Acumen 23

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Issue 23 • First Quarter, 2018

THE WINDS OF CHANGE?

contents Issue 23 • First Quarter, 2018

Issue 23 • First Quarter, 2018

COVER STORY: THE WINDS OF CHANGE P.22

Cara Bouwer examines the prospects for success and the impact on business of new ANC President Cyril Ramaphosa.

THE WINDS OF CHANGE?

ZIM & MNANGAGWA • SA & RAMAPHOSA • KENYA & KENYATTA

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Issue 23 • First Quarter, 2018

PART1: RAMAPHOSA’S MOVING CHESS GAME

P.26

ON THE COVER

Photo: Getty/Gallo Images

PART2: TEETERING ZIMBABWE DEMANDS A BRAVE MNANGAGWA Godfrey Mutiza looks north towards Zimbabwe, another nation rocked by change.

P.29

PART3: THE KENYA RIDDLE

GORDON INSTITUTE OF BUSINESS SCIENCE

Shoks Mnisi Mzolo points to Kenya, which is getting many things right in its bid to industrialise.

ACUMEN IS ALSO AVAILABLE AS AN APP for your iPad or iPhone in the Apple App Store, as well as in the Google Play store for your Android device.

P.22

et cetera

p.02 Contents p.05 Contributors p.08 From the Editor p.10 Network

opinion

p.14

Exploit or Explore?

GIBS Dean Prof. Nicola Kleyn argues that businesses need to both explore and exploit.

The Continuing Voyage

p.17

Columnist Trudi Makhaya gives Acumen an insider's view of the crucial work being done by the High Level Panel.

p.19

Prof. Adrian Saville looks at Cyril Ramaphosa's 10-point plan to turn SA around.

south africa

p.32

Mr. New Deal

p.34 Rooting Out Corruption

Gaye Crossley talks to two experts about

preventing and dealing with corruption. p.36 Multiplication is the Name

p.44 Loosening the Purse Strings

Science writer Sarah Wild explores the

need for this country to spend more

on R&D. p.48 The MBA Who

Ditched Corporate

Cara Bouwer reports on Jamal Sahib,

a GIBS MBA who threw up a promising

corporate career to follow his

entrepreneurial dream. p.52

of the Game

James van den Heever reports on Sasol's successful implementation of a new leadership programme.

p.40 Will Wine Survive

Climate Change?

Tamara Oberholster investigates the

possible impact of climate change on our

favourite tipple.

Into Terra Incognita Writer and photographer Jacques Marais builds the business case for an expedition to a remote part of Namibia.

future p.76 The New Curveballs

Shaping Business

Futurist Dion Chang warns that social media enables consumers to hold businesses accountable.

renew

p.80 Maritime Moods

SA's most travelled writer Caroline Hurry

visits Denmark and its capital, Copenhagen. p.81 Room with a boo!

...and then finds out where Hamlet's ghost

really hung out.

The Finer Things

p.57 Risk and Reward: Walking the Directors’ Tightrope

Gaye Crossley discovers that being a

company director carries a very broad set

of personal risks.

p.82

p.60 Power to the People Eugene Yoga investigates South Africa's

latest crowdfunding start-up, The

People's Fund.

p.84 Forward Motion

Jacques Marais tries out a new hydration

solution, while Stephen Smith assesses the

new BMW 420i Convertible.

dynamic markets

Put the Shine On Again

Ex FinMin Pravin Gordhan visits GIBS and says South Africa needs to regain the shine of the Mandela era.

P.91

P.62

p.62 The Rise of Global Citizenship

Eugene Yiga looks at the benefit – and

costs – of acquiring another nationality. p.66 Doing Business in Iran

Acumen editor Chris Gibbons examines the

potential for business in Iran. p.72 The Top Eight Things to See

and Do in Iran

...and also explores Tehran and Isfahan.

fintech p.74

New Words, Old Tale

Arthur Goldstuck assesses what it takes to make it big in the high-pressure world of fintech.

With winter just around the corner, fashionista Cheska Stark looks at a classic blazer for Her and some long sleeved tees and sweaters for Him.

p.86 What happens in Vegas....

Techno writer Aki Anastasiou makes his

annual pilgrimage to CES Las Vegas. p.88 Books

Chris Gibbons reviews Niall Ferguson's The

Square and the Tower, along with Robert Sutton's The Asshole Survival Guide. p.90 Wine

Wine fundi John Maytham tastes a

Pinotage, a Syrah and a Chardonnay, in

ascending order. p.91 The Birth of a Legend

Acumen's music expert Victor Dlamini

listens to the multi-talented Thandi Ntuli.

looking backwards

p.92 Signing Off

Sam Cowen suggests a less polite

signature for email may be more effective.

contributors

SHOKS MNISI MZOLO

SARAH WILD is a

is an independent researcher and writer whose newsroom background is steeped in financial journalism. He honed his business reporting skills at I-Net Bridge, where he first arrived as a corporate researcher. He has since written for the Financial Mail and regularly contributes to Finweek, Mail & Guardian and Sawubona. Among other duties, he covers business, economics, and arts & culture.

freelance science journalist, specialising in South African science, technology and innovation. She has worked as science editor at Business Day and the Mail & Guardian, and in 2015, she won the CNN-MultiChoice African Journalist of the Year Award for innovation.

ARTHUR GOLDSTUCK

DION CHANG is an

is founder of World Wide Worx and editor-in-chief of Gadget. co.za. Follow him on Twitter on @art2gee and on YouTube.

innovator, creative thinker and visionary. He is a soughtafter trend analyst and, while his feet remain firmly planted on African soil, he uses a global perspective to source new ideas, gauge the zeitgeist and identify cuttingedge trends. He contributes to various print publications and online portals as a freelance journalist and social commentator.

CARA BOUWER is a TRUDI MAKHAYA

is CEO of Makhaya Advisory, an economic and competition policy consultancy. She also writes regularly for Business Day, was previously deputy competition commissioner and a Rhodes Scholar at Oxford where she earned an MBA and a Master’s degree in development economics.

VICTOR DLAMINI

is a writer, columnist, communicator and portrait photographer with a deep interest in social issues.

He collects art and music, especially jazz. He graduated cum laude in English at the University of Natal in Pietermaritzburg.

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PROF. ADRIAN SAVILLE is Professor of

Economics and Competitive Strategy at GIBS, and founder and chief executive at Cannon Asset Managers. He has lectured and taught widely in both South Africa and around the world, has received the Excellence in Teaching Award at GIBS on nine occasions since 2007, and in 2012 was nominated for the Economist Intelligence Unit’s Business Professor of the Year Award.

While completing his doctorate in economics, he formed an investment vehicle which became the forerunner to the investment business Cannon Asset Managers.

freelance journalist and editor.

She’s been published in a variety of local titles including Business Day, Private Life, Destiny and Sawubona.

She cut her teeth at Penta Publications in the early 1990s before moving on to Business Day where she made history by becoming the newspaper’s youngest sports editor and the first woman to hold this title on a national daily in South Africa. She later became the paper’s chief subeditor.

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contributors

GAYE CROSSLEY holds a BCom from Wits University. She has lived in a variety of countries including England, Ireland, Bahrain, Australia and New Zealand. A full-time freelancer for six years, she has a keen interest in sustainability issues. After involvement in several entrepreneurial start-ups, she has a deep respect for those who have succeeded in SA’s challenging business landscape.

editor Chris Gibbons Gibbonsc@gibs.co.za cover images Getty/Gallo Images layout and production Contact Media and Communications (Pty) Ltd designer Quinten Tolken proofreader Angie Snyman

JAMES VAN DEN HEEVER

writes for a range of clients, including the Institute of Directors in Southern Africa, the Ethics Institute of South Africa, the South African Institute of Professional Accountants and Ernst & Young. He was formerly editorin-chief of Systems Relationship Marketing, a custom publisher with blue-chip clients and editor of Computerweek. He also worked as a media liaison in the corporate world.

publisher Donna Verrydt Donna@contactmedia.co.za Contact Media and Communications (Pty) Ltd 011 789 6339 advertising sales Sean Press Pressman@contactmedia.co.za 082 888 1137

contributors Aki Anastasiou Cara Bouwer Dion Chang Sam Cowen Gaye Crossley Victor Dlamini Arthur Goldstuck Caroline Hurry Prof. Nicola Kleyn Trudi Makhaya Jacques Marais John Maytham Shoks Mnisi Mzolo Tamara Oberholster Prof. Adrian Saville Stephen Smith Cheska Stark James van den Heever Sarah Wild Eugene Yiga commercial director Howard Fox Foxh@gibs.co.za contact Acumen 26 Melville Road, Illovo, Johannesburg P O Box 787602, Sandton, South Africa, 2146 011 771 4000 Acumen@gibs.co.za

GODFREY MUTIZWA

is a freelance writer based in Johannesburg. He has covered African affairs for more than 30 years across the print and broadcast media working for both regional and international news organisations. Previously, Godfrey was chief editor of CNBC Africa and before that spent a decade at Bloomberg News and Reuters covering African business news.

Brought to you by:

Disclaimer: Acumen is the official publication of the University of Pretoria’s

GORDON INSTITUTE OF BUSINESS SCIENCE

EUGENE YIGA graduated with

distinctions in financial accounting and classical piano but his career then took an interesting turn when he spent two-and-half years working in branding and communications at two of South Africa’s top market research companies. He also spent over three-and-a-half years working at an e-learning start-up before dedicating himself to his business as a full-time award-winning writer. Eugeneyiga.com

Gordon Institute of Business Science (GIBS). All material is strictly copyright and all rights are reserved. No portion of this magazine may be reproduced externally, wholly or in part, in any form without the written consent of GIBS. The views and opinions expressed by the contributors to this publication are not necessarily the views and opinions of the publishers, GIBS or its associates.

While every effort has been taken to ensure the completeness or accuracy of the published information, errors and omissions may occur. The publishers, GIBS and its associates cannot accept responsibility for any loss, damage or inconvenience that may arise from the unauthorised use of this publication.

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editor’s note

TRAVELLING HOPEFULLY Words Chris Gibbons

It’s better to travel hopefully than to arrive, says the old proverb.

Once again, South Africa and many of our friends on this extraordinary continent have embarked on a set of journeys.

That’s why this edition of Acumen has a three-part Cover Story examining the prospects for ourselves, our long-troubled neighbour Zimbabwe, and Kenya, a country that in many ways epitomises Africa’s challenges and opportunities.

GORDON INSTITUTE OF BUSINESS SCIENCE

Here at home, the ANC has chosen Cyril Ramaphosa as its new president. Will he be able to rescue the captured state?

Will he see off the Zuptas, as EFF leader Julius Malema so memorably described the corrupt clique that has buried its rapacious talons into the national finances? Or will the old order prove too cunning and deep-seated for him to break their hold? It’s too early to tell, although the rand did bounce nicely on the news of Ramaphosa’s election. Suffice it to say that he was also the choice of business leaders across the board.

Putting an end to corruption and the looting of state-owned enterprises is one thing, but finding jobs for the 27% of South Africans who are unemployed is another entirely. It’s a task made doubly difficult by the fact that more and more manufacturing work is being carried out by machines; to call Ramaphosa’s challenge ‘Herculean’ would be a distinct understatement.

Zimbabwe has a well-documented history: one of Africa’s wealthiest, most productive countries moves from independence to economic ruin, with a fair amount of

bloodshed along the way. The architect of both, Robert Mugabe, was deposed at the end of last year in the-coup-thatwasn’t-a-coup. His successor, long-time henchman, Emmerson Mnangagwa, has made some encouraging noises about the economy. Just like ourselves, though, it’s still far too early to tell if he’s serious or if he’s just another ZANU-PF thug, itching to get his hands into the till. The way he handles this year’s election will certainly give us more of a clue about Zimbabwe’s immediate future.

And then there’s Kenya. Politically and socially, it is troubled, with its courts forcing a repeat of last year’s presidential election, worsening tribal divisions and near anarchy in parts of the north as cattle herders continue a two-decade long series of violent raids and counter raids. Yet economically, its capital, Nairobi, looks to be making great progress as a place to do business. Many multinationals are choosing to base regional headquarters there, bypassing both Johannesburg and Lagos. In this sense, Kenya, as much as anywhere, provides a snapshot of Africa – so many problems, so many opportunities.

Elections are also due to be held this year in Egypt, Cameroon, Sierra Leone, South Sudan, Mali, the Democratic Republic of Congo and Libya, so it’s fair to say that large parts of Africa are on the move.

Africa’s tragic paradox is that almost every time a hopeful journey begins, it almost always ends in tears. South Africa was

long held up as the example that broke this doleful chain, but the last nine years under Jacob Zuma have restored the link.

We look increasingly like so many of our troubled peers.

Could it be different this time round? It’s impossible to speculate about the other nations, but former finance minister Pravin Gordhan believes that South Africa, via its businesses, institutions, individuals and civil society, does have the capacity to produce a happy ending for our current journey. This edition of Acumen reports on an appearance by Gordhan at GIBS late last year. He reminded the capacity audience of how a similar alliance in the 1980s had produced sufficient impetus to throw off apartheid. It was time, he said, for all of us to work together once again to restore “the shine of the Mandela era”.

Could South Africa could do it for a second time? If we could, it would certainly be an inspirational example for the rest of the continent, yearning for its own set of journeys to end with happy arrivals

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network

NETWORK Words Acumen Contributors

Our regular look at GIBS’ events and guests

THE POWER OF CORRUPTION

Intended as a guide to the coming 12 months, two interlinked factors dominated Foresight 2018: the presence on the panel of Jacques Pauw, author of the explosive The President’s Keepers and the forthcoming ANC elective conference. Fellow panellists and the capacity crowd packed into GIBS main auditorium focused almost exclusively on the dereliction in South Africa’s political economy, as evidenced by Pauw’s blistering exposé, the likely outcome of the ANC leadership contest and what might happen in the aftermath.

Angelo Fick

“If, over 20 years, [you have] actively – and we can no longer deny that it’s active – crippled the basic education system, compromised the higher education system over its funding, you don’t have a critically literate population that can stand aside and … ask questions about what is in my interest.” Angelo Fick, Senior Researcher, eNCA Jacques Pauw

“Both politicians and business people are as honest as they are allowed to be, because, when you’re dealing with money, you’re also dealing with greed and I think we find greed on both sides.”

Jacques Pauw, author and investigative journalist

GORDON INSTITUTE OF BUSINESS SCIENCE

Colin Coleman

Kuseni Dlamini

“When you look at the industrial scale of the corruption revealed by the #GuptaLeaks, it makes you wonder, ‘Where was I, what was I doing?’ when all this was happening… It indicates the failure of institutions… All of us must be activists against corruption.” Kuseni Dlamini, Chairman, Aspen Pharmacare Holdings

“The patronage system, when you describe it, is actually a system whereby the political elite effectively constructs a distributive system of national resources through the state to the political party constituents sufficient for those constituents to keep them in power. It’s a political organisation to distribute resources in what we would call a corrupt but systemic way. [Jacques’ book] describes effectively a shadow state which uses the state’s resources in this manner.” Colin Coleman, Head of Investment Banking Division for sub-Saharan Africa, Goldman Sachs

network

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IT’S ALL ABOUT BEHAVIOUR

Discovery Group founder and CEO Adrian Gore believes the company can act as a force for good through its core purpose. Speaking at a recent GIBS Forum, Gore explained that Discovery’s sharedvalue insurance model, which pursues financial success in a way that benefits society, can monetise improvements in social risk, thereby creating a virtuous circle.

Dr. Judy Dlamini

Dion Shango

Phuti Mahanyele

Prof. Stella Nkomo

The Discovery Group, which was recently ranked 17th out of 50 companies on the Fortune Change the World List, was initially launched as Discovery Health, with a focus on the customer and the use of incentives to make people healthier.

“This was the simple, deep belief of the people who built the company. The statement has created and framed the journey,” said Gore, that “we began with the end in mind.”

Gore said the breakthrough from an actuarial perspective was applying the data gathered from the group’s health operations to the premiums of Discovery Life.

“The traditional life insurance model is broken, as most risk is behavioural,” said Gore, noting that the understanding that most risk is pre-existing has begun to gain traction globally, as 80% of the disease burden is created by behaviours such as unhealthy eating, smoking and drinking.

EQUAL BUT DIFFERENT

Equality makes economic sense, says Dr. Judy Dlamini, founder and executive Chairman of Mbekani Group. Speaking at a GIBS Forum, Dlamini stated that “Equality is good for the economy, good for the community and good for our daughters. Having an equal society isn’t simply a favour towards women, and we need to have men alongside us, fighting for equality.”

Alongside her was Dion Shango, CEO of professional services firm PwC southern Africa, who explained that one of the reasons for a lack of gender transformation in South Africa was because gender diversity and advancement had been made a women’s problem.

“Leaving women outside the boardroom is like leaving money on the table. We are only using 50% of our potential. South Africa has enabling legislation, but we can’t rest on our laurels, we have to work harder,” said Shango.

Sigma Capital executive Chairman, Phuti Mahanyele, said that the number of women in senior leadership positions remains “discouragingly low. The only way we can change this is if each and every one of us is willing to change.”

Adrian Gore

The fourth member of the panel, Professor Stella Nkomo, strategic professor in the Faculty of Economic and Management Sciences at the University of Pretoria said that even though women have a difficult climb to reach the top positions in organisations, they can make it, and can be effective leaders: “Women can be as effective as male leaders. We must just get over that stereotype.”

network

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Gail Kelly

DANCING AND WATCHING AT THE SAME TIME

South African-born Australian businesswomen Gail Kelly describes her style of leadership as “the hardest style of all”. Kelly, the first female CEO of one of Australia’s Big Four banks, Westpac, explained to an audience at GIBS that she had studied leadership as part of her MBA “here in South Africa”.

Kelly, who stepped down from the Westpac job in 2015, said she had “looked for successful factors of what made for extraordinary CEOs and I came to the conclusion that one of the elements is working with and through people. The global financial crisis made me think that you needed to go deeper than that and I looked at some of the examples that we had had of leaders, especially in banks, but also in other industries, other sectors, and found that this macho, aloof, arrogant, I-know-I’m-right, non-listening style was prevalent. That contributed significantly, I think, to the issues that those banks faced.

“So I started to really think about what’s the right style of leadership. I came to the conclusion – and these are my own words – I talk about generous-spirited leadership. We need leaders who are generous spirited in their approach to things.

“What do I mean by that? It starts with a fundamental belief in the power of each individual to make a difference, a fundamental belief in the dignity of each and every human being, the drive and desire to create an environment where that individual can flourish and grow. My job as a leader is to create an environment where people can flourish and that’s because I believe in their inherent dignity and I would treat them with respect every single time.

“This is a powerful thing. We all know other leaders that don’t do that: leaders that are selfish, quick to judge, Machiavellian, watch other people fail, that are always right, that don’t listen, but this style of leadership requires you to walk in others’ shoes, it requires you to listen, it requires you to be super self-aware, to be able to be on the dance floor, dancing, while being on the balcony, watching myself dance, to be self-aware of my impact on others and how am I helping that individual, that situation be better,

perform or flourish. It requires being in the moment, it requires an inclusiveness, building an inclusiveness and a respect for that.

“People think this is a soft style. I promise you this is the hardest style of all! Because if you are going to do this style of leadership, you are not going to allow HR people to do the tough stuff. You are going to walk the floor and walk the talk with these individuals.

Individuals that are struggling, you’ll let them know and support them early and ask them to give you feedback on how you can be better, how you can support them better and how you can do your job better.”

Kelly was launching her new book, Live Lead Learn: My Stories of Life and Leadership, which is published by Penguin at R225.

FT AGAIN RANKS GIBS AS AFRICA’S PREEMINENT MBA

GIBS has once again scooped top honours as Africa’s leading business school in the annual Executive MBA (EMBA) Ranking, conducted by the UK’s Financial Times. It’s the fifth consecutive year that GIBS has taken Africa’s top spot.

The ranking, which is considered a global benchmark of business school excellence, is based on surveys of business schools and MBA graduates. Various assessment criteria are used, some of which include: career progression of the school’s alumni, the school’s idea generation and the diversity of students and faculty.

GIBS Dean, Professor Nicola Kleyn said, “As a business school, we operate in a competitive space. To be featured in these prestigious rankings is both an honour and a privilege and is testament to the hard work that students and faculty put into the qualification. We continue to make every effort to deliver the very best learning experience possible at every touchpoint, providing students with the best opportunity to drive their careers to the next level.”

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dean's note

EXPLOIT OR EXPLORE? Words Professor Nicola Kleyn

GORDON INSTITUTE OF BUSINESS SCIENCE

As businesses are increasingly affected by global winds of social, political and technological change, managing these shifts lies at the heart of effective leadership.

Whilst no business can argue the need to adapt, the question is how fast and dramatically should one move?

Behavioural economist and winner of the 2017 Nobel Prize for economics, Richard Thaler argues that significant change can be achieved through effecting small shifts referred to as ‘nudges’. Most notably associated with advocating subtle changes in policy to drive long-term interests, Thaler’s work has shown that apparently simple changes can have dramatic effects on how people save, donate blood or are incentivised to buy fruit over chocolates at check-out counters. As human beings, we’re more comfortable experiencing gradual changes that don’t overly disrupt our worlds. So small shifts like moving an opt-in clause to an opt-out clause or rearranging the shelf whether virtually or in the real world, can have far-reaching effects, especially when they are implemented at scale. Discovery’s Vitality scheme is a potent local example of how small rewards and nudges can shift behaviour with large-scale effects on individual health (not to mention Discovery’s bottom line).

by looking for small changes in things like productivity, margins and risk management without destabilising the ship? Or tear the business apart in pursuit of radically new business models that follow hot on the heels of the innovations we’ve witnessed, including Uber, Airbnb and Amazon?

On the other side of the spectrum, words like exponential and radical are used to describe change that dramatically shifts the nature of industries. The term ‘creative destruction’, coined by economist Joseph Schumpeter in the 1940s is increasingly back in vogue as the majority of industries grapple with the looming impact of artificial intelligence, the Internet of things and platform economies, and brace themselves for large-scale shifts.

As is the case with so many apparent paradoxes, the answer for most businesses has to be both exploration and exploitation. I say most rather than all because if you’re starting out fresh, the tilt has been towards the radical exploration end of the spectrum. The recipe for success here is likely to lie at the confluence of a need and a technologically enabled solution. These are the business innovations that we desperately need to nurture and grow in our continent, and if they can not only solve customer problems but social ones as well, so much the better.

So what’s a leader to do? Lean towards the Thaler perspective that favours identifying leverage points in the business

For me, the heart of reconciling Thaler and Schumpeter lies in ethical and skilful navigation of what some academics refer to as “the exploration-exploitation dilemma”. James March published a paperback in the early 1990s where he highlighted the need for organisations to balance the exploration of new possibilities with the exploitation of old certainties. The term ‘exploitation’ is not used in a pejorative or negative sense here.

It really refers to implementing ongoing shifts to optimally extract the benefits from an innovation such as a business model, a process or a product that has been developed.

But what of the argument that new startups can effectively shift to exploitation?

Organisations like Uber have learned that scaling the model and building the organisational cultures and systems to support the innovation takes a different sort of leadership to the maverick start-up mentality that is required at the very beginning. The success of these organisations must move beyond the wonders of the business idea into effective and ethical management.

There are few leaders who can successfully oscillate between exploration and exploitation. The founder of Amazon, Jeff Bezos, has shown adeptness over a long period at not only moving down an exploration-exploitation funnel, but at re-inventing Amazon’s business model on numerous occasions. For the rest of us, building multifaceted business ecosystems that vary in their emphasis on exploration and exploitation is key.

Established businesses that are able to embrace innovation and entrepreneurial talent in their ecosystems without needing to own developments wholescale are most likely to succeed. There’s a strong case to be made that it’s easier for an existing business to partner with new start-ups than it is for them to develop radical innovations from scratch. Consider the significant revenue that Apple has derived from its partnership with app developers.

Making that work calls for sharing both the risks and the spoils. It’s not something that established corporates are particularly good at. But that’s a subject for a whole new day

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opinion

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THE CONTINUING VOYAGE Words Trudi Makhaya

The High Level Panel shows how far we’ve come, and the road ahead.

In 2017, I was privileged to form part of the support team for the High Level Panel on the Assessment of Key Legislation and the Acceleration of Fundamental Change, led by former President Kgalema Motlanthe.

The High Level Panel was a project mandated by the Speaker’s Forum, which represents the legislative sector in South Africa.

In recent years, the executive branch of the state, what we refer to as government, and increasingly, the judicial branch, have been at the forefront of public life in South Africa. The legislative sector – the National Assembly, the National Council of Provinces and the provincial legislatures – has not been as prominent in the public imagination. There is the spectacle and ceremony of major events in the Parliamentary timetable such as the State of the Nation and the Budget votes, but when it comes to the core functions of the legislature – making and passing laws, and providing oversight over government – the sector seems to have been on the back foot.

Lately some high profile Parliamentary hearings, such as those into the public broadcaster, have shown what an effective and active Parliament can achieve. Indeed, commissioning the High Level Panel was a wise and strategic move by the legislative sector.

The High Level Panel, comprised of eminent South Africans who have served in business, government, politics, academia and civil society, was tasked with reviewing the immense legislative output of the post-apartheid era. Over a thousand laws have been passed by the democratic state in pursuit of the ideals of the Constitution

to improve “the quality of life of all citizens and free the potential of each person”.

This is elaborated in the Bill of Rights, which spells out a range of fundamental rights, including second-generation socioeconomic rights that promote equal life chances.

The law is an interesting lens through which to view a society. It sets the trajectory for the economy, for development and for social relations.

Colonial and apartheid laws such as the Masters and Servants Act of 1856, the Mines and Works Act of 1911, the Natives Land Act of 1913, the Bantu Education Act of 1953 and countless similar pieces of legislation created a viciously exploitative economy and society. The question becomes whether the extensive legislative output since 1994 has done enough to reverse that legacy? It is also important to examine the unintended consequences of this historic effort at reform.

The outcome of the High Level Panel’s work is a treasure trove of data, stories and analysis available online. The record of public hearings, commissioned reports, written submissions and ultimately the report with recommendations in four main areas: the economy, land reform, spatial inequality, and social cohesion and nation building, provides a snapshot of how far the country has come, but also the long road ahead.

The simple answer to the questions above, to quote the report, is that: “The evidence presented shows that the ills of the past are being reproduced in post-apartheid society, despite extensive

legislative reform. In answering this question, it is important to note that the evidence also highlights some improvements in outcomes. For example, the mortality rate of children under five has improved, as has access to education (Stats SA, 2014). But the observed changes have not dented the deep inequities in the quality of services received in many instances, nor have they made fundamental shifts in outcomes as seen in evidence presented in the report. Thus, in some areas society appears to be ‘progressively realising’ the inclusive vision of the Constitution, while in others there is a need to accelerate fundamental change, as the very title of the Panel suggests.”

The High Level Panel provides an extensive set of recommendations on the country’s challenges.

I am particularly drawn to the recommendations on codifying the National Development Plan into law, reforming the electoral system to make it more responsive to constituencies, opening up appointment processes in the executive to public scrutiny, devising a land records system that works for the poor and tackling spatial inequality.

Implementing the work of the High Level Panel calls on more than legislators and the executive. This provides opportunity for the business sector to contribute to fundamental change, especially towards the greatest post-apartheid challenge, the effective implementation of progressive policies

.

Find the Report of the High Level Panel on the Assessment of Key Legislation and the Acceleration of Fundamental Change at www.parliament.gov.za/ high-level-panel

opinion

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MR. NEW DEAL Words Professor Adrian Saville

Does Cyril Ramaphosa offer a New Deal for Jobs, Growth and Transformation for South Africa?

Cyril Ramaphosa’s victory in the race for the ANC presidency – and by inference the country – offers a pivotal moment for South Africa. Under Jacob Zuma’s presidency, the country’s prospects have dwindled. The economy went into recession in early 2017; unemployment reached a record high of 27.7% later in the year; and as Zuma’s presidency nears its end, income inequality remains amongst the worst in the world (with a Gini coefficient of 0.66). By contrast, when he came to office, Zuma promised us economic growth of 5.4% per year, that he would halve unemployment (from the then 23.1%) and that inequality would be reversed. None of this has transpired. To add insult to the social injury, corruption and theft from the public purse has been an endemic feature of Zuma’s administration, the extent of which is reflected in the term ‘state capture’.

against his opponent, Nkosazana DlaminiZuma. The fierce contest for leadership of the ANC suggests that Cyril Ramaphosa has the critical job of reversing and repairing the damage done by Zuma to the country and society at large, although his more immediate task is that of unifying the ruling party under his presidency.

Further, ranging from the national prosecutor to the public protector, South Africa’s institutions have been under siege in Zuma’s decade of institutional dismantling. Under Zuma’s leadership, the ANC has also grown increasingly divided, evidenced by the fiercely contested race for the presidency of the party at the end of 2017. Whilst Ramaphosa won the race, it was by a narrow margin of just 179 votes

Clearly, financial markets favour Cyril Ramaphosa. What is required, though, goes beyond market perception. To restore investor confidence to the damaged South African economy and even more damaged collective psyche requires Ramaphosa to deliver good governance at all levels of government; to eradicate corruption, which is rampant inside of the state-owned enterprises

Notably, financial markets responded positively to the outcome of the ANC’s electoral conference. Over the second half of December, the rand strengthened from R13.50 to R12.20 to the US$, and strengthened against other hard currencies, including sterling and the euro. The benchmark government bond, the R186, saw its yield improve from 9.3% to 8.5%, which is an almost mirror image of Nenegate. Whilst the Johannesburg Stock Exchange’s All Share Index gained just under 3 000 points to end the year at 59 500.

(SOEs) and not ignoring the private sector as a counterparty in this activity; and to establish and support policies and institutions that translate into “good growth”. To put it differently, the South African economy is stressed, the real damage that Zuma has done is to the psyche of the country. Ramaphosa’s big job is to repair social fabric; to let taxpayers know money will be carefully spent and well managed; to root out corrupt officials and criminal business activities; and, to find ways to build the country’s materially depleted social trust.

. . . IT IS STARTLING HOW POOR ECONOMIC LITERACY SUGGESTS THAT ‘RATINGS DON’T MATTER . . . ”

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opinion

. . . HE MUST GET THE COUNTRY PAST THE SINGLE BLAME OF ‘ZUMA’ . . . ” THE 10-POINT PLAN

GORDON INSTITUTE OF BUSINESS SCIENCE

To this end, it is well within Ramaphosa’s reach to turn things around. In an address at the ANC Johannesburg Region Economic Colloquium at the Orlando East Communal Hall in November 2017, he proclaimed, “We must be bold and determined. We should be targeting 3% [economic] growth in 2018 … rising to 5% growth by 2023.” Drawing on Franklin D. Roosevelt’s New Deal, which radically transformed the sick United States’ economy in the 1930s, Ramaphosa has identified 10 priorities to underpin a New Deal for Jobs, Growth and Transformation for South Africa.

1. His proposals start by putting the creation of decent jobs at the centre of every policy programme. Mineral wealth and manufacturing are essential elements of the economy.

However, alongside conventional natural resources, the 10-point plan places emphasis on South Africa’s untapped renewable energy resources, including wind power and solar power. He also gives real clues to his mindset by making mention of youth unemployment and suggesting that “… we will take to scale the Youth Employment Service programme, an initiative of government and business to provide a million paid internships to unemployed young South Africans within three years”.

2. He argues that economic growth needs to be lifted to 3% in 2018 and 5% by 2023. To do this requires a massive increase in investment levels from less than 20% of gross domestic product (GDP) currently to 30%. He acknowledges that this will require policy certainty, improved

institutional stability, restoration of the credibility of the criminal justice system and a demonstration of political will to turn around the economy. To support the importance of this element, the Investec-GIBS Savings Index shows that in the absence of an investment rate of at least 30% of GDP, any talk of fast growth is fanciful.

3. A third component is the need to pursue meaningful economic participation for the poor, the landless and the marginalised. Land redistribution is regarded as critical for economic inclusion, and the National Development Plan (NDP) envisages that agriculture has the potential to create close to one million new jobs by 2030. However, this requires investment in systems and infrastructure, such as access to agricultural finance and investment in irrigation infrastructure. The work of the Peruvian development economist, Hernando de Soto, shows what is possible with effective transfer of productive assets, such as land.

His work, and Zimbabwe’s recent experience, also shows the danger of playing to populist sentiment which transfers ownership but not capacity.

4. Fourth, Ramaphosa argues that we will implement a macroeconomic policy that promotes growth and secures our economic sovereignty. We must not fall into an unsustainable debt trap, where the cost of debt cripples our fiscus and leads external creditors to impose conditions that limit our options. At the time of writing, South Africa is on the brink of being ejected from investment grade status.

Encouragingly, Ramaphosa’s election as ANC president received a positive response from the international ratings agencies, which are critical to our ability to finance projects and afford investment funding. In the same breath, it is startling how poor economic literacy suggests that “ratings don’t matter” and the rand can be “picked up” if it collapses.

Ramaphosa has to remove this type of economic naivety for his plan to have any chance of success.

5. Fifth, we must accelerate the transfer of ownership and control of the economy to black South Africans. This is a moral and economic imperative, as it was under Zuma and former presidents Kgalema Motlanthe, Thabo Mbeki and Nelson Mandela. Notably, Ramaphosa places black industrialists at the centre of this policy pillar and emphasises the creation, funding and development of black-owned small businesses, township businesses and co-operatives. Such industrial restructuring is key to the South African economy growing faster, becoming more competitive and achieving economic inclusion.

6. Access for all to quality relevant education is a key to prosperity.

In this sixth pillar of his proposal, Ramaphosa emphasises access to free higher education and he underscores the so-called STEM subjects.

However, little mention is made of the importance of getting basic education right – which is a precursor to any recovery in South Africa’s dismal education results. A 2017 study into trends in international mathematics and science placed South Africa at or near the bottom of a variety of categories, and a shocking 27% of pupils who have attended school for six years cannot read, compared with 4% in Tanzania and 19% in Zimbabwe.

7. Seventh, Ramaphosa argues that we will revitalise and expand our manufacturing capacity, supported by effective public procurement policies and trade policies that promote welltargeted import substitution policies, aimed at stimulating job creation and the building of new, competitive local industries. Whilst this is “great on paper” it lacks any real substance as to how it will shift from policy into reality. South Africa’s manufacturing competitiveness has been falling for decades and the challenges are deeply engrained in economic architecture.

8. Infrastructure investment is the foundation for long-term inclusive growth. The eighth policy pillar holds that we must build on the successful

opinion

examples of infrastructure investment and boost spending on critical infrastructure over the next five years to R1.5 trillion. This has the potential to translate into powerful spillovers and positive economic multipliers if implemented effectively. Talk of investing in renewable energy is pragmatic and encouraging, and rooting out corruption is a necessary precondition.

9. Ninth, we will restore SOEs as drivers of economic growth and social development. For this aspect to materialise it is necessary that SOEs are properly governed, managed and operated for the benefit of the public.

That Ramaphosa suggests private capital should be considered on a coinvestment or strategic partnership basis reflects a modest – but arguably important – shift in policy position versus the path of the “developmental state” pursued under Zuma.

10. As the final pillar, Ramaphosa holds that we will confront corruption and ‘state capture’. No meaningful growth, transformation or development will be possible for as long as key public institutions continue to be used for the criminal benefit of a few and public resources continue to be looted.

CLEAN THE STABLES

As a collective, these 10 points make for a policy set that could translate into sustained, elevated and inclusive growth.

But it goes without saying that each of these 10 elements is complex in its own right. The proof of Ramaphosa’s 10-point plan will be in getting the policy into action. Perhaps the point of departure is rooting out corruption and expunging the pernicious elements of ‘state capture’. It is hard to see how any of the other nine policy proposals matter without this. On this last point, it is important to keep in clear sight the fact that corruption and patronage do not happen in a vacuum

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and that there is a range of players from various economic sectors and different social and political segments that play a part in ‘state capture’ – witness the scandals around KPMG, Trillion and Bell Pottinger.

For Ramaphosa to succeed, he needs to achieve a subtext to his greater 10-point plan. He must get the country past the single blame of “Zuma” and he needs to get to the subtle and more complex story beneath ‘state capture’. To build a healthy society requires Ramaphosa to move from 10-point plans into the action of holding actors across the public and private sector accountable; building institutions that people trust and that work for the social good; developing a common purpose and collective vision that begins with basic economic literacy; and, through that, building trust, cohesion and social fabric. In the absence of that, all we have is another plan under a different presidency

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THE WINDS OF CHANGE

PART 1 – SOUTH AFRICA: RAMAPHOSA’S MOVING CHESS GAME Words Cara Bouwer

The powers of the ANC president may be far-reaching, but navigating the party’s collective leadership structure requires more than just the authority of a title. It demands political nous. Business would do well to remember this as the new-look, factionally divided ANC top brass feels out the lie of the land.

This is particularly telling when you consider when to begin assessing newly elected ANC President Cyril Ramaphosa’s first 100 days in office. Rather than 18 December 2017, when his victory was announced, the true starting point is 13 January 2018, following the first meeting of the new ANC National Executive Committee (NEC). Note that this NEC statement of intent gave the first indication of how a Ramaphosa-led ANC might operate.

Ramaphosa’s speech was heavy on unity speak, came out tough on combatting corruption (in both the public and private sectors), and touched on revitalising the economy while committing to free education and responsible land reform. But the elephant in the room, a recall of State President Jacob Zuma, was neatly sidestepped. With the voice of the NEC embedded in Ramaphosa’s words, the new ANC president’s speech had everything to do with the collective, and not necessarily the man himself.

As FNB Securities’ Head of Research, Chantal Marx, puts it: “You have the good guys and the bad guys working together and the good guys trying to get the bad guys to be less bad… you have the patronage and non-patronage factions sitting together around the table in the NEC. They’ll talk about unity a lot but the downgrade in June 2018 will be inevitable, since we’d likely continue on the path we are on currently.”

This is unfortunate since some vital reforms are necessary if growth is to be reignited. The main priority says Marx, is fixing the state-owned entities, which are “guzzling cash at the moment” and “are our biggest source of fiscal liability and the reason why the ratings agencies are unhappy with us”.

The country needs policy certainty, less red tape associated with running and operating a business, improved immigration policies, increased infrastructure spending in conjunction with

Cyril Ramaphosa

the private sector, and to finally push ahead with the National Development Plan (NDP).

In the absence of these steps, it seems more of the same is likely.

So what does that mean for the economy? “We don’t think there will be much of an effect on bond yields, equities or property because it is already baked in,” says Marx, predicting that growth, with little chance of reform, would remain around 1.5% and the Jacob Zuma issue would continue to hang heavy over the new leadership.

PHOTO: GETTY/GALLO IMAGES

GORDON INSTITUTE OF BUSINESS SCIENCE

In light of this, what is blatantly obvious to South Africans, the markets, international investors and political and economic commentators is that Ramaphosa starts his 100 days on a tightrope. Much of this has to do with the fact that he presides over a divided NEC.

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That said, even with a split in the NEC and Top Six, Ramaphosa might have some wiggle room to affect some necessary changes, says Marx. The question is, notes Professor Richard Calland of independent consultancy The Paternoster Group, if Ramaphosa is the right man for the job. “Cyril Ramaphosa has the CV, one would argue,” Calland told a recent Citadel Wealth Management client event. “But does he have the political nous to turn the NDP into a workable plan?”

THE ‘RAMABUZA’ STALEMATE

One man who thinks the hype around Ramaphosa’s ability to clear out the rot within the ANC is overblown is Citadel Investment Service’s Chief Investment Officer, George Herman.

“Whatever positive sentiment/news/flows/pricing you expected on the back of a Cyril Ramaphosa win… you’ve had it. It’s done.

The Ramaphosa euphoria has morphed into a ‘Ramabuza’ [Ramaphosa-ANC Deputy President David Mabuza] stalemate, which leaves all the previous plans within the ANC perfectly intact.”

With Ramaphosa lacking a clear majority within the ANC Top Six (which is all but split down the middle between Ramaphosa allies and patronage candidates) as well as the 80-member NEC, it seems likely that the new man at the helm will be hamstrung when it comes to implementing meaningful policy changes and stamping his authority on the new ANC leadership. This fact, says Herman, puts a lot of permutations on the table for how the first three to four months of 2018 will pan out. He predicts that “the party is over”, despite the rand ending 2017 some 13% firmer than it was in January.

“There was a lot of positive expectation about a Ramaphosa win and the markets very quickly reacted to that,” admits Herman, with reference to the rand hitting around R12.30 to the US dollar in the wake of his victory. “Why? Because the markets were expecting a few things attached to Ramaphosa, namely that he is more business-friendly, he understands the risks of ignoring ratings agencies and that might give us a stay of execution, which would be fantastic for the country. Also, there was the hope that Ramaphosa understands the terrible price of corruption, and that we’d have more policy coherency in, say, mining.”

But Mabuza’s role dramatically changes this rosy complexion, says Herman, and “Ramaphosa’s ability to change will be hamstrung” as a result of the former Mpumalanga premier’s influence in the organisation.

Recognising these political and power-grab machinations at play, Herman does not paint a halcyon picture for the long-term investment perspective of the country. “Ramaphosa has to handle

. . . THE DOWNGRADE IN JUNE 2018 WILL BE INEVITABLE . . . ”

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. . . EXPECT HUGE TAX CHANGES AND HIKES” the next few steps very carefully. He’s going to placate both sides: business and the populist wishes of the other slate. So he’ll probably take things slowly... The February Budget is already in a tight spot and Mr Ramaphosa has no magical wand to undo the latest promises by President Zuma. So expect huge tax changes and hikes,” says Herman.

The markets will take note of this and, without greater policy certainty and a government which oils the process of doing business each step of the way, then it is unlikely that global businesses will be flocking back to South Africa anytime soon.

Remember too, says Herman, that South Africa’s prospects are also determined by the global situation and risk appetite which investors have for emerging markets and for the carry trade [borrowing at low rates and investing in currencies with higher interest rates] to continue. Those issues are much larger than small South Africa-focused issues. “There are bigger factors at play globally, but the reality is that 2018 will make the end of global liquidity and liquidity will tighten in 2018 and reach a point when it turns negative in 2019,” he says. “So we are in the sunset phase of risk-taking and the emerging market space is going to face a much tougher time in 2018.” South Africa too.

BUSINESS MUST ‘WAIT AND SEE’

In fact, right now Herman admits to being more upbeat on the prospects for Zimbabwe from a business perspective than he is on South Africa. Although, the simple fact that Ramaphosa is in the ANC hot seat is expected to add as much as 1% to GDP, simply due to an improvement in sentiment.

But, on the whole, business is battling to see the positives of a constrained Ramaphosa win for South Africa and business, believes businessman, brand reputation advisor and political observer Solly Moeng. Moeng, who is CEO of DonValley Reputation Managers and a regular columnist for Fin24, bemoans the fact that as the horse-trading within the ruling party continues “business has to sit and wait, again”.

This does not bode well for resolving the impasse which has been holding back the economy and business confidence in recent years: a lack of confidence. “The ANC is in survival mode and that is their biggest fear right now, not appeasing markets and reassuring investors,” says Moeng. “This time is, again, going to be confusing for business. That is why there was a fist fight [during the ANC National Conference] when it came to the issue of land reform. There is a strong, and probably growing, populist element within ANC that wants a Zimbabwe-style approach and others who are urging caution, of course being mindful of the threat of the Economic Freedom Fighters (EFF) in the upcoming election.”

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This highlights the bind in which Ramaphosa finds himself: straddling the very future of the ANC on the one hand and, on the other hand, the needs of the country and the economy.

“The ANC is being pulled to the left by the EFF and they are also struggling to remain the centre-left party they have always been,” says Moeng. “So, it’s going to be a tough balancing act for Ramaphosa.”

A MOVING CHESS GAME

Another challenge facing the new ANC president is the decisionby-committee nature of the party’s policies. While admirably democratic on paper, the current composition of a split NEC will effectively act as a brake to any proposed changes which threaten the other side. “The ANC has always been clear that it works as a collective, despite Zuma’s damage,” said Moeng. “Whoever is elected is supposed to implement collective ANC policies decided upon at the party’s policy conference and confirmed at its elective conference every five years. It was too naïve to assume that Ramaphosa could come in and turn things around on his own. The ANC is too broad. So Ramaphosa finds himself in a very, very tight spot.”

As Herman puts it: “This is a moving chess game.” And it is a game focused not on the long-term future of the country, but on the party.

Moeng agrees. “Over the next year the ANC will be turning its attention to persuading voters ahead of the 2019 general elections that they deserve to be given another chance.” While Moeng does not see that happening, a sidetracked and infighting ANC will do nothing to promote confidence in the country.

GORDON INSTITUTE OF BUSINESS SCIENCE

“I know many people looking for ways to move their businesses offshore and, in the absence of clear policies, that is going to continue to happen,” said Moeng. “Look at the impact of the Mining Charter. In the absence of clear and predictable policies, business will continue to avoid building on quicksand. The ANC needs to wake up to the fact that it needs clear strategies in place, so people can make long-term plans. In the current environment, business cannot make long-term plans. Sure, investors can keep dabbling in the short term, but that isn’t sustainable or long term in nature.”

This is hardly a happy place for business, but, in a distinctly South African twist, Herman notes with irony that in this new hybrid ANC, with its mixture of business-friendly faces and pro-Zuma politicians, the ruling party may well be pulling a fast one on the corporate world as well as the market. “In electing Ramaphosa, the ANC has effectively done fronting for business, like business does for government with Black Economic Empowerment,” he observes.

This sort of game-playing will do nothing to bring business leaders to the table, with Calland noting that “business leaders will only come to the table if they trust the government”. What may well continue, however, is great involvement by business leaders in social and civic affairs. “Big business has been hesitant and possibly cowardly in its involvement in politics, but there has been a mood swing since Nenegate… [and now] business has to show what it is they are doing to contribute to a transformed economy,” says Calland.

Ramaphosa will need all the help he can get from his former corporate stomping ground, as he faces an uphill battle to develop economic policy and regain investor confidence.

“Ramaphosa has a small window of opportunity akin to the famous ‘100 days’ to prove that he is the catalyst for change needed in government,” said Herman. “If he stumbles at any time during this embryonic period, he’ll be seen as a token rather than the strong leader needed, and market sentiment will quickly turn against South Africa.”

Conversely, if business sees attempts to root out corruption and deliver greater policy certainty, then investor sentiment would ‘shoot through the roof ’, predicts Herman. “This, in turn, would spark a positive snowball effect that could uplift South Africa’s economic growth and revitalise the overall business landscape.”

But this is no time for games, warns Moeng. “Right now the ANC’s reputation is in trouble and it has negatively impacted the country’s reputational fortunes. And reputation is more variable than Bitcoin. We live in a world where you can’t fool people, and South Africans are not fools.” Neither is business

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THIS IS HARDLY A HAPPY PLACE FOR BUSINESS . . . ”

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THE WINDS OF CHANGE

PART 2 – ZIMBABWE: TEETERING ZIMBABWE DEMANDS A BRAVE MNANGAGWA Words Godfrey Mutizwa

President Emmerson Mnangagwa will have to scrap some key economic policies he loyally supported for years as Robert Mugabe’s minister and deputy if he is to turn around Zimbabwe’s shattered economy.

Emmerson Mnangagwa

“I believe as a deputy to the former president he had a clear view of the shortcomings of the boss which I am sure he will aim to correct,” Sifelani Jabangwe, President of the Confederation of Zimbabwe Industries (CZI), a business lobby group, told Acumen.

“If he doesn’t, the economy will stagnate.”

From 2000, the economy imploded after independence leader Mugabe allowed a breakdown in the rule of law as protests against economic decline intensified. The invasion and occupation of white-owned farms accelerated the decline of an economy long lauded as one of the region’s brightest prospects.

Nicknamed Ngwena, which is Shona for crocodile, Mnangagwa was justice minister when ZANU-PF supporters forced thousands of white farmers off their land in 2000 and was in cabinet when the government was taken to the Southern African Development Community Tribunal by farmer Ben Freeth over the forcible acquisitions.

A NARROW GAP

Ever-present in cabinet since 1980, Mnangagwa was one of two vice presidents when Mugabe’s government passed the Indigenisation and Economic Empowerment Act, under which all foreign-owned business had to cede 51% of their shares to black Zimbabweans as part of a drive to increase black ownership in the economy, 27 years after independence.

Inaction means “…we continue on a slippery slide of prolonged economic slump. The tragedy being that we miss out on a recovery that is lifting up most African economies,” said Neville Mandimika, Africa Analyst at Rand Merchant Bank. “We are cautiously optimistic about Zimbabwe’s economic prospects.

The political developments have raised hopes of international investors but that hope has to be met with pragmatic economic solutions.”

Those policies and violence during elections after the 1990s dried up domestic and foreign investment and made Zimbabwe a pariah, leading to sanctions from former colonial power, the United Kingdom, the United States and the European Union.

Analysts say Mnangagwa has a small window within which to arrest Zimbabwe’s precipitous decline by avoiding cosmetic changes at a time when neighbours such as Zambia and Mozambique have become some of the fastest-growing economies in Africa and the world.

Thus far, Mnangagwa has been making the right noises. In his first state of the nation address in late December, he declared

PHOTO: GETTY/GALLO IMAGES

GORDON INSTITUTE OF BUSINESS SCIENCE

Mnangagwa, propelled to the presidency by the army’s ouster of long-time leader Mugabe last November, starts the new year facing his first election and an economy that has halved in two decades, leaving a record one-in-nine people without work and millions mired in poverty.

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WE ARE CAUTIOUSLY OPTIMISTIC ABOUT ZIMBABWE’S ECONOMIC PROSPECTS ” Zimbabwe open for business and said his government wanted to build “a free and transparent economy” that welcomed foreign investment.

The CZI says those declarations need to be accompanied by specific actions to improve the business environment.

“The new administration needs to address the issue of creating a business and investor-friendly environment by addressing issues relating to the ease and cost of doing business,” Jabangwe said, noting some progress since Mnangagwa took over. “So I believe we will certainly make economic improvements.”

Record hyperinflation in 2008 devastated savings and helped destroy the country’s formal sector leaving many industries operating around 30% of capacity or below. Millions of Zimbabweans left the country in search of economic opportunities, the majority of them in neighbouring South Africa.

CURRENCY CRUNCH

The government eventually adopted a basket of six foreign currencies led by the US dollar after Zimbabweans abandoned the local dollar as inflation peaked at about 79.6 billion per cent in November 2008. The net result has been a flood of imports, particularly from South Africa.

Businessmen say the government’s first priority among a myriad of problems must be to solve a crippling currency shortage which has seen Zimbabweans unable to transact sleeping at bank automatic teller machines in order to withdraw money, limited to $50 a week at one point.

The CZI groups what’s left of Zimbabwe’s once-powerful manufacturing sector. At its peak, it contributed as much as 25% of Gross Domestic Product (GDP). The CZI says one solution would be to adopt the South African rand as the main currency, as opposed to the US dollar which has made the country’s few remaining exporters uncompetitive.

In one of the first acts of the new administration, Reserve Bank of Zimbabwe Governor John Mangudya urged increased usage of the rand, suggesting Mnangagwa’s regime might be prepared to reverse some of Mugabe’s policies and offering hope it would be more reformist in managing the economy.

“We believe we need a softer currency as trading in US dollars makes us uncompetitive, given the other inefficiencies that we have. We are looking at how we can encourage other economic

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players to trade predominantly in rand,” said Jabangwe. “The rand is already in the basket of currencies that we use, so we need to promote its greater use in local transactions.”

But RMB’s Mandimika says adopting the rand should be seen as a temporary solution. He argues that Zimbabwe must eventually build enough confidence to bring back its own currency “to act as a shock absorber as it refocuses its economy.”

GLIMMERS OF HOPE

In another promising sign, the first budget under the Mnangagwa presidency presented in the first week of December – two weeks after Mugabe’s ouster – was generally welcomed by economists and the business community. That followed the announcement of a cabinet of 22 ministers, compared with 29 under Mugabe, and six deputy ministers versus 25.

Though Patrick Chinamasa was retained as finance minister, the private sector generally saw positives in the budget after years of promises and inaction.

“The policy thrust announced by the Finance Minister in his 2018 national budget presentation, including fiscal consolidation measures, amendment of the Indigenisation and Economic Empowerment Act and security of tenure over agricultural land are very positive,” said Charles Msipa, Managing Director of Schweppes Zimbabwe, a manufacturer and distributor of CocaCola beverages including Mazoe.

“Implementation of these measures will contribute significantly towards an enabling environment for economic rebound,” he added.

IHS Markit Senior Economist for Africa Alisa Strobel highlighted the budget’s attempt to address the country’s high-risk perception and strategies to find a solution to the country’s high debt burden. But she says more needed to be done to bring down government costs.

“Critically, proposed government employment costs are still too high to address the country’s fiscal imbalances,” she said.

Jabangwe says his organisation was consulted in the preparation of the budget in which Chinamasa amended some old standing

. . . A FAILURE TO DELIVER ON THE PROMISES WILL RESULT IN A RE-RUN OF ZIMBABWE’S LOST TWO DECADES SINCE 1999”

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. . . HE IS GOOD AT PLANNING AND IMPLEMENTATION . . . ” BACK TO THE LAND

Business had also been impressed by Mnangagwa’s Command Agriculture project, said Jabangwe, referring to a drive to revive the farming sector which the government has lauded as a success.

“Greater scope for re-engagement with the international community, particularly with concessional lenders, increases the likelihood of a successful re-introduction of a local currency,” BMI Research, part of the Fitch Group, said in a report. “The weather is also a major risk with the country having seen several droughts over the last two decades which have had a devastating impact on the important agricultural sector and there is always a risk of a recurrence of poor rains.”

Aside from addressing the security of tenure issue, the government also promised to pay former white commercial farmers whose land was seized without compensation around 2000, tackling a key issue that has polarised relations with the United Kingdom in particular and the west in general.

The International Monetary Fund (IMF) has urged Mnangagwa to tackle government spending, especially on salaries which currently gobble up about 90% of its revenue, implement structural and economic reforms and resuscitate relations with international lenders to help unlock much needed foreign investment.

The agriculture project showed “…he is good at planning and implementation so we await to see what he can achieve now that he has the full reins of government,” said the CZI boss. “His inauguration speech followed by the tempo of the budget that has been unveiled also reflects a willingness to implement actions that will take the economy forward.”

Re-engaging foreign support is vital in tackling a total external debt mountain estimated at about $9.3 billion or 58% of GDP at the end of last year. Foreign debt arrears currently stand at $1.75 billion with about 70% of that in arrears, effectively barring any return to borrowing from international markets.

anti-business laws including the Indigenisation and Economic Empowerment Act and offered increased security of tenure over agricultural land.

There are other indications that Mnangagwa won’t blindly follow some of Mugabe’s nationalistic policies such as indigenisation under which the government demanded foreign investors only take minority interests in designated sectors. Only platinum and diamonds remain under those rules, according to new regulations passed after he came into office.

GORDON INSTITUTE OF BUSINESS SCIENCE

Economists say Zimbabwe could well be a quick turnaround story if the correct policies are pursued. The country contains the second-largest platinum reserves in the world after South Africa, most of them untapped. In his first foreign visit as president, Mnangagwa called on investors to come and exploit 19 other key mineral deposits, among them coal, gas, chrome and gold.

At a function in Pretoria where he was mobbed by thousands of Zimbabweans, Mnangagwa also called on his countrymen in the diaspora to return and help rebuild the country.

ELECTION AHEAD

Analysts say conducting credible presidential and parliamentary elections next year will help Mnangagwa build confidence in the economy, enabling him to attract foreign investment and donor support after he chose not to include the opposition in his interim administration. The elements may also play a part.

Its main creditors are the IMF, the World Bank, the Abidjan-based African Development Bank and the European Investment Bank.

The government appears to be making some headway in tackling the arrears. In December, the Cairo-based Africa Export-Import Bank (Afreximbank) said it would provide up to $1.5 billion in credit to the country and provide guarantees to foreign investors seeking to invest there after Mnangagwa pledged to implement reforms that would stimulate job creation.

The funding excludes a $600 million line of credit from Afreximbank, which, along with the Chinese, has been one of a few lenders to continue lending to the country in the last few years.

Msipa, whose business weathered the 2008 implosion and general decline since 2009, warns that a failure to deliver on the promises will result in a re-run of Zimbabwe’s lost two decades since 1999.

“The economy is in a very fragile state, characterised by an acute shortage of foreign exchange, insignificant levels of foreign investment and, absent implementation of urgent reforms, is bound to contract and deteriorate further, resulting in worsening unemployment, poverty levels, social unrest and movement of citizens to neighbouring countries in search of greener pastures.”

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THE WINDS OF CHANGE

PART 3 – KENYA: THE KENYA RIDDLE Words Shoks Mnisi Mzolo

Kenya is a sorry contradiction. Its pro-business approach brings in investors but the mix of huge government debt, a weakening currency and rising inflation could discourage inflows. The country has strong governance institutions but the 2017 election was controversial, rejected by some.

Kenya’s location in a highly integrated economic bloc and near world markets is a plus. But being on the cutting edge of technology is offset by perennial graft.

PHOTO: GETTY/GALLO IMAGES

Cranes and construction are not rare sights in Nairobi. Fluttering flags of multinationals also claim their share of the skyline, underscoring Kenya’s improving status as a gateway to Africa.

Right now, Nairobi gives Johannesburg and Cape Town a run for their money while Cairo and Lagos lag from afar. Global blue chips with regional and continental hubs or head offices in Nairobi range from Coca-Cola, Nestlé and Pfizer to PwC, Visa and others. ICT heavyweights Bharti Airtel, Google, Huawei and IBM are also on the list. Global tech firms speak of an extensive talent pool in a nation which, unsurprisingly, has ploughed a fortune into a technopolis, or ICT mega hub.

President Uhuru Kenyatta said last year that Konza Techno City, also known as Silicon Savannah – with a nod to Silicon Valley in the USA – would provide 200 000 jobs when fully completed in 2030 and generate north of US$1bn per year. This is a big deal for a nation of 45 million whose GDP is a middling $70bn (a quarter of SA’s). ICT accounts for 7% while agriculture claims 25%. The smart city, costing taxpayers a fat $15bn, is intended to propel Kenya into the top league of ICT centres, along the lines of South Korea – unsurprisingly a partner at Konza. Beyond boosting the tech sector, Silicon Savannah, a business city under construction, is likely to help attract incoming traffic in terms of new investments and skills across many fields, predicts Konza Technopolis board member Caroline Kariuki in a telephonic interview.

ICT PROJECTS BUOY COMPETITIVENESS

Also CEO of Green Pot Enterprises, a farming and energy outfit, Kariuki attributes the large number of global firms in Nairobi to the proximity to overseas trading capitals. Ten hours from most western European hubs and four to five hours from Johannesburg

Uhuru Kenyatta

and Dubai, it’s a “central location that makes us a gateway to many more economies in Africa,” says Kariuki. Couple that with a sophisticated economy.

Aware that farming accounts for a big slice of GDP, government is diversifying Kenya’s economy but without neglecting its farmers.

To achieve this, it is promoting industries with “the highest capacity to create employment”, found a study by accounting firm KPMG. Nairobi has identified the leather and textile sectors as priority areas for investment and is set to increase incentives for investors in its Special Economic Zones.

Government believes that Konza is the key spoke in a wheel intended to transform Kenya into a newly industrialising and middle-income economy by 2030. However, some industry players expect the digital city to flop. Their concerns include the paucity of top-end skills and the 60km drag from Nairobi city,

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a point they feel could discourage professionals from working there. “Is it far? It’s all relative,” Kariuki argues, noting a steady supply of ICT entrepreneurs in Kenya and new transport projects to cater for this community on what was hitherto a desolate patch of land. “Some people will choose to relocate, after all, Konza will be vibrant. We have done our homework and seen how well smart cities around the globe can work out.”

By way of example, IBM’s move back in 2012 to base its only research lab in Africa in the fledging technopolis seems both a nod to Konza and a smart way to gain first-mover advantage. To put the matter of skills at rest, IBM managed to recruit top brains from within and outside Kenya.

Interestingly, former Google country manager Joe Mucheru was appointed as ICT minister in 2015 in a move that industry players said would rejuvenate the national agenda, given his image as an energetic and dynamic leader. Critics note that government’s ICT projects slowed during the former minister’s shift.

HOW DO SOUTH AFRICANS FARE?

Beyond ICT, South African companies with a footprint in this East African market number a lowly 60 and include JSE-listed outfits like City Lodge Hotels, Naspers, DStv, FirstRand and Woolworths.

Not all have made it big there. Nairobi’s KCA University academic Dr Brigitte Okonga-Wabuyabo attributes failure to factors such as the high price of doing business in Kenya. Part of the problem, she feels, is ignorance by some SA giants who treat different markets in Africa as homogenous, when in fact dynamics and profiles vary markedly. Johncom, now Tiso Blackstar, took too long to learn. Nando’s also left Kenya suddenly. SABMiller, a multinational with roots in SA, went in and out and back in again years later after revising its game plan.

While describing the poor record as “a mystery”, Kariuki says blue chips from the south should always bear in mind that the way of doing business in Kenya is anything but a copy of how things work in SA. For their part, corporations from the south quietly cite a thin middle class, pegged at barely 10% by the Economist Intelligence Unit and contrasted with 42% below the poverty line.

GORDON INSTITUTE OF BUSINESS SCIENCE

Whatever the true picture, Shoprite – with a presence in 15 countries and 2 300 outlets (80% of which are on home turf) – is fishing in this pond. Shoprite Checkers Director Gerhard Fritz told Bloomberg in November that Shoprite was keen to occupy

NAIROBI GIVES JOHANNESBURG AND CAPE TOWN A RUN FOR THEIR MONEY . . . ”

. . . IT IS PROMOTING INDUSTRIES WITH ‘THE HIGHEST CAPACITY TO CREATE EMPLOYMENT’. . . ” space left vacant by Nakumatt which is to wed Tuskys, a fellow Kenyan retailer. Given its failure to win market share in Tanzania, prompting its retreat after an underwhelming decade (it left Egypt within five years), Shoprite would do well to rope in locals as partners – the path that Woolworths and City Lodge have taken. The supermarket giant can then build capacity onshore, replicating its own Angolan model, rather than importing exclusively from SA. While describing the investment environment as uninspiring in the short term, Charles Omondi, an editor at Nation Media Group, reckons Shoprite’s plan is well timed since two leading chains, Nakumatt and Uchumi, are “on their death beds”. This weakness phase, he suggests, is a rare window for retailers “seeking to replace the fallen giants” but Omondi also cautions that Kenya has a savvy consumer base.

Shoprite has another thing going for it: a business-friendly government. Strangely, this attitude co-exists with Kenya’s repeated poor score in the Global Competitiveness Index and even Trace International’s newish business bribery matrix, among other perception-based ratings. Graft is rife in Kenya because chances of being punished are minimal, University of Nairobi’s Dr. Patrick Asingo told the media in December. Despite this embarrassing background, business activity has thrived, though on low notes now, amid sometimes violent tensions which pockmark the political landscape.

POOR ECONOMIC PROSPECTS AND ‘ILLEGITIMACY’ STALK KENYATTA RULE

A case in point is the protracted election season that cost dozens of lives last year. City Lodge, which ventured here in 2012, took pain from an economy “negatively impacted in the last quarter of the year [to end-June] in the lead-up to the Kenyan election”. On the other hand, the Raila Odinga-led opposition argued that the ballot was flawed and took the matter to court which consequently annulled the August presidential polls, ordering a re-run in October. In the end, President Uhuru Kenyatta almost doubled his tally to a dizzying 98%, while the opposition boycotted the election in a scenario that rendered the re-run a one-horse race. A lousy 39% voter turnout in October (versus 80% in August), and ballot papers not being cast in some opposition strongholds gave credence to Odinga’s claims of “sham” polls and an “illegitimate” regime. Mucheru, the ICT minister, was fingered for steering biased coverage.

Cover Story

Notwithstanding lingering questions about legitimacy, Kenyatta, notable for axing five ministers en masse for graft (a factor often cited for Kenya’s squandered opportunities), has assembled a highly skilled and youthful team. Phyllis Kandie, an economist whose qualifications include an MBA, kept her portfolio which includes East African affairs. Another widely expected reappointment was that of old hand Najib Balala, who studied business administration in Toronto, to tourism. Although employing one in nine people – creating a total of 1.1 million direct and indirect jobs – and adding $7bn to the GDP, the Kenyan tourism sector lags behind global trends, according to data from the World Travel and Tourism Council.

That’s not the only point of weakness. While economic growth is likely to remain above 5% per annum, other factors look poor. Inflation is set to soar from the circa 7% pre-elections.

Researchers forecast a fall in the stock market. The shilling has depreciated to long-term lows against key currencies, including the rand – notable since SA is Kenya’s fourth-largest importer.

The East Africans source an annual R8.3bn in goods from this side of the Limpopo. Credit rating agencies hint at a downgrade amid persistent large deficits on the back of high borrowing costs that only widen government indebtedness.

Finance Minister Henry Rotich, an economist too, has his work cut out for him as he begins his second term. Standard Media isn’t convinced he is suitable for the job, once accusing him of running treasury “like a fish market kiosk”. Omondi is ambivalent. Rotich is “level headed” and “a man of good intentions” but beholden to the executive, argues the Nation Media journalist. “He seems to commendably concentrate on his [role but] cannot come clean on sensitive issues like Kenya’s national debt ratio, about which all the serious credit rating agencies, civil society and independent thinkers seem to be worried.”

REGIONAL INTEGRATION UNDERPINS GROWTH

On the upside, the country’s membership of the East African Community (EAC), Africa’s most integrated regional bloc, benefits it in ways that include free trade and movement in six member states that bristle with a total population of 180 million, stretching from Tanzania to South Sudan (a new member).

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This population size would flirt with 200 million should Somalia be admitted. The community has a common electronic passport, offers tourists a regional visa – a fillip for the under-exploited tourism industry – and is due to launch a single currency in 2023 after years of work behind the scenes.

John de Villiers, an expert on African economies, ascribes the community’s integration success to political will: “[This] is certainly a lesson that other African sub-regional organisations can draw on,” he told African Leader. Kenya, whose GDP per capita is a modest $1 600, is the largest economy in this bloc of six nations, but does not play big, observes De Villiers, juxtaposing that powerhouse’s behaviour with South Africa and Nigeria, a pair he accuses of dominating their respective regional communities.

Even so, warns Omondi, referring to questions of illegitimacy shrouding the Kenyatta administration, there remains much to be sorted in relation to good governance, adding that neighbours – Burundi, Rwanda, South Sudan and Uganda – also fare shabbily in this context.

For her part, Kandie, in an article in Standard Media, noted exceptional levels of integration towards becoming “a political federation” and cited joint large and transformational crossborder infrastructure projects. “Key EAC achievements and successes include establishment of the Customs Union; the Common Market; convertibility of the currencies of the three original members (Kenya, Tanzania and Uganda); and capital markets development and cross-listing of stocks. There is free movement of stock.”

This partly explains why EAC states, as the International Monetary Fund found, outpaced most African economies last year in terms of economic growth. Although the community’s economic expansion has slimmed – to end 2015 at $5.2bn ($6bn) – Kenya, among regional peers, maintained an annual growth rate north of 5% to the global average of 2.4% and SA’s sorry 0.3%.

Informed by gains of free movement, our eastern neighbour will soon let citizens of countries in the region use identity cards rather than passports to buy property or do business in Kenya, and go on to ease visa rules for citizens of the rest of Africa

THERE IS FREE MOVEMENT OF STOCK . . . ”

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south africa

Pravin Gordhan

PUT THE SHINE ON AGAIN Words Cara Bouwer

GORDON INSTITUTE OF BUSINESS SCIENCE

“I don’t know why I remain such a bloody optimist,” said former finance minister Pravin Gordhan as he wrapped up a robust end-of-year GIBS Forum. Undoubtedly 2017 was a bruising year for Gordhan, and yet the activist in him keeps pushing to restore South Africa’s lustre.

Gordhan was speaking as the ANC’s National Elective Conference was dawning and with speculation rife as to who would walk away with which coveted title. Risk analysts to ratings agencies, political commentators to policemen held their own views of the outcome, but for Gordhan, it was less about the person in the hot seat and more about the uphill battle to heal the nation – psychologically and economically – in the wake of the bruising encounter.

“We’ve lost the shine we had as South Africa,” he admitted. “The Mandela shine.” It’s time to find that again. “If we can all become inspired, for a couple of years, to do the right thing, do good and build the solidarity we require, then we have more than what it takes,” he said.

Just ‘how’ to do that made for an unconventional GIBS gathering, which often turned the spotlight from the guest speaker to the audience. At one point, having spin-doctored himself out of

outlining how individuals should be driving civil engagement, Gordhan asked the audience to share ideas. He sat back, pulled out his phone and proceeded to video a room buzzing with ideas.

With his microphone still on, Gordhan could be heard remarking to GIBS Professor Nick Binedell: “Look at the buzz!” When the room was eventually called to order, Gordhan said: “This is what an activist forum looked like in the 1980s. I’m serious. And if you could hear yourselves, it’s amazing. The amount of energy you just generated in five minutes.”

SOCIETAL MOBILISATION IS KEY

The world is familiar with Gordhan’s steady financial hand, first as commissioner of the South African Revenue Service from 1999 to 2009, and then as Trevor Manuel’s replacement as finance minister in 2009. Who could forget his fateful reappointment to the Finance Ministry in December 2015 following the Nenegate saga, followed by his controversial axing in March 2017? But the

south africa

true mark of the man lies not in his political credentials but in his activist past, and it is this struggle background which Gordhan is now tapping into to rally South Africans.

In his youth, Gordhan knew the inside of a jail cell for fighting out against injustice and today he believes the same degree of civil engagement is necessary to reclaim South Africa’s future.

“Shame and guilt are not going to shift those who are arrogantly in power, what is going to shift them is societal mobilisation,” he told the GIBS Forum. “What is going to shift society to be mobilised is a keener awareness – going beyond just connecting dots – about how systems like this work… to actually inform the kind of patronage processes, or, to put it more simply, the stealing and neglecting processes.”

What is clear from books like Jacques Pauw’s The President’s Keepers, Adriaan Basson’s Enemy of the People or Crispian Olver’s How to Steal a City, the rot runs deep, so a collective effort from society is essential. In this respect Gordhan did not shy away from telling off the well-heeled GIBS audience by saying: “The upper middle classes, black or white, are worried about where their next million rands or dollars needs to be kept so ‘it is safe’, and who is going to get it out for them, and what commission is going to be charged. The other conversation going on is ‘are my children safe’ and are they going to be properly educated here, or do I need to take them somewhere else? That is also a conversation – I can see from some of the nodding heads – that is beginning to happen.”

Instead of these conversations, Gordhan called for debates around how to resist corruption and the abuse of power and how to go about revitalising the collective vision for South Africa.

Of course, activism also requires money, which led Gordhan to highlight just one way well-to-do South Africans could help: “Let’s crowdfund for civil society and give them the muscle they require when you think the cause is the right one, the leadership is right and they are doing the right things. That is one way of becoming involved.”

Another way is to become more aware and mobilised into some form of action, akin to the levels of social engagement South Africa witnessed in 2016. It is this form of activism which Gordhan credited for keeping him and his two co-accused, Oupa Magashula and Ivan Pillay, out of jail when the National Prosecuting Authority charged them with fraud in 2016. “So thank you very much!” he said.

“The extent to which society is organised is,” stressed Gordhan, “the extent to which there is a better power balance between those who hold corporate and political power and abuses of that power as far as citizens’ interests are concerned. A higher level of awareness, a higher level of mobilisation, and getting more people organised in civil society and elsewhere places us in a better position to resist the abuse of power.”

BUSINESS MUST STAY ENGAGED

While Gordhan was critical of the institutional and reputational damage caused to Brand South Africa by the likes of KPGM and

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SHAME AND GUILT ARE NOT GOING TO SHIFT THOSE WHO ARE ARROGANTLY IN POWER . . . ” Bell Pottinger in the ongoing ‘state capture’ drama, he was keen to highlight the role business can play in this mobilisation process while still making the pointed comment that: “You can’t keep the money in your pocket and think poverty is going to disappear.”

Business, too, is complicit in the ‘state capture’ rot and must be weaselled out as much as the government perpetrators, said Gordhan. “Every single scandal has an accountant, a lawyer, a financial institution – they are all involved. So the question of ethics, shame and guilt, and of being good citizens is a serious challenge in each institution.”

Individual citizens must never become complacent in holding institutions to account, be it business or government. “There is one person, a Mr [Theo] Botha, who – by owning one share – goes around and keeps companies and CEOs and chairpersons on their feet. Imagine if all of us did that?” said Gordhan.

But business should not wait for the Theo Bothas of this world to knock on its door before cleaning house, they need to do this and more to really show a commitment to South Africa. Gordhan called for business to persist with the institutional involvement that started back in 2016. He said: “In 2016, partly out of selfinterest and partly out of a kind of emerging national interest and identification with that, we built a remarkable partnership [between business and government] and key in that partnership was a level of trust; that we could work with each other and talk the same language.”

The engagement was quieter in 2017, but now is not the time for complacency, said Gordhan, instead business leaders have to drive a deeper level of transformation. “What we need is a massive transformation in South Africa, not just in a colour sense. We need a whole new economic dynamism. We need to produce a generation of entrepreneurs, start-ups that will give us a competitive edge into the future. We have fascinating problems to solve which, if the best brains from all sectors come together, I believe we will crack and find innovative solutions. That is what business schools, by the way, should be spending half their time on,” he said, glancing at Binedell.

There is much to be done if South Africa is to reconnect with the Mandela dream. “It’s time to put the shine on again through the collective effort we can all make,” said Gordhan.

Get polishing!

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south africa

ROOTING OUT CORRUPTION Words Gaye Crossley

Corruption, in all its forms, dominated the news in 2017. Some of the big scandals South Africans have witnessed, such as KPMG, McKinsey, Net1 and Steinhoff, have resulted in serious reputational damage and others, like UK-based PR firm Bell Pottinger, have literally brought companies to their knees.

The question is how can companies avoid falling foul of the dreaded corruption lurgy? Prevention, of course, is better than cure, but should a company be infected, there are steps that can be taken to mitigate the damage.

•

Building trust among employees is also important and White emphasises the need for companies to have a genuine opendoor policy. “You must encourage people to speak to you. You have to spend time with them, you have to get out there to understand what people in your organisation are up to, and have a genuine, empathetic understanding of the setting and the pressures under which they are working. Then create a sense that you have their back.” This type of behaviour, says White, will also encourage employees to come forward should they suspect any unethical behaviour among colleagues.

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In order to get people to work with management, a company needs very clear and transparent reporting processes, together with a clear flow of information between management and employees.

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Finally, White says that a company needs to maintain the expectation of high standards, not only in terms of ethics, but in terms of work output. “You should demand high standards because I think we underestimate the impact of tolerance of lower standards. Tolerance of low standards actually creates very low morale in people. It affects their pride in the work they do.”

PREVENTION IS BETTER THAN CURE

Giles White, executive consultant and head of the Financial Services Sector at law firm Webber Wentzel, believes that instilling the right corporate culture within a company is crucial.

“It is possible to maintain high standards and be profitable, even in regions that are traditionally difficult to operate in,” he says.

GORDON INSTITUTE OF BUSINESS SCIENCE

In order to get the balance right, White offers six tips that can help an organisation maintain a culture of good ethics and avoid potential corruption.

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There needs to be a greater degree of owner-manager engagement so the agendas of both parties are adequately represented. “Companies need to find ways to more actively engage with stakeholders and engage them in the business,” notes White.

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This leads on to the discussion of whose interests are being looked after by the board. White believes that fragmented institutional share ownership in listed companies can lead to short-term thinking by boards and management who often act in their own interests. This contrasts the view committed long-term owners of a business have, like those in family-controlled organisations, who look to build the business for future generations. White thus urges companies to create structures and levels of engagement throughout an organisation that foster a long-term approach. “You have to create an environment which encourages people to think longer term and trust that decisions are made for the long-term benefit of the group, people’s behaviour will reflect that.”

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The behaviour of a company’s ownership and board will ultimately be what dictates the behaviour of their employees, so walk your talk. “In order to have an ethical firm that is operating to high standards, it is necessary for owners and the board to build trust throughout the organisation, and that is dictated by the way they behave and the way their employees perceive them to behave,” stresses White.

STRONG MEDICINE

However, no matter how much effort is put into the organisation to create a culture of good ethics and have good policies and oversight procedures in place, Pamela Stein, partner and head of the Employment Practice at Webber Wentzel, believes that there will always be employees who will find a gap and exploit it.

. . . INSTILLING THE RIGHT CORPORATE CULTURE WITHIN A COMPANY IS CRUCIAL”

Effectively dealing with employee corruption is, therefore, critical, Stein told a recent Webber Wentzel seminar entitled Anti-corruption and good corporate governance, local and international trends, themes and developments. She offers a few tips on how companies can effectively deal with the matter.

THE INTERNAL INVESTIGATORS

Firstly, a company must decide who will conduct an investigation.

If the person implicated is lower down in the chain of command, then the board, in-house counsel or a management team can run with the probe. If the person being called into question is a senior manager or director, then a company may have to convene a subcommittee of the board or engage the services of external lawyers and auditors to conduct the enquiry.

COVERT OR OVERT?

offender, and then to look at more complex legal issues at a later stage. “We are not in a criminal court when we are dealing with an internal investigation, we are not going to be proving fraud, we are not going to be proving corruption; all we really need to prove is dishonesty or gross dishonesty… which is without a doubt a dismissible offence.”

IN-HOUSE OR OUTSIDE EXPERTISE

CRITICAL ACCESS

Getting to the nitty-gritty of matters requires a great deal of forensic and legal expertise. Again, who is brought in to delve into the matter will depend on the circumstances. Stein says there is nothing wrong with handling the matter using the firm’s internal auditor and legal department, but if the firm is looking to bring criminal sanctions against the implicated person or the person accused is of a very senior position, then Stein recommends bringing in external auditors working together with an external law firm.

No matter who conducts the investigation, Stein reminds companies to always bear the objective of the investigation in mind. “We want to ensure we are looking at the different stages of the investigation, and get to the bottom of it. We want to get the disciplinary action underway.” She adds: “We also want to look at our reporting obligations, and our civil claims and whether there is going to be a criminal prosecution.”

Ultimately the investigation is about fulfilling the evidentiary requirements of all the stages of the investigation. It is for this reason that Stein strongly suggests that forensic accountants work hand in hand with a legal team.

PHOTO: GETTY/GALLO IMAGES

Pamela Stein

Depending on the circumstances surrounding the allegations, the company then needs to decide whether they want the investigation to be covert, meaning the implicated person has no knowledge of the investigation, or whether it would be preferable to suspend the implicated employees and conduct a more overt enquiry. In many instances, she says, companies prefer to suspend the accused. “This happens in the very early part of proceedings, and it is not too difficult to do under South African law,” she explains.

A SMALL WIN IS BETTER THAN A BIG LOSS

Stein warns that companies should take baby steps in order to get the best result for the business. “Often many disciplinary enquiries are messed up because the charges laid against the employees are too complicated to prove,” she explains. Instead, she urges companies to do what is necessary to dismiss the

A vital policy all companies need to have in place is that of an electronic communication policy, notes Stein. “The extent to which the company can access documents is limited to whether those documents are in its possession or control. I want to stress that every employer should have an electronic communication policy so that at times like this we can immediately go in and access and detect emails that are suspicious.”

Added to this is the issue of preserving evidence. Although companies will not have access to an employee’s private computer and cellphone, they are able to retrieve any company tools as soon as an allegation has been made.

SAFE SPACE

Often for the best chance of success in cases of fraud and corruption, investigators are going to need to have the cooperation of witnesses. It is vital that witnesses are encouraged to come forward and it is equally important to balance the need for evidence with employee relations.

USE THE NPA

Finally, Stein joked that as the National Prosecuting Authority is not prosecuting the people it ought to be, it has a lot of time on its hands to get into the really meaty corporate lawsuits. She suggests companies use this government institution to press for criminal charges. Government, she concluded, has a lot more power than companies to access personal information like bank accounts and private cellphones. And this, she says, is where all the really critical evidence can be found

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general management

MULTIPLICATION IS THE NAME OF THE GAME Words James van den Heever

Sasol has embarked on an ambitious programme to change fundamentally the way its leaders lead, in the process harnessing the intellectual power of its existing employees.

Attending a David Ulrich seminar a while back, S’ne Mkhize, the Senior Vice President: HR at Sasol, gravitated towards the book table, as she always does. Liz Wiseman’s Multipliers caught her eye and so she bought it. “I could hardly put it down because it spoke so directly to the kind of leadership challenge the organisation was grappling with at the time,” she says.

Some five years ago, after a review of its operational model, Sasol had begun to reinvent itself for the 21st century. The review had shown that the company’s divisions essentially operated as individual companies, each with its own management and even, in some cases, boards.

“We had to change this model to structure the company in line with our value chain, in order to compete in what had become a highly competitive sector globally,” Mkhize explains.

GORDON INSTITUTE OF BUSINESS SCIENCE

In line with this thinking, the company’s divisions were placed into three broad categories: Upstream (source), Make (manufacturing) and Downstream (sales and marketing). The new organisational structure signalled a profound change in that divisions now had to operate as parts of a single company with one executive and board and, critically, a single balance sheet.

Obviously, the change was dependent on that most slippery of projects: changing the corporate culture. A key component of achieving that was changing how the organisation was led.

A Heartbeat employee survey pointed to the nub of the leadership problem. “The survey quite strongly showed that leadership was managerial rather than inspirational, command-and-control rather than rooted in trust and respect,” she points out. “How to help leaders transition to a leadership style in line with the new operating model, to move from being managers of tasks

to leaders of people? The Multiplier concept of tapping into the intellectual capabilities we already had in the company, of releasing potential we were already paying for, made such sense.”

Specifically, the five areas – talent, culture, strategy, decisionmaking, and execution – in which Multipliers manage things differently correlated very well with the 10 leadership competencies identified by Sasol.

Sasol’s executive leadership shared Mkhize’s enthusiasm for the Multipliers concept, and GIBS, which was already working on the design of a leadership programme for Sasol, was brought on board, along with the local licensees of the Multiplier programme, Business Results Group.

“Multipliers is a different way of leading that aims to get the best thinking out of people, based on the premise that everybody is smart with the innate ability to work things out for themselves,” says Brad Shorkend, who facilitates the course. “It’s focused on developing leaders who invite people to think rather than telling them what to do. It suggests that the thinking and actions that created past success are unlikely to continue working into the future.”

Despite the enthusiasm to use Multipliers to educate a new generation of leaders, and despite the fact that as part of the restructuring leaders had been shifted around, budgetary constraints intervened. After a year, however, the first pilot was run in North America and the success of the programme spread like wildfire around the organisation.

“It’s the first time that I’ve ever seen a project connect so viscerally with business leaders, and this has created a ‘pull’ from the business that continues to this day,” Mkhize says. “In many

Prof. Karl Hofmeyr

instances, leaders offer to meet the costs out of their budgets rather than wait for HR funding to materialise, again something that I haven’t seen a lot of in my career!”

DIVERSITY AND MULTIPLICATION

Sasol co-designed the programme with GIBS to meet the business need. It originally began as a two-and-a-half day intervention, now expanded to three. It is preceded by a 360-degree assessment that creates “a personal burning platform” for participants. The first two days are focused on Multipliers and Sasol. They begin by articulating the need for and history of the programme, including videos of the joint CEOs talking about the new leadership style and its benefits, as well as GIBS’ Nick Binedell on how the complex world requires building partnerships based on shared value.

The course then covers the Multiplier concept and the tools it offers to help leaders understand their leadership style and, critically, to change it. Mkhize says one of the things that originally attracted her was the practical toolsets that can be used to help leaders change the way they operate. Sasol’s expansion into Mozambique is used to analyse what was done wrong. This module concludes with a practical requirement for attendees to provide an action plan for closing three gaps in their leadership competence.

Liz Wiseman

. . . DIVISIONS NOW HAD TO OPERATE AS PARTS OF A SINGLE COMPANY WITH ONE EXECUTIVE AND BOARD . . . ” argued, the regulatory framework is itself utterly focused on quota thinking. In the final analysis, a company’s BEE scorecard, and thus its social licence to operate and bid for government contracts, is purely assessed on numbers – there is no acknowledgement that this emphasis creates as arid and unproductive an environment as apartheid did.

But the truth is that without going further, companies will fail to derive any benefits from their diversity programmes.

The third and final day focuses on diversity and inclusion, a module that was added in response to another of the key findings from the Heartbeat employee survey: that Sasol’s approach to racial and gender diversity was too numbers-based, and that the company did not provide an inclusive environment.

“You simply cannot access the full intellectual capacity of your people outside of an inclusive environment, it’s that simple,” says Nene Molefi, whose company, Mandate Molefi, facilitates the diversity and inclusion module. “I love the Multiplier thinking because it forces leaders to look beyond the numbers to unlocking the value that a diverse workforce provides, to truly engage with the spirit of Section 9 of the Constitution.”

Of course, as any South African corporate can attest, this is extremely difficult terrain, primarily because, it can be

In this way, Molefi says, a company can convert the potential represented by its people into an actual asset.

general management

The diversity and inclusion module uses a number of techniques to help participants understand how unconscious bias can affect leadership decisions. Whereas conscious bias is relatively easy to deal with, she says, unconscious biases are baked into who we are, and often communicated non-verbally by those whom we love and respect the most at an early age, such as parents, family, teachers and community leaders.

“You have to change your own mindset, and that begins with opening your heart,” Ms. Molefi says. “We all have unconscious bias.”

The diversity and inclusion module places a lot of emphasis on equipping people with practical skills and techniques to embed inclusion in the workplace and beyond.

NOW WHAT?

To date, some 1 700 of Sasol’s 3 000 middle and senior management have completed the training. A website has been created to provide a platform for sharing best practices, keeping updated with new information and generally to build a network of “alumni”.

Indeed, she says there is considerable pressure also to make the training available to front-line leaders.

An ongoing challenge, says GIBS’ Professor Karl Hofmeyr, is to measure the impact of the training, especially as it is so far-reaching. GIBS is working on ways to do this but Sasol’s Mkhize says that while it is difficult to link to the bottom line, the continuing willingness for the business to pay for the training out of its own budgets is testimony to the value it delivers.

“The Heartbeat surveys will enable us to chart how leadership is changing, and a proposal has been made to use the Multiplier intellectual capital to define our corporate leadership style,” she says. “One area we now need to look at is integrating the learnings from the programme into personal development plans, so there are consequences for non-Multiplier leadership practices.”

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THE MULTIPLIER EFFECT The concept of the Multiplier manager, or its opposite, the Diminisher, originated with Liz Wiseman. An HR professional, Wiseman led the creation of Oracle University, and held senior positions in that company for some seven years, thereafter working as an executive coach.

During the course of her career, she observed that there are two broad styles of manager: Multipliers and Diminishers. She conducted extensive research to give meat to these concepts for her best-selling Multipliers: How the best leaders make everyone smarter.

The book and its insights form the basis for the Multipliers leadership development programme used at GIBS and led by the Wiseman Group’s local partners, Business Results Group.

The concept is based on a simple observation with some far-reaching consequences: some managers seem to get more out of their people than their peers, and this is reflected not only in higher productivity and better business results but also in lower employee attrition rates. These Multipliers are able to unleash almost all the intelligence of the smart people they employ – 95% of it – whereas their opposites, Diminishers, only manage to leverage 48% of the intelligence of their people. In other words, for every dollar a company pays in salary, it is getting under half the value from people working under Diminisher managers.

Thus, Multipliers essentially double the intellectual power of their workforce while still paying the same salary as their Diminisher counterparts. In a business environment where cost containment is always important, getting more out of staff and keeping them for longer minimises recruitment costs and maximises value – Yankee frugality in HR, one could say. “[B]efore calling the recruiter, perhaps you should consider how completely you are using the resources already inside of your organisation. You probably know how productively your company is using your physical assets, but do you know how deeply you are using the intelligence and capability of your people?” writes Wiseman in an article in Harvard Business Review.

Multipliers get their results by looking for talented individuals and then giving them space to blossom, along with accountability. Such an attitude encourages people to produce their best work. Hired by Diminishers, similarly, smart people fail to deliver value. Because the Diminisher manager has to be the smartest person in the room, and the source of all the answers, they effectively muffle the potential of their people. By continually offering ideas and making decisions, they undercut the talent they spent so much time and effort on recruiting.

The good news is that many Diminishers are unconscious offenders. By understanding what they are doing, and how to change their management style, they can improve their ability to manage in such a way as to harness the intellects of their team and so, it is hoped, improve business performance. *For more on Liz Wiseman and Multipliers, see Acumen Issue 15, Q1 2016, pp 22-24

. . . SASOL’S APPROACH TO RACIAL AND GENDER DIVERSITY WAS TOO NUMBERS-BASED . . . ”

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WILL WINE SURVIVE CLIMATE CHANGE? Words Tamara Oberholster

“Who knows if we’ll even have Cabernet Sauvignon as we know it now in 10 years’ time?”

GORDON INSTITUTE OF BUSINESS SCIENCE

It was a casual remark, more of a joke than anything, that a new friend in the wine trade made, standing around the braai. It got me thinking. And Googling. According to one study published by the Proceedings of the National Academy of Sciences, by 2050 we stand to lose between 25% and 73% of global viticulture regions.

Gulp!

In South Africa, the severe Western Cape drought has put added pressure on the industry. Weather patterns are shifting, and extreme weather events are set to happen more frequently. The industry needs to consider drastic changes to remain viable into the future.

SOUTH AFRICA’S VULNERABILITY TO CLIMATE CHANGE

In its white paper, National Climate Change Response, the South African Department of Environmental Affairs lays out the facts: as a water-stressed country, South Africa is extremely vulnerable

to the impacts of climate change. Predictions suggest that by mid-century, the South African coast will warm by 1 to 2°C and the interior by 2 to 3°C. By 2100, warming is projected to reach around 3 to 4°C along the coast, and 6 to 7°C in the interior.

“Life as we know it will change completely: parts of the country will be much drier and increased evaporation will ensure an overall decrease in water availability,” the report notes.

“Increased occurrence and severity of veld and forest fires; extreme weather events; and floods and droughts will also have significant impacts. Sea-level rise will negatively impact the coast and coastal infrastructure. Mass extinctions of endemic plant and animal species will greatly reduce South Africa’s biodiversity with consequent impacts on ecosystem services.”

It’s a bleak picture. And the current Western Cape drought, attributed chiefly to El Niño and climate change, has given us a bitter taste of what the future may hold.

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WHAT CLIMATE CHANGE MEANS FOR THE WINE INDUSTRY

For the wine industry, locally and globally, change is crucial for survival. “I think in some areas it will become more difficult to grow vines and it will be necessary to rethink which cultivars are grown where,” says Carolyn Martin, co-owner of Creation Wines, based in Hemel-en-Aarde. “The climate change is more evident inland than on coastal areas, as long as the sea temperature remains consistent. If the sea temperature remains at around +/-12 degrees Celsius, we’ll have a stable climate in the Hemel-enAarde. The bigger effect may be in areas such as Burgundy and Bordeaux.”

Global weather changes have already seen earlier-than-average harvests, more frequently, for these French regions. While this has actually made for better wines, Martin notes that issues like early spring frost and hail are proving problematic.

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LIFE AS WE KNOW IT WILL CHANGE COMPLETELY . . . ” One silver lining, according to Nel and Martin, is that better ripening of grapes in certain “borderline” winemaking areas, like the UK, may make these regions viable for viticulture. The UK, for example, is now producing top-quality sparkling wine.

SA WINE INDUSTRY RESPONSE

She says certain French regions (and those in Switzerland and Austria) may need to rethink their appellations (the legally defined and protected geographical indications that identify the origin of wine grapes).

Rico Basson, MD of VinPro, says the industry has begun to focus on sustainability over the last decade. “We have the world-class Integrated Production of Wine scheme, a voluntary environmental sustainability scheme established by the South African wine industry in 1998, and comprehensive programmes such as Confronting Climate Change,” he says. “These include a strong focus on the reduction in carbon footprint, renewable energy (such as solar at farm and winery level) and droughtresistant plant material. This is further complemented with various training and education initiatives to ensure that a behavioural change is also made in precision farm management of aspects such as soil and water, improving efficiency levels of the value chain and management practices. A number of these initiatives are done in close collaboration with tertiary institutions and government departments such as GreenCape.”

“Global warming does not only mean less rain and higher temperatures, but it also means more extremes,” says Boets Nel, MD of De Krans Wines, located in Calitzdorp, which has been hit hard by the current drought. “We will be more prone to droughts and floods, too much rain/rot, hail (we already insure against hail damage) and possible spring frost.”

The South African wine industry is also a member of the International Organisation of Vine and Wine (OIV) and a founding member of the World Wine Trade Group. “These forums have a strong focus on trade and sustainability-related matters and continuously seek better alignment, traceability and global best practice,” says Basson.

“Where there is a more continental climate, there are impacts that we weren’t aware of, like early bud break, which makes vines susceptible to spring frosts,” Martin says. “Meso-climatic conditions (climate characteristics of a particular vineyard site), such as slope aspect, elevation and prevailing winds, become important in the greater scheme of things. This can mean that what was once the best aspect for making top-quality Riesling in the Mosel, for instance, might not be the best aspect anymore.”

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THE UK . . . IS NOW PRODUCING TOP-QUALITY SPARKLING WINE. . . ” In November 2016, the Institute for Grape and Wine Sciences (IGWS) released practical guidelines for managing grapevines during drought periods, which has been well received by industry.

Covering everything from the management of watering and irrigation to soil surfaces, fertilisers, canopy management, crop/ yield control, pruning, managing young vineyards and preharvest considerations, it lays out strategies for dealing with the drought.

VinPro and Winetech (Wine Industry Network for Expertise and Technology) have presented industry workshops on Efficient Irrigation in Periods of Water Scarcity, and some wine farms are making use of the Western Cape Department of Agriculture’s free web-based FruitLook database to determine vine stress levels for optimal water management.

Still, the response at farm level in certain regions has been drastic. De Krans, for example, has had no significant rain since March 2014. “To claim this is 100% due to climate change/global warming is maybe not a correct assumption, as we’ve had dry and wet cycles for hundreds of years. But the last serious drought like this was around 1915, according to records,” says Nel. Nel says that crops are expected to be down by at least 30 to 40% in the 2018 harvest. “We’ve had no irrigation water for two-thirds of our farm since March 2016 due to an empty Gamkapoort Dam (our main irrigation dam). If we do not get rain over the next month, it will result in permanent damage to some of the vines on this part of our farm. Some vines will die. I am not sure what percentage as I have never been in this situation in my lifetime, since I started farming at De Krans in 1982.”

GORDON INSTITUTE OF BUSINESS SCIENCE

To replant vineyards would cost more than R150 000 per hectare. To try to save the vines, De Krans did a severe suckering, removing roughly 40% of the green shoots (known as ‘suckering’) to reduce water usage.

“This will hopefully result in the vines having a better chance of survival until we have water again,” Nel says. “We might lose part of or the whole crop in some blocks, but we might save the vines. We have started removing more grapes and shoots again in some struggling vineyard blocks to try to keep them alive.

We also ensure that the soil is clean with absolutely no weeds that can compete with the vines for water, and use mulch to keep moisture in the soil. However, we only had 50mm of rain in 2017 and 100mm in 2016 in total (our usual annual rainfall is 250mm), with no significant rainfall in the Great Karoo, our most important catchment area, so I do not think all these measures will be enough.”

De Krans has also implemented long-term strategies to help withstand the effects of climate change. The focus is on Portuguese grape varietals, which can withstand higher temperatures and require less water. “This is what we specialise in, especially in the poorer soils,” Nel says. “We have a similar climate to the Douro valley in Portugal. We also only use droughtresistant rootstocks, which helps in a very dry year like 2017.”

According to Nel, the demand for Portuguese-style wines is increasing in South Africa, particularly in restaurants. In 2017, the De Krans Tritonia Red Blend (made only from Portuguese grape varieties) won the Best Non-Bordeaux Red Blend in South Africa at the Old Mutual Trophy Wine Show.

Martin adds that Chenin Blanc, Syrah, Pinotage and Cinsaut can also work in warmer conditions. She believes other cultivars need experimentation locally.

WHAT CLIMATE CHANGE MEANS FOR CONSUMERS

Nel says wine quality might be more variable from year to year, especially in Europe. Volumes are likely to be lower (2017 produced the lowest crop in Europe since the 1950s), driving prices up.

“In general, smaller yields in the right areas will mean that quality goes up, while a wine shortage will lead to a higher cost per bottle,” agrees Martin. “However, many factors influence a wine shortage. For example, economic factors in South Africa may have an impact on new vineyards not being planted. There are also other issues impacting the vintage of three of the world’s main wine producing countries. France, Italy and Spain had a bad year due to frost, flowering and hailstorms. Fires in the US will have an impact for the next few years.”

Should South African wine drinkers be stocking up now? “No, it’s not necessary at all,” says Nel. “This will be a gradual process and will most probably affect the lower-priced wines more than the higher-priced wines.”

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THE FOCUS IS ON PORTUGUESE GRAPE VARIETALS, WHICH CAN WITHSTAND HIGHER TEMPERATURES AND REQUIRE LESS WATER”

Minister Naledi Pandor

LOOSENING THE PURSE STRINGS Once a year, the South African science community descends upon the Council for Scientific and Industrial Research (CSIR) in Pretoria for a science and research extravaganza. But while the general tone of Science Forum South Africa is the same – “Look how cool our science is. Imagine what we could do if we had more money” – each year has its own as distinctive character.

Now in its third year, 2017 was all about the impact of science and showing that impact. Science and Technology Minister Naledi Pandor, in her opening address, said that one of the objectives of the forum was to “put science at the service of African society”. “Science is an integral part of the African growth and development agenda.”

That is what science ministers, heads of state, and the African Union keep saying, but the numbers show that the reticence to put money on the table continues to constrain home-grown research.

Research and development (R&D) expenditure has been linked to economic development and job creation, but political buy-in hinges on more than an abstract academic link. The golden number in research policy circles is GERD, the percentage of gross domestic product spent on R&D. And the rationale goes something like this: The more money a country – and its companies and universities – spends on R&D, the more competitive it becomes when compared to other countries that are not spending that money.

PHOTO: GETTY/GALLO IMAGES

GORDON INSTITUTE OF BUSINESS SCIENCE

Words Sarah Wild

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COUNTRIES WITHIN THE OECD, FOR EXAMPLE, ON AVERAGE SPEND ABOUT 2.4% OF THEIR SUBSTANTIALLY LARGER GDPs ON R&D” AFRICA’S LAGGING

South Africa, at Pandor’s behest, has been chasing a target of 1.5%, but reality continues to fall short of this aspirational target.

The country’s GERD has continued to inch up, reaching 0.8% in 2015-16, its highest level since 2009-10, but that is more due to the dramatic slowing of South Africa’s GDP growth, as opposed to a rush to invest in R&D. The country is part of the continental trend: other African countries are all below the 1% threshold, even though South Africa’s economy – and its R&D spend – is substantially larger than most of theirs. But it is still lagging the countries it competes with internationally. Countries within the Organisation for Economic Co-operation and Development, for example, on average spend about 2.4% of their substantially larger GDPs on R&D. The Department of Science and Technology, a major funder of research in South Africa, got R7.5 billion for the 2017-18 financial year. While the figure is constant in nominal terms, it has not kept up with inflation or with the country’s weak currency. In South Africa, government continues to spend more on R&D than business, continuing a trend of business’s reticence to invest. This makes it slightly more difficult for proponents of increasing R&D spend. Since it is government money going towards R&D, they must sell science and R&D as something that benefits people on the ground.

“We need to demonstrate the practical value of science, technology and innovation,” Sarah Anyang Agbor, the African Union commissioner for human resources, science and technology, said at the Science Forum opening. “We fail in our duty as government and policymakers if we do not deliver to the people who look up to us.”

SCIENCE AND POLITICS

But perhaps the greatest boost for R&D – and for the push to develop and grow the cohort of young scientists in the country and on the continent – was the presence of the country’s deputy president and African National Congress presidential hopeful Cyril Ramaphosa.

“We have a responsibility to develop a community of young people that believe there is a future for science in South Africa and the continent,” Ramaphosa told the opening

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plenary. “We should never let the constraints of poverty and underdevelopment extinguish the imagination of our people.”

The Science Forum “must rekindle hope in a world of unending possibilities, a world where imagination, innovation, and scientific discovery allows us to dream of a better, more secure, more equitable future”, he said. “But we must not just talk – there needs to be a lot more action on our part to allow them to work and play in this Fourth Industrial Revolution. It must be an inclusive revolution.” It’s hoped that the Fourth Industrial Revolution – in which the complexity of digital technologies fundamentally rewrites the way that business and the world work through the likes of artificial intelligence and machine learning – will allow developing countries, such as those on the African continent, to leapfrog from largely agrarian-based economies to more sophisticated and diversified ones.

BACK TO SCHOOL

But this is dependent on money – training students, performing research (particularly in the science where things tend to be expensive, especially when equipment and journals are bought in pounds, dollars and euros). And in an economic environment in which the South African government is the major funder of R&D, that hinges on convincing Treasury and politicians that science can fix problems.

Having taken this pro-science stance, explicitly backed by Ramaphosa, on the final day of the forum Pandor announced that her department would be offering members of parliament “science policy orientation courses”, with a view to expanding these courses to parliamentarians in other Southern African Development Community countries.

“As political support and appreciation of science is critical… We will be facilitating a science and technology policy orientation course for parliamentarians early in 2018,” she told the audience in Pretoria. While her explicit goal was to see “a significant rise in the number of parliamentarians participating in next year’s forum”, the science community is holding thumbs that science classes for MPs will do much more: rustle up political support for disciplines that are often seen as elite and detached from the lived reality of the majority of South Africans.

WE SHOULD NEVER LET THE CONSTRAINTS OF POVERTY AND UNDERDEVELOPMENT EXTINGUISH THE IMAGINATION OF OUR PEOPLE”

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SPACE IN AFRICA

“It’s not about satellites,” South African National Space Agency (SANSA) CEO Dr. Val Munsami told one session. “The satellites are a means to an end.” Ultimately, the goal of space technologies is to serve users’ needs, whether that is the space industry, government entities or people on the ground. “It’s about addressing human needs. That’s where you start.”

Africa is the second-largest continent; it comprises 55 countries, and about 40% of its citizens live in poverty even though it has 30% of the world’s mineral wealth. It also has poor infrastructure and a scarcity of scientific skills and technical equipment. That makes it difficult to survey what resources the continent has and to map development.

Therefore, space technologies and science have been held up as an answer to solve this difficulty: satellites can canvas areas faster and more effectively than an individual person in a bakkie, and the sensor payloads also mean that satellites can “see” things that the human eye can’t, from plant health to the extent of mineral deposits.

According to Munsami, users on the African continent – whether they are companies or government agencies – want free and open-source solutions, but they also want to be custodians of their data. “This is a problem,” Munsami says, as images are traditionally the property of the satellite owner.

South Africa, which has tentative plans to put up EO-Sat1 (Earth Observation satellite 1) in 2020, wants to make its satellite data available to other African countries. In 2010, when the National Space Strategy was published, it noted that “SA is increasingly reliant on space-based services and applications, particularly those in the domain of satellite Earth observations, communications and navigational positioning and timing”. It is even more reliant on these services and international satellites, as its citizens rely on them.

PHOTO: GETTY/GALLO IMAGES

EO-Sat1, which has a budget of about R500 million, will form part of the African Resource Management Constellation, a collection of Earth observation satellites launched by Kenya, Nigeria, Algeria and South Africa. Despite the four countries agreeing to the constellation as far back as 2009, it is still not operational. Munsami says that EO-Sat1 will still be included in that constellation once it is launched. “It’s not just for South Africa. It’s for Africa, and the data coming out of these satellites should be made available for Africa.”

The African Union (AU) also has big plans for space in Africa.

Last year, its heads of state adopted a space strategy to guide and consolidate the continent’s space agenda. The aim of this strategy, says the AU Commission’s Hambani Masheleni, is to “derive socioeconomic benefits that improve the lives of our people and create wealth” so that Africa can become part of the space race. “We need to be able to launch our own space programmes,” he said.

Currently Ghana and Egypt are vying to host the African Space Agency, with the possibility of other countries throwing their hats into the ring. South Africa has chosen not to bid to host the agency but is driving a space institution council to get countries

Dr. Val Munsami

which already have space agencies to work together on joint programmes.

At the moment, African countries are not major players in the space industry. That’s not to say we don’t have a footprint – the likes of South Africa, Nigeria, Algeria and Egypt, among others, have space programmes or intentions. But no African country is seriously considering starting a Mars colony or going to the Moon.

Take the CubeSat industry, for example. CubeSats, nanosatellites which can be as small as a handspan across, can be built and launched for as little as $200 000, which is substantially less than the millions of dollars required for traditional satellites.

“There’s been a huge expansion in CubeSat launches,” says the Department of Science and Technology’s Humbulani Mudau. As of 11 December 2017, 810 CubeSats had been launched, according to global nanosatellite database www.nanosats.eu. But Africa only accounts for 1% of those launches, compared to the United States and Europe which together are responsible for about 80% of them.

To grow their space footprint, African countries needed to respond to local needs, Mudau said. “National space policies and strategies are important. Countries have different requirements and means, and for us to participate effectively, we have to have our own policies so that we can contribute.”

SANSA’s Managing Director for Earth Observations Andiswa Mlisa notes: “If we are not strong at a national level, there is no way we can contribute at a regional level… And we have to remind ourselves why we are doing this”: to improve people’s lives and living conditions through space technology.

However, a major stumbling block to space in Africa is funding.

“You need political will,” Munsami said. And to get that, you need to demonstrate the socioeconomic benefits. That is the only way that governments will prioritise funding

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GORDON INSTITUTE OF BUSINESS SCIENCE

Jamal Sahib

THE MBA WHO DITCHED CORPORATE Words Cara Bouwer

Jamal Sahib is a hard man to categorise. If he talks like a business coach, it’s because he is one. He’s also an entrepreneur, a GIBS MBA graduate, a former corporate high-flyer, and something of an idealist.

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. . . I JUST WOKE UP ONE MORNING AND DIDN’T FEEL LIKE GOING TO WORK” Sahib will tell you that he also used to be a petrol head, but now he’s driven by a far more altruistic motive: to make a difference in South Africa by creating jobs, building businesses and sharing his knowledge with entrepreneurs.

Acumen sat down with Sahib the day after he arrived home from Action Coach Global’s intensive training course in Las Vegas.

This, he explains, represents the coaching leg of his multipronged business strategy and the venture he’s perhaps the most excited about, given its potential to make a real difference.

This attitude underpins why Sahib walked away from the CEO track and his role as Manager: Development and Delivery Capital Projects (Africa Region) for BHP Billiton spin-off South32, to pursue the life of a social entrepreneur.

Sahib’s inspiration for this radical life shift began at GIBS. A metallurgical engineer by profession, but a lifelong lover of learning, Sahib completed a PDBA at GIBS in 2010, followed by a PMD at UCT Graduate School of Business in 2014 before returning to GIBS to complete his MBA in 2016. It was during 2015 and 2016 that he began taking Professor Nick Binedell’s strategy elective. Sahib took on board Binedell’s call to action for the students to play a transformative role in society.

“He questioned why so many of us sitting in that lecture room with cushy corporate jobs and excellent business skills were not utilising these skills for the greater good and for job creation,” recalls Sahib. “This was the time when I was sitting in corporate, in a high-paying job, and I was tasked with restructuring and had to get rid of people. I sat there thinking there must be a different way to do this.”

So he left corporate and began starting companies.

THE PLUNGE

For a man with a young family, it was a big move. But it was the right one, he believes. “I was well past six digits. I was about 32, married with two kids and I just woke up one morning and didn’t feel like going to work.” He shared his vision with his wife, Sajida, and she backed him all the way.

With Sajida by his side as a co-owner and co-manager, Sahib drew on his years in corporate, his two-year stint as the owner of a Mochachos food franchise in 2005, and his strategic nous and hit the ground running. He opened six businesses in two years, financing them out of his home loan. “I took my pension and shares, sold everything and built my house cash and then geared my house and started to fund my own start-ups. Now they’re paying back.”

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A MIXED BAG

On paper, the ventures all seem completely unrelated. An Essential Hardware store in Midstream, where he lives. A Post Net, which Sajida runs. A construction business focusing on the rapidly growing Midstream and Copper Leaf developments.

A guest house in Alberton. The new Action Coaching leg. A consultancy, servicing the mining sector. And an 80% holding in a décor and picture business called Creative Canvas. “We started in April 2017 and we’re already running at a profit,” says Sahib.

The thread that draws this disparate group of businesses together is Sahib; the strategic mind at the helm. “I’m a good starter and I build a team quite quickly. But if I don’t have another challenge I get bored,” he admits. “So I get it almost to a state of stability and then I hand it over and watch.”

Sitting in the boardroom of his Midstream Essential Hardware franchise, Sahib highlights this business as a case in point. “I’ve built quite a nice team here,” he says, speaking highly of his manageress-in-training Lelani van der Bergh and store buyer Margaret ‘The Mother Hen’ Masipa. “I was in Vegas for two weeks and they just ran with it.”

Within just four months the store increased turnover by 22%, he says, on the back of better client service, fully stocked shelves, new innovations like gas delivery, a DIY call-out service for the estate and paint mixing.

The team, largely inherited from the previous owner, has responded to Sahib’s trust-based leadership style. “I empower people,” he says. “I really don’t believe that people come in every day to stuff up. They come in to make a difference if you treat them the way you would want to be treated.” Bearing in mind that talking about your boss is never an open-cards conversation, it must be said that an informal chat with some of the staff prompted comments like: “We have happier customers and better stock”, “he backs me 100%”, “he mentors me”, and “sometimes he has more trust in me than I do myself ”.

Just months into this venture and Sahib had already been asked to sit on the Essential national c ommittee, despite not having a stitch of hardware experience. “I had suppliers come and see me when I’d just started asking me what I knew about hardware.

Nothing. But I know about building teams, I know about starting a business, and that’s all I need to know. If I actually knew about hardware I’d be playing with hammers downstairs, and who would be running this place?”

SAHIB’S INSPIRATION FOR THIS RADICAL LIFE SHIFT BEGAN AT GIBS”

Jamal Sahib

A GUNG-HO APPROACH

This flies in the face of standard entrepreneurship advice to research and understand the industry you are entering. That attitude just causes paralysis, says Sahib. He advocates a more spirited approach. “I take a piece of paper and map out what I want to do. Then I outline what could possibly go wrong and look at what I can do to mitigate those. Then I go for it.”

GORDON INSTITUTE OF BUSINESS SCIENCE

It’s when he’s formulating a vision and strategising how to grow a business that Sahib is clearly in his element. So it’s hardly surprising that the nascent Action Coaching business fills him with such enthusiasm. His focus will be small- and medium-sized businesses to help them grow and create quality jobs. “This is the skill I can sell, which is the skill of being able to grow businesses and being able to help others.”

40% of his time to focus on the strategic side of running his businesses.

Nothing excites him more. “I get up every day flippin’ excited and bloody nervous because I don’t know where my day is going to go,” says Sahib, who relishes any opportunity to flex his complex problem-solving muscles. This is exactly the dynamic approach which Sahib and his GIBS MBA teammates, Elicia Demont, Thomas Kgokolo and Ewald Beukes, used when they won the prestigious 2016 Zurich Enterprise Challenge. It required breaking complex problems down into a few steps, “then unpacking and simplifying it”. It’s this ability he wants to share with others.

But it hardly seems like the stuff of MBAs – or does it? Well, admits Sahib, his MBA was always about personal development and the skills learnt can always be transferred to others. In fact, this is exactly what he’s looking to do with his new ‘Action Club’ coaching plan, which will bring 10 to 12 start-ups together, lead them through eight modules covering everything from finance to sales to marketing and give them the boost they need to grow to the next level; a mini General Management MBA, if you will.

The million-dollar question is, of course, whether this assortment of businesses is bringing in the sort of money needed to keep the 34 people already on his payroll employed and the businesses growing. He answers with a nod to his new acquisition: a Porsche 911 Carrera S – a car he’d aimed for because it was a dream of his late father. “If I had stayed in corporate I’d probably have been in the space to buy it at this time,” he says of this expensive dream purchase. “I’ve caught up [with where I was financially] in two years, and I’m happier and I’m creating jobs in a country that so urgently needs them.”

The coaching side of the business will, predicts Sahib, absorb about 60% of his time with hands-on coaching, leaving him with

So what’s his next goal? “I want to lecture at GIBS,” says Sahib, with a glint in his eye

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FUNDING TERRA INCOGNITA Photographs & Words Jacques Marais

The north-western corner of Namibia is a vast and empty land. Or so it seems, until you begin to look closer, and then – within the miniscule detail of this ancient desert – an absolute abundance of life will come to mirror the perceived desolation. But how do you fund an expedition there in the first place? Is there a business case?

Few people know that Wilfred Thesiger – acclaimed author of the epic travel journal Arabian Sands – also went by the moniker Mubarak bin London. It translates as the “Blessed One of London”, and was bestowed upon him during his two great crossings in the late 1940s – on foot and by camel – of the very desolate Arabian ‘Empty Quarter’.

“I went there to find peace in the hardship of desert travel and the company of desert peoples. I set myself a goal on these journeys, and, although the goal itself was unimportant, its attainment had to be worth every effort and sacrifice... No, it is not the goal but the way there that matters, and the harder the way the more worthwhile the journey.”

GORDON INSTITUTE OF BUSINESS SCIENCE

Wilfred Thesiger

Namibia certainly equals Arabia when it comes to remoteness, and on the first five days we literally only met other people once. This was on the first morning, when we passed through an itinerant Himba village, and spent an hour speaking to these incredible people leading a feral existence upon the plains beyond the Cunene River.

Then there are wild beasts, where I’d rate Damaraland and Kaokoland as way more dangerous when compared to the Arabian Peninsula. On the positive side, the chances of bumping into contemporary war-like tribes were highly unlikely.

Even the great Thesiger had to pay the bills and was forced into accepting funds from an oil company to pay some of his way. So how do you build a business case that gets you into the great unknown but doesn’t bankrupt you in the process?

Thesiger’s was not the first recorded traverse by a European of the bleak Rub’ al Khali; that honour falls to Bertram Thomas, guided by the Omani Sheikh, Salih bin Kalut al Rashidi al Kathiri in 1930-31.

Measured at over 1 000km from coast to coast, and covering a staggering 650 000km2, the route starts from the Gulf of Oman and finishes on the shores of Qatar.

PAY-AS-YOU-GO: FINANCING AN EXPEDITION

Thesiger, however, has been elevated to legendary status, thanks to his widely read tales of derring-do, and I spent numerous instances during our Dunlop Beyond the Desert Edge Expedition mulling over his writings. There were also numerous parallels between Thesiger and our own ‘Adventurer-in-Chief’, Peter van Kets.

Van Kets, me as the photo-journalist and a small media support team first tackled the extreme #BTDE expedition by fat-bike and MTB, riding a total distance of 1 170km from Angola to Swakopmund.

Even though we did not experience the 50ºC temperatures prevalent in Arabia’s desert, Peter van Kets nonetheless had to cope with searing heat on the bike. Our MTB ride came to a gruelling 1 170km, trumping the distance of the Empty Quarter crossing (but at least we had Isuzu 4x4s as back-up, rather than garrulous camels).

Dunlop Beyond the Desert Edge was the first in a series of Beyond Expeditions ventures to be undertaken by Peter van Kets and me over the next four years. Each mission will highlight specific regions under environmental threat, with us undertaking human-powered journeys never done before.

One of the key considerations when undertaking an expedition such as this is financing, and your best means of doing so is through corporate partners that benefit as much as you do from the exposure generated. In our case, Dunlop was a perfect fit; they needed their new Grand Trek tyre model tested in a real-world

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scenario, while simultaneously generating content to use in various media applications.

A relatively small investment for them meant a big boost for us, allowing us to involve other sponsors by promising them a guaranteed outcome. Isuzu was the perfect vehicle fit – except that we had to scramble to get the correct tyres from Japan in a few weeks.

A key aspect is to then find sub-sponsors that are able to dovetail with your main brands in areas that are non-competitive. Here we were able to involve Hi-Tec, Wilderness Safaris, Spar, Giant Bicycles, Holdfast, DripDrop and a number of other funders, which all contributed key kit required during our trip, thereby reducing our actual costs to a minimum.

Finally, it is imperative to have a valid charity angle in order to engage brands with potential CSI spend. Both Peter and I are official ambassadors for Children in the Wilderness and this was, therefore, a perfect fit.

A major part of Beyond the Desert Edge was therefore aimed at raising funds and awareness around this charity organisation, and promoting its focus on creating sustainable solutions for conservation in wilderness areas. (And this is where you too can pitch in...) Any donations from SA citizens will receive a taxdeductible 18A certificate: Account Name: Children in the Wilderness (Mkambati) Bank: Standard Bank Account Number: 023031735 Branch Code: 001255 Branch: Rivonia Swift code: SBZAZAJJ More information at www.childreninthewilderness.com

GETTING THE ‘MONEY SHOTS’

In order to add value for the sponsors of our expedition, it was necessary to capture unique imagery and video footage that would appeal to magazines and broadcasters, both locally and internationally. The moments below portray what truly stood out for me during our Dunlop Beyond the Desert Edge journey...

THE PREPARATION ~ THE JOURNEY TO SERRA CAFEMA

To get from Cape Town to the far-off reaches of the Cunene River valley, was a massive 50-hour adventure in itself. As we approached the Angolan border, the landscape rucked up in a series of dramatic ridges and outcrops. It was pretty much as if some ancient god had become angry with the creationist process, and dumped a final consignment of stones, rocks and geological rubble in a haphazard fashion. During this process, a dramatic and magnificent mountain desert took shape and, right now, it seemed like the kind of place that would kick your ass if you did not pay due attention. It was undeniably majestic, though, with loads of attitude, and the added cachet of being a personal terra incognita for both Peter van Kets and me.

ANIMAL ENCOUNTERS ~ PACHYDERM PLAINS

Our first face-to-face encounter with elephants is in the spectacular Hoanib River. We first see a cow and young calf browsing along the river bank, but while I’m shooting, a couple of giant desert bulls appear on the opposite bank. We’re slap bang in the centre of the herd and all we can really do is sit tight. Two of the desert-adapted elephants lumber right up to the Isuzus, sniffing inquisitively with their trunks held high. It is a truly incredible encounter with these gentle creatures, who soon lose interest to graze on the surrounding ana trees.

ALL SYSTEMS GO ~ CRANKING FROM CUNENE

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Our lunch stop on Day 1 provided an excellent counterpoint to the gruelling ride so far, and we perched on a towering granite outcrop, with infinite views across bristle-grass plains towards the Zebra Mountains. All around, an utterly vast and expansive desert shimmered beneath an evocative midday sun, with not a single sign of human civilisation in sight. Other than a short interaction with a local Himba family at a decrepit kraal on the edge of the Cunene, we had seen no people. And little did we know that over the following four days, it would be as if we were the only people left here on Planet Earth.

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DESERT PROPER ~ THE COAST OF SKULLS

The Atlantic roils a mere 46km downriver from Hoanib, but it is a long and dusty journey over powder-dust floodplains and via extensive coast dunes. The indistinct track winds ever closer to the tempestuous seas, passing through bleak and inhospitable terrain. Our first stop is the seal colony at Möwe Bay: it is massive, and there must be at least 5 000-10 000 seals. Dozens of black-backed jackals skulk about, intent on snatching baby seals. Even more impressive – but obviously way scarcer – are the brown hyenas that frequent these wilderness shores, preying like wind-whipped werewolves on the seal population.

CIVILISATION BECKONS ~ ROCKS AND HARD PLACES

The canyon bangs us into a narrow and craggy rock funnel, with sawtooth ridges and teetering rock towers all around. It is as if we’re entering a Middle-earth Mordor, with calciumencrusted seep fountains drooling from the cliff walls as we crank ever closer to the Huab River course. There are elephant tracks everywhere, not to mention giant lion spoor, so all our senses are on high alert as we bomb the bikes along this veritable rock garden MTB track. Our camp is the remote Save the Rhino Trust camp site on the edge of the Huab, and we pitch tents under a spreading and ancient acacia, with roots probably tapping dozens of metres into the giant water aquifers below the sand

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Follow our BeyondExpeditions Facebook page, or connect to our social media feed at www. petervankets.com or www.jacquesmarais.co.za

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RISK AND REWARD: WALKING THE DIRECTORS’ TIGHTROPE Words Gaye Crossley

Years of study, hard work and climbing the corporate ladder have paid off. You are at the top of your game with a cosy seat on the board. But being a director can soon turn into a nightmare if you are not aware of the fiduciary responsibilities and risks faced by those at the helm of the organisation.

Kenneth van Sweeden, from Auto & General Professional Liability-Business Insurance, says: “People don’t really understand the risks that go with being a director. Years ago there was not a lot of thought given to what was required from directors. But the Companies Act of 2008 has increased the risk of directors.”

The act goes into great detail about the duties and responsibilities of directors, but Hobson cites the following points as the most important for directors to consider:

Directors’ duties and responsibilities are codified in three primary papers. Philip Hobson, AIG’s Head of Liabilities and Financial Lines for Africa, explains: “When you look at directors’ duties you need to be aware of the requirements stated within the Companies Act as well as the King Code, which is considered best practice on how companies and directors should be conducting themselves.” In addition, the company’s Memorandum of Incorporation offers additional rules which directors are required to follow.

• •

The act defines directors as: “A member of the board of a company, as contemplated in section 66, or an alternate director of a company and includes any person occupying the position of a director or alternate director, by whatever name designated.”

The Companies Act seeks to balance the obligations of directors against the rights of shareholders, and ensure the efficient and responsible management of a company while maintaining high standards of corporate governance.

The duties and responsibilities of directors are clearly laid out by the act which states: “The business and affairs of a company must be managed by or under the direction of its board, which has the authority to exercise all of the powers and perform any of the functions of the company, except to the extent that this act or the company’s Memorandum of Incorporation provides otherwise.”

• •

Disclosing any conflict of interest.

Only using the position and information for the company’s benefit.

Disclosure of any material information.

The performance of duties in good faith, in the best interest of the company and with care, skill and diligence.

HOLDING DIRECTORS TO ACCOUNT

In addition to these behaviours, Hobson points out that “the act makes specific reference that directors can be held personally liable for the debt of the company and its obligations”. In fact, it goes so far as to state that directors are held to a higher standard in skill and care when it comes to the execution of their duties.

Hobson says: “The act states that you, as a director, cannot claim ignorance. When you take on a position of director, you need to exercise your duties with the knowledge that someone in your position ought to have, which goes beyond the skill set of that director.”

Directors can also be held responsible for the decisions made by fellow board members, which is why Van Sweeden urges directors to ensure that a record is kept of all their decisions. “If, in a board meeting, you personally object to something and you get outvoted, it is still viewed as a joint decision. If this later becomes a contentious issue, then the minutes of the board meeting should record that you objected to a decision. Directors need to protect themselves through an audit trail, which shows that they voiced an objection rather than merely being a silent objector.”

. . . DIRECTORS CAN BE HELD PERSONALLY LIABLE FOR THE DEBT OF THE COMPANY . . . ” Directors who fail to fulfil their obligations as per the act can face a number of sanctions, including civil suits from a range of company stakeholders including shareholders, employees, suppliers and regulators. “The act has also made it easier for class actions to take place and made it easier for plaintiffs to make use of contingency fees and all of those pressures I think are adding to the risk of being a director,” says Van Sweeden.

In recent years, thanks to global scandals like Enron, WorldCom, Parmalat and, more recently in South Africa, the Steinhoff implosion, the pressure brought to bear on companies by society as a whole is also noteworthy. “I think a lot of the corporate scandals from the early 2000s forced government to legislate tighter controls around what directors do, their ethics and the way they run their companies,” says Van Sweeden.

Apart from civil litigation, directors who fall foul of the law can also face criminal sanctions including fines, incarceration and the possibility of disqualification from being able to serve as a director in the future.

PREPARE FOR THE WORST

Although the risks directors face should not deter them from performing their roles to ensure the growth and sustained success of the business, increasingly they need to be fully aware of the laws that govern their performance and how they can insure themselves against the risks that they face.

PHOTO: GETTY/GALLO IMAGES

When it comes to insurance it is beholden to directors to ensure they are adequately covered. Directors and Officers (D&O) insurance is a niche risk cover that is offered specifically to directors.

Hobson notes that D&O policies should ideally offer high-level personal cover for defence, should directors need to defend themselves against any legal action brought against them. It should also cover any damages or settlements that are awarded to the plaintiff. However, Hobson explains, D&O cover will not cover a director for any activities that are illegal or criminal, such as fraud. The cover will also often not cover claims brought against directors in other jurisdictions, like the United States or the European Union. Hobson suggests that directors take out this critical insurance and ensure they are fully aware of what it does, and does not, cover. “We encourage directors to go through the D&O policy to have a better understanding of it. They need to take

Markus Jooste, CEO of Steinhoff

responsibility to ensure they know what is covered and what is not covered,” he says.

D&O insurance in South Africa is often taken out by the company on behalf of its directors. “The reason why companies in South Africa are covering this insurance is because people are not always willing to take on the directorship of a company unless they know there is D&O insurance in place. In order to attract talent and the right people the company may justify the purchase of the cover,” explains Hobson.

SUPPORTING THE BOARD

In addition to such cover, insurance companies will also give directors and companies additional support to keep up to date with regulations and best practices. Van Sweeden explains: “We try to meet with the board, and go through risk management steps we feel we can advise them on. So, for example, they need to make sure they are well informed – if there is a conflict of interest they ought to disclose that. We give those kinds of pointers.”

Underwriters also regularly share best practices and trends in D&O insurance-related matters to keep their insureds well informed, says Hobson.

The importance of understanding the law and getting the right cover is summed up well by Van Sweeden when he describes the directors’ dilemma: “They are always playing a balancing trick between short-term profits while ensuring the long-term sustainability of the business. And those two requirements are often not in sync, so directors are making tougher calls to balance those interests. A wrong decision will result in them being accused of negligence. So it is a tough a job.”

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A WRONG DECISION WILL RESULT IN THEM BEING ACCUSED OF NEGLIGENCE”

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POWER TO THE PEOPLE Words Eugene Yiga

The People’s Fund is giving corporations and the general public a chance to support local entrepreneurs.

and owned by everyday people that earn a royalty for usage of their asset by the entrepreneur, who essentially manages the asset on the crowd’s behalf.

According to a 2013 study commissioned by the World Bank, the global crowdfunding market could reach between $90 billion and $96 billion – roughly 1.8 times the size of the global venture capital industry – by the year 2025. The People’s Fund, a South African asset crowdfunding platform that began in July 2017, sees the potential for this to add value to local entrepreneurs.

“It’s hard for entrepreneurs to get funding for their businesses to keep going,” Jafta says. “We also think the primary people who run this economy – the middle class – deserve to be rewarded.

They value the ability of getting a higher than normal return with the assets, the ability to directly build the economy with excess money, and the ability to choose what sort of businesses they would like to see more of.”

“The objective of the business is to build a people-run economy,” says ‘Bootcamp General’ Luyanda Jafta. “People’s excess cashflow that would usually go onto the balance sheets of financial institutions instead goes to small businesses that grow and build the economy.”

Jafta started the company by partnering Paybook, his digital marketing agency, with Selebogo Molefe’s The Hookup Dinner (an entrepreneurial networking community with a presence in over a dozen countries) and Mzuzukile Soni’s BrownSense (a platform for black-owned businesses to find customers). He soon realised that their skill sets were a perfect match.

“South Africa is the stokvel capital of the world and simultaneously has high youth unemployment,” he says. “We felt that this excess capital could be used to help entrepreneurs who might not have access to digital audiences as well as capital but could start employing people given the opportunity. We also felt that average everyday South Africans want to play a meaningful role in the economy and get a return for it.”

BUILDING THE ECONOMY WITH EXCESS MONEY

GORDON INSTITUTE OF BUSINESS SCIENCE

The People’s Fund gives entrepreneurs a platform to crowdfund for assets they need in their businesses. These assets are bought

Even with only around a dozen people working on it and marketing done primarily through Facebook and Google, The People’s Fund has had around 300 contributors from across the country. It also raised over R250 000 in the first few months.

“We think this opportunity appeals to their desire to be part of a start-up without the need to leave their occupations and become an entrepreneur,” Jafta says. “That’s what we think the magic of our platform is: the ability for people to use their money to vote on what they would like to see in the world.”

FINDING THE APPEAL OF EACH BUSINESS

As a company that’s been bootstrapped from the beginning – it takes 10% of whatever is raised on the platform – The People’s Fund has yet to reach profitability. But it keeps expenses low, mostly by covering these from the three partner companies so that the platform can blossom unabated.

“One of the most common challenges is finding a model that works for any kind of business,” Jafta says. “In our earlier campaigns, we did crowdfunding the product-based way (where we would crowdfund and the audience would get a product at the

IT’S HARD FOR ENTREPRENEURS TO GET FUNDING FOR THEIR BUSINESSES TO KEEP GOING”

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end of the campaign). We found that our original model meant that people only contributed to campaigns that mattered to them.

But with the asset crowdfunding model, people can find the appeal of each business. More importantly, they can look at the possibility of return.”

Another constant challenge is dealing with the reliability of entrepreneurs. At the time of writing, the platform only has two active campaigns (with another four in the pipeline) due to the fact that a large number of applicants can’t complete basic tasks such as delivering documents for evaluation. That’s why The People’s Fund uses a vetting period to determine reliability; it’s the only way it can know it has a solid entrepreneur who can handle problems when things (inevitably) go haywire.

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. . . THE WINNINGS ARE ONLY GOING TO COME FROM BEING ABLE TO INCLUDE EVERYONE IN THE PROCESS”

“A good example is a campaign we have currently for Beehives for Native Nosi, a beekeeping company,” Jafta says. “You buy a beehive for R1 200 and the beehive is managed by Native Nosi, which extracts the honey and sells it. You as the beehive owner earn R36 per kilogram of honey sold.”

Another example is the campaign to own a Stimela Beer Tap. The brewing company, whose motto is “Passion, Legacy, Excellence”, was born out of a passion not only to reinvent simple and fullflavoured beer but to create a sense of community around the craft. It currently has six beer taps in and around Gauteng and is adding an additional ten, with the plan to start in Pretoria and Midrand before going nationwide long term.

“Each beer tap costs R37 000 in total and you purchase a portion of it for R1 000,” Jafta explains. “Each beer tap has four beer lines (dispensers). Three will be used for Stimela brands of beer and the fourth will be rented out to another craft beer. The 37 tap owners will earn R140 per keg sold from the tap. Put another way, each person earns R3.80 per keg of beer sold. You own the tap for four years and then it is passed onto Stimela Brewing Company after this period. Put another way, your earnings per keg acts as a buyback by Stimela Brewing Company.”

INCLUDING EVERYONE IN THE PROCESS

Even though crowdfunding seems to be old news in the developed world, the fact that it’s just getting started in South Africa means these are “exciting times” for Jafta. But he believes that the winnings are only going to come from being able to include everyone in the process.

“As a digital company with predominantly black people in it, we are privileged enough to see both sides of the market and how white and Indian people (who are the strongest buying digital market) and black and coloured people (who prefer markets and experiential buying) interact with our platform and how to marry these two markets into a single platform,” he says. “We also feel the traditional methods of crowdfunding are unsustainable, as they rely on goodwill. This presents the opportunity for people to participate at the profit level of a company without the headache of the legal work of equity crowdfunding.”

Looking ahead, the plan is to partner with corporates to enable The People’s Fund to execute on its campaigns in a way that the single platform can’t. It’s about being the linchpin between the public/private investment and the general public in a way that benefits everyone concerned.

“We want to democratise the access to high-yield vehicles such as start-ups to everyday people, and also the economic means of production such as capital to start-ups,” Jafta says. “Our platform is headed toward being a data-rich resource on what industry people want to be part of and can help long-term infrastructure planning and investment.”

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For more information: www.thepeople.co.za

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THE RISE OF GLOBAL CITIZENSHIP Words Eugene Yiga

Talented and wealthy individuals are pursuing opportunities to live, work and study around the world.

Have you seen the news lately? It seems as though not a day goes by without us being bombarded with updates about the rise of nationalism around an increasingly fragile world. But as countries under strain increase borders and barriers with visa restrictions and travel bans, many people are trapped in challenging situations that are far from ideal.

“Educated and financially independent people want to be part of a progressive global economy and not restricted by their citizenship of birth,” says Nigel Barnes, Managing Partner of Henley & Partners South Africa, a global leader in residence and citizenship planning. “And we’ve seen that corruption and civil war have brought out a new class of economic asylum seekers wanting to escape impossible domestic circumstances.”

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And yet some people struggle to pursue better opportunities abroad. Barnes cites the example of someone from the Middle East or Central Africa having limited options when it comes to mobility. But while none of us has control over where we happen to be born, people who aren’t as lucky as others are taking matters into their own hands.

“We’re born where we’re born and that becomes our citizenship,” he says. “Some people are more fortunate than others but, dependent upon their passport, certain individuals born in certain countries have a ceiling of opportunity in terms of how that particular citizenship might work for them in areas like travelling and business. All of these key components are making talented and wealthy individuals look at their options and their situation.”

THE QUALITY OF NATIONALITIES WORLDWIDE As a business, Henley & Partners helps individuals and families look at the options that exist around the world that can allow them to obtain another citizenship or residency and therefore take away the ceiling of opportunity. That assistance works in different ways: talking to clients in one-on-one consultations, running global citizenship seminars all around the world, and developing publications like the Quality of Nationality Index.

The ranking is based on internal factors (economic strength, human development, peace and stability) as well as external ones (travel freedom and settlement freedom). Germany, as in most things, is ranked first in the latest edition, with over two dozen other European countries following before the list reaches the United States (ranked 29th). South Africa is ranked 87th, two positions below Kazakhstan.

“We believe that the ability to invest into another jurisdiction and receive citizenship in return is a good idea,” Barnes says. “That’s why we’ve created and pioneered this business and this industry.

Some don’t believe it’s a good idea but the figures will tell us – and the interest we’re receiving from people around the world will tell us – that it’s something people are focused on.”

VISA-FREE TRAVEL AND SETTLEMENT FREEDOM

In the last two decades, Henley & Partners has worked closely with governments around the world in building and reengineering its citizenship and residency programmes. Barnes believes that it’s this extensive analysis and due diligence that gives the business its edge.

“It’s a big component and strong reason to work with us as a firm because we have that understanding,” he says. “And in terms of citizenship programmes that are available around the world, the European and Caribbean programmes are the ones that we believe have real credibility. They offer strong opportunities.”

The Caribbean, where the focus has been on clients looking for a better travel document, has historically driven the citizenshipby-investment business. But the spotlight is shifting to Europe, whose citizens enjoy visa-free travel to all the prime business and lifestyle destinations around the world as well as settlement freedom across member states.

“This is particularly interesting for our clients as a family planning option because your children will have the right to live, work or study anywhere in Europe,” says Dominic Volek, Head of Henley & Partners in South-East Asia. “For example, I have a

Malta, one of Lonely Planet’s ten best countries for 2018

Japanese client who lived in Hong Kong, has a Maltese passport, and is now living in the south of France. This is the access these passports give you.”

THE UNDERLYING CREDIBILITY OF THE INVESTMENT

And yet this access comes at a cost. While the South African government does allow dual citizenship (provided all applicants over 18 years old are granted permission to retain their South African citizenship before they acquire another one), citizenshipby-investment demands a level of capital that rules out most individuals. For example, Cyprus requires an investment of at least €2 million in real estate, Cypriot businesses, alternative investment funds or some combination of the three. For Malta, the main applicant’s contribution is €650 000, with additional amounts required for spouses, financially dependent children, and parents under the main applicant’s support.

“The reality is that a lot of people will pay a lot of money for these things,” says Chris Immelman, Managing Director of Pam Golding International. “But if you buy right, you’ll earn a recurring rental income. And if you think carefully about what you’re doing, use the right partners, and invest properly, that R35m should be R40m by the time you sell it.”

PHOTO: HENLEY & PARTNERS

For Immelman, research is key. It’s why he personally travels to each jurisdiction to stay abreast of new development trends. It’s part of the process to identify opportunities, avoid pitfalls, and change strategy as needed.

“I keep saying to people that I won’t be able to double your money in five years but I can promise that I’ve done my homework,” he says. “We have a mantra that we will not bring anything to South Africa as an investment opportunity without us personally going to investigate and make sure the underlying credibility of the investment stacks up.”

PART OF THE FINANCIAL PLANNING PROCESS A slightly less onerous alternative to citizenship is residency.

While the latter option pegs individuals to one country and

. . . CORRUPTION AND CIVIL WAR HAVE BROUGHT OUT A NEW CLASS OF ECONOMIC ASYLUM SEEKERS. . . ” doesn’t offer settlement flexibility, it can be a stepping stone to full citizenship. For example, the residency programme for Portugal (which was included with Malta as one of Lonely Planet’s 10 best countries for 2018) requires only 35 days in the country for the five-year period. Residents are then eligible to apply for full citizenship after six years.

“We’re helping wealthy and talented individuals for the reasons I talked about: greater mobility, greater security and opportunities for their children,” Barnes says. “And it all starts by sitting down with a blank sheet of paper and understanding people’s objectives, concerns and thoughts about opportunity.

Unbelievably, we do that for free and don’t start charging until you’ve decided on the programme to choose. Once we understand the profile and what they’re looking for, we can build the right path and implement the strategy.”

Overall, the citizenship-by-investment industry has experienced strong growth over the last few years. But one of its main challenges is a lack of regulation, much as was the case in the financial industry before the crash of 2008.

“I come from 25 years in the asset management industry so I dealt with wealth managers, private bankers and financial advisors for a long time,” Barnes says. “And a year or two ago, citizenship and residency planning wasn’t part of the conversation.

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But we’ve worked hard in southern Africa building relationships with trusted advisors. And we can see that what we do is now becoming a part of the financial planning process.”

HEDGING AGAINST POSSIBLE FUTURE RISKS

“We’re having a lot of conversations here in South Africa,” Barnes says “I don’t have to tell you the picture: you can understand the credit downgrades, you can understand the economic situation, and you can understand that individuals and families are concerned about higher education opportunities for their children. All of these components are putting strain on people.”

Indeed, one of the biggest drivers of growth in the citizenship-byinvestment industry is to open up education opportunities and leave a legacy for a family’s future generations. It’s also the reason Liza Manoussis, Managing Director of Global Education, has seen a 400% rise in interest for studying abroad.

“Everybody faces challenges getting into local universities,” she says. “And this has happened in the last few years with the #FeesMustFall campaign. Because of the quotas, there aren’t enough places at local universities so parents have to look outside of the country.”

HELPING STUDENTS FULFIL THEIR DREAMS

One of the main reasons students don’t take up places abroad is the high contribution they have to make as international students at international universities. Some might get scholarships, but these will often be for tuition only, leaving the student with a high bill for accommodation and living expenses. But being a European citizen would classify the applicant as a domestic student and could result in fees that are a fraction of the cost and sometimes even cheaper than studying in South Africa.

“I promote education, not emigration,” Manoussis says. “I always tell the students to bring their skills back to South Africa. I tell them that they are ahead of everybody else.”

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That’s why another big selling point is the opportunity to gain valuable work experience while studying. For example, some programmes in the UK will let students spend two years at

. . . SOUTH AFRICA IS RANKED 87TH, TWO POSITIONS BELOW KAZAKHSTAN . . . ”

The Castle of Paphos

university, a third year doing a full-time paid work placement, and then a fourth year completing the studies. Those that impress their employers could get an offer of a full-time job, with the company paying the tuition cost.

“We do not sell commodities; we lay the foundations for a student’s future,” Manoussis says. “We recognise that every student’s life is precious. And helping students fulfil their dreams is the most important cog in the global education wheel.”

IN THE BUSINESS OF CHANGING PEOPLE’S LIVES Global Education has spent over a decade educating overseas institutions on the South African matric, which all universities recognise (with the exception of Oxford, Cambridge, Imperial College London, and University College London). Indeed, there are opportunities available for students across a range of studies (including vocational trades like carpentry and bricklaying), programmes (Graduate, Master’s and PhD), as well as ages (the oldest student so far was 77).

“We assist in all aspects of the application process, including visas and accommodation,” Manoussis says. “We have free consultations where we sit with the student and parents to establish what’s required. Even students that have failed matric can go to an overseas university.”

This is possible because many institutions have what’s called a foundation or a pathway year where students can go on the campus, have one-on-ones with their lecturers, be in a classroom environment, and complete that year. They can then either join the first-year students in September or they can go into second year.

“After seventeen years of recruiting students into universities overseas, I can comfortably say that we’re the leaders in student recruitment in southern Africa with offices in Johannesburg, Cape Town, Durban and Harare,” Manoussis says. “What started out as a job has evolved into a successful career, which I’m passionate about. Together with the incredible team of counsellors in our offices, who have travelled extensively to all the universities we represent, we’re in the business of changing people’s lives and we love what we do.”

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Henley & Partners – www.henleyglobal.com Pam Golding International – www.pamgolding.co.za/international-property Global Education – www.globaleducation.co.za

PHOTO: HENLEY & PARTNERS

Barnes believes it’s important to promote the industry in a positive way. Specifically, these programmes aren’t about seeking tax havens for the rich to become richer than they already are.

Instead, it’s about smart financial planning and hedging against possible future risks. Indeed, most of the clients it deals with remain happy in and optimistic about South Africa. Having global citizenship and residency options is just Plan B in case things go wrong.

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Tehran from viewing deck, Milad Tower

DOING BUSINESS IN IRAN Words and Pictures Chris Gibbons

GORDON INSTITUTE OF BUSINESS SCIENCE

Iran is once again open for business, after years of stringent blockade and international sanctions. Be careful, though. With Donald Trump in the White House, that could all change at very short notice.

On board an extremely elderly Iran Air McDonnell Douglas MD-80, bound from Isfahan to Tehran last October, I could see problems all around me. Comfortably seated at an emergency exit, the exit door’s mechanism was rusted and exposed, and a hollow girder also appeared rusty. I was loath to excavate beneath the piles of used sweet wrappers that had been stuffed into this cavity. The elasticated, mesh magazine holder on the seat-back in front of me had simply collapsed and its remains hung limply down, trailing onto the floor.

Shortly after the plane, originally designed in the late 70s, took off from Isfahan, we were served an indescribably bad meal.

Neither I nor the two Iranian passengers seated alongside me, both of whom spoke perfect English, could hazard a guess as to the origins of two grey slices of protein. The one passenger, who had studied at Imperial College London, and completed his MBA

at Manchester Business School, just closed his eyes and wolfed it down. The other, educated at Tehran and Toronto universities, rolled her eyes and pushed the mess to one side. “There was a time when Iran Air used to win major international awards,” she confided.

Much earlier that day, I saw quite a few more very elderly passenger jets at Tehran’s Mehrabad Airport as we taxied out for the flight to Isfahan. Then I had been seated equally comfortably aboard a Mahan Air BAE RJ85, like the ones flown by South Africa’s Airlink. A not-so-young product of the mid-90s, it was spotlessly clean and apparently well-maintained, a stark contrast to the plane I would fly on later.

It seemed to me that these two flights were a microcosm of modern Iran’s dilemmas, giving sharp insight into Iran’s economy, including both opportunities and pitfalls.

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. . . INTERNATIONAL SANCTIONS HAVE BITTEN VERY HARD” good at running businesses. In Iran, a theocratic state, the hand of government is felt in many parts of the economy but there’s clearly a younger, less constrained, highly educated and entrepreneurial side to it, too. Sad to report, Iran has an excellent education system but it tops the international ‘brain-drain’ table.

Bright, well-trained young people are a major export and not one that earns much foreign currency.

Now, though, sanctions have been lifted. Following the 2015 nuclear inspection deal, Iran’s oil flows once again, assets held abroad have been unfrozen and foreign firms can invest in Iran’s

SANCTIONS

At the broadest level, international sanctions have bitten very hard. First put in place by the US in 1979 after the Islamic Revolution toppled the Shah, they have been tightened several times over the last 40 years. Most notably, a global consensus began to emerge in the mid-2000s that Iran’s nuclear programme was aimed at nuclear warheads, not nuclear power. Despite Iranian denials and backed by the UN Security Council, the vice was screwed firmly shut, locking Iran out of global financial systems, causing its economy to contract and unleashing inflation. Sales of Iranian oil plunged, the value of its currency, the rial, fell, foreign assets were frozen, the cost of basic goods went up and international insurers were prohibited by the Americans from insuring cargoes bound for Iran.

The result? Put simply, Tehran has been unable to buy spares to maintain its ageing fleet of airliners, including a replacement for something as simple as a derelict magazine holder on an old MD-80. It’s like that in many other parts of the economy, too, although a strong import-replacement culture, backed with plenty of ‘mend-and-make-do’ has emerged, just like South Africa during the years of apartheid isolation.

But it’s not just sanctions. Empty water bottles rolling around the floor, sweet wrappers pushed into cavities and not removed by cleaners and disgusting meals are the hallmarks of a stateowned airline. The contrast between Iran Air and privately owned Mahan Air could not have been greater. As we know all too well here in South Africa, governments are just not very

Iranian Deputy Press and Information Minister Hossein Entezami

Tehran street with mural featuring Ayatollahs Khomeini and Khamenei

The Majles, Tehra

BRIGHT, WELLTRAINED YOUNG PEOPLE ARE A MAJOR EXPORT AND NOT ONE THAT EARNS MUCH FOREIGN CURRENCY” oil and gas industry, as well as car manufacture, hotels and other sectors. Iran may even be permitted to rejoin the global financial system, although at the time of my visit, no international credit cards like VISA or Mastercard were accepted; it was “Cash only, please, and we’d prefer dollars or euros.”

Almost the first post-sanctions action by the Iranian government and Iran Air was to place huge orders for new aircraft with the big international manufacturers – 80 with Boeing and 100 with Airbus. Smaller private and semi-private Iranian airlines have also placed big orders, but it remains to be seen if they will be fulfilled. There are concerns about how the deals – worth as much as $40 billion – will be financed, as well as whether the US government will permit them to go through or not. (Chicagobased Boeing is an American company, while planes made by Europe’s Airbus contain more than 10% of American-made parts, which gives Washington a veto over both deals, if it should choose to use it.)

IRAN AND SOUTH AFRICA So where does South Africa come in? We have a long history with this country of 80 million people. It goes at least as far back as the deal cut between Smuts and Churchill during World War II to allow the first Pahlavi Shah, deposed by his son, to see out his days in exile in Johannesburg.

Apartheid-era South Africa had ties to that son, himself later overthrown in the Islamic Revolution, and our modern, ANC-led democracy bought oil from Iran until sanctions turned the tap off in the mid-2000s. South Africa’s construction companies did business in Iran for many years and Sasol had an interest in a big polymer company there until as late as 2013. South Africa’s MTN is a 49% shareholder in Iran’s second-largest mobile network provider, MTN Irancell.

Right now, according to IranPartner, an agency which according to its website, helps “small to large enterprises with their strategic entry into the Iranian market”, trade flowing from Iran to South Africa is worth US$43.2 million. Major exports include fertilisers, carpets, transformers, petroleum, coke and bitumen.

Flowing in the opposite direction is US$52.7 million’s worth of precious metals amalgams, dumpers, mixing machinery, seeds and flat-rolled steel.

IranPartner Senior Manager Sina Akbari Mistani highlights three possible growth areas. The first is tourism which “is a great opportunity in Iran,” he says.

“Iran has a wide range of natural, archaeological and religious attractions. The government is supporting the tourist industry since it believes tourism provides opportunities for sustained economic growth and job creation across the country. However, the country lacks the infrastructure, particularly hotels. Even the capital city of Tehran has a shortage of quality hotels. Of course, this shortage creates a great opportunity for foreign hotel operators,” says Mistani.

He adds that in recent years, “travelling abroad has been picking up in Iran…there is a demand for new destinations and South Africa could attract these Iranian tourists.”

A second area is mining. Iran has large mineral reserves, according to Mistani, and “given South Africa’s strong mining industry there are great opportunities for co-operation in this area.” He notes that there are also downstream opportunities in mining, particularly in steel and steel product manufacturing,

But right now, today, Iran could do the same thing – make the world reach a consensus against Trump,” said Deputy Press and Information Minister Hossein Entezami, speaking to Acumen in Tehran.

Entezami also made it clear that his country is looking for investment, although it remains locked out of the global financial system. According to Entezami, construction might be a possible avenue for South African business, but so too would tourism, in which this country is a world leader.

During a visit to the Majles – Iran’s Parliament – Tehran City MP Seyyed Farid Mousavi also pointed to tourism, but wanted to see it going both ways. Mousavi, who is also vice-president of the South Africa-Iran Friendship Group, made a call for a direct flight between Tehran and Johannesburg, although he conceded, after a question from Acumen, that the flight would have to come first to develop sufficient demand amongst tourists in both countries. He added that on the Iranian side, Mahan Air had expressed an interest in the route.

Tehran traffic

although he warns that European companies like the Danieli Group have already started making investments in the sector following the lifting of sanctions.

Finally, Mistani points to chemicals and petrochemicals, which he says “provide a huge potential for foreign businesses”. He’s doubtless aware of Sasol’s presence in Iran until quite recently, although the Johannesburg-based giant has released a statement saying it is not considering returning to Iran at present.

Mistani says “making investments in Iran is pretty easy as there are no restrictions for foreign investments”, although foreigners may not buy land. Company registration is “relatively straightforward” and takes 2-3 months to finalise all the administrative steps.

He does caution that it’s advisable to work with a local partner.

GORDON INSTITUTE OF BUSINESS SCIENCE

“As the country has been cut off from the global economy, the local business environment grew with its particular intricacies,” says Mistani with a certain delicate understatement.

Another source connected to Iran’s tourism industry, who preferred to remain anonymous, was less sanguine, at least about South Africans and westerners, in general, visiting Iran in large numbers.

“There’s no alcohol, therefore no nightlife, and no beaches,” the source told Acumen, referring to the Islamic Republic’s strict ban on booze, as well as beaches which are segregated according to gender. Women must remain covered at all times, whether on the beach or not, and men may not wear shorts.

Here again, though, the tension between – for want of a better phrase – the old and the new Iran is evident. Immediately after the Islamic Revolution, the dress code, particularly for women, was very strictly enforced. Also during the era of the last president, Mahmoud Ahmadinejad, described in western media as a “hardliner”. But now, under his successor, “reformer” Hassan Rouhani, Acumen observed a very wide range of headscarf fashions, ranging from a full chador, which leaves only the oval of the female face exposed and hands beneath the wrist, to relatively small pieces of coloured cloth pinned to the very back of the head, revealing 70%-80% of the head and hair. Short sleeves for men, previously forbidden, are now acceptable.

At macro level, the Tehran government is building a global consensus to back its position against US President Donald Trump. Trump has promised to tear up the nuclear accord, describing it as “the worst deal ever”. The Iranians are at pains to point out not only their compliance with the accord but their commitment to it, a position endorsed by the International Atomic Energy Agency and the key European signatories.

What makes Iran so difficult to comprehend, at least for the South African mind, is that both Ahmadinejad and Rouhani were chosen – if that’s the right word – by Iran’s Supreme Leader, Ayatollah Ali Khamenei, himself a former president. As Supreme Leader, Khamenei controls the 12-member Guardian Council, which in turn must approve any legislation passed by the Majles.

All Parliamentary and presidential candidates must be approved by the Guardian Council, while the Supreme Leader controls the armed forces, the judicial system and all key governmental institutions.

“One of Iran’s victories is that four years ago, the US could make the whole world come to a kind of consensus against Iran.

Again, put simply, that a “hardliner” like Ahmadinejad could be followed, after an intensely fought election campaign, by a

SEEKING FRIENDS

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“reformer” like Rouhani, means that Supreme Leader Khamenei himself must be aware of, and – maybe – struggling to balance the tensions at play in his nation.

ETIQUETTE

At a personal level and during an admittedly brief visit, the Iranians encountered by Acumen were friendly, welcoming and very interested in South Africa. The usual precautions about valuables and hotel rooms apply, although one South African journalist in our group left her cellphone on the back seat of a taxi. Half an hour later she was astonished to be called the hotel’s reception desk – the taxi driver had found the phone and driven across Tehran to bring it back.

Officials we spoke to were punctual, well briefed and well informed. We had been warned that Iranians are habitually late but found that not to be the case. Business cards are exchanged and men shake hands, although women do not, except with other women. Business attire seemed uniform: suits, well-shined shoes and formal shirts but no ties for men, and long-sleeved tunic and trousers with a headscarf for women. In government offices, all female employees wear a full, black chador. Conversation is polite and relatively formal and Acumen left with the opinion that trust would have to be earned, and not given easily or quickly.

IranPartner’s Sina Akbari Mistani suggests that “Iranian businesses put significant importance on face-to-face meetings, building relationships and doing business based on bilateral trust. Thus, you may find people making large deals without a single contract or you may find an Iranian partner acting against their contract with their foreign partner mainly because they do not believe in a piece of paper dictating their interactions.”

Language is also a critical factor. Whilst many Iranians speak good to excellent English, a large proportion, especially in government, speak only Farsi. Expect any official business with government to be conducted in Farsi, so you will need a translator.

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. . . THE TAXI DRIVER HAD FOUND THE PHONE AND DRIVEN ACROSS TEHRAN TO BRING IT BACK” Business structures can be very different from South Africa: many organisations are run by religious charities called bonyads. Reports in western news media also state that the Islamic Revolution Guards Council, often referred to as the “Revolutionary Guards”, is deeply involved in many areas of business. “They’re everywhere,” one source who declined to be named told Acumen in Tehran.

All IranPartner’s Mistani would say on this subject was that “based on the particular regulations that a foreign company needs to comply with, it is crucial to run due diligence on the partner to make sure the Iranian entity is not sanctioned.”

With President Trump itching to tear up the nuclear deal and reimpose sanctions, that’s wise advice. Iran is no different from anywhere else: if you’re venturing there on business, excellent homework is paramount.

Tehran’s climate is not unlike that of Johannesburg, with plenty of air pollution trapped in an inversion layer. With 7.5 million people, it is much bigger and the traffic is dreadful, especially in the late afternoon. We regularly experienced trips of two hours or more as we attempted to cross the city. Do not think of attempting to drive yourself – the rules of the road are idiosyncratic, to say the least – and Iran has the highest road death toll in the world.

On arrival at Imam Khomeini International Airport, expect long delays – it took your correspondent nearly two hours to clear passport control – and yes, South Africans do need a visa.

Iran’s cuisine is superb with plenty of grilled meat, flatbreads and rice. Sauces are lightly spiced, and more often with fruit rather than heavy doses of chilli.

One final caution: most toilets in Iran are of the ‘squat’ variety, rather than SA’s ‘sit-upon’ kind.

You may need to ask yourself if this could be a problem? (And what then? Practise, practise and more practise is the only way!) Toilet paper is not always present so you may need to carry some with you, if that’s your preference. In almost all instances the facilities Acumen encountered were spotlessly clean

Traditional baker at work, Tehran

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Chris Gibbons travelled to Iran as a guest of the Iranian Government.

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THE TOP EIGHT THINGS TO SEE AND DO IN IRAN Words and Pictures Chris Gibbons

DARBAND Part of Tehran’s northern suburbs, a narrow road winds up the hillside past numerous, enticing restaurants.

Tourists and locals eat side by side, al fresco if the weather permits.

HANI PARSEH self-service restaurant. Thronged with ordinary

MILAD TOWER The 6th highest communications tower in the

Iranians every lunchtime, there is a massive choice of typically delicious Iranian food at very reasonable prices. If you want to scratch the surface of Persian cuisine with its wonderful blend of fruit, particularly pomegranate, and spices, this is the place to start.

world, the view from observation desk gives a real idea of just how big Iran’s capital city is. Beware – there’s also a fair chance that you’ll encounter its legendary air pollution, which can be something of a view spoiler.

PHOTOS: B.O'KANE / ALAMY STOCK PHOTO & CHRIS GIBBONS

GORDON INSTITUTE OF BUSINESS SCIENCE

Once the business is done, take some time to look around Iran’s capital, Tehran, and, if you have time, one of its most beautiful cities, Isfahan.

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TABIAT BRIDGE Built to link two verdant parks split by an

unsightly motorway, this award-winning construction is where many Tehranis go for a quiet walk and an ice-cream or a quick selfie.

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Officially called the MUSEUM-GARDEN OF ANTI-ARROGANCE, it’s perhaps better known as the former US Embassy in Tehran. This is where the 444-day hostage drama played out in 1979-80 and offers a fascinating glimpse of the inner workings of a CIA ‘Station’.

ISFAHAN IS A 50-MINUTE FLIGHT FROM TEHRAN – EASY TO GET THERE AND BACK IN ONE DAY. WHILE THERE, YOU NEED TO SEE:

THE MAYDAN-E IMAM. This is the city’s immense and very beautiful central square.

Make sure you’re there at sunset.

Just off the Maydan-e Imam are three ‘must visits’: two exquisitely decorated mosques, the MASJED-E IMAM and the MASJED-E SHEIKH LOTFALLAH, and the ALI QAPU PALACE, with its fascinating 6th floor ‘Music Room’.

For lunch, and an excellent selection of Iranian dishes like lamb shank machicheh, try the SHAHRZAD RESTAURANT. It’s very popular with locals and tourists alike, so make sure you book in advance

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NB: There’s way, way more to see and do in Iran. This list represents just a personal sampling of what’s possible during or immediately after a business trip .

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NEW WORDS, OLD TALE Words Arthur Goldstuck

A whirlwind of investment is swirling around fintech start-ups in South Africa, as innovation in banking and payments changes the rules of the financial game.

A new story, laced with cliffhangers, drama and intrigue, is being written across the pages of the world’s financial newspapers. The plot does not include gangsters, espionage or murder – yet – but it has its readers riveted.

The story begins with the well-worn premise of how technology is changing the world of financial services. But it quickly hurtles into the heady world of start-ups that are rewriting the rules of this nascent industry called fintech. It then charges across the balance sheets of venture capital firms transfixed by unprecedented opportunity to return untold multiples on investments.

GORDON INSTITUTE OF BUSINESS SCIENCE

Depending who does the counting, anywhere from $17 billion to $25 billion in venture capital went to fintech firms globally in 2016. According to CB Insights, 2017 was on track to become the biggest year ever in fintech VC.

LOCAL IS LEKKER!

In South Africa, start-ups seem to pick up million-rand cheques on the basis of little more than PowerPoint presentations.

Relatively young businesses that have already proven themselves are pulling in hundreds of millions.

Three recent examples encapsulate the scope of fintech and the scale of investment:

1. Prodigy Finance, a company started by a South African in the United Kingdom before being brought back to South Africa, offers loans to postgraduate students accepted into leading universities around the world.

This “borderless credit” provider has accumulated funding of R4.2 billion, with R3.19 billion raised in 2017. One of the participants in the latest funding round, AlphaCode, the fintech investment arm of Rand Merchant Bank, is becoming a familiar brand behind much of the fintech VC in South Africa. It recently hosted an event where R1 million was handed to each of four winners of a fintech competition for black-owned start-ups.

2. Luno, a trading platform for cryptocurrencies like Bitcoin and Ethereum, announced a R120-million funding round, led by UK-based Balderton Capital, and also including AlphaCode. An earlier R60-million investment came from Naspers.

3. Synthesis Software Technologies, an established fintech company that approaches innovation like a start-up, was acquired by JSE-listed Capital Appreciation for R132.1 million. While it provides software development and integration services to financial

institutions like Investec, Absa, Standard Bank, Capitec and Nedbank, it has also become a leading player in the rapidly evolving cloud computing space. It recently became the first company in Africa and the Middle East to be named an Advanced Partner by Amazon Web Services (AWS), the fastest growing division of Amazon.

The last is the most intriguing of the three, given that its value and potential are not grounded in a specific trend or marketplace. With the cloud as backdrop, its innovation plays out in the fields of financial channels, blockchain, big data and artificial intelligence.

“We constantly review current technology trends and formulate products and solutions based on common industry needs using current and available technologies,” says Synthesis MD Michael Shapiro. “This is where our focus on cloud technologies was incubated and formulated five years ago.”

The combination of a 20-year track record and a fresh, start-up-like approach to cloud computing, has given Synthesis a head start in an environment where the starting point is often not clear. It assists financial institutions in “becoming cloud-ready, to execute mass migrations, to harness the benefits of big data analytics and to extract the cost savings

fintech

and regulatory benefits of the cloud platforms,” says Shapiro.

“In the world of fintech, technical innovation and business innovation are often interchangeable – and we have to unlock this value. We translate the institution’s business strategy into solutions with real, measurable impact.”

Shapiro points to a fascinating twist in the plot, however: financial services companies that plan to disrupt themselves with their own, internal fintech start-ups.

“Cloud platforms such as AWS give new start-ups the opportunity to disrupt. That is why our customer base of established players is seriously evaluating and using the same technologies to up their game and provide better banking, insurance and investment solutions to the market.”

WHO DISRUPTS THE DISRUPTERS?

A striking example is First National Bank (FNB) in November awarding R10.5 million to employees in a contest to come up with innovations that would create radical disruption in the financial industry. The programme has been running since 2004, and has awarded a total of R54.5 million.

In October, FNB had been named Most Innovative African Bank at the 2017 African FinTech Awards, for the second year in a row, as well as being named Master Innovator in the 2017 Accenture Innovation Awards.

OUR AIM IS TO DISRUPT RATHER THAN BE DISRUPTED”

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. . . VENTURE CAPITAL FIRMS TRANSFIXED BY UNPRECEDENTED OPPORTUNITY TO RETURN UNTOLD MULTIPLES ON INVESTMENTS” FNB Business CIO Peter Alkema puts the strategy simply: “Our aim is to disrupt rather than be disrupted. A new way of thinking is needed to demystify banking within the financial services industry.

Fintech helps grow, educate and enrich the market. We find that businesses are incorporating innovation in their business models which encourages us to think and act differently. This radical disruption is necessary for cross-industry collaboration and is crucial for future value generation.”

However, investing in a fintech start-up is a very different process from incubating an idea in-house. For one thing, the team behind a start-up hasn’t been recruited by the parent company. Yet, it has to fit in with the ethos and goals of the investor.

“The cultural fit of the team is critical,” says Bradley Sacks, joint CEO of Capital Appreciation. “A large component of any fintech company is its people, their entrepreneurial drive, their innovation and their understanding of the market opportunity their product or solution is trying to address. Ideological differences, be it in terms of architecture or otherwise, can be quite disruptive, and it is important to understand this as part of a due diligence process.”

group. Our analysis does not only consider the direct impact within the quarter or half-year results, but also a medium-term horizon. Often the impact of innovative solutions is not visible until the solutions have reached critical mass adoption.”

This is probably the biggest conundrum in fintech investments: how to assess the potential of a solution before it has taken off, and before every other investor lines up to fund this potential. It is into this gap that many VC funding rounds have plunged and many promising fairy tales have ended in financial tragedy.

In many cases, the flaw in the story has been the belief in a good idea rather than a good business. But there is a formula to differentiate the two.

The bottom line, however, is the bottom line.

“The distinction between a good opportunity and a good idea is the viable economic application of the good idea,” says Sacks. “If the idea does not have a viable economic business case, it will never evolve into a real opportunity.

Where clients derive value from an idea or application, they are happy to compensate us. Value to a client arises from the more traditional sources such as lower costs or increased revenue, but equally can arise from user experience, customer satisfaction and retention and brand awareness.”

“The financial returns of any investment are obviously important, and we place a great deal of emphasis on this, including the benefit the acquisition may afford other initiatives we already have in the

Sacks and Alkema sound like they are reading from the same script. But that is probably because most good new fintech stories still depend on the same tried-andtested plots

MONEY TALKS

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THE NEW CURVEBALLS SHAPING BUSINESS Words Dion Chang

When we look back, 2017 will be remembered as a watershed year for corporate governance. The perennial focus on technological disruption, was itself disrupted when complex sociocultural issues came to the fore. So what are the “new rules of business” to which companies will be forced to adhere, whether they like it or not?

Back in 2013, a Havas Global “Prosumer” Report (Communities and Citizenship) revealed that 68% of its global respondents believed that businesses bore as much responsibility as governments for driving positive social change. The same survey also revealed that 55% of respondents thought corporations were better positioned than governments to combat climate change, while 61% wanted their favourite brands to play a bigger role in their local communities. The survey involved over 10 000 respondents across 31 countries, which illustrated a fast-shifting mood in the global consumer mindset (and yes, South Africa was part of the survey).

In the report, David Jones, CEO of Havas observed that “We’re entering the age of damage, where social media has empowered people to hold businesses accountable. As corporations have grown in size and power, people are expecting more from them – to drive positive change and to work toward the greater good rather than acting solely on the basis of their own agendas”.

That bit of sage advice apparently fell on deaf ears: corporate ears in particular. Brands in the retail space took heed and have learnt to kowtow to their real masters – their digitally armed customers rather than their shareholders. In the aftermath of numerous corporate scandals last year, 2018 will see corporate business desperately cleaning house, as well as taking a crash course in the “business of being ‘Woke’.”

GORDON INSTITUTE OF BUSINESS SCIENCE

DEFINITION OF ‘WOKE’ – URBAN DICTIONARY Being ‘Woke’ means being aware. Knowing what’s going on in the community, specifically in relation to racism and social injustice.

It’s going to be an uncomfortable year for businesses that are used to a blinkered focus on the bottom line, keeping their shareholders happy and without too much concern that they might be driving roughshod over their customers, or staff. A tipping point has been reached, and none too soon.

2017 was bookended with Donald Trump becoming president, and Robert Mugabe being removed from power: two pivotal and

historic events that illustrate seismic change in the world. But what happened in between these events is what will determine the trajectory for the year ahead.

Here are three fuses that were lit in 2017, which will change business behaviour and governance irrecoverably.

1. CORPORATE MISCONDUCT

At the close of 2017, the bombshell that was the Steinhoff implosion was added to a growing list of dodgy dealings within the corporate world, which now include: KPMG, McKinsey and Naspers. In all cases, the CEOs apologised for their indiscretions, but as many pointed out, the apologies were less about a show of contrition and rather penitence for their wrongdoings exposed.

South Africans have had their fill of political corruption, and to now add corporate corruption into their already depressed psyche, is going to spur a backlash. However, it’s easier for consumers to punish a retail brand for inappropriate behaviour or not upholding their values: they simply vote with their wallets, which is why consumer brands understand, very clearly, what the impact of ‘Woke’ customers has on their bottom line. It’s more difficult to make the same impact in the corporate world. More difficult, but not impossible. Today brand reputation, and therefore brand association, is becoming more important, so while consumer sentiment might take longer to create change, the businessto-business relationship hits where it hurts most. Look how fast KPMG clients severed ties with the auditing firm in the wake of their scandal. There must be a flurry of hurried and hushed conversations taking place in C-Suites at the moment: and if not, there should be.

2. SEXUAL MISCONDUCT

David Jones could not have dreamt how prophetic his words were about social media, when one little hashtag (#MeToo),

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not only spread virally but also leapt from the entertainment industry into the political arena and then into the business world. While sexual misconduct is the driving force behind the hashtag, it brings with it parallel conversations that have been bubbling to the surface: patriarchy and white monopoly capital. Some would argue that the latter is the spawn of the highly controversial, but nonetheless successful, PR campaign by Bell Pottinger (another name to add to the list above), but it would not have inflamed tensions if there were not a grain of truth behind it. Aggressive male behaviour, whether towards women or in business, has been exposed and confronted, and what we’ve witnessed in 2017, is just the bellwether of change for entrenched, patriarchal systems.

3. ISSUES OF IDENTITY

It’s no coincidence that the spelling of woman or women is increasingly being spelt “womxn” or “womyn” by female activists. The re-spelling is a statement that women no longer wish to be defined by men because, they argue, that in our patriarchal societies men are the ‘norm’ and women a mere sub-category of that ‘norm’. This neo-feminist movement is just one of three identity issues that erupted last year: the other two being issues around race and cultural identity.

Brands and businesses were caught in the crossfire of these socio-political undercurrents (think racial spats at H&M, Spur and Dove’s hapless journey into the minefield of skin tones), and it’s only going to get more complicated. The issue of gender, specifically, is becoming very complex.

When you add the emerging, and very nuanced, issues of gender fluidity, and the well of complexity just becomes deeper. The first signs are already here.

Last year, the UK banned any advertising using traditional gender stereotypes (eg: girls should no longer be portrayed as aspiring ballerinas, nor should boys be portrayed as wanting to be firemen).

The ripple effect was immediate.

London’s John Lewis department store announced that its own children’s clothes would no longer be divided by gender on the shop floor, but also that they would remove binary labels on the clothes themselves, so the clothing labels now read “girls and boys” or “boys and girls”.

GORDON INSTITUTE OF BUSINESS SCIENCE

NEW WORDS, NEW WORLDS

You might think that we’re headed for an overtly politically correct era, but I disagree. A new world order (in every sense of the phrase) is finally crystalising. It’s not so much political correctness, but outdated thinking and systems that need to be reviewed, or simply thrown out.

Take the issue of gender fluidity. Already 52% of American Gen Zs do not identify as heterosexual or cisgender (someone whose personal identity and gender corresponds with their birth sex), which has exposed a complex world of gender and sexual orientation subsects.

Gen Z is now coming of age. They’re leaving school and are, therefore, your new entry-level workforce. They’re also your new

THE ISSUE OF GENDER, SPECIFICALLY, IS BECOMING VERY COMPLEX” customer (who has been subtly steering the household budget for years – ask any parent who decides on the family’s meal plan, holiday destination and tech purchases).

‘Woke’ issues matter to them more than you can imagine. If you thought Millennials were a handful, brace yourself for this generation. They are a post 9/11 and post Great Recession generation, the recipients of a damaged earth, and the first generation of true digital natives – it’s a potent combination that has given them a unique perspective on the world as it is right now, as well as guidelines on what systems have failed and which mistakes should never be repeated. They demand transparency, and even if it’s not proffered, they will sniff it out like a bloodhound.

The Gen Z mindset validates the Havas Prosumer Report. It’s almost as if the report was written with them in mind. Take this excerpt as an example: Transparency is NOT optional: There was a time when people bought products without really giving thought to who or what was behind the brand. This era is long gone. 70% of Prosumers actively seek out information on the companies that provide the products and services they buy.

Prosumers have continuously higher expectations of companies and brands. And since it’s easier than ever today to determine who has been acting “good” or “bad”, companies that fail to meet prosumers’ expectations will pay the price. Two-thirds of Prosumers globally avoid buying from companies deemed to have a negative social or environmental impact. These consumers are actually making purchase decisions based on those values. Eighty percent of Prosumers agree that a clear set of values can help a company be more profitable.

It’s clear from what transpired in 2017 that most corporate businesses do not have a clear set of values, but rather distasteful values that have been exposed. Businesses need to clean house, urgently, and then still consider these new curveballs which will become crucial to a company or brand’s survival in years to come.

But it’s not only about catching curveballs and embracing the new rules of business but also being fully transparent. Transparency makes business uncomfortable. It shouldn’t, but it does, which is telling. It’s becoming the main currency that secures positive brand reputation. We’re soon going to reach a point where companies actually compete on transparency, in a bid to prove to their customers or clients that they have nothing to hide, but everything to boast about.

That day cannot come soon enough

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MSC CRUISES AD

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Nyhavn

Den Blå Planet Aquarium

Han, the little mermaid's brother

MARITIME MOODS Words Caroline Hurry

You don’t need sea legs to enjoy some of Copenhagen’s nautical offerings.

GORDON INSTITUTE OF BUSINESS SCIENCE

Startling newsflash from the deep: fish communicate by farting. Like some politicians, the humble herring ‒ Denmark’s national dish ‒ emits highfrequency sound-bursts from its anus, accompanied by streams of bubbles.

Marine biologists believe expelling torrents of liquid up to 22 kilohertz in volume ‒ likely more enjoyable for the herring than it is for, say, Helsinki honeymooners backpacking in Delhi ‒ ­ helps the fish form protective nocturnal shoals.

Here’s another fishy factoid: despite the Hollywood hype, piranha only devour dead flesh. Should you fall into the Amazon River, a keeper at Den Blå Planet, northern Europe’s largest aquarium, advises flailing about to let these aquatic scavengers know you’re alive. Of course, all that splashing might attract an alligator, so why take a chance? You can watch piranhas and alligators being fed in the South American arm of this starfish-shaped, water-flanked building. You’ll find tropical fish and a pair of orphaned sea otters in the Great Barrier Reef and Arctic sections, while rays, moray eels, and hammerheads swimming overhead, provide an undersea sensation.

Den Blå Planet, within easy walking distance of Kastrup Metro Station, also offers a view of the magnificent 16km Øresund bridge linking Denmark and Sweden, which includes a train tunnel and the artificial Peberholm island.

Using our Copenhagen card providing access to 79 attractions and all public transport, we took the train to Helsingør to visit the Danish National Maritime Museum, which traces the seafaring history of the Danes from the Vikings to the Maersk shipping empire.

Buried full fathom five − or some 10 metres − underground, you descend a giant ramp into the converted dry dock below water level, where uneven floors, recorded seagull sounds, eccentrically angled display cases, cargo, video projections and salty exhibitions imbue the interior with all the sensations of a ship at sea. It’s a pervasive sensory experience, an offbeat nautical world full of maritime adventure.

Next door, the Kulturværftet centre offers modern architecture, restaurants, and Han ‒ the Little Mermaid’s male

counterpart ‒ ­ perched on a rock at the end of the harbour. Unveiled in 2012, Han’s stainless steel exterior mirrors the surroundings and his eyes are said to blink for a split second every hour. We didn’t hang around to test the theory but headed back for central Copenhagen, to stroll the boat-lined canals of Nyhavn (New Harbour) and admire views of Christiansborg Palace and the 60-metre spire of Børsen’s four twisting dragon tails, before lunching on smørrebrød at Café Europa opposite the Stork Fountain in Amagertorv.

The area is a magnet for tourists and buskers, one famous regular being Yul Anderson, a Californian-born, self-taught pianist who has been wowing European crowds since 1983.

What a treat to find him hitting the honky-tonk on his baby grand for all to enjoy along Strøget, Scandinavia’s longest pedestrian street, but that’s Copenhagen for you: a surprise around every corner.

Caroline Hurry flew to Copenhagen, courtesy of British Airways.

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ROOM WITH A BOO! Words Caroline Hurry

Kronborg, Egeskov and Frederiksborg in Denmark are strong King-of-the-Castle contenders, but Dragsholm in the northwest of Zealand has the most ghoulish guests.

Had I known we’d spend a night at a haunted castle, I might have brought some holy water to sprinkle about, but it was my husband’s idea of a wedding anniversary surprise. Rather a nice one, as Dragsholm’s uneven walls house a Michelin-starred restaurant featuring tasty titbits by former Noma chef, Claus Henriksen, and fine wines from the cellar.

First built in 1215, Dragsholm served as a jail between 1536 and 1664, incarcerating any aristocrat who insulted the king. For 10 years, James Hepburn, Scotland’s 4th Earl of Bothwell and third husband of Mary Queen of Scots, was chained here to a pillar ‒ still on display ‒ until his death aged 44 on April 4, 1578. Hepburn is just one of 100 ghosts said to haunt Dragsholm, now a boutique hotel in Hørve.

Some claim to have glimpsed Hepburn’s ghostly funeral carriage conveying his coffin to the nearby Fårevejle church that displayed his mummified remains until recently, but I witnessed no such

Dragsholm castle

thing. Neither did I see the famous White Lady wandering the corridors, said to be the ghost of Celestine de Bayonne Guildenstern impregnated by a stable groom. Her father had promised her to a nobleman and, on discovering her condition, drugged her at a celebratory dinner and had her bricked up inside the castle wall. Her skeleton in a dirty white dress ‒ jaw frozen in a petrified scream ‒ was uncovered during 1910 structural renovations and remains in situ. That I did see, and the horror haunts me still!

In the wee hours, I awoke with a start.

Something ‒ or someone ‒ kept switching on the bathroom light. It would shine for minutes, then go dark. My husband snored on despite my prodding, so I got up to gaze across the moonlit garden and fields, listening for clanking chains or deathly moans. Nada. (Ikkenoget, in the vernacular.) Spousal groans came the next morning on inspection of the DKK7 000 (R14 000) bill for a one-night stay with dinner and breakfast.

Inside Frederiksborg castle

Comparable to Egeskov in Funen, Frederiksborg in Hillerød is Europe’s bestpreserved moated castle. Constructed in the 1600s on the orders of King Christian IV on an island surrounded by a lake, Frederiksborg offers cobbled walkways, Baroque gardens and a grand chapel, still used for royal weddings. A three-floor museum showcases historical portraits, furniture and the first Danish Bible.

Then it was on to Helsingør, 48km north of Copenhagen, to see Kronborg, Hamlet’s 16th-century castle, famous for its Shakespearian productions staged in the courtyard. Playing Hamlet and Ophelia here kickstarted the affair between Laurence Olivier and Vivien Leigh, although I wouldn’t describe the place as ‘romantic’. Even though the cannons are now just ornamental, its austere, wind-blasted looming countenance seems to warn off Swedish, or any, potential invaders.

To flee, or not to flee. That is the question

Kronborg Hamlet's Castle

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THE FINER THINGS Words Cheska Stark

GORDON INSTITUTE OF BUSINESS SCIENCE

HIS CHECKLIST 1.

Work bag, R3 580, Ted Baker This work bag really catches the eye because of its contrasting textures, mixing thick, suit-like fabric with leather trims.

2.

Cuffed pants, R499, Cotton On These cuffed, drop-crotch pants will quickly become your favourite go-to casual wear.

3.

Arthur Jack Dax Boot, R1 199, Tread+Miller This pair of shoes is a winter essential: able to handle multiple contexts while maintaining their style, a desert-boot silhouette is foolproof.

4.

Long-sleeve, striped tee, R279, Cotton On Stripes are an easy alternative print for any man afraid of something being too crazy. This basic tee is light enough to wear during these transition months but the long sleeve gives you warmth.

5.

Retreat backpack, R1 699, Herschel Supply Co. at www.superbalist.com Herschel Supply Co. is one of the coolest bag brands out there. This new collection is inspired by the city of New York and 1900s nostalgia.

6.

Sweater, R999.95, Under Armour at Totalsports and Sportsmans Warehouse You cannot go wrong with grey so this sportsinspired sweater ticks all the boxes when it comes to style and functionality.

7.

Aviator sunglasses, R2 590, Ray-Ban at Sunglass Hut Ray-Ban aviators are one of the most iconic sunglass models in the world. This style is a classic with their semi-rimless rims, gradient lenses and nose pads.

8.

Beanie, R229, Element at https://swindle.co.za Yes, it’s a beanie and no, it might not be so cold that you will wear it every day, but let’s face it, there will be one or two nights that it is cold enough and then this simple classic, knitted one is the way to go.

7.

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HER CHECKLIST 1.

Velvet sliders, R3 999, Pretty Ballerinas at Hyde Park Corner Velvet was back on trend last season and this plush fabric in jewel tones has serious staying power – right up there again this winter.

Follow any stylist, blogger or just Instagrammer from the north and you would have noticed that they are wearing sliders (if they aren’t, cue an unfollow).

2.

Dress, R4 580, Ted Baker Ever since Catherine, Duchess of Cambridge, walked through the Japanese orchid gardens, we’ve been searching for a Japanese floral dress and, at last, this season Ted Baker doesn’t disappoint. The chic, fitted shape brings a classic, glamorous silhouette to your winter look while the beautiful texture is interesting and bang on trend.

3.

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High-rise skinny jeans, R599, Cotton On Ok, let’s face it: a woman’s quest for the perfect jeans is never over.

As soon as you think you’ve found the one, something changes – style, shape, your body... So although we won’t say you’ll never buy another pair of jeans, this Cotton On pair is as close as you’ll get to perfect this season.

Vanessa Bruno Brazoria shirt, R5 290, Mason Mara at www.maisonmara.co.za This is not an ordinary shirt, it’s your investment piece for the season. Constructed with such detail, from the interesting lapel to the wide sleeve and collar (or lack thereof), the concealed buttons give away that this beauty isn’t from the high street.

5.

Sunglasses, R3 090, Prada at Sunglass Hut Just because winter is on its way does not mean that it’s time to stash away your sunglasses – in fact, quite the opposite. Take inspiration from the catwalks and street style and embrace a new shape and brighter colours.

6.

Oversized blazer, R1 999, Witchery Structure and style combine in this classic blazer. In a tailored fit, this sharp piece is accented by the fabric and tuxedo style.

7.

Amplified lipstick in Morange, R240, MAC This is the product that made MAC famous! This ultra-creamy formula features a smooth glide, bold colour payoff, full coverage and a semi-lustrous finish.

8.

Bag, R749, Witchery StyleCaster named Burgundy on its 10-trend list for the season so it is no surprise that this bag makes it onto our must-have list

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FORWARD MOTION Photographs Jacques Marais Words Jacques Marais and Stephen Smith

With or without an internal combustion motor, here are half-a-dozen ways to get ahead (and stay ahead) of the pack. Funky or fun. Far-fetched or absurd. Classic or alternative. Acumen’s motion maestros check out six incredible ways of having fun while moving from Point A to Point B …

HUMAN-POWERED

IN THE WILD – SPOT GEN3 TRACKING DEVICE

ON YOUR FEET – HI-TEC NAMIB ADVENTURE SANDAL

IN YOUR BODY – DRIPDROP ORS HYDRATION POWDER

WHAT IS IT: The SPOT Gen3 is the latest generation of award-winning SPOT trackers, a device which facilitates a critical, life-saving means of communication should you venture beyond cell signal. Eminently portable, the units utilise 100% satellite technology.

WHAT IS IT: The rugged Namib Adventure sandals are ideal when the weather is warm and the outdoors beckon. Superbly suited to summer active and leisure outings, or just to hang around the braai.

WHAT IS IT: DripDrop ORS Hydration Powder is a hydration solution which combines medical standard electrolytes with great taste (ORS stands for ‘Oral Rehydration Solution’).

WHY DO YOU WANT IT: These sandals will be your trusty companions on any journey or adventure. The uppers are crafted in leather to ensure durability and a classic look, while a microfibre footbed lining will keep your feet fresh. Comfort is guaranteed thanks to the phylon midsole which provides constant support, cushioning and flexibility. Dress them with your favourite outdoor shorts and tee for that adventureready look.

WHY DO YOU WANT IT: DripDrop ORS provides a simple and cost-effective solution to enable anyone to treat mild to moderate dehydration with a safe and medically proven product.

Simply mix one sachet with half a litre of water and consume; the powder is loaded with electrolytes that promote professional hydration when regular sports drinks just won’t do the job!

GORDON INSTITUTE OF BUSINESS SCIENCE

WHY DO YOU WANT IT: The SPOT Gen3 enables family or friends to track your movement or, if the worst should happen, it can send emergency responders to your GPS location, all at the push of a button.

This rugged, pocket-sized device should unarguably be a part of your essential gear to enable you to stay connected.

DESIGN USPs: Customised tracking allows you to change the rate at which tracks are sent. Tracking is also motion-activated, with a vibration sensor informing your SPOT device to send track updates whenever you move and/or stop, thus conserving battery power.

Track messages will be sent until the device is turned off, and there is no need to reset after 24 hours.

DESIGN USPs: The microfibre footbed lining wicks away moisture from the soles of your feet, while a tricot padded lining provides added comfort; carbon rubber outsoles ensure superior traction and durability.

GO GET IT : Available online from www.indigosat.co.za

GO GET IT: Available online from www. hi-tec.co.za, or find a registered dealer on the site.

PRICE: R2 999

PRICE: R699

DESIGN USPs: With up to three times the electrolytes and half the sugar of a sports drink, the DripDrop ORS patented formula enhances performance, increases endurance and accelerates recovery after exercise.

GO GET IT: Available online from www. dripdropors.co.za PRICE: R110 (box of 4 sachets, providing for 2l of medical- grade hydration)

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FOR THE PLANET

FOR THE HEART

FOR THE HEAD

MOTORISED On the motorised side, we bring you three aspirational cars for different stages of your life.

FOR THE HEART: BMW 420I CONVERTIBLE

FOR THE HEAD: AUDI Q5 2.0 TDI QUATTRO

WHAT IS IT: The 4 Series is available with two doors or four, in convertible, coupé or gran coupé (four-door) configuration, and with a number of engine options.

WHAT IS IT: The Q5 is pure class. A luxury hatchback on stilts, it offers practical space and it is virtually impossible to fault.

WHY DO YOU WANT IT: Because we live in South Africa, where the sun shines and the sky is beautifully blue. Frankly, everyone should drive a convertible this good on a beautiful autumn day at least once in their life. It has a lovely engine, spectacular good looks, a premium interior, and the hard roof folds into the boot.

DESIGN USPs: One thing that makes the 4 Series convertible such a great car is the interior space – it has four full-size seats, and you can even fit a baby seat in the back! It’s also got fans that keep the back of your neck warm while you drive, and the roof takes just 20 seconds to go up or down. It doesn’t, however, leave the boot with much space for belongings.

The engine produces 135kW and 290Nm, and uses 6.2 litres of petrol per 100km.

There are more powerful options too.

GO GET IT: The 420i convertible is priced from R718 000, including a 5-year/ 100 000km maintenance plan. Visit www.bmw.co.za for more information.

WHY DO YOU WANT IT: If a sedan is too sensible, a hatchback too youthful, the Q5 is for you. It’s an SUV of the times – brilliant around town and on the highway, but still capable of leading you on an adventure into the hinterland. The 2.0 TDI is the model to go for, producing 140kW and 400Nm, with average fuel consumption of just 4.9L/100km. The new model is a decidedly handsome beast, while the interior is as good as you’d expect from Audi.

DESIGN USPs: Despite being bigger in all directions than its predecessor, and therefore much more spacious, the new Q5 still drives like a compact, agile vehicle. All models are equipped with Audi’s celebrated Quattro all-wheel-drive system and S-Tronic automatic gearboxes.

GO GET IT: The Q5 range is priced from R698 000 for the 2.0 TDI Quattro S-Tronic model. All models come with a 5-year/100 000km warranty, while a service plan is an optional extra.

More information can be found at www.audi.co.za.

FOR THE PLANET: KIA PICANTO 1.2 WHAT IS IT: I have a weakness for cheap and feisty hatchbacks, and they don’t even have to be fast to win my heart. Of all the little contenders in this segment, the Kia Picanto is my favourite (although it only just fends off the Fiat Panda and Suzuki Ignis).

WHY DO YOU WANT IT: Character. The Picanto is chockers with character, but that’s backed up by a fair bit of substance.

The 1.2-litre version is the one you want, and the performance is surprisingly peppy – far more so than the figures of 61kW and 122Nm would suggest. As you’d expect, the fuel consumption is excellent, at just 4.6L/100km – and the 1.0 will use less!

Five-speed gearboxes are standard across the range, in either manual or automatic form.

DESIGN USPs: Every time I drive a Kia I am amazed by how quickly they are improving – there’s a tangible leap in quality for every generation, and that’s from an already impressive base. The Picanto has a quality little interior, handles like a star, and offers high spec levels for the price.

GO GET IT: While the Picanto starts at R135 000, the 1.2 is priced from R150 000. That does include a 5-year/ unlimited-kilometre warranty, but service plans are an optional extra. See www.kia.co.za for more

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TECHNO Words Aki Anastasiou

Going to CES in Las Vegas at the beginning of January is one of the highlights of my year. It’s indeed a privilege to trek across the Atlantic to experience the technology feast that has yet to disappoint me. It has been incredible over the years to witness the evolution of technology and get insight into where it’s heading. CES 2018 did not disappoint. This year CES has been like a good red wine that has aged perfectly. In the last few years we’ve seen the promise of many new technologies, but they were not quite there yet. This

year, the tech has matured and is tangible and ready to be incorporated into our every day lives.

Last year, Amazon’s Alexa dominated as an intelligent personal assistant embedded in so many devices. This year, Google came to the party with Google Assistant and it was a battle to see who will rule and own our voices. Almost every device around us today is using voice for instruction.

These voice engines are in cars, phones, machines, fridges, televisions – they’re

everywhere. Voice is becoming integrated with technology to free our hands to do other things. The cars on display were breathtaking and have taken massive strides into a fully autonomous future.

There were robots galore, all trying to become human and be part of our lives.

Televisions get even bigger and the picture quality leaves one gobsmacked at how real it is. Everything is connected and sharing data, from health devices to water meters.

The Internet of Things is finally ready to share its benefits us.

TOYOTA’S NEW MOBILITY ECOSYSTEM

If you won’t go to the pizza store, then the pizza store will come to you.

Price from $699 to $949 This created quite a buzz. The idea behind it takes the technology of autonomous driving vehicles to another level by adding another mobility solution to the ecosystem: taking e-commerce to the customer. The futuristic vehicles are customisable for any business. Imagine a mobile pizza store being able to drive to you or a mobile office at a location when needed or a fully functioning office in the middle of nowhere.

LYFT DRIVERLESS VEHICLES

Public self-driving vehicles become real.

Lyft is Uber’s competitor in the US, and they partnered with BMW and Aptiv, an autonomous tech company, to demonstrate the power of self-driving cars. Their vehicles drove to 20 destinations within Las Vegas. Humans were present behind the wheel as a safety measure although no human intervention took place throughout the show.

GORDON INSTITUTE OF BUSINESS SCIENCE

SAMSUNG’S “THE WALL”

Samsung introduces the modular television.

Price from $699 to $949 Samsung’s new concept gives consumers the option to customise a television to suit the size of their room. The screen can adapt to serve different purposes, such as creating a wall-size display for multiple spaces. The MicroLED technology displayed at CES is designed to be durable and have low power consumption. On display was a massive TV measuring 146 inches or 3.7-metres wide. Yes, it was massive, but the picture quality was remarkable considering the size.

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FOLDIMATE

An automated folding machine for clothing Price $1 000 One of the chores I absolutely hate around the house is folding clean washing. The FoldiMate is a laundry-folding robot that does this job for you seamlessly. You simply feed your clothes into a slot, the smart robotic technology automatically adjusts the folding method based on preferences, item type and sizes.

The folded items appear at the bottom of the machine a few minutes later. It does shirts, pants and even t-shirts. Sadly, it doesn’t do socks yet, but hey, I am willing to make that sacrifice! The machine is scheduled to go on sale early in 2019.

SONY AIBO

A robotic dog that learns from you.

Price $1 800 Sony’s first Aibo robotic dog, introduced 20 years ago, became an instant hit and developed cult-like status. When the first generation Aibo went on sale, it sold 3 000 units in just 17 seconds. The first robotic dogs were very basic, but cute enough for even adults to get hooked. When Sony discontinued production in 2006, they had sold close to 70 000 units. Fast forward to 2018 and Sony has a new hit with the launch of the next generation Aibo. A Sony executive told me that massive technological strides have been made in the last decade, and together with artificial intelligence and smart sensors, Aibo is a totally new robotic dog. Sony’s new digital pet has machine learning capabilities to learn from human interaction and is packed with sensors, it has a wide-angle camera lens in its nose and now connects via an app.

At $1 800 or R22 000 this is one expensive pooch! But wait, think about it: with Aibo, you never have to collect any dog poo from the garden. Surely that’s worth it!

CHIPOLO CARD

For those who tend to misplace their wallets Price $35 Chipolo is the world’s thinnest wallet finder. It is the size of a business card and slides into one of the slots of your wallet.

According to Chipolo, 323 million people have lost a wallet or some kind of bag in the USA over the last 5 years. This tiny device, which works via Bluetooth and an app, helps you find your wallet or bag if you have misplaced it. It has a range of 60 meters so as soon as your wallet goes missing, open up your app, activate the card, and a 95-decibel ring sound is emitted from card to help you find it. If you lose your wallet outside the Bluetooth range, the app remembers the last location of the wallet. Chipolo also has a global community so if any item is lost, a signal will be sent to you anonymously via another user’s app that picks up the signal from your lost item, indicating its location

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BOOKS Words Chris Gibbons

THE SQUARE AND THE TOWER

GORDON INSTITUTE OF BUSINESS SCIENCE

NIALL FERGUSON ALLEN LANE I R385 To someone with a hammer, everything looks like a nail, runs the old saying. To Niall Ferguson, one of the most brilliant and prolific historians of his generation, everything in history looks like a network or a hierarchy. Hence the title of his new book: The Square is the Piazza del Campo in Siena, the Tower is the campanile, ‘the majestic Torre del Mangia’, as Ferguson calls it. The juxtaposition of the two gave him the insight that “the tension between distributed networks and hierarchical orders is as old as humanity itself ”. In other words, the Internet has not “fundamentally changed the world”.

It’s a fascinating and original insight. For example, why was Paul Revere so successful in warning the people of Boston, Massachusetts of the impending arrival of hated British troops, intent on arresting their leaders and seizing their weapons?

Ferguson’s answer is that of all the American Revolutionary leaders, and analysed in terms of network theory, Revere was the best connected. The fact that he was a Freemason was central to his success and Ferguson says that “One plausible conjecture is that Freemasonry was the key network of the American Revolution.”

Henry Kissinger, Secretary of State in, and arch-survivor of, the Nixon administration, is another of the super-connected, a believer in “the lesson that informal networks could provide diplomatic channels superior to foreign ministries and embassies.” Ferguson is also Kissinger’s biographer, so his exposition is meticulous.

But when networks become too powerful, threatening the state or the established order, traditional hierarchies clamp down on them. An example Ferguson opens with is the original group called the Illuminati. Yes, it really did exist, a secret society born in the late 1770s in Bavaria and also, in some respects, a product of Freemasonry. It was a clandestine network dedicated to spreading the ideas of the Enlightenment but banned less than a decade after its founding. By 1787, it had disappeared, after briefly expressing ideas “that fundamentally challenged the religious and political status quo”. The hierarchy struck back.

The problem with Ferguson’s approach appears when he confides that, in fact, hierarchies themselves are really only networks in a different disguise. That may be so, but if everything around us is a network of one or other sort, and, by his own admission, some networks are effective and others not, then is there real value in his hypothesis?

From a business perspective, we know that the larger the corporation, the more hierarchical it is likely to become. We also understand that within these hierarchies, many smaller networks appear: designers who work together, for example, board or management committees, or just people who hang out on the balcony when they need a smoke. Ferguson’s work provides us with a new lens through which to view the interaction between the hierarchy and the networks, to understand how they both operate, and – perhaps – to improve that interaction and harness the power of both.

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THE ASSHOLE SURVIVAL GUIDE

ROBERT I. SUTTON PORTFOLIO PENGUIN I R320 What exactly is an asshole?* In the business world, it’s someone who wastes your time, demeans or bullies you, gropes you, irritates or harasses you, destroys meetings, undermines teams or you personally or even the company. He or she – it can be either – might be someone who talks as loudly as possible or refuses to respond to your questions. It could be someone who is a ‘rules Nazi’ or someone who says one thing to your face and another behind your back. And so on – you get the picture, I’m sure – and I’m also sure that we have all had experience on such assholes and that many of us are suffering right now as a result of their behaviours.

Stanford Professor Bob Sutton first began codifying this enormous and pervasive problem in an article in the Harvard Business Review, and then, in 2007, in a book called The No Asshole Rule. With more than 800 000 copies sold in the US alone and many more around the world, he clearly touched a nerve.

But what he failed to do back then was to deal in depth with how to solve the asshole problem. What options are open to you when you are trying to work in an environment polluted by one of these jerks?

The Asshole Survival Guide is his answer. It’s frank, funny, written in the kind of plain English most of use when describing assholes, covers a swathe of top-quality modern academic research on the subject, and is packed full with genuinely useful tips and techniques to help you rid yourself of the problem.

One caution. Sutton, a psychologist by training, is quick to remind those of us who complain so loudly about the assholes in our offices and factories to hold up a mirror. Think carefully, he suggests, because it might just be that you yourself are the asshole who’s really to blame! * ‘Asshole’ is US English; in English English, it was originally ‘arse’ or ‘arsehole’. In South African English, I would suggest that the most-often used equivalent in a business or social context, although not a direct translation, is ‘doos’.

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RAPID FIRE – REMARKABLE MISCELLANY

JOHN MAYTHAM TAFELBERG I R250 First and foremost, John Maytham is the respected wine critic of this magazine. You’ll find his latest reviews just over the page. Like many of us, though, he also holds down various other jobs, including, in his case, presenter of the afternoon drive show on Cape Talk, a radio station in Cape Town, a slot he has occupied for many a long year.

During the show, he invites listeners to call in and see if they can stump the general knowledge of him and his colleagues in-studio. If they can they might win a small prize or a T-shirt. He calls the quiz ‘Rapid Fire’ and this new book is a collection of some of the most interesting, amusing and bizarre questions he’s been asked. Trivia on steroids, you might call it.

For example, what is a tsantsa? What is the link between Durban and the Empire State Building?

Did Adolf Hitler ever visit Liverpool? What is unique about wombat poo?

You either like this stuff or you loathe it. Personally, it’s like a bag of wine gums. Once I start, I have to have one, then another and then one more after that, until the entire bag is finished. I read Rapid Fire from cover to cover and can’t think of a better way of spending a couple of hours on a rainy afternoon.

By the way, how do you have sex in space? How fat do you have to be to be bulletproof? What is the origin of the word ‘avocado’? The answers are all in Rapid Fire and if you think you can do better, don’t call me, rather call John Maytham any weekday afternoon next time you’re in Cape Town

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WINE Words John Maytham

Acumen’s wine expert picks three of the best at three different price points: Everyday, Dinner Party and Out To Impress.

EVERYDAY I remain ambivalent about competitions in the wine world. There is just too much evidence of how random they are to take them too seriously.

But, every now and then, they deliver unexpected and welcome surprises – like when a wine from an unfashionable area is tasted blind and doesn’t have to fight the prejudice that would almost certainly affect sighted judgement. A case in point is the Eagle’s Cliff Pinotage from the Breede Valley area. All recent vintages have scored, at best, three-and-a-half stars in the Platter’s Wine Guide. The 2017 version won winemaker Christiaan Groenewald the Diner’s

Club Winemaker of the Year Award. (The second time he has achieved this honour – the first being in 2013 for the Voetspore Tannat Syrah 2011 blend from the farm’s more upmarket label, Arendskloof.)

I very much doubt that I would have tried the wine without the award. Having tried it, I think that it falls some distance short of being the best Pinotage in the country. That honour I would give to one of the Pinotage versions made by Abrie Beeslaar under the Kanokop label, or under his own name. But the Eagle’s Cliff version is an example of what new wave Pinotage tastes like – perfumed, pure-fruited and just charming; and, at R60, very good value for money.

DINNER PARTY And, talking of unexpected and welcome surprises, it’s always very pleasant to rediscover a once-favoured producer that had dropped off one’s radar for whatever reason. The 2015 Siren Syrah brings Simonsberg property, Dornier, right back into my limelight and into my cellar.

It was the last vintage worked by Jeanine Craven before she left to set up cellar with her Australian husband, Mick. (Their Craven Wines are well worth seeking out.) Philip van Staden moved from Guardian Peak to take over, and, by many accounts, is continuing a noteworthy process of refinement. The Swartland grabs

much of the attention focused on Syrah, but the Siren is a reminder that, at its best, Stellenbosch is no slouch with this grape. It’s a beautifully balanced wine with an intense nose of red and black fruit, with just the right amount of white pepper prickle. The fruit purity theme continues onto the palate with a delicate line of acidity and tannins that grip and then slide into velvet. The R140 price is very competitive for this level of quality. It’s a farm with a beautiful view, and the Bodega Restaurant has also been reinvigorated, making this a very good destination to taste, eat and linger.

GORDON INSTITUTE OF BUSINESS SCIENCE

OUT TO IMPRESS I always think of Toyota when I think of Hartenberg. I’m not sure it’s a perfect analogy, but there does seem to me a Toyota-like long-term consistency and reliability about this Bottelary Hills producer. To (over-)extend the metaphor, there is a wide range of product available, from entry level to super luxury, and every price level carries with it the same guarantee of care and attention to detail. (I am not entirely sure what would be the Land Cruiser of the range – perhaps the Gravel Hill Shiraz?) Chardonnay and Shiraz are the two main calling cards of long-time winemaker,

Carl Schultz (25 years at the helm). The 2015 vintage of the super-premium Chardonnay, the Eleanor, is utterly delicious. It’s named for the matriarch of the Finlayson family that owned the property between 1948 and 1977. The colour is an arresting primrose yellow; the nose is citric, nutty and delicately yeasty; the palate is refined, elegant and taut with a subtle, oaty creaminess and beautifully integrated oak. There are not many South African Chardonnays that can justify the adjective ‘Burgundian’ as well as does the Eleanor.

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LADY SPEAKS THE . . .

Words & Pictures Victor Dlamini

The pianist, composer, arranger and singer Thandi Ntuli has made 2017 her breakout year. She has long been whispered about in jazz circles as one to watch. But with the release of her album and milestone performances under her belt, she has finally taken her place at the main table in South African jazz. It is perhaps not surprising that her debut album is titled The Offering because it comes across as a highly considered set of songs that seeks to present this major new voice in South African music.

Hers is a sound that is at once traditional, but also inherently urban. Those who know the sounds of the township will immediately know that not only can she swing, but she can jive as well. Her uncle was in the band Harare and its experimental jazz-funk has left its traces in some passages of her songs.

Those who have followed the career of Thandi Ntuli Alice Coltrane will immediately pick up the complexity in the voicing of Ntuli’s compositions, as well as the way in which the music is deeply transcendental. It’s clear, too, that this is a pianist who has studied and played classical music. Like Nina Simone, her improvisations are based on rich allusions to songs that are deeply embedded in our subconscious. Listen to the song Cosmic Light and you immediately grasp the rich musical heritage she is able to draw on.

Ntuli says that growing up in a musical family shaped her sense of how jazz should be approached and from the joy and harmony in her singing, you can feel how the family’s singing has been infused into her own songs.

She is one of a new generation of pianists that includes Nduduzo Makhathini who are quickly reshaping South African music.

They all bring to popular jazz a formal approach that stems from their university education. But they are also drawing from the ‘traditional’ sources that invariably enrich their music and give it a colour that is uniquely South African.

Still only 30, Ntuli has already played at major events like the Cape Town Jazz Festival and has also featured at venues like The Orbit in Johannesburg as well as Nirox Park at the Cradle Of Humankind. Whether she is playing solo or with a big band, there’s a satisfying confidence in her approach to the piano. When she attacks the keys or she whispers to them, you can tell that she has studied the music and knows how to tease out its secrets.

Ntuli started her musical journey very early and before she was five she was already taking classical lessons on piano. She later read for a Bachelor of Music in Jazz Performance at UCT and it is these twin influences that shape her distinct voice. She seems to thrive in collaboration and has already worked with Neo Muyanga, Steve Dyer, Marcus Wyatt and Siya Makuzeni amongst others.

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Her time has arrived and her cosmic light is ready to shine a spotlight on South Africa’s New Age jazz scene

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looking backwards

SIGNING OFF Words Sam Cowen

Are your emails somehow missing the mark?

I used to end my emails with the words: Warmly, Sam “You are who you dream you can be.”

It was a poignant quote, something inspiring. I wanted to make the person who read my email feel warm and hopeful.

Not anymore. Now I have a different goal.

GORDON INSTITUTE OF BUSINESS SCIENCE

When I became an independent contractor I worried about many things. I worried about getting enough work. I worried about having time to do the work if I did get enough work. One thing I did not worry about was getting paid. Because you know, if you do the work, that’s what happens. Simple stuff. I’d submit an invoice with a nice covering email, something like: Dear Whoever, I hope you are well. Herewith my invoice, Warmly, Sam; and within 30 days there would be money in my account for essentials like petrol and scented candles.

It was, therefore, a rude awakening to discover that doing a job carried no guarantee of payment. I heard every excuse there is, including but not limited to: you’re in the pay run this Friday (you aren’t); the accountant is away (she isn’t); we’re waiting for a payment to clear (they’re not); we have a cash flow problem (they sent all the directors on an international team building trip that wasn’t in the budget).

Now, this could be a long and boring diatribe about how awful people are, but actually, it’s not. Nor is it a helpful piece on how to be more assertive when being

your own debt collector.

No, it’s about something FAR better than that. It is about a whole exciting new life skill that is both satisfying and effective. I have compiled an entirely new lexicon of passive aggressive phrases that, lovingly crafted together, create the kind of missive that would annoy me to the tips of my fingernails were I to receive it myself.

I cannot take credit for the idea. It was inspired by a tweet from the account, ‘@OhEmmeG’: “Per my last email” is office speak for “bitch, can you read?”

Previous to that I had been sending emails which started with the words, “Sorry to bother you...” and feeling extremely disempowered indeed. Then I came across said tweet and the revelation that there was a whole new language designed to irritate and annoy! My emails would stop being ignored and instead become digital thorns in the sides of bad debtors! I may not have the confidence to confront them personally but I could sure as hell spoil a coffee break or aggravate a morning hangover with a few choice phrases, or a colour change to the text. (Red is a very good option. It makes people more nervous than a cabinet reshuffle.)

Now you can do it too! Cancel your membership to the online assertiveness in business course you’ve just paid for and join me! Here are a few of my favourites:

you. ‘Warmest regards’ means I hope you burn in the fires of hell.

Putting the words “Follow-up” in the subject bar. Because I am Following Up. Because you are inefficient at best, and a waste of human DNA at worst. You don’t get to ghost me. I know where you work.

“In case you missed my previous three emails...” You know you saw them, you cretin. And you know that I know.

“Perhaps there’s someone else I should speak to?” Now we’re cooking with gas.

Your crime is about to go companywide.

I will cc Ronald McDonald and the Oros man if I have to.

“Friendly/Gentle reminder”: This means I have made a voodoo doll that resembles you but have not yet stuck any pins in it.

You are however on borrowed time.

I’m not the originator of these, merely a lowly compiler so please feel free to add your own. One I am particularly proud of though is my new email signature. I think it sums up the situation nicely.

Using the words “With respect,” when I am about to follow it with some words that are highly disrespectful.

Warmly

Changing my sign off from “Warmly” to “Warmest regards”. ‘Warmly’ means I like

“Some people just need to be hit in the head with a chair.”

Sam

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