In the News Week of January 2010, there is an article titled “How Africa is becoming the new Asia” please read on if you thought the continent (by that I mean the African Continent) is at its beginning or its end.
Here I share my personal experiences in the four months, December 2009 to March 2010. I have had the pleasure of visiting three countries: Nigeria, Angola and Equatorial Guinea. This is just the beginning, as I am due to be back in Nigeria in April 2010. It’s the beginning because personally, I have decided to get to know my continent better, and our company, Amabubesi Group, is exploring various business and investment opportunities throughout the length and breadth of this continent.
I have always suspected, but now I am beginning to know, that South Africans, Black Africans in particular, are bad travelers. I overheard some people the other day planning a trip to Mozambique (602km from Johannesburg). They were talking about:
Ø Informing their friends exactly where they would be at any given time, just in case,
Ø Understanding hospitals there,
Ø Enough cash (dollars) just in case they have to return in a hurry.
Please note that you no longer need a visa now to travel to Mozambique.
My personal interest to explore has been increased by the huge numbers of fellow Africans from various countries, who visit, do business and invest in South Africa. Have you visited some restaurants lately, in Morningside and other shopping centers in Johannesburg?
The perceptions you gather in South Africa about Africa will cover:
Ø Most of what you will read will be about corruption, lack of infrastructure, Malariacomplex ways of doing business,
Ø You would be made to believe that hardly anybody travels to these countries,
Ø You might even be convinced that people in the continent are not interprenual,
Ø There are hardly government plans to improve the conditions of people.
I am the first one concerned about corruption in the rest of the African Continent but I am more concerned about corruption in South Africa because I have a feeling it’s on the increase. I want to see corruption being reduced drastically in South Africa and beyond.
Let me, for now, just highlight my experiences in Equatorial Guinea. Statistically it’s a country of just over 600k. A small country but if you read more about Africa you will, notice that there are lots of small countries, please exclude Nigeria (±120m people).
I found in Equatorial Guinea, a country that does business with everybody including the western world e.g.
Ø America and France are firmly in the Oil and Gas industry
Ø Israel – in hospitals
Ø Arabic countries– building of roads
Ø Chinese companies – construction
The country is abuzz with international operators but if you were to read today about Equatorial Guinea, you would swear nobody, especially from the western world, goes there. It is a country with immense opportunities, which is why everybody is there.
Off course, I do not want to leave an impression that it easy sailing, after all it’s been said that “Africa is not for sissys”. You will experience network congestions, hotels (top ones) do not take credit cards and therefore take cash along and it is rather expensive.
WELCOME TO OUR CONTINENT!
Friday, April 23, 2010
Monday, March 1, 2010
Views on the Budget speech 2010
I would like to go on a relatively long quotation. The reason for this is that it offers a glimmer of hope to the business community who were beginning to doubt what they are regarded as in the recent pronouncements by some politicians.
Some of us have long argued that business, government, labour and civil society is connected by an umbilical cord. Any attempt to cut out any of these without proper surgery, all the quadruplates will die!
The Mail & Guardian, February 19 to 25 2010, vol 26 No7 and on page 2, referring to Minister Pravin Gordham when he delivered the budget speech,
“ … and he ended his speech with a call to government, the private sector and organized labour to forge a new social compact in terms of which government would provide the policy frameworks and socioeconomic conditions to accelerate job creation while business should balance the pursuit of profit with social justice”.
Organised labour, he suggested, must look beyond its existing constituency-with formal sector jobs-to “embrace and act on behalf of all our country’s workers, both those employed and those desperate for employment”.
The key observations I would like to make are:
(a) With due respect Minister, what you are calling for is not “a new social compact”. It is a relationship in the eyes of the private sector that has always been there. The only problem is that the private sector in the recent past has almost believed that the other parties have suspended this compact.
(b) The private sector must take heed of the call to “balance the pursuit of profit for social justice”. It is not a new call but the private sector has sometimes treated the issue of social justice as a peripheral.
(c) This relationship needs to be taken seriously as a relationship in the workplace and not only in the formal structures like NEDLAC.
In the last blog I placed, I indicated that there are 20 young people whose careers I want to follow. I will be challenging them to provide their views specifically on the issues of whether they think it is necessary for the private sector to balance the pursuit of profit with social justice and whether they are prepared to take less profits if that is done to pursue social justice. I would like to know further how they see this balance could be done.
Let me conclude by also leaving one matter hanging, coming also from the same budget speech, and this relates to the relaxation of labour legislation for workers aged between 18 and 25 and state subsidies to reduce the cost of employing them. A lot of attention needs to be given to this considering the effect it will have on the overall employment rate in this country.
I would like to go on a relatively long quotation. The reason for this is that it offers a glimmer of hope to the business community who were beginning to doubt what they are regarded as in the recent pronouncements by some politicians.
Some of us have long argued that business, government, labour and civil society is connected by an umbilical cord. Any attempt to cut out any of these without proper surgery, all the quadruplates will die!
The Mail & Guardian, February 19 to 25 2010, vol 26 No7 and on page 2, referring to Minister Pravin Gordham when he delivered the budget speech,
“ … and he ended his speech with a call to government, the private sector and organized labour to forge a new social compact in terms of which government would provide the policy frameworks and socioeconomic conditions to accelerate job creation while business should balance the pursuit of profit with social justice”.
Organised labour, he suggested, must look beyond its existing constituency-with formal sector jobs-to “embrace and act on behalf of all our country’s workers, both those employed and those desperate for employment”.
The key observations I would like to make are:
(a) With due respect Minister, what you are calling for is not “a new social compact”. It is a relationship in the eyes of the private sector that has always been there. The only problem is that the private sector in the recent past has almost believed that the other parties have suspended this compact.
(b) The private sector must take heed of the call to “balance the pursuit of profit for social justice”. It is not a new call but the private sector has sometimes treated the issue of social justice as a peripheral.
(c) This relationship needs to be taken seriously as a relationship in the workplace and not only in the formal structures like NEDLAC.
In the last blog I placed, I indicated that there are 20 young people whose careers I want to follow. I will be challenging them to provide their views specifically on the issues of whether they think it is necessary for the private sector to balance the pursuit of profit with social justice and whether they are prepared to take less profits if that is done to pursue social justice. I would like to know further how they see this balance could be done.
Let me conclude by also leaving one matter hanging, coming also from the same budget speech, and this relates to the relaxation of labour legislation for workers aged between 18 and 25 and state subsidies to reduce the cost of employing them. A lot of attention needs to be given to this considering the effect it will have on the overall employment rate in this country.
Thursday, February 4, 2010
2010, a year of great expectations.
Welcome back from holidays with renewed energy. The year 2010 starts on a positive note and for a second we have forgotten the dreadful 2009 except those who have already been called by their bank managers.
The soccer world cup is the buzz word and judging by the high standard and the upsets in the African Cup of Nations (AFCON) in Angola, we werw trully entertained beyond our expectations. I was pinning my hopes on at least two African teams going to the quarter finals. I picked Cot De vour and Cameroon but still a loyal South African. We congradulate Egypt for the winning the cup, once again.
Reading the Financial Mail of 15 January 2010, it listed various black people (Pg 30-33) with their wealth and where it comes from. I have said before that some of these names are exaggerated because some of these gentlemen might have the wealth, it is said what we seem to always forget to list is our white compatriots who have far more than these gentlemen (it was only gentlemen).
How do we assist young people to move to the next stage? What we must consider is, if a great number of us would identify at least twenty (20) young South Africans in categories of business and entrepreneurship, intelligence etc, who are possibly in their 20s and we showcase them and look at the contribution they will make in the next ten (10) years or so. Since the financial mail has regular columns which say “Where are they now”. I want us to have one that says where will they be. I have picked twenty (20) youngsters from the ones I know and will follow their career moves and encourage them as they rise and offer support when they stagnate.
On the BEE space, I am going to do an analysis of some of the key figures in 1990s and follow their businesses or what they are doing 20 years later, I want to see what progress has been made.
The soccer world cup is the buzz word and judging by the high standard and the upsets in the African Cup of Nations (AFCON) in Angola, we werw trully entertained beyond our expectations. I was pinning my hopes on at least two African teams going to the quarter finals. I picked Cot De vour and Cameroon but still a loyal South African. We congradulate Egypt for the winning the cup, once again.
Reading the Financial Mail of 15 January 2010, it listed various black people (Pg 30-33) with their wealth and where it comes from. I have said before that some of these names are exaggerated because some of these gentlemen might have the wealth, it is said what we seem to always forget to list is our white compatriots who have far more than these gentlemen (it was only gentlemen).
How do we assist young people to move to the next stage? What we must consider is, if a great number of us would identify at least twenty (20) young South Africans in categories of business and entrepreneurship, intelligence etc, who are possibly in their 20s and we showcase them and look at the contribution they will make in the next ten (10) years or so. Since the financial mail has regular columns which say “Where are they now”. I want us to have one that says where will they be. I have picked twenty (20) youngsters from the ones I know and will follow their career moves and encourage them as they rise and offer support when they stagnate.
On the BEE space, I am going to do an analysis of some of the key figures in 1990s and follow their businesses or what they are doing 20 years later, I want to see what progress has been made.
Wednesday, January 6, 2010
WE MUST DEFINE THESE INSTITUTIONS BETTER
The role of State owned Enterprises (SOEs) has been a matter of discussion and sometimes controversy for many years in South Africa. It has moved from ideological views e.g. support a developmental state, to individual preferences of the leadership of the time.
We have recently had the debacle at Eskom, the still lingering and unresolved issues at Transnet and there is also the role of the regulators that still need to be clarified, especially referring to ICASA, since recently both parliament and the department of Communications have been dealing with the issue of unterconnect charges.
Typical of South Africa, debates sometimes get lost by / around personalities and the whole nation after these have been sorted out, if they are ever sorted out or people simply get tired and move on, has no better understanding of the fundamental issues being debated.
It is becoming clear to me, at least, that we need to address, inter alia, the following issues regarding SOEs and similar public institutions.
1. What is the role of these institutions
a) Are they an extension of government departments
b) Are they expected to make a profit
c) Are they meant to deal with areas which the private sector would not / could not deal with because of the low returns. By the way, there is nothing the private sector cannot do as long as there are commensurate returns.
d) Are they national assets which therefore could / should be funded from the fiscus.
2. What is the role of the shareholder or of the ultimate owner
a) Is it to set them up and leave them alone.
b) Is it to dictate what they should, and should not do.
c) Is it to create one channel of communication and representation so that they should not be answerable to everybody.
3. What is the ideal governance structure
a) Who should oversee the functioning of these
b) What qualities are required from those who oversee these:, independent minds, people merely carrying out instructions of the ultimate owner?
c) How should those charged with governance relate to those they oversee i.e those charged with day to day management
d) Those tasked with governance, who are they answerable to
e) How should their success or failure be judged.
4. What is the caliber of those in management
a) Are they / should they be experts in the filed
b) Should it be people more politically inclined.
c) Who should appoint or dismiss these i.e who are they accountable to
d) How should their success / failure be judged.
5. What is the role of other stakeholders they interact with
a) What are the powers of these vis - a – vis the institutions
Of course, all these considerations must be made understanding that there are rights of individuals, groups, and structures that are enshrined by our constitution. All these discussions should take place with full knowledge that the world over, there are different models and our country must choose what suits it.
The sad part about this continuous state of flux, may I add, which is not new, is that there are many individuals who have made sacrifices to serve these institutions and are getting despondent day by day. There are also opportunists in the process, who will forever derail these institutions to the detriment of the whole nation. These opportunists strive when there is chaos and by the time we wake up, they would have looted these institutions. Good people will move on and these institutions will be plunged into a new form of crisis.
Somebody out there must finally put this matter out for debate so that the whole nation should know if we are dealing with a fish or foul because it has to be something whatever it is, we would even settle for a bat.
The asset base of Eskom, Transnet and SABC (to mention a few) at the last count was about R103 billion for Transnet, R199 billion for Eskom and 443 billion for SABC and the number of people employed by them collectively was over 130 000. By way of comparison, BHP Billiton has a market capitalization of about R509 billion. We are not talking pinutes here.
We have recently had the debacle at Eskom, the still lingering and unresolved issues at Transnet and there is also the role of the regulators that still need to be clarified, especially referring to ICASA, since recently both parliament and the department of Communications have been dealing with the issue of unterconnect charges.
Typical of South Africa, debates sometimes get lost by / around personalities and the whole nation after these have been sorted out, if they are ever sorted out or people simply get tired and move on, has no better understanding of the fundamental issues being debated.
It is becoming clear to me, at least, that we need to address, inter alia, the following issues regarding SOEs and similar public institutions.
1. What is the role of these institutions
a) Are they an extension of government departments
b) Are they expected to make a profit
c) Are they meant to deal with areas which the private sector would not / could not deal with because of the low returns. By the way, there is nothing the private sector cannot do as long as there are commensurate returns.
d) Are they national assets which therefore could / should be funded from the fiscus.
2. What is the role of the shareholder or of the ultimate owner
a) Is it to set them up and leave them alone.
b) Is it to dictate what they should, and should not do.
c) Is it to create one channel of communication and representation so that they should not be answerable to everybody.
3. What is the ideal governance structure
a) Who should oversee the functioning of these
b) What qualities are required from those who oversee these:, independent minds, people merely carrying out instructions of the ultimate owner?
c) How should those charged with governance relate to those they oversee i.e those charged with day to day management
d) Those tasked with governance, who are they answerable to
e) How should their success or failure be judged.
4. What is the caliber of those in management
a) Are they / should they be experts in the filed
b) Should it be people more politically inclined.
c) Who should appoint or dismiss these i.e who are they accountable to
d) How should their success / failure be judged.
5. What is the role of other stakeholders they interact with
a) What are the powers of these vis - a – vis the institutions
Of course, all these considerations must be made understanding that there are rights of individuals, groups, and structures that are enshrined by our constitution. All these discussions should take place with full knowledge that the world over, there are different models and our country must choose what suits it.
The sad part about this continuous state of flux, may I add, which is not new, is that there are many individuals who have made sacrifices to serve these institutions and are getting despondent day by day. There are also opportunists in the process, who will forever derail these institutions to the detriment of the whole nation. These opportunists strive when there is chaos and by the time we wake up, they would have looted these institutions. Good people will move on and these institutions will be plunged into a new form of crisis.
Somebody out there must finally put this matter out for debate so that the whole nation should know if we are dealing with a fish or foul because it has to be something whatever it is, we would even settle for a bat.
The asset base of Eskom, Transnet and SABC (to mention a few) at the last count was about R103 billion for Transnet, R199 billion for Eskom and 443 billion for SABC and the number of people employed by them collectively was over 130 000. By way of comparison, BHP Billiton has a market capitalization of about R509 billion. We are not talking pinutes here.
Monday, November 2, 2009
Down but not out – Economic transformation in South Africa
Johannesburg. October 2009. There is speculation that the recession is bottoming out or will bottom out by mid 2010, depending on which economist you listen to. Whether the recovery will take the shape of a W or V or L, nobody knows. The reality is we have been in recession for 12 months and it has caused damage to all areas of business, including Black Economic Empowerment (BEE)
Before the recession, South Africa was at a stage where it needed to review its progress on the hard and sometimes treacherous route of transformation, more specifically, economic transformation. This review is now even more necessary as we approach 2010, as it will mark 20 years since BEE, as we know it, emerged.
Whilst we should be careful of being lost in numbers and forget the fundamental reasons of the transformation process, we cannot ignore that some of the recent figures are worrying, to say the least. The Finweek edition published on 15 October 2009, quoted extensively from various reports, results and studies in its cover feature: “We’re all equal but some are more unequal that others- Fifteen years after the claim of democracy, we seem to be back to the starting blocks”. In quoting UNISA’s Bureau of Market Research it states, (page 17), “Last year, almost two thirds (61,9%) of black Africans were 'languishing' in the lowest income group, with just 0, 2% occupying the highest income bracket.”
What attracted my attention is the 0,2% cited in the study. To understand the context of this 0,2%, it has to be put in the following context:
· If the South African population is 47 million, then this represents about 94000 people
· The other race groups, other than black African, comprise 99,08% of the highest income
bracket
· If you were to take the average over the past 15 years, that would mean a petty 6000
more people being admitted into these upper echelons per annum.
If one thinks of how much time and energy has been devoted to this group that some have labeled as “black diamonds”, “usual suspects” and other terms, one wonders what we should be calling the other 99,08%.
The same article quotes from Statistics SA's Quarterly Labour Force Survey and states “By stark contrast, a whopping 80% of the richest 3% of the general population are still white. White unemployment stayed stable at just 4.6% – lower that 10% average unemployment rate among whites in the United States. Let me say no more.”
If you consider the above report and understand that most, if not all the statistics, do not cover the period of the recession, it starts to show that this recession has caused major set backs, especially noting that:
· Some BEE schemes have evaporated, leaving the companies they invested in
underpowered.
· Most vendor financing schemes have been reversed, in some instances permanently,
setting their BEE ratings back to where they were
· About 40% of the value has been lost over the period.
In my view, the progress of BEE is almost where it was in about 2005 and that is nowhere .
The same Finweek article offer some solutions for the government, amongst which are: “to increase services, design more teeth empowerment and transformation legislation and then wield bigger sticks to make sure companies adhere to it”. I wish we will not get to the stage of a bigger stick being wielded but that depends to a great extent on how, all of us, as the business community:
· Recognize the backlog which was there even before the recession
· That very little has changed over the past 20 years,
· That the recession has reversed a huge portion of the gains which were made and has the
nation back by many years.
Not all is lost. There are huge lessons which have been gained on which we should build. We should realise that if we do not move on our own, we are inviting government (rightfully so) to intervene. I remain optimistic that the storm will clear and the journey will continue, this time with a sense of urgency for our country and for future generations.
Before the recession, South Africa was at a stage where it needed to review its progress on the hard and sometimes treacherous route of transformation, more specifically, economic transformation. This review is now even more necessary as we approach 2010, as it will mark 20 years since BEE, as we know it, emerged.
Whilst we should be careful of being lost in numbers and forget the fundamental reasons of the transformation process, we cannot ignore that some of the recent figures are worrying, to say the least. The Finweek edition published on 15 October 2009, quoted extensively from various reports, results and studies in its cover feature: “We’re all equal but some are more unequal that others- Fifteen years after the claim of democracy, we seem to be back to the starting blocks”. In quoting UNISA’s Bureau of Market Research it states, (page 17), “Last year, almost two thirds (61,9%) of black Africans were 'languishing' in the lowest income group, with just 0, 2% occupying the highest income bracket.”
What attracted my attention is the 0,2% cited in the study. To understand the context of this 0,2%, it has to be put in the following context:
· If the South African population is 47 million, then this represents about 94000 people
· The other race groups, other than black African, comprise 99,08% of the highest income
bracket
· If you were to take the average over the past 15 years, that would mean a petty 6000
more people being admitted into these upper echelons per annum.
If one thinks of how much time and energy has been devoted to this group that some have labeled as “black diamonds”, “usual suspects” and other terms, one wonders what we should be calling the other 99,08%.
The same article quotes from Statistics SA's Quarterly Labour Force Survey and states “By stark contrast, a whopping 80% of the richest 3% of the general population are still white. White unemployment stayed stable at just 4.6% – lower that 10% average unemployment rate among whites in the United States. Let me say no more.”
If you consider the above report and understand that most, if not all the statistics, do not cover the period of the recession, it starts to show that this recession has caused major set backs, especially noting that:
· Some BEE schemes have evaporated, leaving the companies they invested in
underpowered.
· Most vendor financing schemes have been reversed, in some instances permanently,
setting their BEE ratings back to where they were
· About 40% of the value has been lost over the period.
In my view, the progress of BEE is almost where it was in about 2005 and that is nowhere .
The same Finweek article offer some solutions for the government, amongst which are: “to increase services, design more teeth empowerment and transformation legislation and then wield bigger sticks to make sure companies adhere to it”. I wish we will not get to the stage of a bigger stick being wielded but that depends to a great extent on how, all of us, as the business community:
· Recognize the backlog which was there even before the recession
· That very little has changed over the past 20 years,
· That the recession has reversed a huge portion of the gains which were made and has the
nation back by many years.
Not all is lost. There are huge lessons which have been gained on which we should build. We should realise that if we do not move on our own, we are inviting government (rightfully so) to intervene. I remain optimistic that the storm will clear and the journey will continue, this time with a sense of urgency for our country and for future generations.
Subscribe to:
Comments (Atom)