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BUSINESS

A publication for progressive business

THE AFRICAN FREE TRADE AGENDA THE AFCFTA PROJECT How to assess the attractiveness of entering new African business markets

ECONOMY FORECAST The good, the bad and the ugly of the South African economy in 2021

DUBE TRADEPORT SEZ Durban Aerotropolis part of plan for world-class industrial and commercial centre

GBS CHAMPIONS Victory for the Global Business Services industry on Ryan Advisory’s Survey

Issue 20 | May 2021

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MF Jassat Dhlamini (MFJD) is committed to a culture of continuous improvement in striving to achieve service excellence. It aims to be a leader, among both emergent and established firms, in its chosen field of expertise. MFJD has concentrated its efforts on satisfying the legal requirements of all its clients. Its clientele includes both large and small business enterprises, as well as a number of non-profit organisations and individuals.    Motor Vehicle Law | Commercial Law and Litigation Company Law and Litigation Insurance Law and Litigation including Compliance and Ombudsman Law of Property including Landlord and Tenant Conveyancing including Transfers, Bond Registrations and Sectional Title Labour Law | Personal Injury Law including Medical Negligence Sports and Entertainment Law | Debt Collection

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9 Lutman Street, Richmond Hill, Port Elizabeth 6001 | PO Box 15063, Emerald Hill, 6011 Tel: 041 586 0402 | Fax: 041 586 0405 | Cell: 073 067 9326 | Email: info@setuqs.co.za

Setu Quantity Surveyors was appointed by

The Bluewater Bay Sunrise Hotel with sea view

the Coega Development Corporation (CDC)

bedrooms,

as a Principal Agent and Quantity Surveyors to

centre, outdoor pool and conferencing facilities

complete a 58 bed four-star Boutique Hotel to

opened in its doors in November 2020 and

the project value of R 60 000 000 located in

was officially launched in March 2021 by the

Bluewater Bay in Gqeberha.

Honourable Minister of Department of Tourism,

CDC with its interest of developing Small

full service restaurant, bar, fitness

Mmamoloko Kubayi-Ngubane.

Enterprises undertook a decision that the hotel

The development has created permanent jobs

be completed by SMME Contractors and EME

from basic to management level, value chain

Consultants as a SMME/EME Pilot Project.

opportunities for external service providers and

CDC has never employed SMMEs directly in a singular multi-million project without a

added a tourism asset for the metro of Nelson Mandela Bay.

main contractor. Setu was therefore required

On its 10 year anniversary Setu is proud to

to supplement some of the functions of a main

have facilitated the development of the hotel

contractor.

for the Coega Development Corporation with a

The

project

employed

over

15

SMME

Contractors and a significant number of local

unique transformation procurement process for Small Enterprises.

labour from the CDC Local Labour Database with over 350 jobs created.

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FORMER CONVENOR’S MESSAGE

MESSAGE FROM THE OUTGOING PBF CONVENOR, SASHA MULLER, ON PEOPLE INNOVATION AND VALUE-BASED LEADERSHIP As I reflect on my time as Convenor of the PBF, three major features stand out for me: People, Innovation and Value-Based Leadership. I consider these the magic – and also essential – ingredients which have allowed the PBF to weather the storm of changes we have seen over these months of my term. From embarking on programmes of modernisation to having to adapt systems and processes through lockdown, both factors when not managed correctly can completely cripple a business. However, through all of this, the PBF team was able to innovate, come closer together and harness the power of value-based leadership, to assist our subscribers to not

only ‘think outside the box’ but also help them find new opportunities through a new way of doing business. And as I step away from steering the ship of the ANC Progressive Business Forum, and join you, the businessperson, as a subscriber of the PBF, I’m excited to continue the journey with the PBF from the other side of the helm. I can say this confidently, because of the people within the PBF and because of the leadership and strategy of the Treasurer General of the ANC, Paul Mashatile, who has always been someone who openly seeks to grow South Africa through innovation. These hands-on PBF team members, who implement this strategy, are truly a reflection of South African diversity working together. A non-racial, non-sexist, non-biased equal footing team, who work for the better of South Africa together. They are leaders in their own right,

who have taken on a strategy as their own career journey and have all notably grown as people through working together and embracing change. Even though the decision to take on new challenges has not been easy, I’m extremely grateful for the time and space I have had to grow and learn to stand fast and literally stick through the thick and thin of a devastating global pandemic. My warmest and confident wishes to the incoming Convenor, Sipho Mbele, who has been the Executive Manager of the PBF working side by side with me. Wishing everyone every continued success and my heartfelt thanks. It has been a privilege!

Sasha Muller

FORMER CONVENOR

Convenor Sipho Mbele

Managing Editors Alwyn Marx and Olivia Main

Chief Albert Luthuli House 54 Pixley Ka Isaka Seme Street Johannesburg

Art Director Clare Schenk

PBF Editorial Team Stephen McQueen, Seth O’Dea, Miranda Abrahams-Hermans

Contributors Kaashifah Beukes, Werner Gaigher, Chantelle Gladwin-Wood, Sandile Gwala, Blake Hamilton, Ulrich Joubert, Petrus Mohlomi, Dr Popo Molefe, Eustace Mashimbye, Vernon Subban

Images

Publisher Yes!Media Suite 20-301B Waverley Business Park, Kotzee Road, Mowbray, Cape Town PO Box 44383, Claremont 7735 Tel: +27 21 447 6467 www.yesmedia.co.za Printed by CTP Printers

National Sales Manager Jan Weiss

shutterstock.com Business Update is published by Yes Media. Opinions expressed in Business Update are not necessarily those of Yes Media, the ANC or Progressive Business Forum. No responsibility can be accepted for errors, as all information is believed to be correct at the time of going to print. Copyright subsists in all work in this magazine. Any reproduction or adaptation, in whole or in part, without written permission of the publishers is strictly prohibited and is an act of copyright infringement which may, in certain circumstances, constitute a criminal offence.

Project Sales Tatenda Musonza Reginald Motsoahae Crosby Moruthane Christa Nel

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TEL IUB EH k a s .w w w hkas@liam

LE T’S BUIL D HE ALTH w w w. s a k h i w o . c o m mail@sakhiwo.com

SPECIALISE in strategic health planning, health briefs, facility WEWE SPECIALISE in strategic health planning, health briefs, planning, design, project and construction facility planning,architectural architectural design, project and construction WE SPECIALISE in strategic management, health technology, consultancy and advisory management, health technology, health planning, health briefs, consultancy advisory servicesand related to hospital infrastructure development, facility planning, architectural services related to hospital design, project and construction infrastructure development, commissioning and health facility maintenance management. management, health technology, commissioning and health facility consultancy and advisory maintenance management.

LE T’S BUIL D HE ALTH w w w. s a k h i w o . c o m mail@sakhiwo.com

LEB EW REWOP OW FO HTLAEH tnerruC RF A H T U OS C o po pmiL • s o H m a o liS • r t siD u te piS • gnekobeS • e ra C tn a fn I( d aeH we N • ninia rT we N • aM n o sle N • O( l a t i p s o H • A LOG N A v i rP a d n au L • E WB AB M I Z e u n e vA e h T •

services related to hospital infrastructure development, commissioning and health facility maintenance management.

WE BELIEVE IN THE Previous projects Previous projects POWERFUL IMPACT SOUTH AFRICA Previous projects BELIEVE IN THE OF WORLD-CLASS WE Makiwane Hospital POWERFUL• Cecilia IMPACT • Frere Hospital (Oncology, ICU) HEALTHCARE. OF WORLD-CLASS Current projects

WE BELIEVE IN THE POWERFUL IMPACT OF WORLD-CLASS HEALTHCARE.

SOUTH AFRICA • Cecilia Makiwane Hospital • Frere Hospital (Oncology, ICU) • Thabazimbi District Hospital • Letaba Regional Hospital • Ngwelezane Hospital (Paediatric Burns Unit) • Lilitha College of Nursing • Eastern Cape Health Facilities Maintenance

SOUTH AFRICA • Cecilia Makiwane Hospital • Frere Hospital (Oncology, ICU) • Thabazimbi District HospitalDistrict Hospital HEALTHCARE. • Thabazimbi SOUTH AFRICA • Letaba Regional Hospital • Limpopo Central Hospital • Letaba Regional Hospital • Ngwelezane Hospital • Siloam Hospital • Ngwelezane Hospital (Paediatric Burns Unit) (Paediatric Burns Unit) Current projects MOZAMBIQUE • Sipetu District Hospital SAKHIWO – Leaders in Health Infrastructure Development. • Lilitha College of Nursing • Nampula General Hospital • SOUTH Sebokeng Hospital SOUTH AFRICA• Lilitha College of Nursing AFRICA (Infant Care Complex) • Eastern Cape Health Facilities GAMBIA • Limpopo Central Hospital Maintenance • •New Head Office (RTMC) Hospital • Eastern Cape Health Facilities Maintenance Limpopo Central • Horizons Private Clinic • Siloam Hospital • New Training College (RTMC) SAKHIWO Health Solution is an organisation that (TA for AfDB) MOZAMBIQUE provides Clinical Engineering Management services • Sipetu District Hospital Siloam Hospital • •Nelson Mandela Academic SAKHIWO – Leaders in Health Infrastructure Development. • Nampula Generalfor: Hospital Medical and support service facility equipment NAMIBIA • Sebokeng Hospital • Hospital (Oncology, ICU) MOZAMBIQUE • Sipetu District Hospital planning, Functional narrative design, Implementation (InfantReferral Care Complex) • Otjiwarongo Hospital GAMBIA ANGOLA SAKHIWO – Leaders in Health Infrastructure Development. of HT projects, Commissioning process including the • New District Head Office • Ondangwa Hospital • (RTMC) Nampula General •Hospital Sebokeng Hospital (Infant Care Complex) integrated civil, electrical and mechanical engineering, Horizons Private Clinic • •Luanda Private Hospital • Khomas District Hospital • New Training College (RTMC) SAKHIWO Health Solution is an organisation that Maintenance of health facility engineering projects (TA for AfDB) • New Head Office (RTMC) • Katutura Hospital ZIMBABWE provides Clinical Engineering Management services • Nelson Mandela Academic with Post occupational evaluation assessment for SAKHIWO Health Solution is an organisation for: Medical and support service facility equipment • Windhoek Central Hospital ICU) • The Avenues Woman & Child Hospital quality value returns of project cost. NAMIBIA • Hospital (Oncology, GAMBIA • New Training College (RTMC) planning, Functional narrative design, Implementation that provides Clinical Engineering • Otjiwarongo Referral Hospital ANGOLA of HT projects, Commissioning process including the • Horizons Private Clinic (TA for AfDB) • Nelson Mandela Academic • Ondangwa District Hospital Management services for: Medical and integrated civil, electrical and mechanical engineering, • Luanda Private Hospital • Khomas District Hospital support service equipment planning, Maintenance of health facilityfacility engineering projects • Hospital (Oncology, ICU) • Katutura Hospital ZIMBABWE with Post occupational evaluation assessment for Functional narrative design, Implementation NAMIBIA • Windhoek Central Hospital • The Avenues Woman & Child Hospital quality value returns of project cost.

Current projects

ANGOLA Luanda Private Hospital ZIMBABWE The Avenues Woman & Child Hospital

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• • • • •

Otjiwarongo Referral Hospital Ondangwa District Hospital Khomas District Hospital Katutura Hospital Windhoek Central Hospital

of HT projects, Commissioning process including the integrated civil, electrical and mechanical engineering, Maintenance of health facility engineering projects with Post occupational evaluation assessment for quality value returns of project cost.

5/6/21 11:34 AM


CONVENOR’S MESSAGE

THE PBF – LOOKING AHEAD The year 2021 looks for all intents and purposes to inspire us to look ahead and recover from the enormous challenges of the past 12 months precipitated by Covid-19. This may appear easier said than done, but the ANC’s Progressive Business Forum is determined, with your kind participation, to make the bold steps necessary so that we can together give effect to the theme of the ANC for 2021: “Unity, Renewal and Reconstruction in the Year of Charlotte Maxeke”. It is undoubtedly the harnessing of our greatest strengths together that will see the social compact with business deliver the resolution to the challenges we face. Under the leadership and direction of the ANC Treasurer General, Cde Paul Mashatile and with the guidance of the former

Convenor, Sasha Muller, the PBF has seen a modernising, streamlining and updating of its work processes to enhance communication and interaction with its subscribers, to ensure that it becomes the reliable and trusted voice of its subscribers at the highest levels. The programme of the PBF for the remainder of the year intends to build on that legacy, to inspire confidence and to strengthen our resolve together to ensure inclusive growth. The offerings of the PBF in terms of its mandate, seek to empower and upskill, and include Ministerial briefings, research and roundtable discussions, business summits, skills training and development workshops, trade exhibitions, trade facilitation and progressive Women in Business summits. To this end the PBF is alive to the dynamics of a South Africa that sees the importance of participation in the economy locally, regionally and abroad. Examples of these include, among others, the imperatives presented by agriculture,

the oceans economy, construction, mining, energy, science and technology, communications, the African Continental Free Trade Area (AfCFTA) and working to expand and enhance cooperation and liaison with our international partners. As we take these steps, we are conscious that this is a process which will require joint effort, a journey together that will combine the work of the PBF and its companion Progressive Citizens’ Forum (PCF) with its subscribers, to achieve the future that is well within the grasp of South Africa. I encourage each and every subscriber to engage actively and to reach out to the PBF and become part of the social compact to have an impact for good. We look forward to engaging with you in the months ahead.

Sipho Mbele CONVENOR

THE NEW CONVENOR Sipho Mbele was appointed as the PBF

on behalf of the Department of Economic

He was also involved in the amalgamation

Convenor with effect from 1 April this year.

Development; developing a FIFA 2010

of the National Youth Commission and

Sipho has served as the Executive Manager

Transport Master Plan for Gauteng and the

Umsobonvu Fund leading to the establishment

of the PBF since February 2020.

implementation of the plan through the

of the National Youth Development Agency.

Gauteng Freight and Logistics Strategy.

Sipho holds a BSc from UNISA and a Policy

in senior management in the public sector,

He has served in the Strategic Infrastructure

and Governance qualification from Wits

including management of intergovernmental

Programme (SIP) 2, representing the

Graduate School of Public Development.

relations, stakeholder management,

Gauteng Department of Economic

He is currently studying for his Honours in

content development and developmental

Development. During his participation in

Developmental Studies. He has attended

communication. His past experience includes

the formulation process of the SIP 2

courses on languages at Wits University;

developing the institutional structure of the

programme, the Economic Infrastructure

Transport Economics, Transport Planning

Gauteng Transport Management Authority

Bill later became legislation.

and Environmental Management at

(GMTA); serving on the Transport Board

Stellenbosch University; on Political Science

(GTMA and Urban Transport Board);

African Youth Council between 1998-2000

in Denmark; and has attended conferences

participation in the transport legislative

and during this period was involved in

and presented papers on various subjects

processes, serving on the Steering Committee

National Youth Development Policy.

including in Belgium and locally.

He has served in excess of ten years

He was the Chairperson of the South

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CONTENTS 10 COVER STORY

24 TRANSPORT

38 LAW

AfCFTA Secretary General HE Wamkele Mene and Deputy Minister of the dtic Fikile Majola on how the African Continental Free Trade Area has the potential to uplift Africa out of poverty.

Transport infrastructure – including the transport of information through technology – can mobilise our social and economic environment. By Dr Popo Molefe

Is the SA legal profession ready to embrace digitisation? By Blake Hamilton and Chantelle Gladwin-Wood

40 INSURANCE 26 INDUSTRIAL DEVELOPMENT

16 TRADE AND INDUSTRY Using the PESTLE analysis to uncover the macro-economic challenges that impact new businesses and those entering a foreign market. By Petrus Mohlomi

19 GOVERNMENT PROFILE Get to know your Deputy Finance Minister, Dr David Masondo, a political activist for almost 30 years and trailblazer in the vehicle industry. And a soccer fanatic – on and off the field!

The latest news on the R21-billion Saldanha Bay IDZ initiative. By Kaashifah Beukes

Liability insurance is a must-have for any business in the time of Covid-19, as claims rise. By Vernon Subban

30 ECONOMIC DEVELOPMENT

42 MENTAL HEALTH

There are big plans afoot at the Dube Tradeport SEZ, including the Durban Aerotropolis.

Tools for resetting our nervous systems and learning how to avoid burnout in future. By Werner Gaigher

34 SMALL BUSINESS

44 HOSPITALITY

A key element in building an economically inclusive society and creating much-needed jobs is localisation. By Eustace Mashimbye

Award-winning Pumula Beach Hotel in Durban is a great place to unwind, recharge and then hit the conference room running (or not).

20 ECONOMY

36 BUSINESS SERVICES

From a positive growth rate forecast for SA in 2021, to concerns about a further credit downgrade, the economy is unpacked. By Ulrich Joubert

The SA Global Services Industry celebrates its triumph as the most favoured front office Customer Experience offshore delivery location in 2021. By Sandile Gwala

46 BOOK REVIEW Keep Your Focus by Sarah Arnot Mulhern is an easy-to-read guide on how to maintain your peak performance.

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TRIBUTE TO

MAMA CHARLOTTE MAXEKE Extract from a lecture on the life and times of Mama Charlotte Maxeke delivered by the Treasurer General of the ANC, Paul Mashatile, at the Durban City Hall on 7 April 2021

T

he month of April in our country and in our movement is recognized as Heroes Month. It is a month in which we remember our fallen martyrs: Mama Winnie Madikizela-Mandela who passed on the 2nd of April in 2018; Solomon Kalushi Mahlangu who was hanged by the apartheid regime on the 6th of April in 1979; Chris Hani who met his brutal death on the 10th of April in 1993; Oliver Tambo who passed on the 23rd of April 1993; and many other heroes and heroines. April is also our Freedom Month. It was during this month – on the 27th of April in 1994 – that millions of South Africans

voted for the first time as equal citizens in the country of their birth. By doing this they put the final nail in the coffin of institutionalized oppression, discrimination and exploitation. In one united voice they declared boldly that apartheid and separation have no future in our country. Freedom was achieved in our lifetime! As a nation we owe a great debt of gratitude to those who came before us for the freedom and democracy we enjoy today. This year, our movement also marked the 150th anniversary of the birth of Mama Charlotte Maxeke. She was born on the 7th of April in 1871. We will always remember Mama Charlotte Maxeke as an outstanding leader of the people of South Africa, a visionary, a fearless freedom fighter in her own right, and a pioneer of the women’s movement and the struggle for a non-sexist South Africa. As we reflected on the life and times of Mama Charlotte Maxeke we were reminded, once again, that as a movement and as a people we stand on the shoulders of giants. It took courageous men and women of great vision – men and women of the caliber of Mama Charlotte Maxeke – to secure freedom in our lifetime. Like many of her generation Mama Charlotte Maxeke dared to tread where others feared. She dared to dream of what others thought was impossible. In doing this she inspired many generations

of freedom fighters to take up the fight for freedom and the struggle for women emancipation. The 150th anniversary of the birth of Mama Charlotte Maxeke’s was also a reminder of the important role that women played in the struggle for freedom and justice in our country. Often, the role of women in our struggle is relegated to the footnotes of history. They are seldom accorded the honor and respect they so richly deserve, as freedom fighters and activists in their own right. We used that special occasion to reaffirm that Mama Charlotte Maxeke was a dedicated freedom fighter in her own right. She is counted among that rich galaxy of fearless women freedom fighters who were prepared to sacrifice all for our liberation. Along-side their male counterparts, they occupied the foremost trenches in the struggle to defeat apartheid in all its manifestations. Mama Charlotte Maxeke’s name occupies pride of place side-by-side those of heroines such as Mama Ruth Mompati; Ray Alexander; Amina Chachalia, Lilian Ngoyi, Helen Joseph, Aunty Sophy de Bruin, Idah Mntwana, Albertina Sisulu, Winnie Madikizela-Mandela and many, many others. We will continue to honor our forebears – such as Mama Charlotte Maxeke – for they are our liberators. They held our hands and showed us the way to freedom. When our spirits and morale are down,

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TG’S MESSAGE

we will draw inspiration from their lives of selfless dedication to a higher cause – the cause of freedom. When we seem to lose our away, we will revert back to their teachings for guidance and nourishment. Mama Charlotte Maxeke was a pioneer in many ways. She was the first black South African woman to obtain a Science degree, as well as the first black African woman to graduate from an American university. She was a delegate to the ANC’s founding Conference in 1912 and was a founder, in 1918, of the Bantu Women’s League, a forerunner to the ANC Women’s League. She was at the forefront of organizing the first defiance campaign against the pass system, mobilizing women to burn their passes. History records that this first of its kind, militant anti-pass campaign of 1913 – led by women – inspired many similar actions across the country. It also became a source of great admiration and general pride within the Congress leadership; at a time when membership of the ANC was only open to men. The mobilization of women against the pass system resulted in the formation of the Bantu Women’s League, under the leadership of Mama Charlotte Maxeke. In her, women had a leader of national standing among the African people; one who was highly capable of dealing directly with legislators and officials. With Mama Charlotte Maxeke at the helm of the women’s movement, women no longer had the need of interpreters or spokesmen. They could articulate their demands and make their own representations. Mama Charlotte Maxeke also organized farm and domestic workers. She appeared and made statements on platforms of the then militant Transvaal ANC and the Industrial and Commercial Workers Union, which she joined in 1920. She used those platforms to encourage women’s militancy at grassroots level. Mama Charlotte Maxeke dedicated her entire life to the cause for liberation and improving the conditions of African women. It was therefore fitting that Dr A.B. Xuma, the President General of the ANC from

1940 to 1949, described Mama Charlotte Maxeke as, “The mother of African freedom in this country.” The American civil rights activist William Edward Du Bois described Mama Charlotte Maxeke as having a clear mind, subtle humor and straight-forward honesty. She did her work with a slow, quiet determination. Du Bois goes on to say, “I regard Mrs. Maxeke as a pioneer in one of the greatest of human causes, working under extra-ordinarily difficult circumstances to lead a people in the face of prejudice not only against her race but also against her […gender].” Mama Charlotte Maxeke was passionate about the education of the African child. After graduating in 1901 with a BSc degree from the Wilberforce University in Cleveland Ohio, in the United States of America, she returned home in 1902 with her husband Reverend Marshal Maxeke to establish the Wilberforce Institute. The Institute later became one of the leading higher schools of learning for Africans in the Transvaal. Mama Charlotte Maxeke has left us a legacy of absolute dedication to the cause of freedom and dignity for all, gender equality and the emancipation of women. We will walk in her footsteps. We will emulate her example. We will jealously guard and deepen her legacy. In her honor, we rededicate ourselves to strengthening the fight against racism, patriarchy, the exploitation of workers, joblessness, poverty and inequality. We also remind ourselves that the struggle for women’s emancipation is an integral part of the National Democratic Revolution, whose strategic objectives include the resolution of the triple oppression of women: based on their race, class and gender. Inspired by Mama Charlotte Maxeke’s struggle and passion for gender equality, we will do everything necessary to eradicate from our society all forms of gender discrimination, femicide, as well as violence against women, children and young girls. Ours must be the generation that banishes this scourge! In keeping with the ideals of Mama Charlotte Maxeke, we must be unrelenting in our forward march towards building

a society that cares for, respects and promotes the rights of women. Consistent with our hard earned role as the leaders of society, as the ANC, we will continue to work with communities to reclaim every part of our country from those who terrorize women, children and young girls. We will liberate our homes, streets, neighborhoods, workplaces, places of recreation and every space in our country. Ultimately, our goal is to ensure that women can walk freely in our streets without fear of being victimized. Together, we will build a movement against gender stereotypes and patriarchal tendencies. Our work to advance the empowerment of women must also include expanding access to educational and skill development opportunities for women and young girls. This includes closing the digital divide between men and women in our country. We will continue to support young girls in schools and institutions of higher learning so that they can reach their full potential. We will also ensure that women have expanded access to entrepreneurial and other opportunities for economic empowerment. As our country has embarked on a path towards economic reconstruction and recovery, we are determined that women will be at the forefront and be the major beneficiaries of this endeavor. We will work hard to ensure that no one, especially women, are left behind as we build a new economy for all, following the devastation caused by the COVID-19 crisis. We know that in our country the face of poverty, unemployment and underdevelopment is largely female, African and young. The new economy we are building, therefore, must help us make a permanent and decisive break with this unpleasant reality. Linked to this is the need to ensure the eradication of unequal pay for work of equal value, glass ceilings and the juniorization of women at places of work. We will do all of these things because in us the spirit of Mama Charlotte Maxeke lives on. We will walk in her giant footsteps. We will endeavor to be like her.

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THE AFRICAN FREE TRADE AGENDA Secretary General of the AfCFTA Secretariat, HE Wamkele Mene, and Deputy Minister of the dti, Fikile Majola, shed light on how we can use the African Continental Free Trade Area to lift Africa out of poverty and into an environment rich with opportunity through using the Development Integration approach to boosting intra-African trade

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COVER STORY

Statement by the Secretary General of the African Continental Free Trade Area (AfCFTA) Secretariat, H.E. Wamkele Mene, at the AfCFTA Start of Trading Ceremony Webinar held on 1 January 2021

T

ruly today is a historic day, a day in which we start officially trading under the preferences of the African Continental Free Trade Area. Today is a day we take Africa a step closer to a vision of an integrated continent, a vision of an integrated market on the African continent. This African Continental Free Trade Area should not just be a trade Agreement, it should actually be an instrument for Africa’s development. In this regard, we have seen the World Bank produce a report that projects that by the year 2035, if we implement this Agreement effectively, we have the opportunity to lift out of poverty one hundred million Africans. And the majority of this hundred million Africans that will be lifted out of poverty, are women in trade. It will be the opportunity to close the gender income gap, and the opportunity for SMEs to access new markets. We are working very closely with our technical partners to develop digital technology platforms that will enable connectivity of small to medium enterprises, and enable connectivity of young Africans in trade. This Agreement does not benefit only the big corporations on the African

Address by the Deputy Minister of the dti, Fikile Majola, to the Progressive Business Forum webinar on the African Continental Free Trade Area (AfCFTA) – opportunities for SA business, held on 8 April 2021 APPROACH TO INTEGRATION In conventional trade integration theory, regional integration is understood as a process through which participating partners climb a ‘ladder’ of institutionalised trade arrangements:

continent, but it should always be inclusive of young Africans, women and African SMEs. We have partnered and worked very hard the past years with UNECA, with AfreximBank, with Afrochampions, with UNCTAD, and recently with UNDP. Today, as Africans, we are witnessing the beginning of a new chapter in terms of trade and investment relations of the African continent. I have to say, personally, as an African, I’m truly proud today because 54 countries have signed this Agreement, 33 have ratified it, over 40 have submitted their tariff offers. This is a strong signal that Africa is ready to start trading today on the basis of new rules and preferences that will ensure that the African Market is integrated. We have to take, as Africans, active steps to overcome the smallness of our respective national economies. We have to take active steps to overcome the lack of economies of scale. We have to take active steps to make sure that we place Africa on the path of industrial development so that by the year 2035, we’re able to double intra-African trade with value added goods. As I observed before in the past, we have to take active steps to dismantle the colonial economic model that we inherited and that has been sustained over the last 60 years. We have to stop being exporters of primary products to countries of the North. We have to create jobs on the

African continent by developing our regional value chains and be self-sufficient in our own continental production. In 2020, Covid-19 has demonstrated, that Africa is overly reliant on global supply chains, and when these global chains are disrupted, Africa suffers. When these global chains are subdued, we know that Africa suffers. So, we have to take active steps to make sure this industrial development is accelerated, and this African Continental Free Trade Area and the Launch of Trading today are the first steps we take in that direction. Finally, I want you, Africans, to join me as we take this historic step towards the vision of an integrated Africa, the Africa we want.

From Preferential Trade Area (PTA) to Free Trade Area (FTA) to Customs Union to Common Market to Economic Union. The “ladder approach” to integration approach has been criticised as not being appropriate in developing country regions. In developing regions, the major barriers to increasing intra-regional trade are not just tariffs but rather real economy, productive constraints: under-developed production structures and inadequate infrastructure.

If one under-developed country’s trade profile is dominated by the export of primary product (and it does little processing in its domestic economy), it has little to trade with its neighbour whose specialisation is also export of primary raw materials. If the road and rail connection between the two is inadequate that further impedes trade between them. An alternate approach is needed – the “Development Integration” approach.

H.E. WAMKELE MENE Secretary General of the African Continental Free Trade Area

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In this perspective, we argue that trade integration needs to be seen as only part of a broader integration strategy. It must be accompanied by cooperation to overcome infrastructure backlogs and policy cooperation to promote economic diversification, including industrial development. SOME HISTORY African integration is a longstanding continental objective. From the dawn of the independence, virtually all African countries have embraced regionalism. The commitment to regionalism was part and parcel of the broader aspiration of continental integration, a vision that led to the creation of the Organisation of African Unity (OAU) in 1963. Integration is seen as essential to overcome the limitations of small fragmented economies established under colonialism. Integration in Africa since then has proceeded at the sub-continental level, notably the Economic Community of West African States (ECOWAS); the Economic Community of Central African States (CEMAC); East African Community (EAC); Southern African Development Community (SADC); and Southern African Customs Union (SACU). The AfCFTA builds on these arrangements and does not replace them. Very importantly, the strategy document – “Agenda 2063: The Africa We Want” – adopted by the AU in 2015, speaks of structural transformation that is in line with recent developments on regional integration. This document fully reflects the development integration approach for the continent. There is ongoing work under the Programme for Infrastructure Development in Africa and the Specialised Technical Committee on Trade, Industry and Mineral Resources deals with industrialisation on the continent. The AfCFTA should therefore be seen as the market integration pillar of the broader development integration agenda.

WHAT IS THE BROADER CONTEXT OF INTRA-AFRICAN TRADE? We use some figures to illustrate Africa’s place in the broader scheme of things, for example, Africa has: • 17% of the world’s population • 3% of the world’s GDP • 3% of the world’s trade • 2% of the world’s manufacturing output • Only 1% of the world’s steel production. Policy initiatives like trade must change this. There is general concern that Africa’s share of world trade is small – estimated at 3%. Intra-regional trade is also relatively small: between 16%-18% and this compares to intra-Asian trade at 52%, intra-North American trade at 50%, and intra-EU trade at 70%. While this is the case, it is important to consider that despite the fact that commodities to the rest of the world dominate Africa’s exports – such as oil and minerals – Africa is by far the second most important export market for most African countries behind Europe. Seven African countries count Africa as their main export market and 25 count it as their second most important market. More importantly, intra-African trade is largely in value-added manufactured products and over three quarters of intra-African trade takes place within regional trading blocs. PROGRESS REGISTERED The AU launched the AfCFTA negotiations at the 25th Summit on 15 June 2015 in Johannesburg. Fifty-four out of the 55 AU members have signed the AfCFTA (not Eritrea). The AU Heads of State adopted the legal instruments establishing the AfCFTA on 21 March 2018 in Kigali.The AfCFTA formally entered into force on 30 May 2019 (22 ratifications). To date, 36 members have ratified the agreement. OUTSTANDING ISSUES The July 2019 Summit in Niger launched the operational phase.

Operationalising the preferences requires finalising agreement on tariff offers, schedules of all members. It also requires agreement on the accompanying rules of origin. At the beginning of last year (2020), the Summit agreed to the recommendation that a three-month intensive work programme should aim to finalise the outstanding work. The deadline was 1 July 2020. But, this was disrupted by the pandemic in March 2020. A Virtual Summit at the end of May decided to postpone the deadline and instead proposed a new deadline by the time of an extraordinary Summit that was scheduled for 5 December and that preferential trade should commence by 1 January 2021. Negotiations restarted in September 2020, with SA chairing the meetings.

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COVER STORY

Pull quote

There was an intensive process leading to the 5 December Summit. WHAT WAS ACHIEVED AT THE 5 DECEMBER SUMMIT? The Summit Decision took into account that AU Members are at different stages of readiness to operationalise preferential trade. Not all had ratified; or submitted tariff offers; and not all rules of origin were agreed. However, ratifications were continuing, and rules of origin negotiations were proceeding. We managed to get agreement on the rules of origin for 81% of all tariff lines. This is critical: RoO determine how much of the value of the goods traded under preferences must be Made in Africa – critical for encouraging a move up the value chain and ensuring that the

benefits of the integration process accrue to African producers. The number of offers was still low but started to come in larger numbers around the time of the Summit. In summary, the 5 December 2020 Summit provided the legal framework to allow AU Members/Customs Unions (CUs) to agree to operationalise preferential trade amongst them in a somewhat flexible manner. The decision specified that members could commence trade as soon as they meet the following minimum conditions: • Ratification of the AfCFTA by individual members and by all members of customs unions that want to participate in the exchange of preferences • The submission of technically sound tariff offers based on the 81% of tariff

lines with agreed rules of origin • Domestic legislation to administer imports • Agreement by both parties that reciprocity had been achieved. The process of assessing and verifying tariff offers is currently underway. There are a number of technical clarifications that are required on the offers received. In SACU, Botswana is yet to ratify the Agreement, but it has indicated that other SACU Members can move ahead while it completes its internal processes. In parallel, ongoing negotiations on rules of origin and working towards increasing the tariff offers to 90%. All this work is ongoing. OPPORTUNITIES FOR BUSINESS It is often said that “Africa consumes what it does not produce; and produces what it does not consume”.

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COVER STORY

African countries imported R8-trillion of goods in 2019 but only R1-trillion came from other African countries African countries imported R8-trillion of goods in 2019 but only R1-trillion came from other African countries. Lowering trade barriers presents a massive opportunity for South African industries, and for development across the continent. The 10 million jobless South Africans need to have the AfCFTA as a jobs-driven strategy, focusing on an expansion of labour-intensive sectors and those with strong rural and women-employment linkages. Currently, 250 000 direct jobs are sustained by African exports. The rest of Africa imports R2.9-trillion worth of manufactured goods annually from outside Africa. If South Africa were to supply just 2% of these manufactured goods, it would add 1,2 percentage points to SA’s annual GDP and add R60-billion to our economic output a year. African countries (excluding SA) imported goods worth R6-trillion from outside of Africa in 2019. Key imports of other African countries from outside the continent represent growth areas for South Africa, including refined oil, automotive, agroprocessing, CTFL, iron and steel, plastics and pharmaceuticals and in investment in services sectors (telecoms, retail, banking and E-Commerce). South Africa exported R347-billion to other African countries in 2019 – mainly to SADC countries. The AfCFTA provides opportunities to export to North, West and East Africa. Foreign direct investment into Africa has plateaued in recent years, with investment across the continent falling from US$50.6-billion in 2018 to US$45.3-billion in 2019 (Source: UNCTAD). The World Bank estimated that successful

implementation of the AfCFTA can raise GDP across the continent by US$450-billion per annum by 2035. An estimated US$100-billion annually is needed in infrastructure investment on the continent – SA will need to drive the effort to attract this investment, backed by commitment to policy certainty. Increased industrial opportunity across the continent will spur investment in key “gateway” economies like South Africa. A focused capital-raising strategy will need to accompany implementation of the trade provisions of the AfCFTA. A number of large and medium-sized South African companies have established businesses across the continent. South Africa’s manufactured product exports to other African countries is strong, representing 80% of all exports to the rest of Africa. Bilateral engagements (for example, Nigeria) will be undertaken to address practical obstacles to deepening trade. Key imports of other African countries from outside the continent represent growth areas for South Africa. There are already companies with these demographics active in the export market. Over the next five years, the dtic will nurture and seek to expand such enterprises through the AfCFTA. Efforts to improve competitiveness of the sectors through industry Master Plans and financial support to upgrade local sector are underway. To underpin the AfCFTA, a whole-ofgovernment implementation plan will be put into effect during 2021. Each Master Plan will include an AfCFTA chapter. Key sectors include autos, steel, poultry, sugar, agro-processing, clothing and machinery. Provinces and districts will be assisted to identify both the opportunities for firms in their area; and the local/provincial government contributions to realise the potential. We also aim to identify export-champions that will support SMEs and black industrialists to gear up for new markets.

CONCLUDING REMARKS The AfCFTA brings us a step closer to realising the historic vision of an integrated market in Africa – and creating a basis for increasing intra-African trade. We must complement and consolidate parallel AU work on infrastructure and industrial development pillars – build supply capacity to take advantage of more open African markets. We must also take to heart that for sustainability and legitimacy, the benefits of the AfCFTA must be shared across all members. Countries across the African continent are engaged in a battle to restore the economy in the midst of an ongoing onslaught from the Covid-19 pandemic that has destroyed lives and livelihoods. One of the instructive lessons learned from this crisis is that economic resilience is critical. It is critical to build up industrial capabilities, trade and supply chains across African countries. Greater supply-chain resilience needs to include efforts to spread risk by enabling the greater geographic spread of manufacturing. This resonates with bringing to fruition the goal of the ‘Made in Africa’ initiative. We have to seize the opportunity presented by the African Continental Free Trade Area (AfCFTA), which is aimed at boosting intra-Africa trade.

FIKILE MAJOLA Deputy Minister of the DTI

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BUSINESS

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PUBLISHED FOR THE PBF BY

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HOW BUSINESS SHOULD APPROACH THE OPPORTUNITY OF AFCFTA PETRUS MOHLOMI, a seasoned procurement executive and co-founder of Sambo Town, describes how to use the PESTLE analysis when starting a new business or entering a foreign market to analyse and monitor the macro-environmental factors that might have a profound impact on business performance

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fter the informative PBF webinar on the Covid-19 rollout plan, held virtually on 19 January, I was encouraged by our honourable President Cyril Ramaphosa saying that we have to open our eyes and look for business opportunities in the African Continental Free Trade Area (AfCFTA) project. The AfCFTA emphasises the reduction of tariffs and non-tariff barriers, including the facilitation of free movement of people, labour, right of residence, right of establishment, and investment, within a block, creating a single currency and customs union. It has the potential to create a continental free trade zone with a combined Gross Domestic Product (GDP) of US$3.4-trillion, according to the African Union (AU). This trade agreement, if implemented fully, would lead to the African economy becoming the largest in the world. Learning from the European community and other trade blocks which started to emphasise globalisation, the AfCFTA is following their example: think globally, act nationally. Based on my wealth of working experience across multiple African countries, I have written this article to advise how business can approach the opportunity of the AfCFTA project. It is crucial that before you can think of doing business across the African continent, it is

important to understand a country’s macroenvironment dynamics, also the industry and competitive environment in which you want to operate or do business on the African continent.

PESTLE analysis Ultimately, the business will need to develop a strategy or contingency plan to ensure that the business can sustain the macro-economic challenges that exist in the new environment and prosper. The PESTLE analysis can be of great use in this regard, to analyse and monitor the macro-environmental factors that might have a profound impact on business performance. PESTLE stands for Political, Economic, Social, Technological and Environmental factors. This tool is especially useful when starting a new business or entering a foreign market as in the case of entering new African markets. The PESTLE analysis is often used with other business tools such as SWOT analysis and Porter’s Five Forces, to give a clear understanding of internal and external factors that can affect the performance of the industry within a specific country. Each factor will be elaborated on below. These are the factors that need to be taken into consideration when assessing the attractiveness of the potential market.

Political factors These factors are all about how and to what degree a government intervenes in the economy or a certain industry. Some of the government intervention can include government policy and regulation, political stability or instability, corruption, foreign trade policy, tax policy, labour law, importexport regulation or restrictions, bilateral relationships, special tariffs, trade control, political lobbying activities. Economic factors Economic factors may be used to determine a certain economy’s performance. Factors include economic growth, exchange rates, inflation rates, interest rates, disposable income of consumers and unemployment rates. These factors may have a direct or indirect long-term impact on a business, since it affects the purchasing power of the consumer and could possibly change demand and supply models in the economy. Consequently, it also affects the way companies price their products and services. Social factors This dimension of the general environment represents the demographics, characteristics, norms, customs and values of the population within which the business or organisation operated.

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TRADE AND INDUSTRY

This includes population trends such as the population growth rate, income distribution, career attitudes, safety emphasis, health consciousness, lifestyle attitude and cultural barriers. These factors are especially important for the marketers when targeting certain customers. In addition, it also says something about the local workforce and its willingness to work under certain conditions. Technological factors These factors pertain to innovation in the technology that may affect the operations of the industry and the market favourably or unfavourably. This refers to technology incentives, internet infrastructure, automation, research and development (R&D) activity, technology change and the amount of technological awareness that a market possesses. These factors may influence decisions to enter or not

enter certain industries, to launch or not launch certain products or to outsource production activities to the countries that have adequate capability and capacity. By knowing what is going on technology-wise, you may be able to prevent your business from spending a lot of money on developing a technology that would become obsolete very soon due to disruptive technology changes elsewhere. Environmental factors Environmental factors have come to the forefront only relatively recently. They have become important due to the increasing scarcity of raw materials, carbon footprint targets set by the government. These factors include ecological and environmental aspects such as weather, climate, environmental offsets, climate change, which may especially affect industries such as tourism, farming, agriculture and insurance. Furthermore, growing awareness

of the potential impacts of climate change is affecting how businesses operate and the products they offer. Legal factors Although these factors may have some overlap with the political factors, they include more specific laws, such as discrimination laws, employment laws, fraud and corruption prevention laws, consumer protection laws, copyright and patent laws, environment, health and safety laws. It is clear that businesses need to know what is legal and what is not legal in order to trade successfully and ethically. If the company trades globally, this becomes especially tricky since each country has its own set of rules and regulations. In addition, you want to be aware of any potential changes in legislation and the impact it may have on your business in the future. Recommended is to have a legal advisor or attorney to help you with these issues.

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GOVERNMENT PROFILE

MEET DR DAVID MASONDO

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ailing from the province of Limpopo – the heartland of South Africa – Deputy Finance Minister Dr David Masondo has a PhD from New York University and is an expert on the vehicle industry. By that measure, it is safe to say that the 45-year-old trailblazer is indeed a driven man. With a passion for education and the community, Masondo is also soft-spoken and blessed with a mild temperament. Unless it comes to corruption. In 2011, while serving as Limpopo Finance MEC, Masondo spoke out against former president Jacob Zuma in the strongest possible terms. Defending his province of birth, Masondo accused Zuma of trying to undermine Limpopo to silence opponents ahead of the Mangaung conference. In a show of things to come, he wanted to take legal action against Zuma, but unfortunately couldn’t find the support. Masondo was born in a small village in the Vhembe district of Limpopo, grew up in Gauteng and studied towards a teaching diploma at Giyani College, where he led the South African Students Congress (Sasco) and was president of the Student Representative Council. He did a BA at Wits in the late 1990s, where he was elected Wits SRC president. He studied labour rights in the vehicle manufacturing industry as part of his Master’s degree. In the early 2000s, Masondo received a PhD from New York University for a thesis entitled Post-Apartheid Nanny State: Case Study of the Motor Industry Development Plan (MIDP). He received the Ford Foundation International Fellowships PhD programme award and the MacCracken PhD scholarship during his studies. In 2015, Masondo was appointed head of the Automotive Industry Development Centre in the Gauteng provincial government. He was tasked to transform the local automotive industry and ensure that it contributes meaningfully to the province’s economy. Masondo also served as a board member of the Financial Sector Charter Council, which advocates for the transformation of the financial industry. He has been a political activist for a period of approximately 30 years, saying that it is the experiences that he, his family and members of the community had in the areas that they resided which dictated his involvement in the struggle to liberate all South Africans. His commitment to his populace has seen him collect the “200 Young South Africans You Must Take to Lunch”

awarded by the Mail and Guardian newspaper. He believes that through discussion, however divergent the opinions may be, a very strong and implementable position accepted by the constituency is always possible. Masondo’s other interests include running and reading. And when he’s not in Parliament debating the best way to take South Africa forward, you will find him on the soccer field showing off his skills there.

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ECONOMY FORECAST 2021 Although most forecasts indicate a positive growth rate for SA in 2021, government finances remain a serious concern and needs the serious attention of all role players, to avoid further credit downgrades, reports ULRICH JOUBERT

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ECONOMY

INTERNATIONAL ENVIRONMENT Indications are that the world economy will show a healthy recovery from the negative growth – due to the impact of the Covid-19 pandemic – in 2020. Last year all mentionable economies showed negative growth, with the exception of China and Turkey which showed positive growth of 2.3% and 1.8% respectively. Latest information indicates negative growth of 3.6% in 2020 for the world economy. The developed economies were hardest hit with negative growth of 5%, while developing economies – which

includes China – showed negative growth of only 1.5%. If China is taken out of the developing economies’ equation, developing economies showed negative growth of 4.6%. Forecasts for 2021 indicate a recovery in all mentionable economies. Forecasts indicate US real growth of more than 6%, less than 6% in Western Europe, Germany less than 5%, United Kingdom less than 7%, Japan just more than 4%. Chinese growth of more than 9% is forecast, although the Chinese government indicated it aims for only 6%. India is forecast to show growth of more than 13% in 2021. Positive real growth for the world economy is based upon mainly four assumptions: • Given the negative growth recorded in 2020, even a modest turnaround is likely to show a good performance in 2021. • It is assumed that a large portion of the world population will be vaccinated against the Covid-19 virus by the middle of the year, diminishing the risk of a recurrence of the pandemic. • Growth is stimulated by large fiscal packages – especially in the US. • Central banks continue to stimulate growth by pumping large amounts of liquidity into the financial system while keeping official interest rates in many cases at record low levels. In the USA, the Federal Reserve Board (the Fed), indicated that official interest rates will be kept at current low levels until 2023. Short-term interest rates in Western Europe, the UK and Japan are likely to stay at current low levels for the same duration. The Fed forecasts inflation to remain subdued while employment improves only slowly in the period until 2023. Low inflation and modest improvement of employment is also foreseen in Western Europe, the UK and Japan. Given the improved outlook for the world and especially the Chinese economy, mining commodities showed a healthy recovery since the beginning of 2021. Oil prices also rose sharply since the beginning of 2021. It finds support from the anticipated stronger demand from road traffic,

According to figures published by Statistics SA, the domestic economy showed negative growth of 7% in 2020 but also from the decision by OPEC and Russia not to increase their oil production in the foreseeable future. The higher oil price could, however, encourage US oil producers to increase production. In the meantime, wind and solar energy increases. For the time being, the worldwide tourism industry is in the doldrums and is only expected to improve once large percentages of populations have been vaccinated and tourists feel comfortable to travel internationally and locally. As international long-term interest rates rose sharply in February/March, the gold price weakened. The Fed expects inflation to remain under control in the rest of the year, while they would tolerate some periods when inflation exceeded the 2% target. Long-term interest rates have risen quite sharply since the beginning of 2021. This rise reflected the expected strong recovery of the US economy which could lead to inflation rising faster than earlier forecasts. In February, US inflation rose by 1.7% year-on-year, which was the highest in the past 12 months, but less than the 2% targeted rate. The sharp rise in international oil and food prices could be reflected in higher inflation rates in the second half of the year. The overall impression of the world economy is one of a relatively positive economic recovery, while inflation and international interest rates remain at subdued levels for quite some time.

DOMESTIC ECONOMY According to figures published by Statistics SA, the domestic economy showed negative growth of 7% in 2020. This reflected the impact the invisible virus had on the population and the ensuing lockdown of the economy.

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ECONOMY

During 2020, lockdowns varied in intensity, but the five-week complete shutdown of the economy resulted in a very deep recession in the second quarter. As the lockdowns eased, the economy showed a strong recovery in the third quarter. This recovery subsided somewhat in the fourth quarter – the important holiday season in South Africa – as the lockdown intensified due to a sharp rise in infections. The level three lockdown continued into the first quarter of 2021 with negative economic growth implications. Fortunately, the lockdown eased to level one at the beginning of March. The risk still exists that infections could rise again later in the year, leading to stricter lockdowns and negative implications for the anticipated economic recovery. Most forecasts, however, indicate a positive growth rate of approximately 3% in 2021. The domestic economy will benefit from: • the forecast recovery of the world economy • the resultant stronger demand and higher prices for commodities • the fiscal and monetary stimulus in the domestic economy • current low interest rates which are unlikely to rise before 2023 • the assumption that successful vaccinations will prevent further lockdowns and result in lifting of current restrictions on economic activities. The deep recession of 2020 had various implications. Firstly, the trade surplus improved substantially in 2020 to R270.6billion compared to the R23.7-billion surplus in 2019 as imports declined by 11.8% while exports rose by 7.8%. Given this trade surplus the current account of the balance of payments showed a surplus of R108billion in 2020, compared with a deficit of R153-billion in 2019. Given the forecast recovery of the domestic economy, it is expected that imports will rise strongly in 2021. To a certain extent this will be offset by a further improvement of exports, given the forecast recovery of the world economy as well as commodity volumes and prices. However, it is anticipated that the trade account as well as the current account of the balance of payments could show much

smaller surpluses or even some deficits in 2021. Any future deficit will have to be financed by the inflow of mostly short-term foreign capital. The negative growth of 2020 resulted in a further deterioration of employment and unemployment rising to 32.5% in the fourth quarter of 2020. Given the financial distress that many companies, and especially small and medium sized companies experience, it is expected that unemployment will rise even further in 2021. The high unemployment rate indicates that crime and social disorder could increase in coming months. The poor performance of the domestic economy, as well as the decline in international oil prices, brought about a healthy decline of the inflation rate. The average inflation rate was 3.3% in 2020 which is lower than the Reserve Bank’s target rate of 4.5%. The current sharp rise of international oil and international and local food prices, the recovery of the economy, all indicate that inflation will rise in 2021, but will remain on average below the target rate of the central bank. The expected modest economic recovery, the relatively low inflation rate as well as the unacceptable unemployment rate, indicate that local short-term interest rates could stay at current low levels until even 2023. Given international trends as well as the large financing needs of the public sector, local long-term interest rates could however rise in coming months and years. The biggest problem South Africa faces is the large central government budget deficit and the rising trend of government debt as a percentage of the total economy. The expected budget deficit in the financial year 2020/21 of 14% is much higher than the accepted international norm of 3% of the Gross Domestic Product (GDP). It is assumed that government revenue will improve in the 2021/22 financial year, while expenditure will be managed very carefully. This should enable government to cut the budget deficit to less than 10% of GDP in the next fiscal year. A large portion of bringing down the deficit, will depend on the success of freezing government employees’

The expected budget deficit in the financial year 2020/21 of 14% is much higher than the accepted international norm of 3% of the Gross Domestic Product (GDP) salaries and wages – not only in the current financial year, but also in subsequent years. Hopefully the effort to control the budget deficit will also limit the rise of government debt as a percentage of the GDP to less than 95%. Government finances remain a serious concern and needs the serious attention of all role players. Some of the biggest headaches are however the dire financial situation of state-owned enterprises, like Eskom, Transnet, SABC, the Post Office, Denel as well as the large percentage of local authorities which are actually bankrupt with no indication of a turnaround in these financial situations in the foreseeable future. The dire financial situation of municipalities and state-owned enterprises, remains a very serious problem as these authorities and institutions must provide an environment where businesses can do profitable business and employ people. If this is not the case, unemployment as well as social grant payments will continue rising further, leading to intensified financial and social problems in coming years. If there are no clear indications that government is very serious in bringing government finances under control it is likely that South Africa could face further credit downgrades in the second half of 2021. This will increase the cost of borrowing in international markets and could once again weaken the rand. Currently the rand still finds support from the welldeveloped local financial system as well as the high level of local interest rates compared to most international interest rates, but is likely to weaken in the longer term against all major currencies.

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THE DEFINITIVE GUIDES TO GOVERNMENT IN SOUTH AFRICA Yes! Media’s annual Government Handbooks are the most comprehensive guides to government in South Africa. Each publication focuses on a particular layer of government, and together they provide detailed information on more than 800 national and provincial departments, institutions, public entities, state-owned enterprises, and municipalities. The comprehensive directories provide relevant descriptive information, contact details, particulars of senior political and administrative officials, as well as financial and other performance information.

The Handbooks are aimed at government officials, local and foreign representatives of business, as well as investors and NGOs, who need complete, yet concise, reference sources to South African government. Copies are distributed to senior government and municipal officials, government and industry bodies, investment promotion agencies and business chambers. Copies are sold to the private sector via the Yes! Media website. Online versions of previous editions of the print publications can be viewed at www.issuu.com/yesmedia

To advertise in future editions contact: Jan Weiss | Email: jan@yesmedia.co.za | Tel: 021 447 6467 To order copies of current editions visit www.yesmedia.co.za.

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TRANSPORT AS A

MOVER OF THE ECONOMY DR POPO MOLEFE, Chairperson of Transnet, discusses how efficient transport infrastructure can be used as a shaper and mobiliser of economic and social opportunities and benefits

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he importance of an efficient transportation system for the movement of goods and people cannot be over-emphasised. The advent of globalisation meant that companies and firms operate and trade across continents, countries, cities and regions and that therefore goods, services and people had to move at a speed never seen before. Technology and communications is another form of transportation that fuels the economy by transmitting information and data through wireless mechanisms and cables running across countries and

under the sea. Technological developments that the world has experienced through many decades of research and innovations have contributed to better and efficient production methodologies and a greater understanding of the world we live in. The establishment of the Square Kilometre Area (SKA) in South Africa, for example, is likely to lead to a greater and deeper understanding of the evolution of living and extinct species. The developments in aviation and marine information and technology led, for instance, among others, to the creation of supersonic

jets and improved air and sea cargo carriers. This led to quicker transportation of goods and services across countries all over the world. Human beings are also transporters of information through technology and our physical presence in the world. We all live in a global village where executives, managers and employees are deployed at various company sites around the world, where it is believed they make a difference in the entities’ efficiencies in production, information dissemination and such.

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TRANSPORT

THE MATTER OF PERSPECTIVE Research authors, Doctors Jean-Paul Rodrigue and Theo Notteboom assert, in The Geography of Transport Systems, that the economic importance of the transportation industry can be assessed from both a macroeconomic and microeconomic perspective. At the macroeconomic level, the transportation system and mobility mechanisms benefits are linked to a level of output, employment and income within a national economy. In many developed countries transportation accounts for between 6% and 12% of the Gross National Product (GDP). In these instances, logistics costs can account for between 6% and 25% of the GDP and the value of all transportation assets, including infrastructure and vehicles, can easily account for half the GDP of an advanced economy. At the microeconomic level, transportation is linked to producer, consumer and distribution costs. The importance of specific transport activities and infrastructure can be assessed for each sector of the economy. Usually, higher income levels are associated with a greater share of transportation in consumption expenses. Transportation accounts, on average, for between 10% and 15% of household expenditures, while it accounts for around 4% of the costs of each unit of output in manufacturing.

SA’S TRANSPORT ROLE PLAYERS In SA, the Department of Transport (DoT) is responsible for the legislation and policies for rail, pipelines, roads, airports, harbours and the intermodal operations of public transport and freight. It is also responsible for conducting sector research, formulating legislation and policy to set the strategic direction of subsectors, assigning responsibilities to public entities, regulating through norms and standards, and monitoring and implementation. Chapter 4 of the National Development Plan (NDP) calls for the economic infrastructure as the foundation of social and economic development. In short, the policy’s objective is a result of ‘a

competitive and responsive economic infrastructure network of government’. Transnet, South African Airways (SAA) and the South African Express (SAX) fall under the Department of Public Enterprise, as these are classified as commercial role players. Transnet, a state-owned company (SOC), is responsible for a number of transport modes and sites that ferry goods and services across South Africa and into and out of the country. In fact, this month the SOC celebrated 110 years of existence. Its mandate is to contribute to lowering the cost of doing business in SA, enable economic growth and ensure security of supply by providing appropriate port, rail and pipeline infrastructure in a costeffective and efficient manner. Furthermore, Transnet is the largest freight logistics company in the country enabling competitiveness, growth and the development of the country’s economy by delivering reliable freight transport and handling services that satisfy customer demand. Transnet National Ports Authority (TNPA) regulates and manages the seven ports from Richards Bay to Saldanha through which products such as coal, manganese, iron ore, motor vehicles and agricultural goods are exported and imported. The port terminals through which containers, ferried across the country by rail and road, are loaded and offloaded, and other container terminal sites such as the one at City Deep in Johannesburg and Durban are under the management of Transnet Port Terminals (TPT). Transnet Freight Rail (TFR) is responsible for the rail net that links SA to Botswana, Zimbabwe, Zambia and Swaziland and provinces, cities, towns and regions within SA. TFR runs the longest train in the world – with 375 wagons – between Thabazimbi and Saldanha and from Sishen to Saldanha. Lastly, the fuel that is utilised across SA at various fuel outlets is carried through pipelines managed by Transnet Pipelines (TPL). As you can see, through TFR, TPT and TPL, Transnet contributes greatly to economic growth.

THE FUTURE OF SA TRANSPORT South Africa has one of the most developed transport infrastructures on the African continent. The holding of the Soccer World Cup in 2010 provided a further impetus to the transportation infrastructure through the development and improvement of airports and road infrastructure. Unfortunately, the rail infrastructure did not benefit to that extent. The use of other transportation modes such as drones and scooters have proved useful during election time in many countries such as the Democratic Republic of Congo (DRC), which has a vast terrain. In SA there are already individual entrepreneurs who use their own personal vehicles to transport commuters to the airport, documents and hardware from one place to another and so on. The possibilities are there for many, for small and medium enterprises to invest in such modes of transport. In general, transport systems have to be efficient and provide the desired economic and social opportunities and benefits the world has opened for humanity – in order to be a ‘Reliable Mover of the Economy’. Equally, and inversely, inefficient and deficient systems provide economic costs or opportunities that may never be recovered – and thus become ‘Immobilisers of the Economy’.

DR POPO MOLEFE CHAIRPERSON OF TRANSNET

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R21BN INVESTMENT PROGRESS FOR SALDANHA BAY IDZ The Saldanha Bay Industrial Development Zone has to date attracted more than R21-billion worth of private investments. The Zone’s CEO, KAASHIFAH BEUKES, provides updates on the progress so far of this long-term initiative

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he Saldanha Bay Industrial Development Zone Licencing Company SOC Ltd (SBIDZ-LC), South Africa’s first and only Special Economic Zone (SEZ) located within a port, is a new, open 356ha space catering specifically to the oil and gas, maritime fabrication, marine repair, logistics and related support services. Situated in the largest and deepest natural port in the southern hemisphere, it operates as a Freeport offering streamlined customs processes and bespoke facilities and services to its tenants and operators. The SBIDZ, designated as a Customs Controlled Area (CCA) and Freeport, allows for duty and VAT-free entry of any foreign goods intended for re-export. This means we can ensure ease of operations for zone users and enable them to import, store and manufacture goods (including processing, cleaning and repair) without being bound by various time and economic restrictions. The SBIDZ is the single largest project the government has embarked upon in the Western Cape and is the “most significant area of spatial development potential within the West Coast district”. Our aim over the next 25 years is to create a vibrant hub of opportunity, job creation and sustainable growth utilising the special economic zone (SEZ) legislation as a catalyst.

COOPERATION WITH MAJOR STAKEHOLDERS

We work with many organisations, businesses and institutions operationally and strategically. We are immensely appreciative of the support given over the years by

the Department of Trade, Industry and Competition and the Department of Economic Development and Tourism in the Western Cape. Their support in the establishment of the zone has really been part of our success in turning around an undeveloped area into a world-class operation. The Saldanha Bay Municipality (SBM) and Transnet National Ports Authority (TNPA) are also quite critical to the zone’s investment attraction potential and sustainable regional economic development impact. The SBM and SBIDZ-LC have launched several new developments recently, which included the SME Co-Lab Centre. A shared workspace for the Saldanha Bay business community, the Centre provides offices, meeting rooms, free Wi-Fi, printing facilities and access to laptops. The Centre also offers access to networking sessions with relevant public and private sector stakeholders and partners. The Co-Lab has attracted more than 1 500 SMME visits and engagements since it opened. Also, our SBIDZ skills programmes have created over 1 800 individual training opportunities over the last four years. Enterprise development has completed a first-of-its-kind Oil & Gas SMME Readiness Assessment. Various projects to upgrade bulk and transportation infrastructure were completed over the last few years. As the port is TNPA’s responsibility and domain, the SBIDZ symbiotic relationship ensure that what is offered to investors and stakeholders is aligned with the plans and projects of the TNPA.

ATTRACTIONS AND BENEFITS OF THE SBIDZ There are several. Western Cape is an established hub for boat and shipbuilding. More than 80% of the country’s total ships, boats and other floating structures come from here, and approximately 70% of boat building companies are located in the region. The region is the petroleum trading node for the country. The ports in the Western Cape handle 59% of SA’s total petroleum product exports and 47% of SA’s total petroleum product imports. It is ideally situated to service East and West African sea traffic and provide a linkage point for African and international markets. It is perfectly placed to accommodate and service a wide range of vessels. We have a solid maritime regulatory and policy framework in place to drive the development and efficient management of the industry. The African Continental Free Trade Area (AfCFTA) agreement makes this increasingly important. Then there is our Innovation Campus. We asked ourselves: “How do we create a thriving, inclusive and resilient maritime and energy industry?” Our research showed that the successful oil, gas and maritime SEZs encouraged research, development, and innovation (RD&I) capabilities. Clusters that drive innovation have cutting-edge knowledge centres that create and seize opportunities and do so with sustainability and inclusivity in mind always. These thriving SEZs are able to rapidly respond to shifting global trends and

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Grant Duncan-Smith / Shutterstock.com

INDUSTRIAL DEVELOPMENT

continue to find new ways to solve industry problems and remain globally competitive. Economic growth and job creation is only sustainable if it is competitive, and although innovation increases competitiveness, it is only sustainable and effective when it is collaborative. So, the SBIDZ Innovation Campus is a substantial value add to the SBIDZ, our stakeholders, and the energy and maritime industry at large. To make it work, we shall need active involvement from government, industry, academia and the community in an ongoing collaboration and co-creation approach.

INVESTOR RESPONSE To date, we have attracted more than R21-billion worth of private investments into the zone, with a total of 2 900 jobs created over the past five years.

During the 2020/21 financial year, we completed construction on the first investment project – a specialised corrosion protection facility. We are currently in the process of constructing an additional two investment projects involving specialised manufacturing and fabrication, as well as partial assembly and manufacturing of components which are currently being imported into South Africa. In addition, we completed construction on the Access Complex Building – a 5ha state-of-the-art commercial office facility that started taking in tenants in September 2020. The SBIDZ has a robust investor pipeline that continues to grow in manufacturing and export facilities, and new-build port infrastructure.

Several private investors have undertaken, at their own cost, bankable feasibility studies that demonstrate demand for vessel fabrication, maintenance, recycling and equipment servicing. For example, the Saldehco Offshore Supply Base in the Port of Saldanha Bay is an investment that has made good progress. Construction of the facility is currently underway. The facility will offer internationally competitive services to vessels passing along our coastline, and projects looking to undertake surveys, exploration and production activity on the West African Coastal Area. The common-user Project Leasing Facility (PLF) is another development by the SBIDZ that already delivers value in assisting with strategic government energy projects and meeting a business need.

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INDUSTRIAL DEVELOPMENT

The 12ha facility accommodates projects with a duration shorter than 24 months and assists logistics companies and project managers with an easy-to-access facility near the port infrastructure when handling equipment and goods in or out of the port and zone. The PLF currently provides temporary storage to tenants for wind blades, nacelles and tower sections to support the national Renewable Energy IPP Programme (REIPPP). We expect more projects related to REIPPP to be rolled out in 2021. Both facilities support investment in the SBIDZ and have received significant backing from the Department of Trade, Industry and Competition (DTIC).

technical demands, and market demand from the marine services sector. This infrastructure will provide sorely needed capacity for vessel builders, repairers, recyclers, equipment manufacturers, and many more – essentially all activities in the marine manufacturing and maintenance space. Concurrently, and as a complementary

initiative to the CBA, the SBIDZ-LC has initiated the Environmental Impact Assessment (EIA) for the marine infrastructure, which aims to be completed by the second quarter of 2022. This EIA aims to secure the relevant environmental authorisations required to de-risk investment into the marine infrastructure when it goes out to market eventually.

FUTURE PLANS For the immediate future our focus will be: • achieving commercial self-sustainability to increase the value it will create for shareholders and stakeholders of the Zone • investing in and establish catalytic infrastructure and facilities that will unlock local and regional productivity and employment • improving the readiness of the local community and industry to leverage Zone-related opportunities that will result in competitive local and regional value chains for the marine and energy services industry being built • deepening and expanding our partnerships with business, government and society that ensures the SBIDZ remains the definition of an inclusive and transformative strategy. Two strategic projects to actively de-risk, enable and create the conditions for continued and increased investment into the Zone have commenced. First, in partnership with the Transnet National Ports Authority (TNPA), we have embarked on a Marine Infrastructure Cost-Benefit Analysis (CBA) as the prefeasibility study to bring in additional quaysides into the Port. This is to be completed soon. The study will assess the various options available in terms of marine infrastructure development at the Port of Saldanha against cost,

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SIWELA SAMANDLOVU GENERAL TRADING CC “MABUYA SEZEMBETHE UGOGWANE”

Siwela Samandlovu General Trading is a black-owned construction company, formed in 2008, that has successfully operated in KwaZulu-Natal for the past 11 years, working on small- and large-scale construction projects, repair and alteration projects, focusing on residential contracting and plant hire.

Founder: Banele Nkosi Cell: 081 548 7437/071 545 7958 / 067 096 7623 Fax: 086 5110 726 16 SCOTT STREET PMB 3200 E1186 Ntuzuma Township P.O KwaMashu 4359

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Siwela Samandlovu General Trading offers comprehensive services designed to allow the company to do whatever it takes to finish a project. Services such as building material supply to construction site, house plans, remodelling and alterations, site preparation and clearance, carpentry, cement foundations, painting and plumbing. The company has introduced the field of consulting and project managers in building and civil services. Quality Policies Comply with JBCC, ISO certificates and SABS

Products and services • • • • • • • • • • •

Ensure all building materials comply with SABS Work with other service providers and local residents on sites Provide TLB, tipper trucks, ready mix trucks Provide brick making equipment to minimise building costs and affordable construction materials Work with project managers and superintendents to assume the delivery of goods Provide a schedule showing all material supplied Provide storage for materials to ensure that the goods are not affected by natural disaster Consult with stakeholders weekly for material shortage and acquisition Provide a temporal utility like water tanks, material storage, mobile toilets and bobcats General building, civil projects Supply of sand, road building lime and aggregates

5/6/21 1:06 PM


DUBE TRADEPORT SPECIAL ECONOMIC ZONE REACHES NEW HEIGHTS With the company’s mutually beneficial relationship with King Shaka International Airport – and the new urban development, Durban Aerotropolis, underway – the Dube Tradeport SEZ has the potential to become a world-class industrial and commercial precinct. Here is how they plan to achieve this over the next 50 years…

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ube TradePort Special Economic Zone was established as a catalyst for economic development, using a combination of its unique location – over 3 000 hectares of greenfield developable land – with King Shaka International Airport at its core. Its close proximity to the seaports of Durban and Richards Bay as well as its connectivity to a wide-reaching rail and road network, is the perfect setup to drive the implementation of a number of integrated infrastructure projects and business operations, which come together to create a world-class industrial and commercial precinct. Dube TradePort Special Economic Zone’s infrastructure and business operations include: • Dube TradeZone: A light industrial precinct for electronics, pharmaceutical and aerospace manufacturing, as well as logistics and distribution firms; (Designated Special Economic Zone). • Dube Cargo Terminal: A state-of-the-art cargo handling facility, linked to King Shaka International Airport’s airside operations (DUR). • Dube AgriZone: An integrated agricultural precinct (Designated Special Economic Zone). • Dube City: A business, commercial and hospitality precinct.

• Dube iConnect: A cutting-edge telecommunications provider and a premier cloud computing service provider.

KING SHAKA INTERNATIONAL AIRPORT In the last ten years, the organisation has worked to develop its globally integrated manufacturing and logistics infrastructure, which has grown to support a range of airport-related activities, including cargo operations, warehousing, agricultural production and processing, as well as commercial office real-estate. Dube TradePort Special Economic Zone CEO, Mr Hamish Erskine, notes, “Dube TradePort continues to enjoy a fruitful and mutually beneficial relationship with King Shaka International Airport on several critical projects that are aimed at driving the economic development of the province of KwaZulu-Natal. These include cargo and property development as well as air services. “King Shaka International Airport is one of the central resources that Dube TradePort is building upon to develop a globally competitive air logistics platform, which seamlessly integrates inter-modal sea, rail and road infrastructure. Through this we aim to propel the expansion of export-orientated manufacturing

within Dube TradePort Special Economic Zone.” As of Q1, 2021, work has begun in earnest to develop the second phase of the Dube TradeZone light manufacturing precinct, with bulk services being installed in the levelled 38-hectare site. A major milestone for the organisation, the land has been set aside for a medical and pharmaceutical cluster, an electronics cluster as well as general manufacturing. The entire Dube TradePort Special Economic Zone is made up of over 3 000 hectares, which will be developed over the next 50 years. Some of the key sectors that will be provided for during that period will include: • Aerospace and aviation-linked manufacturing and related services • Agriculture and agro-processing, including horticulture, aquaculture and floriculture • Electronics manufacturing and assembly • Medical and pharmaceutical production and distribution • Clothing and textiles • Automotive component manufacturing. This will be done following market demands at the time, however, agro-processing is set to be allocated space within the development of the second phase of the 30 hectares Dube AgriZone 2 development, which is anticipated to commence construction in the fourth quarter of 2021.

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ECONOMIC DEVELOPMENT

Mr Erskine further notes, “Even during the current socio-economic climate brought on by Covid-19, it is important to note that our work is guided by a long-term business strategy as far as our operations go. Our priorities remain unchanged, and we have been able to continue serving our stakeholders without any disruptions to the organisational programme. Our focus is to drive investment and job creation in KwaZulu-Natal and South Africa through the provision of world-class infrastructure and operations. We continue to see potential in both industrial and commercial property. “While passenger movements through King Shaka International Airport declined by 88% when comparing the period of April-October 2019 and 2020, which has hurt cargo throughput as the majority of cargo through King Shaka International Airport (DUR) is transported on passenger aircraft.

However, now in the first quarter of 2021, we are seeing a firm recovery in air traffic since the government has eased lockdown restrictions and reopened the economy. “November figures show that King Shaka International Airport’s route network has been restored to 29%, with a hub carrier like Qatar Airways providing onward connectivity to around 120 destinations within key markets around the world. As a province, we are actively working through the Durban Direct Route Development Committee to engage with airlines to reinstate and increase frequencies into the market.” Air services are a critical component of the Dube TradePort Special Economic Zone development, the airline connectivity to export markets is central for providing access and stimulating the growth of the local manufacturing within the zone.

Especially in the wake of the African Free Trade Continental Agreement coming into effect earlier this year paving the way for improved intra-African trade, air freight will be the quickest mode of transport to access new markets within the continent. As Mr Owen Mungwe, Dube TradePort’s Development Planning and Infrastructure Executive highlights, “We are already seeing local and multinational firms position themselves within Dube TradePort in order to take advantage of the market opportunities that are available within the rest of the African continent. “Therefore, Dube TradePort in collaboration with provincial and local government as well as the private sector is currently in the process of developing one of Africa’s most connected cities, the Durban Aerotropolis.”

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ECONOMIC DEVELOPMENT

DTPC prescribes that for all large contracts, bidders must subcontract a minimum of 30% of the tendered amount to black-owned companies including women, youth and people living with disabilities. Furthermore, DTPC’s procurement strategy targets vulnerable groups, in line with the priorities of Operation Vula.

THE DURBAN AEROTROPOLIS The Durban Aerotropolis is a new urban development around King Shaka International Airport, taking advantage of increasing global air connectivity, and the efficient manufacturing and logistics infrastructure, of Dube TradePort Special Economic Zone, which is connected to the nearby seaports of Durban and Richards Bay. The Durban Aerotropolis is set to cover an area of 32 000ha of land, translating to 42 million square metres of developable property, inclusive of a green space area of some 10 000ha. The area has been designed to develop a globally competitive environment that becomes a catalyst for social, spatial and economic transformation, which is the basis for a robust and flexible long-term development framework for KwaZulu-Natal. Durban Aerotropolis Master Plan has a 50-year development horizon – in that time it is projected that it will stimulate the creation of some 750 000 employment opportunities, as well as the attraction of R1-trillion in investment. The Durban Aerotropolis already comprises of a foundation of a purpose-built airport city development, centred around Dube TradePort Special Economic Zone and King Shaka International Airport; and area that is enhancing urban and industrial competitiveness through improved multimodal transport access that is opening up new land for development, while improving the efficiency of transport nodes throughout the region, as seen through

the expansion of the N2 and upgrading of the R103 and M4, with plans underway to introduce a rapid bus system and monorail connecting the rest of the northern region to the Durban CBD. The Dube TradePort Special Economic Zone precinct has created a manufacturing and air logistics platform which supports export and logisticsorientated firms enabling them to speedily access markets locally, throughout the rest of the African continent and globally. The area covered by the Durban Aerotropolis also caters to local communities, transforming the traditional commercial, urban, peri-urban divide, by fostering an integrated development, revitalising neighbourhoods, creating mixed-use developments, improving transport links, and bringing opportunities to where people live, in a structured and sustainable way. Through this whole development, Dube TradePort Special Economic Zone remains committed to ensuring transformation is achieved in all its activities with the implementation of a sound and robust BBBEE Policy, that seeks to ensure the participation of all previously marginalised groups. “Amongst the key positions the organisation has taken in the last five years, is ensuring that there is full implementation of the provisions of the PPPFA. We have furthermore developed a comprehensive supplier development programme which creates space for increased participation for SMMEs,” concludes Mr Erskine.

Supply Chain Management Dube TradePort Special Economic Zone issues contracts to suppliers through two procurement processes, namely, Requests for Proposals (RFP) for contracts exceeding R500 000 and Requests for Quotes (RFQ) for contracts under R500 000. Requests for Proposals To get access to all the Requests for Proposals that are issued by Dube TradePort regularly visit: www.dubetradeport.co.za/ Pages/Tenders/Adverts www.gov.za/tenders. Requests for Quotes To receive Request for Quotes from Dube TradePort ensure that your business is registered on the South African Government Central Supplier Database (CSD): secure.csd.gov.za. Thereafter submit your company profile as well as the Central Supplier Database Report to Shashni.Narain@ dubetradeport.co.za. Dube TradePort has committed itself to the development of SMMEs and therefore gives preference to SMMEs when issuing Requests for Quotes. Supplier Training Dube TradePort Special Economic Zone provides development training to SMMEs in various fields, in partnership with accredited institutions. In addition, the organisation has established a quarterly Supplier Forum, where enterprises have an opportunity to meet the Supply Chain Management team to discuss any of the aforementioned items. To receive an invitation to the Supplier Forum and training opportunities email: Shashni.Narain@dubetradeport.co.za.

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KABE Consulting Engineers is devoted to establishing general engineering and project management services which they feel will create job opportunities and enhance their reputation for loyalty, respect, responsibility, professionalism and quality.

KABE is a BBBEE Level 1 Contributor, ISO 9001:2015 certified. SERVICES 1. Civil Engineering 2. Structural Engineering 3. Project Management The company, a 100% black-owned civil engineering consulting entity established in 2005, specialises in the investigation, planning, design, implementation and project management of township services, roads and storm water management and water and sanitation with emphasis on research into and the introduction of affordable services. Their services are well-structured to assist all their clients sufficiently and easily. They also assist emerging contractors by offering project management services.

We aim to form joint partnerships with other experienced strategic partners to facilitate skills transfer, transformation and growth locally and internationally. Our team subscribes to and upholds the international standards of project management as set out in the PMBOK, as well as principles and procedures associated with ISO quality standards, ECSA and other Engineering bodies.

Contact details:

Head office: 218 Dr van der Merwe Road, Montana Park, 0182

Other offices:

South Africa: Eastern Cape, Free State. Kwazulu-Natal, Mpumalanga, Limpopo, North West | Zambia: Lusaka Tel: +27 (0) 87 809 0982 | Fax: +27 (0) 86 516 4728 E-mail: info@kabe.co.za | Website: www.kabe.co.za Facebook: www.facebook.com/EngKabe Twitter: www.twitter.com/EngKabe LinkedIn: www.linkedin.com/company/kabe-consulting-engineers

Delivering Transport Solutions Specialists in Full Logistics Services → → → → → → → →

South African Inland Logistics CC is a specialist in Road Transport, Rail and Warehousing with services offered country wide. We own a large fleet of Light and Heavy Motor Vehicles; Multipurpose Trailers; Forklifts; and a host of ancillary support Vehicles, all of which are operated and managed by an experienced Team. Our Warehouse facilities are Food Grade Certified. At South African Inland Logistics CC our primary objective is to deliver a fast, efficient and comprehensive service – one in which customer satisfaction is prioritised. DURBAN 10 Nottingham Place, Mobeni, 4060, Durban, KwaZulu-Natal PO Box 22403, Glenashley 4022 Tel: +27 31 462 2250 Fax: +27 31 462 2376 Email: roland@sa-il.co.za gerald@sa-il.co.za • arvin@sa-il.co.za

B-BBEE LEVEL 2

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JOHANNESBURG 91 AG Dewitt, Solheim, Germiston, Gauteng Tel: +27 11 822 9397 Fax: +27 11 822 6876 Email: denolan@sa-il.co.za

www.sa-il.co.za

ISO 9001:2015 Certificated

5/6/21 12:59 PM


BUILDING AN ECONOMICALLY INCLUSIVE SOCIETY Localisation and inclusion can be synonymous. By practising the one, we are by default supporting the other and creating much-needed jobs in the process, writes EUSTACE MASHIMBYE, CEO of Proudly South African

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uring this period of re-building and regeneration of the country’s economy in the wake of the Covid-19 pandemic and the impact of the resulting lockdown period, economic inclusion is a vital element in equalising our society in so far as it promotes growth and job opportunities. A number of business practices conspire either for or against inclusivity and it is worth having a look at just a few in their relation to localisation and its own role in promoting broader participation in our economy.

KEEP IT LOCAL Local procurement has never had more importance or relevance than it does now. But preferential procurement and enterprise development cannot be used merely as tools for your BEE scorecard. That is not sustainable and does little to entrench a culture of meaningful local procurement that truly benefits the business, the supplier, the growth of the economy and jobs. Enterprise and supplier development programmes, supplier pipeline initiatives, impact partnerships – these are some of the ways in which corporate South Africa has truly embraced the need to grow and nurture small, mostly black-owned businesses and bring them into their supply chain. These small businesses have the biggest potential for job creation and must be nurtured.

A number of Proudly South African’s members and stakeholders have done this with great effect. SA Breweries, together with some of the companies that are part of the Market Access Programme, have created a database of pre-qualified SMMEs available to other companies looking for local suppliers. Absa has partnered with the Lionesses of Africa programme to grow and develop specifically female entrepreneurs. These and many more of our large corporates are playing their part in creating sustainableinclusivity programmes.

KEEP AN EYE ON VALUE CHAINS A critical component to be monitored consistently is to look at the value chains of our private sector companies, to ensure that the actual products they are sourcing from local suppliers are locally produced. It begins with raw materials and day-to-day consumables, bringing new entrants into the supply chain, in order that they, too, can drive economic inclusivity. As part of our ongoing follow-up since the October 2018 Presidential Jobs Summit, we have been soliciting localisation commitments and pledges from corporate South Africa, as part of our work in pushing the inclusivity agenda. By encouraging companies to commit to a specific

Rand amount, or a specific part of their procurement process (sourcing only locally manufactured office furniture for example, or stationery) we are slowly but surely converting their supply chains to become more local, coupling this with their preferential procurement and ESD programmes, also making them inclusive.

KEEP FRANCHISING FAIR We have worked over the past few years with the Franchising Association of South Africa (FASA) and taken smaller member companies to ‘elevator pitch’type events in an effort to grow the levels of local procurement and inclusivity in that sector. Franchising is a massive business, and irrespective of the nature of the franchise (from fast-moving consumer goods to hardware and everything in between) there is the procurement not only of the raw materials such as restaurant ingredients, but of the furniture, crockery, uniforms, etc, that create the specific ‘look and feel’ of that brand. Done correctly, and through fair import replacement sourcing strategies, franchise procurement can be a great driver of inclusivity. However, done in an unfair and anti-competitive manner, it benefits only the few and can even lead to the

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SMALL BUSINESS

Economic inclusion creates economically active citizens who are free to buy and sell how and where they wish, which in turn increases the tax revenue base putting more back into the fiscus

downfall of small business owners, who buy a franchise believing it to be a ‘safe bet’ only to find that prescriptive buying and even pricing regulations render the business unsustainable.

THE BOTTOM LINE New anti-competition laws, which we are still studying, have stringent measures in place against ‘closed shop’ arrangements that work against economic inclusivity. The new legislation should support small business owners not only in respect of overly prescriptive contracts but also in allowing better access to markets as prioritising, favouritism, nepotism, collusion

and all these variations of unfair business practices come under legal scrutiny. Economic inclusion is an imperative for the country. It creates economically active citizens who are free to buy and sell how and where they wish, which in turn increases the tax revenue base putting more back into the fiscus. Localisation and inclusion can be synonymous. By practising the one, we are by default supporting the other and creating much-needed jobs in the process. We therefore appeal to all members of the PBF to review their procurement processes and supply chains in favour of businesses that are manufacturing locally and who are therefore creating jobs.

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PROUD MOMENT FOR SOUTH AFRICAN GBS INDUSTRY Rising from obscurity to compete with the likes of India and the Philippines, a few weeks ago, South Africa was rated the most favoured front office Customer Experience (CX) offshore delivery location in 2021. Founder and CEO of SoluGrowth, SANDILE GWALA, reports on what this achievement means for GBS in SA

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e all have strong memories of the race that made Wayde van Niekerk a national and global hero at the 2016 Olympics. There was massive jubilation across the nation at the accomplishment of such an impressive feat. But ask the majority of South Africans about their knowledge of the journey he took to achieve such a result and barely anyone can give you much of the background without performing an in-depth

Wikipedia search and read. This is not surprising in a nation that counts soccer, rugby and cricket as its most popular sports. The same can be said for the Global Business Services (GBS) industry. In South Africa, this industry was a sleeping giant in comparison to the mining, banking, telecommunication and retail sectors. It has risen from obscurity to compete with the likes of India and the Philippines.

A few weeks ago, South Africa was rated the most favoured front office Customer Experience (CX) offshore delivery location in 2021, as announced by the trusted Ryan Strategic Advisory’s Annual Front Office BPO Omnibus Survey. A tremendous number of stakeholders worked tirelessly to implement the objectives of the GBS Incentives that has led the industry to very successful growth in South Africa and achieving this rating.

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BUSINESS SERVICES

These stakeholders include BPESA and its GBS community, various levels of government led by the dtic and several NGOs. The definition of GBS includes CX call centres, shared services outsourcing, IT outsourcing, finance and accounting outsourcing, back and front office offshoring services from overseas-based multinationals as well as entities operating within the African continent. Some of us may not be aware of the jobs that the GBS industry has imported into this country and its future potential. This recent accolade of surpassing India is a massive coup for the country. Many of us who have been aware of the criticality of the GBS industry’s contribution to the growth of the economy can be proud of this achievement. Our esteemed President of the Republic also reinforced that this recent recognition goes a long way towards solidifying the industry’s importance to the South African economic growth agenda. However, this is where it gets interesting. Just as Wayde is now expected to be the front-runner by most South Africans even whilst his competition focuses on extricating themselves from their positions in his rear flanks, so do South Africans now expect the GBS industry to drive home our newly found position, with our global rivals in hot pursuit. Ryan Advisory’s announcement of the results explains this best, indicating “It is also clear that buyer favourability is fluid… South African outsourcing stakeholders [sic] cannot rest on their laurels.” Whilst our clear communication of South Africa’s GBS Value Proposition should be applauded, it will be unwise to underestimate the effort it will take to maintain our newfound position, especially in the wake of a global pandemic that has created a hotbed for increased disruption in global industries.

WHAT SHOULD SOUTH AFRICAN GBS STAKEHOLDERS BE DOING TO AVOID “THE RISE AND FALL” SYNDROME? SoluGrowth (Pty) Ltd is one of the GBS players in South Africa. We founded the company in 2018 and we currently employ 230 employees, with the majority of our staff serving offshore clients in the US, UK,

Singapore and in various African countries. As one of the players in the sector, we believe avoiding the “rise and fall” syndrome should be approached in two ways: • Firstly, by constantly innovating in the GBS sector using technology enablers to strengthen the foundations built by our accent-neutral, empathetic and skilled workforce, which has made South Africa a firm favourite with international buyers. This requires continued investment in capabilities such as customer analytics, conversational artificial intelligence, and augmented platforms. • Secondly, by furthering our push towards being at the forefront in the nontraditional areas of the GBS that focus on the more complex back-office and niche domain services (e.g. data analytics, digital software testing, financial reporting and actuarial services). There are specific industries that South Africa has been one of the great leaders in globally, such as banking, insurance, retail, health, etc. GBS provides significant opportunities for these industries to continue offshoring their complex back-office services. This two-pronged approach has the potential to solidify South Africa’s foothold in the GBS arena, whilst creating significant opportunities to increase employment and enhance our skillsets as a nation. There is no reason why the reputation of our Chartered Accountants cannot vault us to the top Global F&A destination ranking within the next few years. The advantage of improving innovation and niche services does not replace the importance of new jobs and inclusive employment growth to bring the unemployed youth into the workplace. Instead, this provides an opportunity to attract more companies to offshore to SA through (i) Attracting more globallybased multinationals to offshore their services into South Africa, (ii) Attracting global GBS companies to select South Africa as one of their delivery locations around the world, (iii) Encouraging globally operating South African companies to relocate their GBS services to South Africa and (iv) Incentivising SA companies that were early adopters of offshoring to other

This recent recognition goes a long way towards solidifying the industry’s importance to the South African economic growth agenda competing locations, such as India, to return their GBS services back home. Innovation and digital economy are not a threat to inclusive job creation but are an integral part of attracting more new jobs into South Africa. The latest proof of concept conducted by Harambee – which develops the youth as new entrants into the digital economy, such as digital software testing – is proving very successful. Their proof of concept is already serving a Canadian client utilising previously unemployed youth and will soon be helping South Africa to increase the supply of the digital workforce. As President Ramaphosa wrote in his weekly newsletter on 12 April 2021 “… the economic recovery is not about a return to what was, but about transformation to what is next”. While we are celebrating this recent accolade, let us visualise the dream and focus on leveraging the sectors that will contribute towards attaining the required jobs growth for the next decades.

SANDILE GWALA Founder & CEO of SoluGrowth Questions? sgwala@solugrowth.com

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IS THE SOUTH AFRICAN LEGAL PROFESSION READY TO EMBRACE DIGITISATION? BLAKE HAMILTON, Candidate Attorney and CHANTELLE GLADWIN-WOOD, Partner at Schindlers Attorneys urge legal professionals to swop the paper trail for the digital world, to keep on top of a new system which has the potential to save time and money

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he world is being propelled into utter turmoil with the emergence of the Covid-19 pandemic. It has been almost a year since the global pandemic struck South Africa, and for many months, people around the world have had to restructure their lifestyles, buying patterns, eating habits, daily schedules, working habits, and reliance on technology. The South African justice system and the legal profession are not exempted from these reforms. The Covid-19 pandemic propelled the law into a more modern era and is restructuring the entire landscape. The required restructuring will affect the entire legal profession, including legal professionals, clients as well as court procedures. The question is, are South Africans ready to embrace digitalisation in the legal profession? The writers postulate that the “new normal is here to stay” and it is prudent that we all shift our paradigm sooner rather than later.

PAPER IS TRADITIONAL The circumstances that we find ourselves in today are quite frightening, especially for firms that are reluctant to embrace this change. The sad reality is that many firms are not equipped and prepared for this change. The legal profession is an old, an honourable one, and one that is (like many others) steeped in paperwork. It is a slow and uncomfortable change

for most law firms and courts to move away from physical paper-based systems towards less physical and more electronic and online storage and document management systems. Whilst many firms have been forced, by Covid, to adapt, our government offices (Master’s Offices, Deeds Offices, and courts) have been slow to adapt. The noteworthy exception here is the Johannesburg and Pretoria High Courts, which are currently working with an online paperless system called Caselines. Although we understand that there are plans to roll out this document management system to the rest of the courts in the country, progress has been slow in this regard and there is, as of yet, no publicly known target date for this rollout.

ELECTRONIC SIGNATURES The use of electronic signatures has exploded since Covid first graced our shores, and since last year there have been extensive developments in systems offering quick and easy document signatures. However, the issue in the legal profession is fraught with dissension, because certain legal documents can only lawfully be signed electronically using an advanced electronic signature, which is currently not available for free. One can only obtain the same by subscription to a paid service, which many customers, and attorneys, cannot afford.

This is also not widely known or understood and results in much confusion in the profession and even in court when people question whether the documents presented have been lawfully electronically signed. Until we have had more practice and become more familiar with these issues and perhaps come up with some creative solutions to these problems, electronic signatures remain somewhat of a mysterious creature in the legal profession.

A GENERATIONAL CHANGE Despite the frustration, change can be very positive. As a candidate attorney at Schindlers, it is liberating to witness how welcoming the firm is to digital transformation. The firm supports and empowers its employees to work remotely and further equips employees with the appropriate equipment and preparation. The courts are overburdened with cases, which often take years to finalise. Digital transformation serves as a response to this challenge, through allowing more judges to preside over cases and possibly expedite cases. There are various platforms such as Microsoft teams and Zoom, which serve the same purpose as going to court and carrying out the court procedure. This also reduces the costs of the clients and legal professionals attending, whilst saving driving time.

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LAW

But the online document management system also comes with its challenges – there are some difficulties with the online system and the profession is consistently engaging with the court staff members to tweak it, and to educate users, and to make the system more user friendly. With time these creases will be ironed out, but in the interim, whilst they exist, they create much frustration for the legal professionals and clients affected. But one must persevere and find creative

solutions to these problems. One can only move forward.

CONCLUSION Digital transformation could revolutionise the legal profession and its ability to sustain the latest legal developments is self-evident. Automation of records, outsourcing of repetitive duties to machines and the opportunity to efficiently perform legal duties remotely will save all legal professionals and clients, both time and

money. Law firms should be willing to press ahead with the enhancement of technology in practice, especially in the long run and not only as a temporary measure due to Covid-19. Although fraught with difficulties, we must accept as the ‘new normal’ that legal professionals will increasingly be called upon to provide digital-based services to their clients, and where challenges arise as a result, we must persevere and pioneer, for the sake our clients, and justice as a whole.

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D&O LIABILITY INSURANCE CRUCIAL DURING COVID-19 As the risk of claims against directors and officers is slowly rising, so to is the value of liability insurance. In fact, it has never been more important, writes VERNON SUBBAN

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s South Africans move down the levels of national lockdown to curb the spread of a lingering pandemic, the economic impact remains severe. Businesses had to grapple with office closures, collapses in supply chains, fall in consumer demand, remote working, travel restrictions and more. How swiftly and efficiently directors and their senior management have reacted to these challenges will take centre stage not only in the months to come, but also in the years ahead. The robustness of their crisis management policies and business continuity plans will be tested. Headlines have focused on the buzz around business interruption claims due to the Covid-19 crisis, while claims against directors and officers have slowly been on the rise. Will their directors and officers liability insurance be able to assist with the pandemic-related claims?

WHAT IS DIRECTORS AND OFFICERS LIABILITY INSURANCE (D&O)? The full impact of the pandemic and the lockdown on D&O liability insurance in South Africa is not clear cut currently, however globally in particular the US, claims against directors and officers have gained momentum, holding them personally liable for losses arising due to the economic crisis caused by Covid-19. D&O insurance offers cover for directors and their officers / their management team from claims which may arise from the decisions and actions taken within the

scope of their regular duties. It does so under the following three instances: • Coverage for director’s or officer’s personal liability or Side A – when claims are made against directors and officers for wrongful acts where indemnity from their insured company is not available. • Company reimbursement coverage or Side B – the insured company will indemnify the director or his officer and the company will then be reimbursed by the insurer/policy. • Securities entity coverage or Side C – this is for companies who issue or raise new capital. Who is covered or who is the insured? • Past, present and future directors • Non-executive directors • Employees in management or supervisory capacity / officers What is covered? • Costs and expenses of the insured – defence costs • Allegations of a wrongful act • Financial losses for which the insured is held liable

POSSIBLE CLAIMS THAT DIRECTORS AND OFFICERS MAY FACE DUE TO COVID-19 The risk of breaches of duty by directors and officers grows in a time of crisis. There are a myriad of ways that directors and officers’ breach of duties can unfold during the pandemic and lead to claims from shareholders, clients and other stakeholders and third parties (employees, SARS, trade unions, competitors and so forth):

• Failure to implement effective safety and health precautions to prevent the virus from spreading among employees and clients • Not having adequate risk management programmes in place and not being able to develop adequate contingency plans – like ensuring safe remote access to the company’s IT system when staff are working from home, perpetuating cybersecurity • Failing to properly assess the direct and indirect risks the pandemic posed to the company and its financial performance – doing all possible to mitigate these effects, like adapting products and services offered to address new market conditions, making alternate supply arrangements. Assessing all relevant contractual relationships and identifying any force majeure clauses • Not complying with the Disaster Management Act and its regulations • Failing to inform shareholders adequately • Failure to apply correct labour laws • Industries hardest hit by the pandemic – travel, hospitality, healthcare and airline industries – will see a huge influx of such D&O claims.

WILL COVID-19-RELATED CLAIMS FALL WITHIN THE TERMS AND CONDITIONS OF A D&O LIABILITY INSURANCE POLICY? As the risks for directors and officers increased in the past two years, so have the policy terms and conditions adapted accordingly.

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INSURANCE

The clauses have typically broad triggers that offer cover for a wrongful act from directors and officers under all three sections of the policy – Side A, B and C – as mentioned earlier. Policy wordings will vary according to insurer: • The bodily injury exclusion – as Covid-19 claims seek damages for indirect financial loss, there should be no coverage impediment in this regard. • Pollution exclusion – precludes claims based on the release or dispersal of pollutants including specified contaminants; may include germs and viruses which may have a bearing on Covid-19. • Conduct exclusion – the exclusion of intentional and deliberate acts will be viewed on an individual basis in relation to Covid- 19 claims.

RISK MANAGEMENT The economic effects of this crisis will require an active and carefully considered crisis management for businesses of all sizes.

On the occasion where individual companies are not endangered by the crisis, they are still faced with the devastating repercussions the company would have on its revenue. Directors and officers will need to establish and/or adapt risk management programmes in the best way seen fit. This will enable them to timeously identify parts of their business that are particularly exposed and implement corrective measures. No director wants to fly blind during these times. As expense pressures grow for even previously well performing businesses, D&O liability insurance coverage is not an avenue to venture into for cutting costs. It has never been more important. Side A coverage is critical as it is the last line of defence for every business’s risk management plan. This is particularly pertinent when bankruptcy legislation precludes the company from indemnifying director and officer losses.

CONCLUSION As directors and officers move through fluid

and changing times, they need to engage their risk management team or insurers on D&O risks and review insurance coverage terms on renewal and going forward. The lingering pandemic and a very stressed economy will make D&O liability insurance more expensive, but it may be far more valuable than it ever was.

VERNON SUBBAN Questions? Vernon@subban.co.za

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USING MINDFULNESS TO REDUCE STRESS (PART 2) We need to be aware of crossing the line from beneficial acute stress to chronic stress, which leads to burnout. WERNER GAIGHER explains how we can find and maintain the equilibrium through being mindful of ourselves and others

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n highly competitive environments such as business and athletics, and in lifethreatening situations, acute stress is beneficial. It gives us that drive to get things done and stay safe. As I highlighted in my previous article, Working with stress, not against it, we often remain in this stress response long after the threat is over, or the deadline has been achieved. This chronic stress wreaks havoc on our body, mind, relationships, and ability to function effectively in our everyday lives.

THE FLIGHT OR FIGHT RESPONSE Chronic stress keeps the body in a fight or flight state, where the body is constantly prepared for a high energy response. In this state the nervous system perceives (neuroception) the threat as still present (real or not) and fighting or running away as an insufficient response. As a result, our body moves into an immobilised, or collapsed, state to protect us. Without awareness, our body and mind remain in this incomplete defence state and the energy never completes its natural cycle. Whatever the cause, suppressed and blocked energy causes discomfort, illness and dis-ease, and needs to be released and biologically completed for the body to return to a state of balance. It is often our rational mind and suppression of this blocked energy in our bodies that keeps us in a hyper-aroused anxious state or hypo-aroused depressed, or collapsed, state.

Without a sense of awareness that this is happening to us, we get stuck in this cycle, unable to bounce back.

HOW DO WE RESET OUR NERVOUS SYSTEM AND WORK WITH FUTURE STRESSORS? It starts with being mindful of our body. Mindfulness requires us to turn towards our present moment experience without judgement, but rather, with acceptance. It does not require us to fix anything, only to become the observer of our actual experience. It reveals the truth of our reality. Turning towards and noticing our bodily sensations, we can soon identify what is our experience on a feeling level and then do something about it. When we are stressed, we will often find areas in the body that are constricted, tense, or even in pain. We need to start becoming aware of these stuck places, befriend them and move through them, in order to return to a state of equilibrium. It is easy to “talk the talk”, but to put this into practice requires a perception of safety and often we need to be guided. These stuck energies can be overwhelming when we first start turning towards and feeling them. But, by changing our understanding of and relationship with these sensations, we can gently remove the fear from these energy states. By removing the fear, we can start investigating what triggers us into these states and questioning the legitimacy of

our nervous system responses. If we find ourselves in a mobilised fight or flight response or an immobilised, or collapsed, response when we know there is nothing threatening our life at the time, we can then use various techniques to regulate our nervous system.

CUES OF SAFETY For the nervous system to regulate, there needs to be a neuroception of safety, whereas being stuck means there is a neuroception of danger or life-threat. One of the things we lose when we are activated in fear or collapse, is a sense of presence. Through various grounding techniques such as sensing soothing areas of our bodies, feeling the pressure of gravity, feeling our feet on the ground and orientating ourselves within our environment, takes us out of the negative feedback loop and into the present moment. This regulates our nervous system and helps us to start feeling the body and tracking sensations. Movement is a tool we can use to help us complete these immobilisation/ mobilisation responses. Unfortunately, going for a run or a yoga class might help in the short term, but movement needs to be directed towards the particular body response and there needs to be a sense of awareness.

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MENTAL HEALTH

A movement strategy will look and feel different depending on the state; it is not a one size fits all model. Understanding and regulating our own nervous system also allows us to understand and co-regulate others around us. We only need look to nature to understand how we can regulate ourselves and others. When a member of a wild herd of horses has a dysfunctional nervous system – as in feeling distressed – the horse is seen as a liability to the herd because it is not present enough to sense potential danger and alert the herd. Consequently, the herd will work on the distressed horse’s nervous system to bring it back into equilibrium. They do this through coregulation with their own nervous system. When a member of the herd is feeling anxious, the other horses drop their heads

and slow their breathing down to slow their own heart rate down. This, in turn, causes the anxious horse’s heart rate to entrain (synchronise) with theirs and so, it too slows down, and the horse begins to feel calm. When a horse is feeling low, flat or depressed, the other horses increase the speed of their breathing, which causes their heart to beat faster. The depressed horse’s heart rate then speeds up as it entrains with the other horses in the herd and experiences more vitality and energy. The outcome of both responses is to bring the horse’s nervous system back into equilibrium. How can a corporation utilise this approach? Through co-regulation and removing fear from the immobility response. This then increases the three critical components of leadership: resilience, compassion and courage.

WERNER GAIGHER Questions? wernergaigher@gmail.com

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HOSPITALITY

FIND SANCTUARY IN THE SUBTROPICS Award-winning Pumula Beach Hotel offers the perfect mix of work and play facilities, and a dedicated staff complement to cater to your every need. You’ll leave wanting more!

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waZulu-Natal is South Africa’s lushest region, where winter doesn’t exist. And it is here, situated 100km south of Durban, where Pumula Beach Hotel welcomes guests to its sandy beaches and crystal-clear pools. With its rooms adorned with paintings of delicate seashells and colour tones that match that of the Indian Ocean nearby, the hotel seems to be the very home of champagne wishes and caviar dreams.

IDEALLY LOCATED Pumula is unique in its location, situated right on one of the few select beaches in the country that enjoy Blue Flag status. Between all the on-site facilities and those right on Pumula’s doorstep, guests are indeed spoilt for choice. Never-ending golden beaches, protected bathing, rock pools, surfing, excellent fishing opportunities, the annual sardine run, and dolphin or whale watching to name a few. Throw in the fact that South Africa’s playground, the vibrant city of Durban, is not too far away – accessibility and entertainment to counter the utter peace and tranquility, should you need it – are two more major drawcards.

who love nothing more than to soak up the breathtaking surroundings of KZN’s coastline. Many families return year after year to create more happy memories as the kids grow up. As a family-owned hotel, family is important to Pumula. The staff take great pride in being part of each family’s history and do everything in their power to ensure their memories are happy ones. Even the staff find it hard to leave, with the longest member of staff recently acquiring their 40-year Service Award.

AWARD-WINNING The personal attention given to the guests, their dedication to service excellence and exceptionally high standards have led to Pumula Beach Hotel winning accolade after accolade, and the respect of many. Including taking home the Lilizela Award for the best three-star Family Hotel Nationally (for service excellence). They have also been awarded Best Family Hotel in South Africa many times. “Good News! Some people still strive for excellence,” says Consumer Watch radio and media personality, Wendy Knowler, commenting on Pumula’s staff.

FAMILY VALUES

FULLY-EQUIPPED

For decades, Pumula Beach Hotel has been the destination of choice for families, friends and conference guests,

Pumula Beach Hotel has recently expanded to a total of 66 hotel rooms and two conference venues.

Conference facilities include the Intshambili and Amawele rooms, with room for up to 100 and 120 delegates respectively. The rooms are fully air-conditioned, with fixed screens. The following equipment is available: overhead projectors, data projector, flipcharts (flipchart paper and pens are provided), TV & VHS VCR, DVD and podium. A note pad and pen per delegate are also included. Nearby amenities include a selection of well-known golf courses, tennis courts, deep-sea fishing charters, ocean safaris, Oribi Gorge, Wild Coast Sun, hiking trails and much more. There really is no place like KwaZulu-Natal for a work event that doesn’t feel like work at all. The deck chairs are almost always out and the grass green all year round. Pumula Beach Hotel with its sun, sea, excellent service and sultry temperatures makes a lot of sense when it comes to choosing a venue with a little something for everyone. Telephone: 039 684 6717 Email: reservations@pumulabeachhotel.co.za Website: www.pumulabeachhotel.com

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BOOK REVIEW

FIRST-AID FOR LEADERS This easy-to-read guide by SARAH ARNOT MULHERN is a must-have for executives with a small time budget but a big thirst to improve their leadership style

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ith chapters such as Setting Intentions, Causes of Fear of Failure, Vulnerability and Courage, Keep Your Focus by Sarah Arnot Mulhern is part self-help guide, part first-aid kit for leaders with enough humility to know that they too need leadership from time to time. Because, after all, leaders are humans and the downside of achieving great success is that it can be lonely at the top. As a leader you are expected to have the answers and come up with solutions, which is why it’s good to know help is an arm’s length away in the form of books. And although many books have been written on the topic of effective leadership, few of them have content that is easily digestible. And this is ironic since the one thing that leaders have precious little of is time. Keep Your Focus stays true to its title by offering its audience wellwritten material that’s easy to read, presented in a format that ensures all the information is assimilated. Compiled for leaders eager to learn, the book is a collection of useful

leadership research findings, distilled into 40 bite-sized leadership lessons. The briefings are perfect for leaders who are chronically short on reading and research time. They unlock the latest thinking about learning, leadership, decision-making and growth to help executives “move the dial” on leadership. Mulhern offers insights you can apply straight away to improve your leadership style and keep a clear head while doing so. It’s a valuable resource to dip into when you need inspiration, or to be reminded of what’s important as a leader. Sarah Arnot Mulhern is Managing Partner of the Woodburn Mann Leadership Science Institute, which provides leadership development and assessment services to Boards, CEOs and senior executives in South African corporate businesses. She’s been featured on Cape Talk, Power FM, eNCA, CNBC and SABC for her insights on leadership. Sarah’s career spans more than 25 years, most of it spent at two companies – Accenture and

Spencer Stuart – based in Ireland, France, the UK and South Africa. She held international leadership roles in both organisations. As an executive search consultant at Spencer Stuart, she led the European Internet Practice and the European Software Practice. After moving to South Africa, she joined the Leadership Advisory Services (LAS) practice, consulting to global clients in multiple industries.

ORDER INFORMATION Keep Your Focus can be ordered from Knowledge Resources Ground Floor, Yellowwood House, Ballywoods Office Park, 33 Ballyclare Drive, Bryanston Contact: tel: (+27 11) 706 6009 fax: (+27 11) 706 1127 e-mail: orders@knowres.co.za Available online at: www.kr.co.za

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