains that are going to be replaced R440 per month against normal taxi.

Source: PRASA Annual report 2013

Metrorail was criticized by its inability to serve people in a satisfactory manner which led to burning of Mabopane train in 2012 but with these new trains all of those problems will be things of the past, we hope. Lateness of current trains became a norm to us commuters, I also write by things I witnessed. The unpunctuality led to overcrowding and crime also. The obsolete and outdated signaling system which makes the movement of trains unsafe and less predictable is challenged and expects to be defeated by this new project, PRASA‘s chairman Sfiso Buthelezi highlighted in the 2013 annual report. Dr. Werner Heyns, Associate (Transport Planning) from ARUP indicated current network issues and generic interventions in PRASA National Strategic Plan document that was delivered at 32nd Annual South-

ern African Transport Conference that was This project is going to simplify lives of held on 8 – 11 July 2013. ARUP is an in- poor people from the black communities dependent consulting firm. and entrepreneurs who are looking forward to penetrate the market by crafting opporThis initiative turns to be a great move but tunities for themselves and other people. do we really understand what it means to The current business activities in the train working class and young entrepreneurs? stations are quite promising even if the Every plan turns to be good and bad at the health issues arise at all times due to unsame time but it depends of how you apclean trains and stations caused by the proach and analyze the situation. It is sigsame people selling and buying, in general nificant that we use Cost Benefit Analysis us commuters. Different kinds of product to judge the projects but the problem is are sold in trains at daily basis, ranging that not all of the costs are quantifiable and from fruit and vegetables, toiletries, accesthat‘s where we always get things wrong sories, food and drinks. Did you know that or accidentally right. It will in fact save the you cannot starve in a train if you have R2 most important commodity that cannot be in your pocket? NO HUNGER IN A found in any market in the world, which is TRAIN. time. We still have one question that needs PRASA to answer it, are we still going to pay the same amount we used to pay?

Issue 1| APRIL 2014

COVER STORY

Pictures New trains versus Old trains

New Trains

Old Trains

Issue 1| APRIL 2014

YOUTH AND LAW

Why is there an Employment Tax Incentive? Millions of young South Africans are currently unable to participate in economic activity, and as a result suffer disproportionately from unemployment, discouragement and economic marginalisation. High youth unemployment means young people are not gaining the skills or experience needed to drive the economy forward. This lack of skills can have long-term adverse effects on the economy. In South Africa the current lack of skills and experience as well as perceptions regarding the restrictiveness of labour regulations make some prospective employers reluctant to hire the youth. As a South African employer you now have a great opportunity to boost the employment of young work seekers.

What is it? The Employment Tax Incentive (ETI)/Youth Subsidy is an incentive mainly aimed at encouraging employers to hire young and less experience work seekers. It will reduce the cost to employers of hiring young people through cost-sharing mechanism with government. This incentive will complement existing government programmes with similar objectives. ETI was implemented with effect from 1 January 2014.

Who qualifies? The employer is eligible to receive ETI if the employer

Is registered for employee‘s tax (PAYE);



Is not in the national, provincial or local sphere government;



Is not a public entity listed in Schedule 2 or 3 of the Public Finance Management Act (other than those public entities designated by the Minister of Finance by Notice in the Gazette);



Is not a municipal entity;



Is not disqualified by the Minister of Finance due to displacement of an employment of an employee or by not meeting such conditions as may be prescribed by the Minister by regulation.

As an individual is a qualifying employee if he or she

Has a valid South African ID;



Is 18 to 29 years old (Please note that the age limit is not applicable if the employee renders services inside a special economic zone (SEZ) to an employer that is operating inside the SEZ, or if the employee is employed by an employer that operates in an industry designated by Minister of Finance;



Is not a domestic worker;

 Is not a ―connected person‘ to the employer; 10

Issue 1| APRIL 2014

YOUTH AND LAW



Was employed by the employer or an associated person to the employer on or after 1 October 2013; and



Is not an employee in respect of whom an employer is disqualified to receive the ETI ( i.e. the employee is paid below the minimum wage applicable to that employer or paid a wage below R2 000 per month if a minimum wage not applicable).

www.sars.gov.za

How does it work? Employer will calculate and claim the incentive on a monthly basis. The employer must follow these steps: 

Identify all qualifying employees in respect of that Month



Determine the applicable employment period for each qualifying employees



Determine each employee‘s monthly ―remuneration‖



The EMP201 form was amended to include a field for claiming ETI.

How long will it be available ? The incentive is currently scheduled to end on 31 December 2016 but its effectiveness will be reviewed to determine whether to continue with the incentive.

NEED HELP? Call SARS 0800 00 SARS (7277) or visit your nearest SARS Branch.

Source: SARS

Issue 1| APRIL 2014

DEBATE

ECONOMICAL POLITICAL

SOCIAL

Circle of

AWAKENING THE MASSES | EDUCATING OUR NAT ION

A page dedicated to political, social and economical debates for young people. Its time we acknowledge the fact that problems we are currently facing cannot be solved using one perspective, consolidating them will easy our way to economic emancipation Thabo Godfrey Mongatane CA(SA) Manyosi Mswazi Mantutle It’s a slippery slope question. To be fair though I say African empowerment. As we cannot dwell on the past, rather have an open-minded approach to bettering the lives of all Africans. Everyone under our skies deserves a better life. Professional Chef & Entrepreneur

Freddy Sambo We need black empowerment because there is a huge gap between whites and black communities. Although people says its not about money but it is a real factor and majority of blacks are still poor while they are in majority. We don’t blame whites the past differences but the gap can only closed by uplifting the previously disadvantaged. Blacks are not economical active that is why we need to uphold black people to ensure equality with the country. Blacks only concentrate on studying and looking for a job. The gap in terms of education is closed but in terms of skill still remain a huge problem. Transport Graduate

Based on current BEE structures it seems there’s been too much abuse. But like anything ,any project is prone to abuse. The need is there for corporate to support previously disadvantaged. The trick is not of our people can benefit from BEE. For example if government can take back land and give it to my grandfather who has no education, no background, nothing. Do we expect that the operations at the farm be as lucrative as before? But look at me, look at you. If transformation projects like Thuthuka didn’t exist do you think there’d be Godfrey Mongatane on SAICA’s list of members? Auditor at Auditor General of South Africa

Sipho Skhosana Is there any difference between the two? Okay I think we do need African empowerment not black empowerment, as it defines specific color whereas the word “African” depicts a kind of human species from Africa that is also capable and has the ability to improve a nation’s performance by providing and participating in economic activities. IT Student at UNISA and Data Capturer Issue 1| APRIL 2014

DEBATE

Prince Moeng

Sanele Zulu

There are 925 million black people in Africa out of 1.033 billion in totality (2011). This shows that there are more black people in Africa; therefore, empowering black people would also lead to African empowerment. The concept of black individual would mean being a “black” ethnicity in their particular country, typically having a degree of Sub-Saharan African ancestry, or who are perceived to be dark skinned relative to other “racial groups”.

Ok, well at this stage in our society, considering our past and the ills in our society that is tracked to the past of apartheid and colonization, also the fact that what our past looked like was only biased towards colour. It is really important to appreciate that where we find ourselves now, we must have black empowerment, because, anyone can be an African, whether, white, Jew, or Chinese, but the most affected race by our past is the Black community. The reason why I'm starting with the past is because we can never appreciate where we are if we don't know where we come from and we can never understand the promises of the future if we don't appreciate where we are. Having said this, the reason why we must push for black empowerment is because a black mens background has always been that of little or poverty or limited resources. Black empowerment is also important so that we may be able to balance our society, because as a country and continent we are the most unequal society in the world, especially when you compare with other racial groups. In SA alone, white people still occupy more than 60% of the executive seats in corporate... And about 55% are amongst the richest but are also considered Africans. So we cannot pursue African empowerment without tackling the real issue at hand that a black was supressed and therefore never had enough opportunities in the past. So by empowering black we are rewriting the past, which many of you guys are fortunate enough to be part of. And then for harmony, love and peace, ofcourse we must pursue the empowerment of Africans. But yeah, your question would also be dictated by the context of the topic, if we speak, financial, we speak, educational, we speak, Africanism with our brothers and sisters from our neighbouring countries.

Empowering black people who occupy majority of the African demographic would broaden participation in the economy. Africans, on the other hand, include other racial groups like Whites, Indians, Portuguese, etc. who also have their origins in Africa. With light to that I believe we need black empowerment, which has a lasting, real and sustainable impact on the continent economy and promotion and development of Black-owned companies. This will also harness a race representation in Top Level management. The truth about the demographics of the business structures in Africa is that they are mostly dominated by white people; therefore, empowering black people will cause a fair representation of race in decision-making positions and top level positions. The empowerment of black people would lead to an increase/improvement in the performance of the company that they work for, specifically with regard to overall and international competitiveness, service excellence and client satisfaction, quality, productivity, entrepreneurial spirit and innovation, production performance, human development, staff morale, business ethics and transparency, sale and access to markets, and financial performance. Therefore I conclude that Black empowerment is needed!

#BlackEmpowerment.

ABASA UJ Student Chapter Chairperson

VISIT OUR FACEBOOK/WEBSITE TO CHECK NEXT MONTH’S TOPIC!

CIRCLE OF CONCERN MAGAZINE

Issue 1| APRIL 2014

Philasande

Anonymous

Firstly South Africa is a rainbow nation, full of different tribes, cultures and languages. So if we say we need black empowerment, we will be stealing others the opportunity to make their part in our country. South Africa is diverse, so we need that diversity to make it a better place to be. It might be hard to say but there are other things that as black we cannot do but other races can, like when we talk of creativity, we lacking at that so we need other races to fill up the circle by coming with their creative minds. We are all gifted in our different ways no matter you are white, black or coloured u have a gift and u need the opportunity to show it, whether it's political, economical or social but u need be given a chance to show that gift. So we don't need a black epowerment but an African, a united country is a successful country.

If you are basing it on apartheid then yes ,Black empowerment or rather the idea of it is exploited by corruption as much as we try to move on from apartheid south africa is deeply scarred by it in terms of inequality...people still struggle to break out of poverty because apartheid put them there its hard even with freedom because of lack of means to sustain the desired lifestyle just know that thereâ&#x20AC;&#x2122;s still a big gap to fill before south africa is an actuall unit in terms of equality...as for the corruption...its sad because it takes away from the larger portion of poor people that cud b helped...its the sad truth...

Sifiso Thela

BEE as a policy to address inequalities which are the product of the past apartheid era is still a much needed policy. The objective of the policy is still not achieved. Though it may seem that blacks have moved into positions of influence and are now in control of companies, this is only a minority of individuals. Even in these cases you find that some are used as fronting for the company to have a certain BEE status. In instances where a company is wholly owned by black individuals, you find that it (company) ends up being bought out by big companies to gain BEE points. Still the objective to level out economic positions is not achieved. All is not so bad, a huge distance has been covered but we still have to find ways in implementing our policies as a country and not have loopholes found by many defeat our strides to become a better country that we are.

I do think it works...just that they go off lane here nd ther...which is sadly at the expense of people who already have nothing.

Lebo Yes, I think BBE is important because it gives black people the opportunity to level out the effects of apartheid and to reach their true potential. Apartheid left black and white people in different generation spheres... BBE bridges the gap.

Retang Phaahla I believe we do need African empowerment more than money and more than hand outs. Empowerment liberates our minds in a way that enables us to start searching for solutions to our own problems and strengthens belief in ourselves. Africans need to be empowered to believe that they have the ability to think for themselves and freed from a mindset of dependency.

Issue 1| APRIL 2014

Spetane Sithole

Miranda

No. I believe there should be South African empowerment. I understand that our govt is attempting to amend the injustices of the past, but 20 years on we need to focus on the present injustices that occur daily in this country. Being disadvantaged is no longer defined by race; it is defined by economic status. Those without the opportunity to better them financially are the ones who are being oppressed. Empowerment by the government should focus on those who are unable to empower themselves. Universities should not favour black apeopleicants for places; they should make active efforts to help underprivileged schools grant their students a better quality education, so that the students are able to get into higher education through merit, not by colour. By empowering black citizens now, white and other races are being disadvantaged, creating a vicious cycle that will have to be rectified later on. True equality cannot be achieved through methods of inequality. Something to ponder is how black empowerment makes black people who have gained opportunities merely on the basis of their skin colour feel? Do they feel worthy? Do they believe they deserve their place, that they have earned it, or do they realise that they have been given a chance simply because of the race into which they were born. What about a black person who has genuinely earned their place, how do they gain a sense of accomplishment if they are constantly questioning whether they received the opportunity based on their hard work or on their skin colour? The government needs to consider all of its citizens, and empower those who are powerless to do so for themselves. This, I believe, begins with a proper education and job creation.

Lol I can't give u 100 to 200 words but my opinion is that dat we do need it. In a perfect world with no corruption itâ&#x20AC;&#x2122;s actually a beautiful concept dat aimed at correcting the inequalities of the past. But it also has its disadvantages and is unfair on white people of our generation cuz they ddnt ask for.....so explore it and have fun it.

Athi There is a strong argument about how bee status is granted to companies and research shows that certain companies use black employees to gain a certain bee status is a reality. This shows that there are still holes in the administration of BEE. We need to have bee being more than just financial support but something beyond that to achieve a situation where we don't only have numerous black business people but quality black business people.

However, in a different view, the attempt to level out economic positions according to the demographics of the country may be counterproductive in the growth of our economy. Hence this calls for a general African Empowerment.

Issue 1| APRIL 2014

DEBATE

The National Student Financial Aid Scheme (NSFAS) is one of the most successful stories of the ANC-led government. Since its inception it has supported more than 1.4 million students, mainly from poor black families, most of whom being first generation university or college graduates. It has grown from around R400 million in 1999, to a staggering 9,6 billion in 2014; tripling from R3.1bn in only the last five years since 2009. Very few, if any, budget items has grown so much in any one term of government, underlining President Zuma's commitment to education as an apex priority. It would perhaps be no exaggeration to claim that NSFAS is the single largest contributor to the growth of the black middle class since 1994. However, the last few weeks has seen some public criticism of the National Student Financial Aid Scheme (NSFAS), often without any verification of the facts. While some of the criticism may have been warranted, most has been uninformed or even mischievous. The danger is that such unfair denigration of NSFAS could not only undermine public confidence in this extremely valuable national institution, but also distort its enormous achievements. The origins of NSFAS can be traced back more than twenty years. Careful reflection on its achievements and future plans can put current debates into perspective. In the early 1990s the African National Congress (ANC), the government in waiting, began preparations to govern South Africa. The movement visualised a liberated South Africa in which all men and women would be equal and where all would receive education and training to help them to fulfil their potential, as outlined in the Freedom Charter. It was aware that one of the most destructive legacies of apartheid was Bantu Education which hindered the intellectual development of blacks in schools and tertiary institutions. Without an expansion of educational opportunities, one of the main aims of the liberation struggle would not be achieved. Black people would not gain the skills necessary to play a leading role in the economy, the government and the civil life of society. Unemployment would be intensified and lead to frustration, disillusion and socio-economic turmoil detrimental to a new democracy. 18

Although the ANC did have some successes in providing higher education and training to exiles in the decades preceding 1990, a massive expansion of skills was needed to run a future South Africa, the majority of whose citizens had been deliberately robbed of a proper edTo counteract this problem, the newly-unbanned ANC put pressure on the apartheid regime and big business to look seriously into the plight of black students at tertiary level. In 1991, the newly established Independent Development Trust (IDT) established the Tertiary Education Fund of South Africa (TEFSA) to provide loans to black students. Issue 1| APRIL 2014

DEBATE As with any fast-growing organisation, administrative challenges have arisen as NSFAS has expanded. The 2010 report of the Ministerial Review Committee on NSFAS identified the challenges and most have already been addressed. The greatly increased efficiency of NSFAS over the past few years was acknowledged by the Vice Chancellor of the University of Cape Town, Dr Max Price, at a meeting of the parliamentary higher education and training portfolio committee on 5 March. NSFAS continues to look into innovative ways to improve efficiency and tackle bottlenecks in its system. It has recently launched a student-centered loans and bursaries model aimed at putting students themselves at the center of the funding system. This new model, piloted at seven universities and five FET colleges in January this year, enables NSFAS to have direct contact with students and gives the organisation tighter control of disbursed funds. The overall aim of the new funding model is to replace the old Loans and Bursaries Management System, designed to handle

reasonably low amounts of funds for fewer students. NSFAS will continue to pay tuition and residence fees directly to public institutions. However, allowances for private accommodation, food, books and transport will be paid to the students themselves in the form of credit available on a smart card that will ensure that the funds are used solely for the intended purpose. Most importantly, this project enables students to apply for financial aid before registering with their institutions of choice, preventing the long queues at universities and colleges that have up to now been a feature of the beginning of each academic year. Above all, this new funding model is aimed at preventing fraud and corruption. This will enable NSFAS to account fully to the Auditor General and Parliament for the public funds for which it is responsible. Today, NSFAS beneficiaries are making a meaningful contribution to the economy of the country, serving as engineers, teachers, curriculum designers, scientists, artisans and economists. A large section of todayâ&#x20AC;&#x2DC;s black middle class owes its success to NSFAS and its forerunner, TEFSA. This support for needy students will continue and grow.

Empowering the nation through education!

Issue 1| APRIL 2014

LAW&ECONOMICS

Acquiring for profit and resource intensification, or for competition elimination?

ergers appear in three forms, based on the competitive relationships between the merging parties. The most common of which is a horizontal merger wherein one firm acquires another firm that produces and sells an identical or similar product in the same geographic area and thereby eliminates competition between the two firms. Competition law seeks to prohibit transactions whose probable anticompetitive consequences outweigh their likely benefits. It is widely accepted that industries and or sectors function properly and consumers are treated fairly where there is fair competition amongst the producers. Anti-trust laws have been put in place to guard against unfair competition and unfair competition elimination, like where Company A acquires a well doing start-up, Company B merely because given the right amount of time, B would become a major player in the industry or sector in which A dominates, or rather monopolises and as a result pose as a threat to A. However, exceptions do exist through which companies have been left the latitude of selling or buying companies in whole or in part because mergers are said to have a couple of social benefits, hence anti-trust laws make way for mergers for which benefits outweigh anti-competitive consequences.

Donald Msiza merging firms' operations might create substantial market power and might enable the merged entity to raise prices by reducing output unilaterally. This can be seen, as per according to my view from recent acquisitions associated with Facebook. Facebook has acquired 10 companies with its largest acquisition being the purchase of WhatsApp on the 19th of February â&#x20AC;&#x2122;14 for $19 billion thereby raising its market capitalisation which as of January â&#x20AC;&#x2122;14 was US $ 177.78 billion. Most of Facebook's acquisitions have been 'talent acquisitions' and acquired products are often shut-down. Facebook CEO Mark Zuckerberg has been reported as saying "We have not once bought a company for the company. We buy companies to get excellent people... In order to have a really entrepreneurial culture one of the key things is to make sure we're recruiting the best people. One of the ways to do this is to focus on acquiring great companies with great founders." Although hiring is one of the biggest motives behind mergers and acquisitions, some motives might just be a faĂ§ade of the real rational behind an acquisition, competition elimination which will, through the elimination of start-ups (thereby increasing concentration in the relevant market for the acquirer), lead to many transactions strengthening the ability of the market's remaining participants to coordinate their pricing and output decisions; price fixing, which we see in the South African construction industry.

Mergers can produce economies of scale; where the combined company becomes able to reduce its fixed costs by removing duplicate departments or operations, lowering the costs of the company relative to the same revenue stream, therefore increasing profit margins, and economies of scope where efficiencies primarily associated with demand-side changes, such as increasing or decreasing the scope of marketing and distribuOr are we perhaps living in economical times requiring entretion, of different types of products, these reduce costs, improve preneurs to start companies with only the view of disposing quality, and increase output. them of for profit in the future, thereby evading being competiAnother reason for which mergers occur is synergy; a merger tively weak and strategically eliminated, are mergers and acquimay result in managerial economies, i.e. managerial specialisa- sitions really murders and executions? tion. In as much as mergers might be desirable, they do raise donaldmsiza@circleofcorncern.co.za competitive concerns one of which is that the unification of the @nmsiza 21

Issue 1| APRIL 2014

CAREERS

By South African Institute of Chartered Accountants and Komane Tshegofatso

FAST FACTS  Currently there are ap-

he debate on a career path has always been on whether to choose a career path for job satisfaction or for monetary reward. The debate also begs the question: Can I get both monetary reward as well as job satisfaction and the answer is a very firm yes. Research revealed that the South African businesses needed 22 000 qualified accountants. Therefore students choosing to study chartered accountancy have a better chance of good achieving better career prospects than any other profession and getting well paid because of the demand. If you have a flair for numbers, excel in Mathematics and enjoy the business working environment, then job satisfaction as a chartered accountant will be a given. Perhaps you plan on going into commerce, starting your own business or want to enter a profession that will ensure you always have a great job anywhere in the world. The smart thing to do is become a chartered accountant. The South African Chartered Accountancy [CA (SA)] qualification is not only highly regarded in South Africa, but throughout the world and currently there are approximately 6 000 South African chartered accountants who are working abroad. In its 2010/11 Global Competitiveness Report the World Economic Forum (WEF) rated South Africa 22

proximately 6 000 South African chartered accountants who are working abroad.  In its 2010/11 Global

Competitiveness Report the World Economic Forum (WEF) rated South Africa No.1 in the world for the strength of its auditing and reporting standards  75% of CFOs of the JSE

top 200 are CAs(SA)  32% of CEOs of the JSE

top 40 are CAs(SA)

Issue 1| APRIL 2014

CAREERS

Fly away with your CA(SA) qualification The South African Institute of Chartered Accountants (SAICA) Senior Executive for Professional Development, Transformation and Growth Chantyl Mulder herself a CA (SA) says that the qualification opens up the world. ―With CA (SA) after your name, there are very few business obstacles you can't conquer. The CA (SA) designation is well thought of and recognised the world over.‖ It is easily the most sought after professional qualification in South African business. A recent survey of the top 200 companies on the Johannesburg Stock Exchange (JSE) found that: 11.59% of Directorships held by MBAs are CAs(SA) 32% of Directors of the JSE top 200 are CAs(SA) 75% of CFOs of the JSE top 200 are CAs(SA) 32% of CEOs of the JSE top 40 are CAs(SA) This shows that there is a demand for chartered accountants in the corporate world. And, this year an independent survey of South African Business leaders found that:

STEP ONE SECONDARY EDUCATION You've got to have that university exemption in the bag (that means you must work hard in your last few years of school). You’ll need at least a C-plus in mathematics (simple maths literacy is a definite no-no), maybe you did accounting until grade 12 (but that's a bonus, not an essential). You must hold your own easily when debating in the English language.

STEP TWO VARSITY EDUCATION Next you need to apply to study a relevant BCom degree at a SAICA accredited university. SAICA, as a registered Education and Training Quality Authority (ETQA), only recognises certain universities as having the necessary quality to academically qualify prospective CAs (SA). These universities are rigorously and continuously monitored to promote quality in the content and delivery of the education programme. A list of accredited universities and detailed career information is available at www.nowican.co.za. After graduating from you accounting degree then you will have to register for CTA– certificate in theory of accounting also know as honours in Accounting .

ABOUT SAICA The South African Institute of Chartered Accountants (SAICA), South Africa‘s preeminent 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 30 000 members who are Chartered Accountants and hold positions as CEOs, MDs, board directors, business owners, chief financial officers, auditors and leaders in their spheres of business operation. Most of these members operate in commerce and industry, and play a significant role in the nation‘s highly dynamic business sector and economic development. SAICA serves the interests not only of the Chartered Accountancy profession, but also of society in general through its key objective of upholding professional standards and integrity. The pre-eminence of South African Chartered Accountants [CAs (SA)] nationally and internationally attests to the successes achieved by SAICA on a broad global canvas. SAICA‘s members enjoy the privilege of using the highly regarded and prestigious CA(SA) designation. Members of SAICA are subjected to a Code of Professional Conduct, which provides guidelines for ethical and professional behaviour. Fundamental ethical principles to which CAs(SA) are expected to achieve include: Integrity, Objectivity, Professional Competence and Due Care, Confidentiality, and Professional Behaviour. SAICA members serve on international accounting bodies including; the Trustees of the International Financial Reporting (IFRS) Foundation, the International Accounting Standards Board (IASB), the IFRS Interpretations Committee, the IFRS Advisory Council and the Council of the Issue 1| APRIL 2014 International Federation of Accountants (IFAC). SAICA is also a member of The

CAREERS

STEP THREE TRAINING STAGE Once you finish your BCom degree and then the certificate in theory of accounting (CTA) - an Honours level degree – you will start your three-year internship or ‗articles‘ with an accounting firm, in government or in a commercial company. This is called a training contract. A training contract is tough. You have to hold down a full-time job, study for your various exams — and still find time for some recreation. But it can be done – and more than 33 000 CAs(SA) can testify to this! However, it requires discipline and good time management. You will be deeply involved with practical issues of real businesses, all the while fine tuning your academic knowledge. You could possibly work in one or a combination of the following environments: Auditing – express your opinion on financial statements Taxation – Tax Consultant – advise clients on their tax Accounting – lead a team that handles the payroll, VAT returns, tax reports, annual financial statements, cash flow forecasts etc. Business Advisory - business plans, profit improvement advice, investment strategies Forensic Accounting – investigate fraud, high overhead costs Corporate Finance – mergers, acquisitions, disposals Schemed Finance – structured deals, investments and businesses Company Secretarial – Statutory books Wealth Management – estate planning, wills and trusts Entrepreneur – pursue a business of your choice Education – Lecturer

If you do your training contract in one of the large accounting firms, you can specialise fairly early in your training, focusing on specific sectors or industries such as, for example, mining, manufacturing, banking or financial services. In a small- or medium-sized firm you may find you can move into, or even start, one of the firm‘s subsidiary companies that might include corporate governance, internal auditing, IT and recruitment. In government you might see what makes the economy tick at the National Treasury or guard public spending with the Auditor-General. Regardless of where you serve your training contract, your qualification is the same — the globally recognised and prestigious CA(SA). While completing your training contract there are two final qualifying exams (QE 1 and 2) that must be passed before you can call yourself a CA(SA) and can practise as a CA(SA) and or as a registered auditor (RA). You can now work in almost any field of business. For example: You can go into private practice. You can work as a tax advisor or consultant. You can become a forensic accountant. An entrepreneur. A financial manager. A chief financial officer (CFO). A chief executive officer (CEO). The list goes on, beyond accounting firms. A CA(SA)‘s reputation is built on four pillars: Integrity, ethics, technical excellence and training 24

Issue 1| APRIL 2014

CAREERS

SAICA- Professional development – 20 Years of Democracy By South African Institute Chartered Accountant South Africa‘s National Development Plan (NDP) focuses on education as one of its priorities to address the issue of transformation and growth in the country. Some of the priorities include: ―eradicate infrastructure backlogs‖ ―provide 1 million learning opportunities through Community Education and Training Centres‖ ―improve the throughput pass rate to 80 per cent by 2030‖ ―increase enrolment at universities by at least 70 %‖ It is clear that such an ethos is mirrored in SAICA‘s unit that focuses on Professional Development, Transformation and Growth. Examinations and statistics Aspiring chartered accountants achieved excellent results in Part II of the Qualifying Examination, Financial Management (QEII) towards becoming a CA(SA).

The overall pass rate for QEII, written in November 2013, is 86%, an all-time high from the previous year‘s 78%. A total of 209 candidates sat for the 2013 examination, whereas only 182 candidates wrote the examination in 2012. Mandi Olivier, Senior Executive Professional Development at the South African Institute of Chartered Accountants (SAICA) said, ―More African candidates wrote and passed this crucial examination, Olivier points out that the number of these candidates passing had risen from 63 to 102 candidates in 2013. This means that more than half of the total number of candidates passing the 2013 QE II is African-an excellent milestone indeed. The overall pass rate among Indians, African and Coloured candidates was 84% (up on last years 71%).‖ The QE II and PPE will be replaced in November 2014 with one assessment for all prospective CAs(SA) irrespective of where they are undertaking their training. This new form of assessment will be known as the Assessment of Professional Competence (APC). The APC has been designed to more appropriate-

Let the beneficiaries speak: ―I am so excited to hear that I have PASSED the IRBA Public Practice Examination (Audit) which was my last professional board exam to becoming a Chartered Accountant. I have now the next 10 months remaining (till 31 December) to finish my articles here at Deloitte. These are great news. The Thuthuka programme has played a massive role in me being where I am today. My family could have never been able to put me to university. Through hard work and my faith in God I studied at one of the best universities at no cost to my family. I usually say when I talk to other young people: The Thuthuka Bursary was designed with people like me in the mind. It requires nothing from you but your commitment towards academic excellence in so doing becoming a Chartered Accountant. Where would I have been without this support? Thank you to Unathi Speirs who believed in me when there seemed to be no way. Thank you to Lwando Bantom from SAICA who is the pillar of strength for our Eastern Cape region. Thank you to Nthato and Desmond from SAICA who came to NMMU to give a presentation on ―Attitude‖ in 2011 – when I was so negative because I had failed my Honours (2010)they changed my life for the better. I never failed since then. Thank you to Chantyl Mulder from SAICA who heads the Professional Development, Transformation and Growth unit who bravely knocked on different doors seeking funding and support for a Black kid. This is a transformed action in itself. I will never forget the role you played. I vow to be one of the best community-centered and empowering individuals- this is how we change communities: you impact one person and that person impacts others.‖ 25

James Sithembele

Issue 1| APRIL 2014

CAREERS

By SAICA When Vusi completed matric in 1981 in Middelburg, Mpumalanga, he was forced to work as a laboratory technician for years to earn a salary. Then he went to Rhodes University to pursue his dream of qualifying as a chartered accountant. He attended Rhodes from 1986-1989 where he completed his BCom degree followed by CTA. He then wrote the Board examinations five times and failed. In 2008 he enrolled for CTA again, but he suddenly contracted Chickenpox. In 2009 he enrolled again. This time the taxi that he was travelling in broke down and he had to literally run for five kilometres and arrived at the examination venue an hour late. Then he experienced anxiety and swollen hands and was unable to go beyond one question. He re-wrote the examination in 2011 and he had one supplementary examination to write. Finally, in 2102, he wrote QE1 and passed. He enrolled for PPE in 2013 and hear on 21 February 2014 that he had passed and finally he can add the much sought after CA (SA) designation to his name. He describes his joy as “dizzy” and for a 52-year old man, this can be a fulfilling experience indeed. To Vusi, he is a worthy role model to his three children: an 18-year old son (who is currently in Grade 12); a 15-year old daughter and an impressionable 12year old son. Who says that chartered accountants are dull and boring people who love grey suits? What do some of them do in their spare time (when they manage to get some)? Vusi says, “I grew up playing soccer. I also have a deep love for music, especially South African gospel and choral music. I follow national cricket, rugby and soccer. I love eco-tourism and have a basic off- road driving certificate. I enjoy travelling (when I can afford it) and admiring our country’s natural beauty. I obtained a karate black belt in 2004. I visited Japan the same year and trained under Master Hirokazu Kanazawa (and his son), Master Manabu Murakami and Master Suzuki (and son). In 1995, I trained under Master Kenneth Funakoshi during his visit in South Africa. Master Kenneth Funakoshi is the son of Master Gichin Funakoshi, who is regarded as the founder of karate. My South African karate trainers and heroes in karate include Sensei’s (Sensei is a Japanese term for Teacher, accorded to someone who has obtained at least a third degree black belt) Rashid Loonat (my second karate instructor), Gordon Apollis, Edward Mtshali, Master Mohan Hira, the late Sensei Patrick Lubambo. (I also acknowledge my chief karate sparring partner Sensei Zane Abrahams. I had a few training sessions under the late Sensei Kisofero (from Kenya). I became junior karate instructor, preparing students for their grading and tournaments. I also obtained a few gold and silver medals in karate competitions. My karate career was shortened by a nagging groin muscle injury that started late in 2004.” 27

Issue 1| APRIL 2014

Presents Spread your wings and win clients.

“Building bridges is useless when roads are of disgrace” Circle of Concern Magazine’s Founder

WHY BUSINESS SHOWCASE EVENT?

Participation as a business



To create a solid network within small and medium-sized businesses.

Email: events@circleofconcern.co.za



Expose young entrepreneurs to the iconic world of business leaders.



To help small and medium-sized enterprises to advertise their products or services.



To ensure that prospective entrepreneurs get mentors within their industry.



To equip business leaders with financial and leadership skills.

Participation as an individual Email: golden@circleofconcern.co.za

Date: to be announced soon Place: Protea Hotel Hatfield

Issue 1| APRIL 2014

DID YOU KNOW?

Issue 1| APRIL 2014

FUNDING OPPORTUNITY

Description The South African Government offers a package of incentives to promote its film production and post-production industry. The incentives consist of the Foreign Film and Television Production and Post-Production incentive to attract foreign-based film productions to shoot on location in South Africa and conduct post-production activities, and the South African Film and Television Production and Co-Production incentive, which aims to assist local film producers in the production of local content.

Foreign Film and Television Production and Post-Production Incentive Objectives: To encourage and attract large-budget films and television productions and post-production work that will contribute towards employment creation, enhancement of international profile, and increase the country‘s creative and technical skills base. Benefits:



Shooting on location in South Africa, the incentive will be calculated as 20% of the Qualifying South African Production Expenditure (QSAPE). No cap will apply for this incentive.



Shooting on location in South Africa and conducting post-production with a Qualifying South African Post-Production Expenditure (QSAPPE) of R1.5 million in South Africa, the incentive will be calculated at 22,5% of QSAPE and QSAPPE (an additional 2,5%, cumulative 22,5%)



Shooting on location in South Africa and conducting post-production with a QSAPPE of R3 million and above in South Africa, the incentive will be calculated as 25% of QSAPE and QSAPPE (an additional 5%, cumulative 25%).



Foreign post-production with QSAPPE of R1.5 million, the incentive is calculated at 22,5% of QSAPPE.

Foreign post-production with QSAPPE of R3 million and above the incentive is calculated at 25% of QSAPPE. Eligible Enterprises: Foreign-owned qualifying productions and South African qualifying post-production work with:



QSAPE of R12 million and above, provided that at least 50% of the principal photography schedule is filmed in South Africa, for a minimum of four weeks.



QSAPPE of R1.5 million and above, provided that 100% of the post-production is conducted in South Africa, for a minimum of two weeks.



An applicant must be a Special Purpose Corporate Vehicle (SPCV) incorporated in the Republic of South Africa solely for the purpose of the production and/or post-production of the film or television project.



An applicant must be the entity responsible for all activities involved in the production and/or post-production in South Africa and must have access to full financial information for the whole production and post-production worldwide.



Only one entity per production and/or post-production for film, animation and television drama or documentary series is eligible for the incentive. The applicant must comply fully with its obligations in terms of the Legal Deposit Act 54 of 1997.

SA Film & TV Production and Co-production Objectives:

Issue 1| APRIL 2014

Benefits: The rebate is calculated as 35% of the first R6 million of QSAPE and 25% of the QSAPE on amounts above R6 million. Eligible Enterprises:



Special Purpose Corporate Vehicles (SPCV) incorporated in the Republic of South Africa solely for the purpose of the production of the film or television project. The SPCV and parent company(ies) must have a majority of South African shareholders of whom at least one shareholder must play an active role in the production and be accredited in that role.



An applicant must be the entity responsible for all activities involved in making the production in South Africa and must have access to full financial information for the whole production.



Only one film production, television drama or documentary series per entity is eligible for the incentive.



The following formats are eligible: feature films, tele-movies, television drama series, documentaries and animation.

The incentive is available only to qualifying South African productions with a total production budget of R2.5 million and above. Contacts:

Issue 1| APRIL 2014

You must look within for value, but must look beyond for perspective. Denis Waitley

Issue 1| APRIL 2014

YOUTH AND INFRASTRUCTURE

By Bongani Rakgalakane

outh Africa has become one of the biggest economies in the African continent attracting millions of foreigners and direct foreign investment. It can be said that this encourages the growth of the economy; as such the infrastructure of the country has to keep up with the growth in economic activity. In the 2012 World Economic Forum discussions the lack of adequate infrastructure was cited as one of biggest factors affecting growth in the African continent. With its vast natural resources Africa has been attracting investment however the infrastructure to support industry, manufacturing and mining has been a concern for foreign investors .

In addressing the transport infrastructure challenge Transnet another state owned company launched a R300bn infrastructure plan that is set to create a total of 588 000 new jobs in the SA economy, this will include rail, ports, pipelines in a seven year period not only the state and public enterprises are playing a role in this sector but also private companies in the form of Public Private Partnerships.

The private sector is also gearing up for the boom in infrastructure development a case in point would be the development of the Gautrain, it too is an example of infrastructure development with the concession company Bombela Concession Company Inadequate energy supply hampers production, whilst inade- having announced plans for a R50bn expansion. quate rail infrastructure results in delays in terms of the delivery One can easily ask where the capital to finance such projects of goods to their destinations not forgetting low port capacity. comes from A finance mechanism called project finance is used; this method engages a multilateral of participants including multilateral organisations, governments, banks and private SA is one of the African countries that are making strides in companies. When such method is the preferred method of fiaddressing the infrastructure backlog in South Africa. The govnancing the parties share the risks that may follow as a result of ernment has appointed the Presidential infrastructure committee the projects a project company also known as a Special Purpose which is tasked with advising in matters relating to infrastrucVehicle is incorporated which then has independent legal pertures development this is accompanied by the National Infrasonality this form of financing is also called off balance sheet structure Plan and further legislative processes have been abled financing because unlike normal corporate finance, in project before parliament in the form of the Infrastructure Bill. This is finance the repayment of a debt is not based on the assets reall aimed at addressing the infrastructure problems facing the flected on the sponsored companyâ&#x20AC;&#x2DC;s balance sheet but on the country. revenue the project will generate. In addressing the energy crisis the state owned power utility namely Eskom has commenced the construction of a hydro power plant in KZN namely Ingula and two coals fired power This form of financing has and continues to stimulate economic stations Medupi and Kusile in Limpopo and Mpumalanga with activity in the SA economy with professional services firms Medupi upon completion producing 4.764mw of power whilst such as Law firms and Investment banks increasing their praccreating job and skills development opportunities during the tice groups in areas of project finance. construction phase.

Issue 1| APRIL 2014

FUNDING OPPORTUNITY

THE NPA’S ASPIRANT PROSECUTOR PROGRAMME - WHAT YOU NEED TO KNOW Are you a law graduate or student interested in pursuing a career as a Prosecutor? The National Prosecuting Authority (NPA) is offering you an excellent and a lifetime opportunity to fulfil your career ambitions through our unique training programme – the ASPIRANT PROSECUTOR PROGRAMME.

Please go through the Questions & Answer below to find out more about the above programme:

1. What is the Aspirant Prosecutor Programme? The Aspirant Prosecutor Programme is an internship programme offered by the NPA, aimed at equipping law graduates with practical experience to pursue a career as a Prosecutor. It is an in-service training programme in which successful candidates are attached to the NPA’s National Prosecutions Service to gain the required practical experience.

2. How long is the Aspirant Prosecutor Programme? The programme runs for a period of 12 months.

3. What happens on successful completion of the programme? On successful completion of the programme, you can expect to be offered an entry level prosecutorial position within the NPA’s National Prosecutions Service.

4. I am interested in joining the programme. What are the requirements? Interested applicants should have a Bachelor’s degree in law or in their final studies towards an LLB degree, which should include at least the following courses: • Law of Evidence, • Criminal Law, Criminal Procedure, • Civil Procedure; and • Interpretation of Statutes 35

Issue 1| APRIL 2014

FUNDING OPPORTUNITY

5. Where does the training programme take place? The programme is presented at 20 training centres, namely: Athlone, Bloemfontein, Durban, East London, George, Johannesburg, Kimberley, Klerksdorp, Middelburg, Mthatha, Pietermaritzburg, Polokwane, Port Elizabeth, Pretoria, Thabamoopo, Benoni, Welkom, Madadeni, Randburg and Soweto.

6. Do successful candidates choose which training centre they will be attached to? During the application process, candidates are required to submit their applications to the preferred training centre.

7. Who conducts the training? The training is conducted by qualified tutors who hold the same rank as Senior Public Prosecutor. Each tutor is assigned a maximum of 10 aspirant prosecutors during the 12 months evaluation period.

8. How is recruitment done? Is there an application form I can fill straight away? To ensure that the recruitment process is fair and transparent, an advertisement will be placed in the national newspapers, inviting interested candidates to apply. Therefore, there are no application forms that you need to fill in to apply – you’ll only apply in response to an advertisement that the NPA will place in the national press. You must therefore be on the look out for that advert! The advert is normally placed in the national press and the NPA website in June or July every year.

9. How is the selection process conducted? The following outlines how the selection process will be conducted: • Based on the requirements of the advert, the tutors perform pre-selection of candidates • After the pre-selection phase, applicants who qualify are invited to register for the entry examination. The purpose of the entry examination is to assist with the sifting of applications. Upon registration, applicants are each given a Training Prosecutors Manual from which they prepare themselves for the entry examination. 3

• Amongst other criteria, the mark obtained by a candidate will also be used to 36

Issue 1| APRIL 2014

FUNDING OPPORTUNITY

â&#x20AC;˘ Following the interviews, ten (10) successful candidates at each centre are recommended to undergo the training. In addition, five (5) candidates at each centre are recommended as secundi. â&#x20AC;˘ Upon completion of the aforementioned process, candidates will be required to sign a contract with the NPA for a period of 8 months.

10. In what format is the training conducted? During the first month, Aspirant Prosecutors receive classroom tuition. From the second month onwards, they receive practical or in-court training. They will be required to conduct real cases in court to demonstrate their competency.

11. How will learners be assessed? Learners are assessed on a continuous basis to determine their competency. Before the expiry of the programme, final assessment is conducted on each aspirant prosecutor. Only those that are found to be competent may be offered positions within the NPA.

12. Do you need SA citizenship to apply? Yes, only South African citizens must apply.

13. Is the training programme accredited by the South African Qualifications Authority (SAQA)? Not yet, but the NPA is in the process of seeking full SAQA accreditation.

Issue 1| APRIL 2014