SA Business Integrator - Volume 9 l Issue 2

Transformation has been a buzz word for years. For some it creates anxiety, for some it signals opportunity, and for some it's just a word.

We are currently at a point where so much is happening - a lot of it downright scary.

Transformation can also be construed as a fancy word for change, and change is inevitable.

The shock factor is the fast rate at which we are having to adapt. Circumstances out of our control, are forcing us all – in both a professional and personal capacity – to be more flexible, resilient and open to opportunities if we want to succeed.

One of the critical areas we are having to adapt to is load-shedding. Many businesses, particularly SMMEs, are having to rework budgets to invest in alternative energy solutions to try to ensure sustainability. Long term this initial investment could work out more costeffective for the future.

Similarly, the introduction of new technologies is seen as intimidating to some, but in essence could provide more efficiencies and opportunities for enhancing skills.

Change is here, but it is up to each of us to unlock the opportunities it brings...

56 Uncovering the truth behind ‘greenwashing’

58 The role of electric vehicles in SA’s energy transition

62 Logistics industry trends that are reshaping supply chains

64 Manufacturing sector paying a high price

66 Successfully plan for supply chain challenges

68 Five challenges every young construction business must overcome

72 SA’s landfills are filled with construction waste

74 Fintech is a path to democratised financial services

78 Women in tech: progression hampered

82 Technology: New approach to address critical skills shortage

86 Advertorial: Aims International 5 reasons to get ‘psyched’ about executive psychometric assessments

88 When is it time to bring in a BPO partner?

92 Risks when preparing for a B-BBEE verification

CREDITS

South African Business Integrator

PUBLISHER

Elroy van Heerden-Mays elroy@mediaxpose.co.za

EDITOR

Tashne Singh editor@sabusinessintegrator.co.za

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Tessa O’Hara tessa.ohara@gmail.com

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EDITORIAL CONTRIBUTORS

Webber Wentzel Finance Team

Institute of Waste Management of Southern Africa

Jacques Farmer

Dennis Phillips

COVER

South African Medical Research Council

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Collaboration is key

to enhancing healthcare

During the Covid-19 pandemic, Prof Glenda Gray, President and CEO of the South African Medical Research Council (SAMRC), played a key advisory role. Here, Prof Gray speaks to SA BUSINESS INTEGRATOR about SA’s impressive legacy of pioneering medical innovation and research, and how the medical sector can be used as an instigator of proactive change using a multidisciplinary approach.

How can our medical sector impact change on a socio-economic level, improve partnership opportunities with the private sector, and develop and retain talented individuals in STEM?

The South African Medical Research Council (SAMRC) harnesses its science talent to address the four intersecting epidemics facing our country today, that of:

1. communicable diseases (HIV, TB and SARS-CoV-2);

2. communicable disease (diabetes, hypertension, cardiovascular diseases and cancer);

3. maternal and infant mortality; and

4. trauma (intimate partner violence, interpersonal violence, car accidents, etc).

By addressing these intersecting epidemics, we can impact on survival and life expectancy. We are committed to the transformation of health research in South Africa, and as the SAMRC President and CEO I have overseen this both in the Council and in our extramural programmes at universities.

We have improved equity in science funding through driving initiatives that have significantly improved funding for young scientists, black African scientists and women. The SAMRC has also established key collaborations and partnerships that will impact scientific research locally.

We have established a collaboration with the Beijing Genomics Institute to fund the first whole genome sequencing resource in South Africa. The vision to design and establish the first facility on the African continent capable of large-scale whole genome sequencing started in 2017. We opened this Genomics Centre in 2019, displaying the latest sequencing technology and cutting-edge facility design. This dedicated centre builds on South Africa’s previous participation in the Human Heredity and Health in Africa initiative (H3Africa).

Mindful of the lack of science leaders in South Africa, we established a novel grant to support mid-career scientists to become science leaders. We have established key funding initiatives within the BRICS countries, Grand Challenges South Africa with the Bill and Melinda Gates Foundation, the SAMRC-UK MRC Newton Fund, SAMRC-Forté (Sweden) Collaboration to Support Inequalities in Health and Health Systems, the SAMRC-CIHR Healthy Life Trajectories Initiative (HeLTI) in collaboration with Canada, China and India, the US-South Africa Programme for Collaborative Biomedical Research (NIH), and the India- South Africa Collaborative Research Programme on HIV/AIDS and TB, as well as an SAMRC-EDCTP collaboration on Malaria in Mozambique.

Another area we are interested in is funding innovation in cancer and non-communicable diseases using precision medicine methods. We

collaborate with the Technology Innovation Agency (TIA) and Department of Science and Innovation (DSI) in this area as well as investing in medical devices and diagnostics.

How important is it to secure more private sector partnerships, and what will this look like?

Working with the private sector ensures the commercialisation of the technologies we have invested in. Our recent collaboration with Afrigen and Biovac in vaccine manufacturing is a critical partnership to ensure the sustainability of that sector.

Private sector partnerships are critical for innovation. We do need partners who can commercialise drugs, devices, diagnostics and vaccines.

We are able to partner with the private sector right from inception, or to support product or clinical development or transfer innovation to the private sector for commercialisation.

The SAMRC also supports pharma-funded product or drug development, and these partnerships enable the movement of these products towards commercialisation.

In terms of achieving SDG 3, how is SA progressing?

Sustainable Development Goal 3 (good health and wellbeing) is a critical SDG for countries in Africa, where universal health coverage is limited, and health systems are under tremendous strain.

We will need both curative and preventative/ promotive approaches if we are to attain SDG3. Legislative changes should focus on mechanisms to attain universal health coverage.

At a population level, interventions to detect, diagnose and treat non-communicable diseases like hypertension and diabetes will improve morbidity and improve survival, especially in the elderly. Any interventions that increase life expectancy will have

ramifications in all facets of our society, including socio-economic benefits and GDP growth.

How can a multidisciplinary approach

unlock opportunities?

South Africa has complexities that are becoming increasingly challenging. These complex matters affect the broader society and its most vulnerable members; it needs knowledge that is not in one discipline.

A multidisciplinary approach by definition requires work and knowledge outside of that known discipline. It needs to cross cognitive boundaries by sharing scientific understanding and consequently integrating institutional capacity to provide real solutions in real time. Health research concerns itself with building on knowledge and expertise to improve the health of all South Africans. We cannot ignore that improvement does not occur in silos.

A benefit to that reality is that although problems become more complex, there is accelerated growth of knowledge and strength from varied disciplines to reach South Africans in all levels of society. For example, if access to clinics is an issue in a rural environment, then there should be a way that technology and business can come together to bring treatments and healthcare to people.

What is the scope for a multidisciplinary approach for tackling challenges?

There are two ways in which a multidisciplinary approach can expand the work of improving the health of South Africans in the context of health science research:

1. Capacity development: The SAMRC is the most significant local funder of health research and a custodian of the values that embody health research and has developed funding mechanisms, which supports research leaders in different areas of health

research. The purpose of doing so is to create opportunities that grow early-career and mid-career scientists.

The outcome of developing such scientists is proven through the opportunity given to them to implement the findings of their research by work. For example, maternal health – specifically breastfeeding – is an area studied by health systems, producing a breastfeeding series through The Lancet journal to scientifically illustrate the proven lifelong benefits of breastfeeding for infants and children.

Combining this research with business would seek to not polarise commercialised baby formula with scientifically incorrect messaging – the intention is to ensure parents make an informed decision.

2. Funding and collaboration: More funding and support towards health science research is important from all sectors of business. Tackling health care challenges require a multidisciplinary approach. Researchers need to work together to share ideas and solutions even if they work in a different research discipline. The health challenges that we face in this world cannot be solved by medical research alone, we need scientists to continue to collaborate just like they did during the Covid-19 pandemic.

What are the greatest challenges facing the medical research sector?

Health equity: South Africa is diverse in population but also in access. There are disparities in healthcare capacity across different regions. Health equity is an area that experienced challenges pre-apartheid and now post-apartheid. There are lots of improvements but a much more advanced conversation needs to happen in ensuring health equity.

An advanced conversation towards health equity can include a bigger intention on personalised

medicine. Personalised medicine aims to provide more precise and effective medical care to individuals, as opposed to a “one-size-fits-all” approach, with the goal of improving patient outcomes and overall health.

Personalised medicine is a medical model that is used to characterise an individual’s phenotype and genotype (e.g. molecular and genetic profiling, medical imaging, and lifestyle data), to tailor the right therapeutic strategy for the right person at the right time, and to determine the predisposition to disease, and to deliver timely and targeted prevention.

Advancing healthcare technology: Again, here we can emphasise on the importance of ‘transdisciplinarity’ to create sustainable healthcare through research science and other disciplines.

For example, BGI Group recently donated a gene sequencer, DNBSEQ-G400, to the SAMRC. This equipment helps to further improve the institute’s sequencing capability and benefit the people of South Africa and beyond. It is also imperative that such contributions are made by South African businesses within technology. To understand what these contributions can be, businesses must engage with health science research.

What interventions are needed to overcome challenges?

Grow healthcare research scientists: A varied pool of healthcare research scientists is needed. There is still room. Filling up that room in the long term means educating the current generation about opportunities available as a scientist.

One can easily argue that is it solely up to organisations like the SAMRC to avail that education to scholars, but predominantly that education needs to happen through career guidance.

With health equity and the interest in pertinent matters such as personalised medicine it is

important to make use of AI technology. AI technology can source information readily and make it timeously available to career guidance counsellors.

Health equity therefore can be broken down to the simple detail of information sharing; information being accessed at the right time by right people to benefit a large community. That requires an investment that needs to be evaluated so that it can identify areas of growth and improvement.

More state-of-the-art labs and equipment: South Africans are pioneering their own healthcare research in this generation, ensuring the continued contributions of healthcare research.

What are the key opportunities that can help cement SA as a leading medical research, innovation and production hub?

Paediatrics and child health: Having completed a post-doctorate in clinical epidemiology, focusing on clinical trial designs, socio-behavioural and translational research, I see that there are still opportunities in managing childhood illnesses and investing in early childhood development.

HIV and AIDS research: Recently, an international study gave a thumbs-up for the safe use of Tenofir Disoproxil Fumarate and Emtricitabine as pre-exposure prophylaxis (PrEP), a big step towards change. Yet, HIV and AIDS are still a significant problem and there are still socio-demographic factors that impact providing treatment.

What are some of the key lessons you have learned as a leader?

Growth is constant! This is one of the major lessons I have acquired; the lesson that illustrates that I am always learning and discovering that through science life can be improved. As a leader this teaches you compassion for those you lead and also for yourself. 

SAMRC hosts 15 universities for research capacity development

The South African Medical Research Council (SAMRC), through its Research Capacity Development (RCD) division, hosted more than 65 RCD grant holders from 15 universities during its annual grant holder’s meeting on 8-9 March this year, under the theme of “Building Research Leadership for Societal Impact”.

As the most significant local funder of health research and a custodian of the values that embody health research excellence in South Africa, the SAMRC has, over the years, developed research capacity development funding mechanisms to

support emerging research leaders in different areas of health research. The purpose of the RCD grant programmes is to create opportunities to fast-track and transition early-career and mid-career scientists into independent research leaders.

RCD grants programmes account for 60% of the RCD budget, with more than 70% of grant holders being hosted at historically disadvantaged institutions (HDIs), namely the University of Fort Hare, University of Zululand, University of Limpopo, University of Venda, Mangosuthu University of Technology, Walter Sisulu University of Technology, Sefako Makgatho Health Sciences University, and the University of the Western Cape.

The SAMRC’s RCD grant holder’s annual meeting is a capacity development opportunity with this year’s event bringing together beneficiaries from RCD grant programmes, including the SAMRC Intramural Postdoctoral Fellowship Programme, Clinician Postdoctoral Career Development Programme, Early Investigators and Mid-Career Scientists Programmes (Principal investigators in pre-selected strategic research areas), and the Research Capacity Development Initiative (Principal Investigators) from selected HDIs. With a strong focus on the science, the meeting provided an opportunity for grant holders to present on their research, to learn about new topics of relevance to their research endeavours, to network and to seek new collaborations.

The meeting was attended by some of the SAMRC Board members, the SAMRC President and CEO, Prof Glenda Gray, and other members of the SAMRC’s Executive Management Committee.

The meeting also included esteemed keynote speakers who delivered outstanding lectures on various topics in the context of “Building Research Leadership for Societal Impact”, spanning ethics in research, innovation and intellectual property,

career development and research, societal impact, research translation and indigenous knowledge systems.

Commenting on the presentations made by the grant holders, SAMRC Board member, Prof Mosa Moshabela, noted how the universities were working together.

“What is more interesting is the strong collaboration that could be seen between researchers from various institutions,” he said.

In her address to the beneficiaries, Prof Gray said: “By receiving a research grant, even a small amount, emerging researchers can gain access to resources and expertise that would otherwise be unavailable to them. Additionally, research grants can help emerging researchers develop their skills and gain recognition in their field”.

The meeting showcased the high quality of the research being supported through the RCD grants programmes and the successes achieved to date in building research capacity in the featured institutions and was an inspiration for the health research leaders of tomorrow.

www.samrc.ac.za

The RCD grant holder’s annual meeting

SA’s biggest opportunity Investment in biotech,

3Sixty Global Solutions Group evolved from funeral services to financial services, and is now diversifying into biotechnology (pharmaceuticals).

SA BUSINESS INTEGRATOR spoke to Khandani Msibi, Executive Chairman of 3Sixty Global Solutions Group and Group CEO of NUMSA Investment Company, to learn more.

What was the rationale for diversification into the fields of biotechnology and pharmaceuticals?

When I joined 3Sixty Global Solutions Group, its major business was provision of burial and cremation services through Doves Group as well as Independent Crematoriums South Africa (ICSA). We saw this business model as unscalable and extremely hard to market. Thus, we shifted our focus to the “life-enhancement” side of things instead of the “end of life” side of things. The immediate diversification was to get into life insurance with the acquisition of Union Life in 2009, which we later rebranded as 3Sixty Life.

Our strategic view about our clients was that it is more desirable to help them live longer, healthier lives and pay us a premium for longer, as opposed to relying on a business model which entails a once-off transaction, burial or cremation services. We classified death as an unfortunate event for which our clients must be covered to ensure a dignified send-off in its eventuality.

We expanded our business strategy to encompass business models which can help prolong life and active economic participation. The medical aid industry became very attractive as a means to begin executing that strategy. As a result, a 10-year strategy was developed from 2010 to enter the healthcare industry.

The Group started at the bottom by establishing two healthcare advisory companies; NUMSA Financial Services and 3Sixty Client Solutions, and progressed to the acquisition of Sechaba Medical Solutions, which we have since rebranded as 3Sixty Health. 3Sixty Health administers both the Sizwe-Hosmed Medical Scheme and the South African Breweries Medical Aid Society.

Further analysis indicated that medical aid costs are driven by hospitalisation, pharmaceutical products, and specialist services. We attempted to enter the hospital industry with

little success. Our view at that time was that the entry into pharmaceuticals was difficult, and that South African pharmaceutical companies were primarily distributors of products from foreign companies – a position we do not want to be in.

We regarded specialists as the “Gods” of the industry that kept power to themselves and could not be disrupted.

It was not until I met Martin Magwaza, that the possibility of playing in the biotech space through innovation, as an equal amongst international innovation-based companies, became apparent.

We have, over the past five years, invested significantly in biotech to develop, reformat, and reformulate existing compounds, which have set us apart from existing South African pharmaceutical companies. We created four startup companies, which focus on well specified and well-chosen areas of biotechnology, namely:

1. 3Sixty Biopharmaceuticals: In this subsidiary we invested in Covid therapeutics, Covid vaccines, and antimalarials. The Group successfully completed animal tests for a Virus-Like Particles vaccine grown off tobacco leaves, with the majority of our work having been internationally published in peer-reviewed journals. We are about to conduct animal tests for our Covid therapeutics and malaria drugs. 3Sixty Biopharmaceuticals is currently expanding

... the entry into pharmaceuticals was difficult... South African pharmaceutical companies were primarily distributors of products from foreign companies.

its anti-infectives portfolio to tackle multidrug resistant infections through a new strategic partnership. Our company is also pursuing compounds that show potential for the treatment of Alzheimer’s.

2. Sixty Biomedicine: Under 3Sixty Biomedicine, we have botanical extractbased women’s health products, the first migraine prophylaxis capsule and proprietary strains of rationally designed probiotics for gastric health and metabolic disorders.

3. 3Sixty Nuclear Medicine: We are preparing to launch radioisotopes for cancer treatment, rheumatoid arthritis, and haemophilic synovitis.

4. Cape Sativa: This is our cannabinoid business focused on using nanotechnology to produce finished dose formulations. This subsidiary is not in the business of growing cannabis nor doing primary processing. Our focus is to develop cannabinoid-based therapeutics for cancer, communicable diseases, metabolic and mental health disorders. The business is about to start animal trials for our cancer applications. Additionally, we have developed watersoluble cannabinoids for use in beverage and nutritional products.

What opportunities are there for South Africa in terms of pushing R&D, development and production of biotech and pharmaceutical products?

South Africa lost a culture of investment in innovations as the State has been discouraged from being entrepreneurial, with the gap left by the State not filled. You would remember that the Sasol coalto-fuel Pebble Bed Modular Reactor, Rooivalk, and many other technologies we led the world with were part of the State’s investment in innovations.

Despite having vast technological innovation, South Africa fails to capitalise on these technologies, which are available from universities and state research agencies. Despite South Africa’s world-class research capability, it lacks entrepreneurship collaboration, so our scientists do research out of scientific curiosity rather than progressing technologies from conception to commercialisation.

Additionally, unlike Nasdaq in the USA, the Johannesburg Stock Exchange (JSE) does not have a culture of supporting new ventures. The requirements for listing are such that you need to have a track record of at least three years of revenue and profitability. Our retirement fund legislation is such that investment in unlisted assets is uncommon and venture capital funding is limited.

Unless we unleash funding to entrepreneurs,

value in the JSE will always be driven by the problem of “too much money” chasing “too few assets”, and the JSE appreciation will remain at variance with the performance of the economy for its citizens; red hot stocks in the mist of increasing unemployment.

Investment in innovation is the only reason why the USA dominates the world economy. The rest of us are their clients and at times we copy what they have produced. Investment in innovation for South Africa will make us the industrial giant we should be; it’s the only way we can eliminate unemployment and poverty and solve some of our most complex problems.

As an African organisation with global aspirations, the diseases of the developing world like tuberculosis (TB) and malaria will receive serious attention from us. We need to ask ourselves how can TB remain as the number one killer in South Africa in this day and age? How can malaria be the number one killer in Africa, and both without Africans and South Africans making significant investment in research? That being the case, investment in such areas will be our contribution to society amongst other things.

Does SA have the capacity to compete in the biotech sphere on a global scale?

Yes, South Africa has enormous research capability and capacity in State agencies and universities. These capabilities exist but they have remained unrecognised because we lost the culture of investing in innovations at the level of the State.

Our economy is too skewed towards financial services and mining. Banks employ engineers so that they can assess mining proposals, but they are in the dark about biotech. A country will only become successful in areas it focuses on and heavily invests in from a research and investment perspective.

Our competitive advantages as a country

include: being the lowest cost research destination; having a strong manufacturing base; a skilled workforce that is unemployed; and having the South African Health Products Regulatory Authority (SAHPRA) – a globally recognised regulatory agency.

Although limited, South Africa has a few companies that specialise in clinical studies and the University of Cape Town’s Institute of Infectious Disease and Molecular Medicine has a Biosafety level three (high containment) accredited facility managing highly infectious disease agents required for basic research and diagnosis.

Our country has the skills to become a biotechnology powerhouse, a position we occupied before losing it to India. As an organisation we picked this opportunity and have spent the past five years gobbling up technologies, registering patents, developing and testing products.

What potential opportunities linked to the energy and telecommunications sectors is The Group investigating?

We regard energy

and

telecommunications as the next frontier for us after biotech. The organisation has looked at Small Modular Reactors (SMRs) and the Open Base Transceiver Station (Open BTS). Our work on SMRs has led to contacts with companies in the USA, South Korea, and China.

Our telecommunications technology is a local innovation based on Open BTS, a USA open-source platform that enables calls into the Global System for Mobiles (GSM) at minimal cost. We placed the former on abeyance and some work continues on the latter, all due to the disruption of Covid and the 3Sixty Life curatorship.

What are some of The Group's offerings to mitigate challenges?

Our investment is designed to address the challenges of rising healthcare costs caused by the burden of disease. For instance, our investments in weight loss technologies (three weight loss products will be launched) will have a positive impact on diabetes and hypertension.

In conjunction with this investment, we are acquiring a company that specialises in treating diabetes and hypertension. They have a vision to expand services to include renal dialysis, pathology, and a whole lot of areas in which we can bring costs down whilst making a decent profit.

We remain in an environment where we are exposed to an abundance of technology, so much so that we are like kids in a candy shop, and had to quickly develop the discipline to choose high impact technologies.

How is the 3Sixty Global Solutions Group unique in its offerings?

Partnership symbiosis is one of our strengths as we are able to engage with local and international partners effectively, because we have a unique biotechnological innovative offering to put on the table.

Partnerships are transformative in that through complementing one another we are able to advance each other’s objectives much quicker and more cost effectively.

Our growth will be driven by entry into global markets through partnerships as well as offering inward and outward innovative products. We will export South African Intellectual Property (IP) and integrate with the best global IP to advance mutual benefits with numerous partners. 

Is the vision of being "a listed Pan African Group with significant global market presence by 2025" on track?

This objective remains on track, albeit in different shapes. We have broken the Group into two groups now, Doves Group Holdings (DGH) which offers funeral services and insurance, and 3Sixty Global Solutions Group (3Sixty GSG) which offers healthcare and biotechnology solutions. The paths taken will be different, but the objective will be met.

What are the opportunities for The Group, despite the challenges?

Our investment in biotech remains the single biggest opportunity. We remain one of the few in South Africa who have invested heavily in biotech research and development, especially considering our size.

Khandani Msibi, Executive Chairman, 3Sixty GSG, has 30 years’ experience, which started in manufacturing in the steel industry and later moved on to the FMCG industry, working for companies like Bristol Myers, Bromor Foods and ABI senior management level.

His introduction into sales was when he was appointed National Sales Director at Fedics. After a short stint in at the Water Board as CEO, he joined NUMSA Investment Company when it was being liquidated and rescued it with a team of professionals.

Msibi and his team transformed NUMSA Investment Company from a funeral services company into a group of companies in life insurance, medical aid, retirement funding and investment, and more recently, biotechnology.

Our investment is designed to address the challenges of rising healthcare costs caused by the burden of disease

Smile Foundation transforms the lives of children with facial abnormalities and severe burns through the best possible surgical and psychological care.

We are currently based in 14 of South Af rica’s leading hospitals where we invest in development programs and purchase much needed medical equipment for depar tments specialising in plastic and reconstructive surger y.

With the compassion and suppor t of our benefactors and teams of medical staff, we can sprinkle a little bit of magic into the lives of these children and give them a future full of joy.

Please donate to help us continue our work and suppor t children in need.

EVERY CHILD DESERVES TO SMILE.

Invest in South Africa

to make it work

Busisiwe Mavuso, Chief Executive Officer at Business Leadership South Africa (BLSA), talks to SA BUSINESS INTEGRATOR about the biggest challenges facing the South African economy, what is needed to mitigate this, and more...

What are the biggest threats facing the South African economy and/or business?

From BLSA’s perspective, these are the scourge of criminality and corruption; the energy (electricity) crisis; the woeful state of our transport and logistics network (particularly freight rail and the operations of our ports); and threats to water availability and infrastructure.

What is required to mitigate this?

An all-of-government approach is required, delivered by an effective and capable, professionalised civil service. This is arguably one the key initial steps.

In addition to this, the policy environment needs to encourage the private sector to partner with government to deliver some of the essential services referred to above. For example, the private sector is already contributing to energy generation and there is scope for further private sector participation in transmission and distribution.

The same is true for transport and logistics; the conditions need to be attractive to allow the private sector to invest and contribute to social goods (like facilitating the maximisation of export revenue).

And of course, we need to urgently ramp up our collective efforts to eliminate as far as possible corruption across the public and private sectors, and generally minimise the endemic criminality that is significantly affecting economic growth and job creation.

Which sectors need urgent intervention to bring about positive change?

The network industries are critical. Without these operating effectively, all other sectors are compromised. We’ve seen this in manufacturing, agriculture, mining and services across the economy.

What interventions are needed?

Put simply, we need to move away from a statist conceptualisation of the economy and towards recognition of the fundamental, catalytic role that unleashing the power of the private sector can play.

We are making tentative moves in this direction, but this needs to be speeded up significantly. Concessioning of ports, railways, power stations, etc. are obvious examples but this has to be accompanied by a crackdown on criminality.

What are some of the key opportunities that businesses can capitalise on?

South Africa has a lot going for it – a vibrant democracy, a strong judiciary, a capable and patriotic private sector, and enviable endowments of natural resources conducive to major sectors like mining, agriculture, tourism (to name just a few).

With the right policy mix and a professional, capable civil service, there is little we cannot achieve.

What role does BLSA play in helping to unlock and enable opportunities?

BLSA as an industry association works hard to unlock opportunities. We do this by advocating for appropriate regulation, capacitating the state wherever possible (at local and national government level, as well as state institutions), and providing technical expertise for the realisation of specific objectives (e.g. supporting NECOM, Operation Vulindlela, the Presidential SOE Council, SAPS, NPA, etc.).

How much leeway does the private sector have to bring about proactive change to help drive growth?

The private sector is ready and willing, and already contributes extensively to finding solutions. However, there is always the need for the basics to be in place – a willing partner in government with the requisite appetite and skills to effectively partner with business.

Business has no option (other than divestment, which would be disastrous to SA) but to invest in making South Africa work.

Short-termism won’t help – we need to focus on sustainable solutions to our most pressing problems, like load shedding, or we will be stuck with the status quo indefinitely. That would not be good for business or society as a whole.

Q&A: BLSA

Why should multinational corporations want to (or continue to) invest in SA?

South Africa enjoys a number of advantages, notwithstanding our very serious deficiencies. We have an effective judiciary (sanctity of contracts), an ecosystem of a solid private sector, enviable natural endowments, a reputation as a reasonable choice as a gateway to the region, preferential trade agreements with the EU, UK and the US, soon to be augmented by the African Continental Free Trade Agreement.

Looking at the recent budget speech, what would you say was lacking?

We thought the budget speech was excellent, considering the multiple challenges facing the country. The fact that the Minister was able to balance fiscal consolidation (albeit with some slippage on the debt-to-GDP ratio) with multiple spending pressures was very impressive.

We do, however, think that more should have been done to incentivise off-grid energy solutions. For example, expanding the tax incentive for solar power generation to include batteries would have been prudent given the severity of the electricity crisis.

The constraints emanating from our network industries especially militates against meaningful growth. We would not be surprised to see growth coming in at around the SARB’s expectations.

What growth is SA expected to achieve in 2023?

We are unfortunately quite conservative in our estimations. The constraints emanating from our network industries especially militates against meaningful growth. We would not be surprised to see growth coming in at around the SARB’s expectations.

How do you see the year unfolding?

A lot of political “noise”, but (and this is crucial) slow and steady progress on the economic reform front.

The work that Operation Vulindlela in the Presidency is doing is very important and should over time significantly move the dial on growth if implemented effectively. 

Busisiwe Mavuso is a Chartered Certified Accountant, CCA, qualified with Association of Certified Chartered Accountants (ACCA–UK) and holds a Master’s Degree in Business Leadership, a Postgraduate Qualification in Management from GIBS, a BCompt in Accounting from the University of South Africa (UNISA), and is currently completing her PhD.

She is the Chief Executive Officer at Business Leadership South Africa (BLSA); Business Unity South Africa (BUSA) and Resultant Finance (a PIC investee company) and serves on the Human Resources Development Council (HRDC), the Advisory Committee of the Local Government Ethical Leadership Initiative (LGELI), The Alcohol Industry Advisory Council (TAIAC), the Drinks Federation of South Africa (DF-SA) Council of Members and the Social Justice Council. Furthermore, she is a Visiting Adjunct Professor at the Wits Business School (WBS). Mavuso is also a member of the YPO (Young President’s Organisation), the IoDSA and ACCA.

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SA’s grey-listing

by FATF

On 24 February 2023, South Africa was placed on the Financial Action Task Force’s (FATF) grey list. This is a list of countries and jurisdictions where the FATF exercises enhanced monitoring with regards to anti-money laundering (AML) and combatting the financing of terrorism (CFT) legislation and the effectiveness of the implementation of the laws.

There were 12 key areas identified where South Africa needed to improve and these related to the strength of our processes as well as institutions regarding AML and CFT. The table below lists the countries on the FATF’s monitoring lists:

•

• Iran

enhanced due diligence in the processing of transactions, vetting clients, verifying the sources of funds, and tracking their use.

• Myanmar

This has the effect of undermining the credibility of the country and tarnishing its reputation. Further, the enhanced vigilance will increase the cost of doing business for local entities when engaging with foreign counterparts.

Next steps

• Albania

• Barbados

• Burkina Faso

• Cayman Islands

• Democratic Republic of Congo

• Gibritar

• Haiti

• Jamaica

• Cambodia

What is FATF?

• Jordan

• Mali

• Mozambique

• Nigeria

• Panama

• Philippines

• Senegal

• South Africa

• Morocco

The (FATF) is the global money laundering and terrorist financing watchdog. It sets international standards that aim to prevent these illegal activities and the harm they cause to society. (Source: FATF)

What does it mean for SA and what is our plan?

Whilst not having specific adverse consequences, this classification does signal that greater scrutiny and caution needs to be exercised by other countries and institutions when dealing with South African entities at large. Foreign institutions are therefore likely to exercise

• South Sudan

• Syria

• Tanzania

• Turklye

• Uganda

• United Arab Emirates

• Yemen

Drawing from our rest of Africa research, Mauritius was also subjected to a similar fate. That country instituted swift actions and was promptly removed from the list in less than two years.

The South African government has outlined a plan of action and allocated a budget of R41 billion towards these efforts. It is believed that this plan should be implemented over the next few months. South Africa has requested to be formally reassessed in June of this year and this could pave the way for a reversal of the listing by 2024. In terms of the FATF process, the shortcomings identified need to be rectified by the end of January 2025.

It is hoped that the status is likely to be reversed in 2024 as the action plan appears achievable. The 12 areas identified are relatively similar to those Mauritius needed to address and hence there is confidence that the milestones can be achieved. There is also sufficient political will to believe that there will be a concerted effort in addressing the issues identified by the FATF.

Asanda Notshe, Chief Investment Officer at Mazi Asset Management

South Africa has been grey listed!

What are the implications?

South Africa’s grey listing by the Financial Action Task Force (FATF) has significant implications for its economic growth and global competitiveness but moves are already being taken to satisfy the FATF.

By the Webber Wentzel Finance Team

The main implication of grey listing is that members of the international community are "warned" that conducting business with the impugned country could facilitate terrorism financing and money laundering.

South Africa has taken certain measures to address FATF concerns

In April 2022, the Investigating Directorate (ID) was established within the National Prosecuting Authority to prosecute individuals and entities that were involved in state capture. Besides, South Africa submitted several reports to the FATF, prosecuted several money laundering offenders, and utilised extraditions to get fugitive offenders. The National Treasury also moved quickly to enact necessary legislation.

On 22 December 2022, the General Laws (AntiMoney Laundering and Combating Terrorism Financing) Amendment Act commenced after being signed by the President. The Act amends five pieces of legislation including the:

1. Companies Act, 2008;

2. Financial Intelligence Centre Act;

3. Financial Sector Regulation Act, 2017;

4. Nonprofit Organisations Act, 1997; and

5. Trust Property Control Act, 1988.

For more details on the amendments made to the aforementioned legislation and when the relevant sections in the Act are commencing, please visit www.webberwentzel.com/News/Pages/ commencement-of-the-general-laws-anti-moneylaundering-and-combating-terrorism-financingamendment-act.aspx

On 23 December 2023, the Protection of Constitutional Democracy Against Terrorist and Related Activities Amendment Act commenced after being signed by the President. This Act

expands the definition of terrorist activities; provides for crimes related to terrorist training, the joining of terrorist organisations, and the possession and distribution of publications with terrorism-related content.

In February 2023, South Africa made a highlevel political commitment to work with the FATF and ESAAMLG to strengthen the effectiveness of its AML/CFT regime. Since the adoption of the Mutual Evaluation Report (MER) in June 2021, South Africa has made significant progress on many of the MER’s recommended actions to improve its system, including by developing national AML/CFT policies to address higher risks and newly amending the legal framework for TF and TFS, among others.

What are the implications for the country moving forward?

The implications of grey listing for South Africa are two-fold: reputational and economic. South Africa now has a negative reputation in the global economy. It may also be downgraded by credit rating agencies, which would affect the country's ability to borrow on the international capital markets. Economic consequences of grey listing can be summarized as follows:

1. Less capital flows into South Africa: According to a report by the International Monetary Fund (IMF), grey listing leads to a significant decrease in capital inflows. For vulnerable countries, this could result in a balance of payments crisis. This is because grey listing entails that all transactions of South African companies and individuals will be seen as high-risk transactions, resulting in complicated compliance and administrative duties, and likely disincentivising investment into and trade with South Africa.

2. Economic penalties might be imposed on South Africa: FATF member states and other international bodies might impose economic penalties and similar measures against South Africa. International finance flows to and from SA will entail higher compliance obligations and transaction costs.

Regulators in the US, EU, and the UK might place restrictions on their banks regarding transacting with South African banks. Some international financial institutions have policies that prevent them from doing business with grey listed countries or at least, limit the scope of business that can be conducted. Such restrictions will further impede business and foreign investment.

3. Less foreign direct investment (FDI): Grey listing will discourage FDI in South Africa and

reduce capital inflows. It will raise the cost of doing business in South Africa, making foreign investors reluctant to invest in the economy. This is because international counterparts will have to undertake increased due diligence when dealing with South African entities. As transaction costs rise, there is a disincentive to do business with South African firms. South Africa will be viewed as a high-risk jurisdiction for business, so some foreign investors might take out their investments.

4. Decrease in South Africa's external reserves: If there are lower capital inflows and FDI into South Africa, this could reduce external reserves as there will be less tax revenue.

5. Difficulty obtaining financing on the international market: Given the implications of grey listing, South African companies will find it harder to obtain financing from foreign lenders on the international capital markets, and from multilateral lenders such as the World Bank.

6. Decreased competitiveness of South African companies in the global economy: South African companies, due to enhanced monitoring, will face more requirements to prove sources of funding, leading to higher transaction costs and delayed execution of transactions. This will ultimately harm the competitiveness of South African companies and South Africa as a whole in the global market.

Financial institutions that rely heavily on global trade in their treasury departments will be heavily impacted. Trading offshore will come with higher due diligence hoops to jump through and more red tape. Trading revenue is therefore going to decline. The South African insurance industry will particularly be impacted.

7. Climate adaptation will be impacted: South Africa urgently needs to adapt to climate change, and financing from international partners is needed. At COP 26, the US, EU, UK, France, and Germany pledged to give USD8.5 billion to South Africa to finance its transition to a lower carbon economy. After grey listing, international finance flows to and from South Africa will be riddled with higher compliance obligations and transaction costs. Even if South Africa does receive the funding, it is likely to need the support of other foreign investors and companies to successfully transition to a lower carbon economy. Grey listing will make it harder for the country to achieve its ESG goals.

What does South Africa need to focus on?

The FATF has identified eight areas that South Africa needs to focus on, which include improving South Africa's risk-based supervision of identified risks. South Africa is also required to improve their investigation and prosecution of serious and complex money laundering and terrorist financing activities. Competent authorities are also required to ensure that they have accurate and up to date beneficial ownership information.

It is important to note that, as Mauritius has shown, South Africa can come off the grey list within as little as two years if government and the private sector co-operate to take decisive actions to address the FATF’s concerns.

Government is clearly committed to these actions. Finance Minister Enoch Godongwana, in his Budget speech on 22 February, said the outstanding deficiencies would be addressed through regulations and the eight actions summarised above. South Africa has a plan of action, it is now about implementation. 

to mitigate threats to SA’s economy Action needed

The lack of leadership and of decision-making, and the inability to implement critical interventions needed to instil confidence, attract investment and grow the economy are the biggest threats to South Africa, says Cas Coovadia, CEO of Business Unity SA (BUSA).

Considering South Africa’s grey listing, how is this expected to impact business?

As regards foreign investment, this will further erode confidence and potential investors will be concerned about South Africa’s ability to combat money-laundering and terrorism financing. This erosion of confidence will also lead to lower investment and an inability to grow the economy to create jobs, thus causing a negative impact on job-creation. Businesses will find it difficult to retain jobs in a shrinking economy.

What are your thoughts on President

Cyril Ramaphosa’s calls on the private sector to intervene and find solutions?

The private sector has bent over backwards to support government. Examples are the mobilisation of the private sector during Covid and support of the private sector to help NECOM implement the President’s Energy Plan.

How much freedom does the private sector actually have to enact proactive change?

The private sector needs to move away from concentrating on expectations of government’s positive response to offers of help from the sector, to focusing on areas we can implement on our own and make a real difference in the national interest.

What are the tangible solutions and actions to drive sustainable growth in South Africa?

We need to work on specific sectors and identified products to drive growth, but government must work on structural reforms to the economy to enable this. Critical sectors are mining, agriculture, manufacturing, automotive and services.

Is there sufficient intervention from government to help businesses navigate the energy challenge?

There has been some progress on this as laid out in the President’s budget speech. The President’s Energy Plan needs to be implemented urgently to help solve the energy crisis and assist business.

Is the privatisation of SOE’s a viable option, and why?

There must be an option to increase efficiencies, reduce state exposure and drive economic growth; but within the context of the rationalisation of SOE’s and the closure of some.

What are some of the other challenges that can be expected in 2023 and going forward?

Logistics and law and order are critical challenges. Also, a looming water crisis and dysfunctionality of municipal government.

How do you see the rest of the year unfolding from a business perspective? Jobs will be shed without decisive moves to attract investment and enable growth. Immediate appropriate interventions in energy, logistics and law and order could improve the environment.

Progress in improving leadership in government and implementing critical interventions will help raise confidence. BUSA encourages government to send the message that South Africa is open for business in order to attract investment.

What are some opportunities that can be unlocked?

The private sector generation of energy and driving Transnet towards greater participation of the private sector in logistics. And the South African private sector has the capacity, resources and skills to do this. 

Cas Coovadia took over the reins as CEO of BUSA on 1 April 2020, after retiring as Managing Director of The Banking Association SA (BASA) where he spent 15 years. He was instrumental in positioning BASA as one of the leading business organisations in SA and positioning it as a credible voice for the banking industry.

Addressing industry skills shortages in

the mining sector

In its global risk barometer for 2022, international financial services provider Allianz surveyed 2 650 risk experts in 89 countries on the biggest perils facing industries in the coming year. Notably, skills shortages were identified as the eighth biggest risk in South Africa currently.

By Jacques Farmer, MD of PRISMA and Roland Innes, Group CEO of Dyna Training

Our economic recovery and growth in the aftermath of the Covid-19 pandemic will depend largely on our ability to address skills shortages in the labour market and the workplace. Companies and individuals should make the most of every opportunity to develop skills and align these skills with the Quality Council for Trades and Occupations (QCTO).

Responsible for the oversight of the accreditation, implementation, assessment, and certification of occupational qualifications, part-qualifications, and skills programmes, the QCTO has a major role to play in tackling skills shortages. It does so by placing vocational certification by means of learnership and apprenticeship programmes at the centre of South Africa’s skills creation system.

Urgent need for practical skills and artisans

There has been an increased demand worldwide for artisans, engineers and technicians along with individuals skilled in sales and marketing. This highlights the fact that practical skills are urgently needed in the labour market and that there should be an increased focus on training artisans.

South Africa’s QCTO was established to manage the Occupational Qualifications Sub-Framework (OQSF) by setting and developing standards, while assuring the quality of national occupational qualifications. The purpose of the OQSF is to facilitate the development and registration of quality-assured occupational and trade-related qualifications, part-qualifications and skills programmes from the National Qualifications Framework (NQF) Level 1 to 8. This is intended to meet the needs of existing and emerging sectors by ensuring that all learners, professionals, workers, unemployed and those classified as NEET (Not in Employment, Education or Training), are equipped with relevant and transferable competencies to enhance lifelong employability.

Win-win for businesses and labour market

Ultimately the QCTO is intended to replace the Sector Education and Training Authority (SETA), while closing the gap whereby individuals in the labour market have the skills but lack the formal certifications or paperwork necessary to find employment or to maximise earning potential. While higher-level qualifications are essential, it is also necessary to address the immediate gap that stands between an individual coming out of school and becoming eligible to embark on the national qualification process.

To this end, the QCTO has implemented skills programmes, effectively a shorter skills syllabus, at the end of which a learner can gain entry into a qualification or a part-time qualification. This also has the immediate benefit of making the individual more employable.

In addition to increasing and keeping their own skills in-house, businesses can contribute to the career development of their people which provides a greater level of motivation and incentive. Skills development training also assists with reducing absenteeism where workers feel that the training they’re getting is valuable to their personal growth, contributing to a more committed workforce.

Where companies offer skills development opportunities, it becomes possible to redirect budget spend previously used for recruitment into training, shifting the focus to retention instead of acquisition.

more committed workforce.

Skills development training also assists with reducing absenteeism where workers feel that the training they’re getting is valuable to their personal growth, contributing to a

The nitty gritty of the QCTO: how does it work?

As mentioned, the QCTO is responsible for the accreditation of Skills Development Providers (SDPs), authorising them to facilitate programmes and qualifications that fall under the OQSF. These include occupational qualifications including ‘old’ trades, N4-N6 Programmes, historically registered qualifications, and the shorter, bridging skills programmes. Any SDP offering training or intending to offer training in any of these must seek accreditation from the QCTO and must comply with the entity’s minimum criteria.

Out with SETA, in with QCTO

From June 2023, SETA accreditation will be subject to a teach-out period, after which qualifications and skills programmes will need to be aligned with QCTO. This is a valuable opportunity for training providers to align their offerings to the QCTO accreditation standards, as that is the direction in which we are headed.

It will be necessary to work hand-in-hand with industry leaders in developing learning material to ensure that the necessary knowledge is combined with practical experience, hands-on learning opportunities and assessments.

Additionally, a major focus of these skills development and training programmes will be ensuring that learners are placed at companies where they can gain experience and skills in the workplace, and ultimately take up employment after assessment and qualification. The output from SDPs will be assessed by Assessment Quality Partners (AQPs), and it is the responsibility of the AQP to sign off on the provider issuing a Statement of Result to the learner which gives them entry to the Integrated Summative Assessment for certification.

Smarter approach to skills development

For companies to maximise this opportunity, both from a tax rebate and Broad-Based Black Economic Empowerment (B-BBEE) scoring perspective, they will need to ensure that they coordinate training initiatives with SDPs that are

accredited by the QCTO.

SDPs will need to modernise their curriculum to be more learner-focused, while forming relationships with AQPs. In order to exit learners smoothly, organisations will need to prepare their workplaces so that they are compliant with QCTO requirements, developing the necessary mentoring infrastructure to enable those placements while giving learners the best possible support.

In shifting the focus from generic skills training to inclusive learner development and facilitation through the QCTO framework, it becomes much easier to address South Africa’s skills shortage effectively and sustainably.

The mining perspective

With the South African and pan-African mining sectors growing significantly over the past few years, the skills shortage in this industry has widened massively across the entire spectrum of skills – including artisans, engineers and technicians. This skills shortage was further compounded by the COVID-19 pandemic, with mining houses being reluctant to develop qualified people during times of economic uncertainty and limited activity.

As a result, private training providers, such as SDPs, have seen a recent spike in the uptake of their services – not only for the development of skills within mining houses themselves, but also for the upskilling of local communities in which these miners operate. The need is not only to catch up

on the skills that have been neglected during the pandemic, but equally to focus on skills that need to be developed for the future. Hence, there is currently a renewed emphasis on learning and development within the mining industry in South Africa, in SADC, as well as across other parts of the continent.

However, there seems to be a significant margin for improvement in the commitment of local mining houses to learning and development initiatives. While South Africa currently has more than 2 000 recognised and operational mining operations within its borders, only about 50% of them proactively submit their annual Work Skills Plans and Annual Planning Reports, as required by the Mining Qualifications Authority (MQA), to qualify for training-related tax rebates.

There might be bigger changes on the cards for organisations operating in other sectors, where no practical training component can be provided before a trainee is deemed competent.

Repositioning legacy qualifications

Despite there being more than 2 000 operational mining houses in South Africa, there are currently only 183 SDPs. Due to the phasing out of SETAs from June 2023, these SDPs are currently working closely with the MQA and qualified curriculum designers to reposition their legacy qualifications as occupational qualifications, as well as partqualifications, as per QCTO requirements.

In 2020/21, a number of occupational qualifications were selected to be redesigned and registered with the QCTO, and the training sector as a whole is largely in line with its targets

for registering the new qualifications by June 2023. From that date, all unit-standard-based training will lapse and will be no longer be registered on the mining qualification system. Instead, unitstandard qualifications will essentially be replaced or incorporated into modular training or partqualifications.

Currently, mining training providers, or SDPs, obtain their accreditation through the MQA, but as the MQA will be replaced by an AQP in June 2023, all legacy qualifications will be placed in the QCTO basket, with this body taking charge of qualifications going forward.

Under the new structure, SDPs will still be able to obtain accreditation as different types of qualification bodies, such as those that provide training in the knowledge spectrum or compliance spectrum. For the third spectrum – workplace approval – SDPs will need to conclude a service level agreement with a mining house that runs its own training centre to obtain Workplace Approval Accreditation. Essentially, this means that SDPs will still be involved in all three spectrums of mining training.

Changes for miners

Traditionally, the training offered by private training providers to the mining industry has always been of a circular nature – encompassing a knowledge component, a practical component and a workplace component, and this will largely still be the case. The specifics of the relationship between SDPs and AQPs is yet to be determined.

Hence, mining houses are not expected to see significant changes to how SDPs provide training under QCTO. There might be bigger changes on the cards for organisations operating in other sectors, where no practical training component can be provided before a trainee is deemed competent. Nevertheless, miners will need to remain vigilant of developments in the QCTO space and specifically the emerging role of AQPs. 

Uncertainties in base and precious metals supply:

Is Africa ready?

The ongoing Ukraine war and ensuing sanctions imposed on Russia have resulted in spasms in the oil and natural gas markets, driving well-documented disruptions to energy supplies, as well as agricultural resources.

By Kearney

However, the shortages in supplies of crucial basic and precious metals, which are just as concerning to Africa's business leaders as those in energy and agriculture – have garnered far less coverage and attention.

"The sanctions against Russia, one of the world's biggest exporters of raw materials, is causing knock-on effects that are rippling throughout many spheres of business, from the sustainability of Africa's mining operations to the stable functioning of the manufacturing base," explains Igor Hulak, a Partner at Kearney, a leading global management consulting firm. The suspension of foreign shipping operations has triggered a worldwide shipping container shortage. With existing infrastructure insufficient for handling the redirection to and through Asia of raw materials in their full volumes, industries are looking for solutions.

In addition, alternatives that make use of ageing infrastructure are unsuitable as they pose massive environmental risks, as proved by the catastrophic 2020 diesel spill at Norilsk Nickel, Russia's worst-ever Arctic environmental disaster. China may have been able to fill the supply gaps, but ongoing Covid-related shutdowns and supply chain interruptions have made that difficult.

These sanctions and shutdowns will continue to affect Africa's consumers as well, having manifested in increased prices for food and fuel.

Deficit in global nickel supply is an opportunity for African nickel producers

Since early 2022, the five base metals that Russia produces on a vast scale; nickel, aluminium, copper, iron, and zinc; have experienced sharp price increases, and continued supply disruptions are likely to see prices rise further still.

"Nickel, which is a critical ingredient in lithium-ion batteries and essential for the global energy transition, is in short supply. Russian companies such as Norilsk Nickel, the world's largest nickel producer, had historically supplied global markets. However, the sanctions have made Russia, which accounts for roughly 10% of the global share of nickel, unable to meet this global demand," Hulak notes.

"This deficit in global supply presents an opportunity for African nickel producers, such as Zimbabwe and Botswana, to step in and fill the gap. However, overcoming existing inadequate export infrastructure will be a major challenge, requiring government buyin and a collaborative multi-sector approach. Though the challenges are formidable, Africa must find a way to seize this opportunity and emerge as a key player in the new global metals market," Hulak asserts.

Hulak says that prices of other base metals for which the world is less reliant, such as iron and zinc (of which Russia produces 4% and 2% of the global share, respectively), are likely to stabilise.

Precious metal prices have, by contrast, shown less volatility. However, as these too are crucial to the electric economy, experts warn that price increases are still on the cards.

Nickel, which is a critical ingredient in lithium-ion batteries and essential for the global energy transition, is in short supply.

Most significant increases expected for platinum

The most significant increases are expected in the platinum group. Russia accounts for almost 40% of the world's supply of palladium and 11% of platinum, which is essential for hydrogen-based energy technologies (as well as alloys, circuitry, and ceramic capacitors).

According to Hulak, market and pricing drivers are currently indicating long-term price increases for the platinum group metals. This presents a golden opportunity for South Africa, still the world's largest producer of these metals, to step in and fill the supply gaps. Moreover, this is a unique opportunity for South Africa to leverage its already strong position and expand its operations in the sector to meet the escalating global demand.

Hulak goes on to add that platinum group metals are typically associated with rare earth metals such as rhodium, iridium, and palladium. With Russia unable to supply such metals, and with potential higher demand for these metals from increased military activity, it creates a market gap that African countries can fill.

"Traditionally a reliable safe-haven investment, gold (of which Russia is a major producer) is likely to see moderate price increases. This could work in favor of Africa's gold production powerhouses like Ghana and South Africa.

The silver price is, however, expected to stabilise, mainly because of the lack of direct sanctions and Russia's minor share of global production (6%).

Can the market find enough critical raw materials needed to support energy transition?

At this pivotal moment, with the energy transition enjoying popular public backing, the major concern now is whether the market can find enough of the critical raw materials needed to support it. Apart from exacerbating the disruptions driven by the Covid pandemic, these supply shocks are compounding the price pressures associated with this global shift and the resources this requires.

Offshore wind plants, for example, need more than seven times the amount of copper compared to equivalent gas-fired plants; and EVs use more than six times more minerals than internal combustion-powered vehicles.

Supply disruptions will likely continue to affect global markets. As a result, some African companies may need to pivot or scale down to withstand the current strains and maintain their operations.

However, Africa's wealth of natural resources, including many of the basic and precious metals currently in short supply, could allow her to leverage the opportunities presented by the shift towards an electric economy. By leveraging these resources effectively, Africa has the potential to drive additional economic growth, develop industries along the value chain, and create jobs.

Overall, however, the balance in global supply will not change significantly. As a result, prices for many base metals are expected to revert to the global consensus-forecast levels. Still, for some commodities, like nickel and precious metals, price increases look like they're here to stay. 

REFERENCES

i https://www.weforum.org/agenda/2022/05/africa-faces-new-shock-aswar-raises-food-and-fuel-costs/

ii https://www.statista.com/statistics/1058851/russia-gold-productionvolume/#:~:text=In%202021%2C%20Russian%20gold%20 production,366%20metric%20tons%20in%202019.

iii https://www.businesslive.co.za/bd/markets/2022-02-24-higher-metalprices-benefit-sa-amid-ukraine-turmoil/

iv https://elements.visualcapitalist.com/evs-vs-gas-vehicles-what-are-carsmade-out-of/#:~:text=Electric%20vehicles%20(EVs)%20require%20 a,kg%20(750%20lbs)%20heavier.

... Africa has the potential to drive additional economic growth, develop industries along the value chain, and create jobs.

Dry ice blast cleaning

on electrical stators & rotors can cut downtime by as much as 80%

Dry ice blast cleaning could save South Africa at least one level of load shedding if all the power generators are dry ice blast-cleaned on a planned maintenance schedule within the next 12 to 24 months, says Deon Roux, CEO of Dry Ice Blasting Services. SA BUSINESS INTEGRATOR spoke to him to find out more...

Dry Ice Blasting Services (DIBS) was born out of Dry Ice International. I was part of the startup 30 years ago, and we were the first company to bring dry ice blasting from the USA to Africa.

From the beginning, DIBS was part of Dry Ice International, but due to the rapid growth of the dry ice blasting market, it was decided five years ago to form a separate entity for blasting. The main focus was the dry ice blasting market in Southern Africa.

Dry Ice International is the mother company and supplies dry ice pellets to DIBS from six different

manufacturing sites in South Africa, 24 hours per day, 7 days per week, 365 days a year. DIBS delivers the dry ice blasting service, either on a contract basis, planned shutdown cleaning or 24-hour emergency cleaning.

What is the background to Dry Ice Blasting Services?

What was the rationale behind starting this business?

My background is mechanical engineering. During the first part of my career I worked as an engineer in a chemical factory. One of the plants at the factory manufactured liquid CO2 from a fermentation process. Downstream from that was a dry ice plant, on which I spent time maintaining and optimising the plant.

This company was bought by an international chemical company and the liquid CO2 and dry ice plants were shut down just after I left to start Dry Ice International.

What is dry ice blasting and what are some of the benefits?

Dry ice blasting is similar to sand blasting, where 3mm dry ice pellets are accelerated in a pressurised air stream to impact the surface to be cleaned. Once in contact with the surface, the dry ice evaporates.

This process is called sublimation and this unique characteristic of dry ice is what makes it ideal for cleaning a variety of industrial equipment. During the cleaning process two things happen – high kinetic energy impact and a thermal shock.

Which industries benefit the most?

Cleaning of the stators and rotors on large electrical motors, generators, and electrical panels that have been damaged by electrical flash or fire damage, mould cleaning, removal of ink on printing presses, cleaning of chemical plants and tanks, and food manufacturing plants.

The costs of cleaning a large electrical generator can be recovered in less than a month...

Which industries would benefit in the long term?

ESKOM is one which could benefit from dry ice blast-cleaning of their generators, transformers, and steam turbine rotor blades.

Dry ice blasting can make a significant difference to the downtime, efficiency and lifespan of generators by dry ice blast-cleaning of the stators and rotors on the large generators at all the major power generation stations in South Africa.

What is the impact from an environment and safety perspective?

The use of dry ice pellets eliminates any solvent or chemicals and solid waste, like sand, as it sublimates into the atmosphere after the cleaning process. It is like an industrial dry cleaning process without any secondary waste.

How does this service enable improved efficiencies?

Downtime on electrical stators and rotors can be cut by as much as 80%. The costs of cleaning a large electrical generator can be recovered in less than a month due to the improved output and higher efficiencies.

Considering the challenges facing South Africa, can the service offerings potentially assist to plug the gap?

We believe that we can save South Africa at least one level of load shedding if all the power generators are dry ice blast-cleaned on a planned maintenance schedule within the next 12 to 24 months.

During major breakdowns, dry ice blast cleaning can be done in parallel to emergency repairs and maintenance without any major disturbances to the technicians. We have teams that are on 24-hour standby in case of any electrical emergency in Southern Africa.

Many breakdowns occur due to short circuiting of the electrical control equipment. This happens when regular maintenance cleaning is not done to remove the carbon build-up between circuits. Dry blast cleaning is the perfect process to clean these circuits quickly and effectively, almost certainly eliminating short circuits due to carbon build up.

What other services do you offer?

DIBS also sells dry ice blasting machines to the industry in Southern Africa. We empower the client to do the dry ice blasting themselves or we offer a service and do regular blast cleaning for the client, depending on their needs.

What opportunity is there for SMMEs to enter this field, and enable job creation?

Many SMMEs have bought their own blasters. We take them through a training programme, highlighting all the correct safety equipment needed and accessories for the blasting equipment. We supply them with dry ice pellets and back-up service on the dry ice blasting equipment.

What are some of the indicators that could stimulate the dry ice blasting market locally and into Africa?

We have developed an alternative and less expensive dry ice blaster over the past three years. We supply the machine on a rental base to the client at an affordable monthly cost. The client uses the machine in his workshop or factory, as and when needed.

A new initiative we have started is providing a machine at no cost against a service level agreement coupled to minimum purchases of dry ice monthly.

How do you foresee the expansion of the company?

We have grown by at least 20% a year over the past 10 years, and believe that we will maintain this growth rate to 2030 and beyond.

Our operations are national with facilities in Gauteng, KwaZulu Natal, Eastern Cape and we recently established a new manufacturing facility in the Western Cape in December 2022. We are in the process of further expansion with the aim to establish manufacturing facilities in all the provinces by 2030. 

www.dryiceblasting.co.za

Unlock the Future in Construction and Mining in Africa

Hitachi Construction Machinery supplies an extensive range of Hitachi products and associated life cycle support solutions throughout Africa and the world.

All Hitachi products are known for reliability, performance and cost efficiency in their specific applications and carry quality assurance to international standards. Built on the foundation of superb technological capabilities, Hitachi Construction Machinery is committed to providing leading-edge solutions and services to contribute as a reliable partner to the business of customers in Africa and globally.

brighter future for SMBs Renewables revolution offers a

South Africa experienced more days and hours of load shedding in 2022 than in any other year, but we also saw the longest stretch of unbroken load shedding across September and October. It’s clear there will be no quick fixes for this long-standing challenge.

By Pieter Bensch, Executive Vice President for Sage Africa & Middle East

In crisis lies the opportunity for organisations of all sizes, including small and medium businesses (SMBs). The public conversation often focuses on the challenges and costs of load shedding for smaller businesses and how these can be mitigated. But a more empowering way to look at it is as a chance for SMBs to champion and lead the shift to a cleaner, more sustainable energy world.

SMBs can play a key role in the transition to cleaner energy

The SME Climate Impact Report commissioned by Sage and launched in partnership with Oxford Economics and the International Chamber of Commerce (ICC), shows SMEs' footprint totalled 29% of non-household emissions in South Africa when greenhouse gases generated in their supply chains were considered.

As such, SMBs can play a key role in the transition to cleaner energy. Let’s start with the enormous demand we see in the market for

Opening the floodgates

renewables. From independent power producers (IPPs) building wind and solar farms to feed into the grid to large companies self-provisioning power to solar installations for SMBs and homes – there are plenty of growth opportunities.

In 2020, electricity generated from renewables amounted to a mere 10.5% of the South African national total. One researcher forecasts that South Africa’s renewable power capacity will increase at a compound annual growth rate of 10.7% from 2021 to 2035 to reach an estimate of 40.6GW by 2035, which will constitute 48.3% of total installed capacity.

President Cyril Ramaphosa opened the floodgates for renewables investment, announcing a broad package of reforms. These include making it easier for large power users to self-provide up to 100MW of embedded power generation, launching an Eskom feed-in tariff for solar users to sell power to the grid, and acceleration of IPP rollouts.

This creates enormous opportunities for entrepreneurs and SMBs throughout the supply chain, from providing and installing systems to manufacturing components and playing a role in power storage and provision. The market is far from saturated, and skills are in short supply, creating compelling entrepreneurial prospects in an industry with a bright future.

The pace of innovation in renewables has been astonishing; we could envisage SMBs playing a leading role in driving further progress. One of the lessons we could take from the load shedding crisis is that avoiding another monopoly would be highly desirable. Instead, we could foster a renewables ecosystem with competition at every level – from installation to power provision.

In fact, driving entrepreneurship is essential for a just transition. Government, labour and communities are justifiably concerned about the loss of fossil fuel jobs and the poor getting left behind in the renewable energy revolution. An inclusive renewables industry would help address these challenges by potentially creating 250 000 new jobs over the next 25 years and off-grid power solutions for rural communities.

One of the lessons we could take from the load shedding crisis is that avoiding another monopoly would be highly desirable.

Harnessing renewables in your business

Of course, not every SMB will want to become directly involved in the renewables industry, but every SMB uses electricity. Herein lies an opportunity for SMBs to evaluate ways of harnessing alternative energy to improve business resilience, sustainability, and efficiency. Rapid renewables innovation means a strong business case for going solar.

For most businesses, barring those with heavy machinery or commercial fridges, solar panels and battery backup are excellent backup power sources. They’re cleaner, quiet, and don’t depend on expensive fuel. What’s more, solar offers small businesses the prospect of becoming increasingly independent from the grid and reducing their power bill over time.

Some municipalities, such as Cape Town, allow businesses to feed power back to the grid for a rebate. Over time, solar installations will pay for themselves, even if you don’t factor productivity through load shedding into the equation. Becoming more sustainable is also a good reputational move that enhances an SMB’s standing with customers and suppliers.

From a short-term perspective, it may be frustrating for SMBs to redirect their capital towards alternative energy sources rather than expanding their teams, opening new branches or undertaking other growth initiatives. However, the shift towards renewable energy should be viewed as a long-term investment in

sustainability and cost reduction. Remember that the calculations will not be the same for any two businesses.

Some of the factors they need to consider include the following:

• Are they using cloud-based software to minimise power consumption in their business and ensure business continuity during power outages?

• Does their building have adequate rooftop space to support a solar installation?

• Do they operate from rented premises? Is it possible that their property owner will be willing to invest in solar?

• How energy-intensive is the business, and how much investment would it take to create a solar and battery installation that would enable it to keep operating through load shedding? Solar can offer those that don’t run commercial fridges or heavy machinery a relatively quick return on investment (ROI).

• Does the municipality buy excess power back from solar users in their metro?

• How will the business finance solar and how much budget does it have? Bear in mind that it’s possible to start small and incrementally add more batteries and solar panels to the system to achieve higher levels of grid independence over time.

Powering less intensive loads with renewables

On balance, many SMBs will find that renewables and battery backup costs are justified. It will enable them to keep running their most important processes during load shedding, so they don’t lose sales or production. In addition, even those that run heavy equipment or refrigeration may be able to save money on the diesel they currently pour into running their generators by powering less intensive loads with renewables.

Another factor to remember is that the National

Over time, solar installations will pay for themselves, even if you don’t factor productivity through load shedding into the equation.

Energy Regulator of South Africa (NERSA) has approved tariff increases for Eskom. With an investment in solar power, companies can insulate themselves against rising power costs by selfgenerating some of the time. The payback will take a few years, depending on the installation size, the number of batteries installed, financing costs etc.–but the investment will ultimately pay off.

The government has also proposed to provide solar-related bounce-back loans for SMBs on a 20% first-loss basis. Small businesses can secure loans from finance providers where the National Treasury will assume 20% of the initial loss. Hopefully, this will help make loans more accessible.

Tools such as Spherics, a carbon accounting solution from Sage, can help businesses easily understand and reduce their environmental impact. Though not yet available in South Africa, it will help SMBs manage their carbon footprint and the data shows where the low-hanging fruit is for SMBs in making the transition.

Renewable energy is key to securing energy future

Given that coal and nuclear plants are built on decade-plus timespans, solar and wind are the best options to address South Africa’s power shortfall rapidly. But the backstory is that we need to gradually wean ourselves from fossil fuels to meet our climate emission promise to the global community and play our part in addressing climate change.

It’s clear the future is renewable. Energy reform is an opportunity for businesses to increase growth and become more sustainable. SMBs need to take their rightful place at the energy reform table, so they don’t get left behind. Government and big business would be wise to tap into the resourcefulness and innovation of the SMB sector to help drive a faster and more successful transition. 

‘go solar’ Small businesses urged to

The 2023 Budget Speech revealed that devising a targeted plan to solve South Africa’s ongoing energy crisis remains the government’s top priority.

The immediate future will see a concerted and collective focus on bringing together the public and private sectors in a bid to fuel the cleanenergy transition and end loadshedding. For small businesses looking to ride this wave on the path to post-pandemic recovery, the key is to “go solar”.

This is the opinion of Jeremy Lang, Chief Investment Officer at independent small- and medium-sized enterprise (SME) financier, Business Partners Limited. Prior to the Budget Speech, Lang aired hopes that “large-scale interventions” would be on the cards for the small business sector in the form of much-needed relief measures.

Budget speech delivered little in the way of SME-specific relief

In light of the almost single-minded focus on boosting embedded generation efforts through various fiscal measures and policy reforms, this year’s speech delivered little in the way of SMEspecific relief. It did, however, propose several measures that speak to the urgent need for government to address the resounding impact that rolling blackouts have had on small businesses.

On this, Lang suggests that South African small businesses review the viability of installing solar energy systems to power their operations.

“Not only will this help to alleviate pressure on the national grid, but it will also ensure business continuity – a vital factor given that loadshedding will likely persist for a long while longer. This could also bring good news for small businesses in the formal sector, who will realise gains in the form of a 125% deduction in tax in the first year for all renewable energy projects,” says Lang.

Proposal to provide solar-related loans for small and medium enterprises

Further state-led interventions aimed at benefiting the SME sector include the government’s proposal to provide solar-related loans for small and medium enterprises on a 20% first-loss basis.

“What this means essentially is that going forward, small businesses will be able to secure loans from finance providers where the National Treasury will assume 20% of the initial loss. This will help to mitigate the total risk on behalf of lenders and hopefully make these loans more accessible to a wider base,” explains Lang.

This development will likely form part of the proposed Energy Bounce Back Scheme, set to launch in April 2023 – an extension of the Bounce Back scheme initiated during the pandemic years to assist SMEs in recovering Covid-19-related losses. On the effectiveness of this particular measure, Lang remains hopeful that the new solar-directed slant of the scheme will attract more uptake than its predecessor which saw only R140 million in loans being approved and R77 million disbursed of the proposed R15 billion.

“This is where the cooperation of state entities, governmental departments, private sector players and financiers will play a crucial role in reaching out to the thousands of small businesses in need of relief, facilitating a streamlined loan application process and deploying funds efficiently,” says Lang.

Overall, government’s R5 billion investment into the expansion of the renewable energy tax incentive is a welcomed development, in tandem with the decision not to increase fuel levies.

... small businesses will be able to secure loans from finance providers where the National Treasury will assume 20% of the initial loss.

R2.8 billion allocated to support 12 000 township & rural businesses

Additionally, this year’s extended Budget Review revealed that the Department of Small Business Development has been allocated R2.8 billion as part of a fund to support 12 000 townships and rural enterprises. The measures on which these funds will be spent remain unclear, but as Lang asserts, “a meaningful impact on informal SMEs and the economy can be made by funding a concerted effort to formalise the many township and rural businesses that exist in South Africa.”

In pushing the agenda to formalise these businesses, government will achieve the dual purpose of providing more support and regulatory protection to small businesses, while expanding the tax base.”

Missing from this year’s Budget Speech was mention of any forthcoming adjustments to the Employment Tax Incentive (ETI) – a policy that Lang suggested should be revised as a way of directly addressing the problem of record-high youth unemployment.

Ahead of the speech, Lang had hoped for another increase over and above the maximum monthly value of R1 500 as per last year’s Budget Speech. It would also be advisable for government to revise the applicable age bracket of the ETI to 35 and expand the designated list of special economic zones to include more underresources communities across all nine provinces.

On this Lang believes the temporary diversion of focus to a more consolidated effort to solve the energy crisis is well-warranted and that a “solution that includes and benefits small businesses is a solution that benefits all South Africans”.

As he concludes: “In light of the changes that are afoot in South Africa’s tax regime, small business owners would do well to seek the advice and guidance of tax professionals and remain informed, via the available knowledge bases, to understand how they can make the most of the tax-related benefits on offer for the foreseeable future, this is where further relief will stem from.”

How to grow

SA’s hydrogen economy

South Africa has the potential to be a global leader in green hydrogen production due to our natural and technological endowments.

By Yershen Pillay, CEO of the Chemical Industries Education and Training Authority (CHIETA)

The hydrogen economy can help to address climate change challenges through reducing greenhouse gas emissions while simultaneously creating jobs along the hydrogen economy value chains. According to a recent report by Masdar-ADSW, the African hydrogen industry could create approximately 1.9 to 3.7 million jobs and boost GDP by 60 billion dollars by 2050.

However, not much attention is being paid to the skills needs of the hydrogen economy and the widening green hydrogen skills gap. It is therefore imperative that we prioritise the training and development of a green hydrogen

workforce so that we are ready when the promise of this renewable energy technology reaches our doorstep. The first immediate task of growing South Africa’s hydrogen economy is to invest in skills development and training of a hydrogen-ready workforce. This will ensure that essential skills are not imported from abroad.

The Chemical Industries Education and Training Authority (CHIETA) has identified 17 future skills for success in the hydrogen economy and developed a ‘Top Ten Skills in Hydrogen’ roadmap. It has also embarked on a plan to upskill 1 000 chemical engineers to become hydrogen systems engineers by 2025.

The second key driver of growth is hydrogen infrastructure development. This entails shifting the current state of hydrogen projects from prefeasibility and feasibility to actual investment.

Hydrogen initiatives in South Africa need swift execution. The slow pace of execution of hydrogen infrastructure projects could significantly stifle the growth of South Africa’s hydrogen economy.

South Africa needs a coherent national hydrogen policy and a standardised hydrogen certifications framework.

schemes for hydrogen are not new and examples can be found in other parts of the world. In the context of South Africa, deliberate and intentional government support would ensure the localisation of hydrogen opportunities.

Growing the hydrogen economy requires a comprehensive set of legislation, policy, and regulations to facilitate a more enabling environment. Perhaps a “Minister of Hydrogen” could have assumed the role of leading the development of an enabling environment and its accompanying legislation. What we need is not debilitating regulations, but transformative regulations that mitigate the risks associated with all aspects of the hydrogen economy. South Africa needs a coherent national hydrogen policy and a standardised hydrogen certifications framework. The development of enabling legislation, policies, and regulations for effective risk mitigation constitutes the third key driver of growth.

The fourth driver for swift and substantial jobcreating growth in the hydrogen economy would be the establishment of government support schemes. The government of South Africa should consider establishing a Hydrogen Innovation Fund and Hydrogen Bank, including a dedicated support fund for hydrogen-related SMMEs. Countries such as Morocco have witnessed a significant share of hydrogen production (almost 30%) being attributed to local SMMEs. Government support

The fifth significant driver of hydrogen’s growth is the need for better coordination and more crosssector collaboration. The private sector cannot play the role of coordination as its primary focus would be profit maximisation. The role of coordinating all stakeholders in the hydrogen economy should be left to government. As an enabler of growth and development, government should facilitate structured collaborative agreements between the leading sectors of the economy involved in the hydrogen value chain, that being the energy, chemicals, transport, agriculture, and mining sectors. From a skills development and training perspective, the sector and education and training authorities (SETAs), have been leading the way with collaborative agreements between CHIETA and EWSETA, as well as CHIETA and the transport SETA or TETA, already in the pipeline.

In addition to these five growth drivers, there is a further need to reduce the carbon footprint of hydrogen. Hydrogen energy is not entirely zero carbon. The production of hydrogen may lead to substantial carbon emissions, and this may vary from different stages (installation, distribution etc.) to the different types of hydrogen energy (green, grey, blue etc.) It is therefore incumbent on all stakeholders to formulate a clear plan for zerocarbon hydrogen production.

These five drivers of growth would lead to a jobcreating hydrogen economy in South Africa within the next few years. South Africa needs a mixed energy policy and hydrogen constitutes a vital addition to the basket of success. What is needed is the swift implementation of hydrogen initiatives and a clear coordination plan with collaboration being an apex priority. Let us hope that South Africa seizes the hydrogen opportunity before it is too late. 

Uncovering the truth behind ‘greenwashing’

Companies and producers have in recent years come under increased pressure to run their operations in an environmentally responsible way – both from a legal and ethical standpoint.

“Whilst this is undoubtedly something to be lauded, it has sadly also given rise to a practice known as greenwashing,” warns Patricia Schröder, spokesperson for the producer responsibility organisation (PRO) Circular Energy.

Schröder cites the environmental charity ClientEarth when defining corporate greenwashing as “the practice of making a company appear more climate friendly and environmentally sustainable than it actually is”.

This can be achieved through advertising and public messaging and is also a tactic adopted by certain businesses to divert customers' attention away from the fact that their operations actually cause significant harm to the environment.

“Although greenwashing is deceptive, it is not necessarily prohibited because of legal loopholes,” Schröder elaborates. “The fact that it persists despite being denounced by NGOs, the media,

and increasingly, regulators is remarkable.”

She points out that greenwashing is not necessarily a deliberate rogue tactic, as it could even take place as a result of mere corporate ignorance.

"Customers are increasingly drawn to producers with outstanding sustainability credentials, and this is a fantastic incentive to meet green targets. But too frequently the correct processes are then not followed," Schröder says.

Different types of greenwashing

“One of the biggest concerns regarding greenwashing, is how intricate the deceptive tactics have become,” Schröder warns.

She refers to a report by the non-profit financial think tank Planet Tracker, titled “The Greenwashing Hydra", that explains the sophisticated schemes some producers and organisations resort to.

“One of the tactics the authors of the report has observed is called Greencrowding,” Schröder says.

“It relies on safety in numbers and is based on the idea that you could hide in a crowd to avoid detection. However, a closer look reveals that none of these organisations' progress reports offer open, quantifiable, and audited data.”

Another tactic used is Greenlighting. This occurs when company communications stress a particularly green characteristic of its operations or products, however tiny, in order to shift attention away from ecologically damaging actions being performed elsewhere.

Greenlabelling is also a deceptive method.

“This is when the term "green" or "sustainable" is used by marketers, but a deeper look reveals that their claims are false. It is challenging for a layperson to understand the numerous environmental labels. Terms like ‘bio’, ‘from nature’, ‘natural’, ‘green’ and ‘eco-friendly’ are commonly used, but poorly defined and therefore abused.”

Consequences could be dire

Schröder emphasises that it is crucial to remember that making false environmental claims has huge consequences – like hindering the development of the green economy.

“Greenwashing hampers sustainability. It makes it easy for customers, governments, and even businesses to believe the environment is benefitting from certain practices, when in effect, nothing is happening.”

Producers also stand to lose big, though.

“A backlash will most probably occur if a firm is exposed as exaggerating its environmental promises. They are then likely to suffer the resulting consumer backlash. When customers go so far as to boycott producers they deem as dishonest, it might further result in a decline in sales.

Nowadays, investors, customers, and employees want producers and companies to act in a sustainable manner. If it becomes apparent that you were part of a greenwashing scheme – whether intentional or not - the reputational damage can be huge,” she concludes. 

The role of electric vehicles in SA’s energy transition

... studies in the UK, US and Germany have shown that charging electric vehicles in offpeak hours, can contribute tremendously to balancing out electricity demand and supply during a 24-hour period.

In a keynote address delivered at the 15th Africa Energy Indaba in Cape Town, Dr Titus Mathe, CEO of the South African National Energy Development Institute (SANEDI), unpacked the role that electric vehicles can play to facilitate the country’s muchneeded energy transition.

The driving force behind the world’s best-known electric vehicle company, Tesla, is a South African. However, for the majority of Elon Musk’s compatriots the technology is so far out of reach as to feel almost irrelevant.

In addition, electric vehicles seem counterintuitive in a country that doesn’t have enough electricity as it is. Adding energyhungry vehicles to the grid will surely make matters worse.

Not if it is done smartly, SANEDI believes. In fact, studies in the UK, US and Germany have shown that charging electric vehicles in offpeak hours, can contribute tremendously to balancing out electricity demand and supply during a 24-hour period. Avoiding significant fluctuations is critical to grid stability and makes planning for new capacity easier and more effective.

The Electric Vehicle-to-Grid (V2G) model

To achieve this, the Electric Vehicle-to-Grid (V2G) model comes into play. In simple terms, it means that electric vehicles are in communication with the grid so that they can be charged during offpeak hours, which are typically in the middle of the day and during the night when household and commercial consumption, respectively, is at its lowest.

The V2G model integrates electric vehicles, charging stations, other energy providers, grid connections and smart metering. Smart charging enables communication and interaction among all connected elements on the system, and this turns electric vehicles into providers of energy services rather than simple users of electricity. If implemented correctly, consumers can provide energy to the grid through bidirectional charging stations, while generation, transmission, distribution, energy usage and storage are optimised across all actors.

ELECTRIC VEHICLES

A three-pronged solution

Who, however, will buy enough electric vehicles to make this potentially beneficial impact a reality? The existing exorbitant import duties on vehicles and components alike put electric vehicles beyond the reach of most South Africans, but SANEDI sees a three-pronged solution:

1. First, import duties must be reconsidered and incentives put in place for households and fleet managers to consider electric vehicles.

2. Secondly, original equipment manufacturers, fleet operators and municipalities must focus on transport in the public sphere, i.e., buses, taxis and sedans used in ride-share services. Not only is the market enormous, but public transportation will also make electric vehicles relevant to the majority of South Africans.

3. Finally, the manufacturing of at least some EV components must be localised urgently. While a measure of importation will always be needed, much can be done to decrease our import dependency and, in the process, create the jobs that will sustain the transition to a new energy future.

For SANEDI, the energy transition has to be seen in the context of South Africa’s socioeconomic realities. Therefore, as we introduce electric vehicles into the grid, we have to ask how it’s going to help us create employment, even out inequality and deal with poverty. With V2G technology these outcomes are possible.

A smart grid is critical

It is not, however, an overnight implementation. A smart grid is critical, which will require modernising the existing infrastructure. In addition, we need policy certainty and enabling industry norms and standards to develop the infrastructure, skills and investment needed for a V2G rollout.

The opportunities are many, varying from manufacturing jobs to opportunities for entrepreneurs to deliver services related to charging infrastructure, grid management and ancillary services such as voltage management. It is also important to consider a cloud-based big-data platform that optimises the V2G process to provide useful information to vehicle owners, OEMs, charger providers and government.

Electric vehicles themselves are not the silver bullet. However, as part of a well-conceived and properly implemented V2G programme, they can accelerate South Africa’s energy transition, while becoming relevant and valuable to the entire population. 

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that are reshaping supply chains Logistics industry trends

The need for flexibility and agility is becoming key to servicing clients, say Bidvest International Logistics experts Rhett Oertel and Marcus Ellappan.

The logistics industry battled a number of challenges in 2022, least of all the war in Ukraine and turmoil over China’s strict Covid-19 policies. That said, the world also emerged from the worst of the pandemic, meaning that supply chains returned to some degree of normality despite the conflict in Eastern Europe.

Within this context, a number of significant developments occurred within the industry itself, and the impact of these is anticipated to be felt this year and beyond.

Acquisitions by shipping lines in 2022 changed the landscape

From a shipping perspective, acquisitions by shipping lines last year changed the landscape to some extent. The lines were highly profitable between 2019 and 2022, and many used some of their profits to enter various landside logistics businesses –from warehousing to transport and IT-related services. Going forward, this shake-up is expected to create new alliances within the industry, with old alliances becoming new competitors.

Increased adoption of technology and automation

Another major development last year was the increased adoption of technology and automation to drive efficiencies and reduce costs.

According to Bidvest International Logistics (BIL) Head of Sales Rhett Oertel, in 2023 technology adoption will keep driving supply chain companies in the direction of automation while increasing visibility, improving predictive analytics and ultimately optimising supply chains.

“The impact of blockchain, artificial intelligence (AI) and electric vehicles in the supply chain industry will be ongoing. Blockchain is in use in trade financing and contract execution and is even tracking to AI use in the supply chain to help with forecasting,” he adds.

It is a view shared by Oertel’s colleague and BIL Director Marcus Ellappan, who says with the logistics industry under constant pressure to reduce costs, businesses increasingly will be looking at automating processes.

Environmental, social, and governance compliance

Another trend that emerged in 2022 and should become even more prevalent this year is Environmental, Social, and Governance (ESG) compliance.

“ESG will remain for years to come as companies focus on reducing their carbon footprint and reducing their overall impact on the environment. The emphasis on ESG is at the forefront of a lot of discussions nowadays as companies look to partner with people who, like them, invest in green technologies and initiatives,” Oertel says.

This will entail companies needing to be more involved in the entire lifecycle of products and packaging.

Focus on efficient management of fuel usage and renewable energies

For South African businesses, load-shedding and high fuel prices remain a huge problem. As a result, Ellappan expects to see a lot more focus on efficient management of fuel usage and renewable energies.

“Burning fuel in generators is not the way to go.”

New policies that impact trade could be introduced

The industry is of course keeping a watchful eye on tensions between certain countries, as in the event of these escalating new policies that impact trade could be introduced. Trade agreements or changes in tariffs, for example, will affect the flow of goods and the cost of doing business.

“I do believe as a company one needs to be aware of these developments and strategically apply the required focus on the aspects that will impact your market in the most effective way,” Oertel says.

“All in all, supply chain business models seem to be changing and the need for flexibility and agility is becoming key to servicing clients. E-Commerce is continually growing. This in the end leads to the demand for faster and more flexible and reliable supply chains.”

Again Ellappan agrees.

“Coming out of Covid, together with various global supply chain issues, businesses are forced to become more efficient. The benefits of digital transformation, risk management and ESG will most certainly talk back to a business’s bottom line results and sustainability.” 

Manufacturing sector

paying a high price

South Africa’s manufacturing sector, which contributes around 14% to GDP, is still struggling to recover to pre-pandemic levels amidst persistently high levels of load shedding and failing infrastructure. Both these issues were addressed in President Ramaphosa’s recent annual State of the Nation Address (Sona).

By Dennis Phillips, National Sales Manager at PFERD-South Africa

It has become an increasingly challenging operating environment locally for manufacturers. In addition to energy insecurity, they are also having to contend with port inefficiencies and softer global demand for export-oriented manufacturers. Subdued local economic growth is also likely to slow further.

Stats SA reported that manufacturing production decreased by 4.7% in December 2022 compared to December 2021. Manufacturers have cited power supply disruptions as the most significant cause of declining manufacturing activity.

Load shedding in 2022 reduced SA’s real GDP growth by up to 5%

PwC’s published economic outlook says load shedding in 2022 reduced South Africa’s real GDP growth by up to 5% despite businesses and members of the public mitigating against the impact of power cuts.

In 2022, South Africa imported more than R5-billion worth of solar panels which PwC estimates provides an additional 2 000 MW of generating capacity, potentially saving the country from an additional stage of load shedding at any given time.

Absa’s Manufacturing Survey for the fourth quarter of 2022 confirmed that the challenging operating environment has resulted in low business confidence levels. The bank’s Purchasing Manager’s Index, which is compiled by the Bureau for Economic Research in partnership with Absa, fell from 53 in January to 48.8 in February. The fall is attributed to record levels of stage 6 load shedding which negatively impacted factories.

Higher fuel costs adds pressure

Increased production costs are just one of the reasons for poor business confidence. Although many businesses have implemented strategies to mitigate against the risk of load shedding, including solar power solutions and generators, higher fuel costs from early February, particularly for businesses using diesel generators, will put additional pressure

on production costs.

The automotive sector, one of South Africa’s key industrial sectors, is typically one of the shining stars in the manufacturing sector. However, according to a survey conducted last month by the National Association of Automotive Component and Allied Manufacturers (Naacam), persistent and prolonged bouts of load shedding have had a negative impact on monthly production and turnover amongst its manufacturing members. The automotive sector accounted for more than 4% of South Africa’s GDP in 2022.

Significant impact on the automotive sector’s economic contribution

Naacam says that stage 6 load shedding, characterised by up to 12 hours a day of no electricity, will have an impact on the automotive sector’s economic contribution both in the short and long-term, given that many of its members don’t have the money to implement measures that limit the impact of load shedding.

The Naacam survey revealed that 75% of respondents said new business opportunities were at risk because of prolonged load shedding while more than 58% said they had placed their workforce on short time as a result of production interruptions. More than a fifth of respondents said they had either started cutting jobs or had to put a halt on new hires.

During his Sona address in February President Ramaphosa revealed that more diesel would be procured for Eskom to power up its emergency generation fleet. He also announced tax incentive schemes to encourage taxpayers to install rooftop solar panels and businesses to invest in renewable energy solutions.

Globally, the World Steel Association expects that demand for steel will start recovering this year. This, combined with the new local tax incentive for rooftop solar panels, bodes well for the local steel industry.

Successfully plan for supply chain challenges

Change is the only constant in manufacturing today. Disruption, innovation, and continual refinement of shopfloor processes are driving factors in today’s complex market landscape. All organisations need to stay on top of trends and adapt... new strategies and actions must sync and align with customer expectations. It’s no easy task.

“There’s some good news, though. The right manufacturing ERP software helps,” says Paul Bouchier, Sales Director at iOCO Software Distribution, an Infor Gold Partner.

“Modern, composable enterprise resource planning (ERP) solutions with last-mile functionality built in provide the capabilities businesses need

to address today’s most pressing challenges. By modernising manufacturing ERP, it’s easier to update the entire organisation, from new product introductions to operational efficiency. So, one step leads to many benefits,” he adds.

Bouchier offers three tips to help enterprises adapt to changing demands.

Improve supply chain agility

The disrupted supply chain has been a major headache for most manufacturers. That’s an understatement for many. Trade tariffs, bottlenecks and delays, the war in the Ukraine, chip shortages, unavailability of cargo containers, and high costs of fuel have turned procurement into a game of chance, with unfavorable odds.

Modern software, with artificial intelligence (AI)driven analytics and full supply chain visibility, can provide relief. Smart solutions drive smart decisions. Anticipate risks, make strategic choices, and forge new partnerships. Data insights help plan for contingencies and manage expectations, with visibility into the stock needed and when it’s expected to arrive.

Manage shop floor complexity

Manufacturers must meet the demands of customers for highly personalised products, while controlling costs and improving margins. In many industries, traditional mass production is being replaced by mixed mode manufacturing with highly configured products, engineer-to-order, and assemble-on-demand operations becoming the new normal. Modern manufacturing software is essential for the transformation. It helps streamline processes, close gaps and keep workflows synchronised. The latest Industry 4.0 technologies provide critical tools, like smart sensors, for tracking machine performance, output, quality control, and optimising resources.

Tools also help manage the existing workforce which must work smarter, not harder, to get the job done. Data insights help keep the shop floor running with orchestrated precision, because every part, every machine, and every work cycle matters.

Leverage data insights

While answering consumer demand for new and personalised products, manufacturers must simultaneously strive to improve productivity, boost efficiency, automate processes, and strategically plan the use of resources. There are tough decisions to make.

Modern ERP software helps capture, track, and leverage data throughout the organisation. Using facts, not feelings or hunches, manufacturers can better align with customers, launch new product introductions, design and source appropriate parts and components, and track all costs. New strategies for remaining relevant and growing the business can now be planned and executed with a balance of long-term goals and short-term capacity and cash flow restraints. Data insights are key.

Use the right tools to improve operational efficiency & foster innovation

“To avoid threats to market share and profitability, manufacturers must stay alert and on top of the everevolving trends. They must adopt modern, data-driven processes and turn to technology to help them introduce new products. When inefficiencies are eliminated, teams have more time for innovation,” says Bouchier. “Technology, such as modern cloud-deployed ERP solutions, help organisations quickly adapt to change, including starting new branches or divisions. This agility means you the business can focus on green initiatives, offering new services or managing logistics. Even creating hubs closer to end customers becomes easier. Manufacturing is being redefined, and software plays a major role in supporting the new era – from go-to-market strategies to supply chain planning and shop floor operations.” 

Five challenges

every

young construction business must overcome

Before starting out and investing heavily in a new company, it’s wise to consult a seasoned industry specialist on what to expect and how to overcome some of construction’s most prominent challenges.

Thorough planning will help to identify and resolve common industry issues before they become a stumbling block on the road to success, explains Roelof van den Berg, CEO of the Gap Infrastructure Corporation, a leading infrastructure developer in Southern Africa.

These are his top five challenges that small businesses and entrepreneurs in construction should watch out for:

Forecasting and budgeting 1

Calculating total project costs, including labour, materials and equipment, is a monumental task for any construction company, but is especially difficult for novices in the construction industry to perform correctly.

Risk tends to scale up and increase in line with the scope of the project, making it particularly easy to underestimate material quantities during the planning and budgeting phases.

“The solution is to appoint a skilled project manager who is adept at calculating and setting up material lists, and who strictly regulates store levels throughout,” says van den Berg.

“Ultimately, the three most important Ps in the construction industry are planning, planning and planning. Spending time and money on planning is the key to a successful project.”

Newer contractors rarely make additional consideration for where a project is located, and what issues the site may pose. However, not all projects will be ideally located in or near a city, close to suppliers, subcontractors or the necessary labourers and workforce.

It is therefore important to do research before accepting a contract. Is the worksite easily accessible or will you need to budget for additional transport costs for machinery, material, and workers located far from the site?

“This has been the downfall of various projects in South Africa, especially those projects in rural areas which are not close to cities and suppliers. Material prices can easily double in price due to transport costs,” says van den Berg.

“Make sure that suppliers know the exact destination before submitting their quotations”.

Supply-chain instability 3

Global events have caused serious supplychain disruptions throughout 2022, resulting in higher prices and difficulties in sourcing the right materials and equipment.

“The global supply-chain should correct itself later in 2023,” says van den Berg. “But until then, new contractors should consider how any material shortages will affect their workflow and be ready to seek out alternatives.

“There is always an alternative solution in the construction industry. Focus on remaining resilient when facing a supply chain challenge – if you keep searching for a solution, you will find one,” says van den Berg.

‘Don’t quit’ attitude

Onsite security 4

Worksites are especially attractive targets for criminals and vandals at night. Construction sites are filled with expensive tools, machinery, and materials, and extra steps should be taken to improve security.

It’s therefore crucial to appoint trustworthy security officers or a security company to patrol worksites after hours. Additionally, care should be taken to securely store and lock up expensive equipment that cannot be removed from the site every day.

“Even one security incident could be the cause of your entire project failing. Prioritising security and allocating the necessary funding to your security bill will pay off in the long run.”

More than 90% of new construction companies in South Africa fail within the first 24 months. Most of these have the relevant skills and resources to make it work, but lack resilience and a ‘don’t quit’ attitude, notes van den Berg.

“The construction industry is not a walk in the park. Those who have the resilience to withstand the strong winds are those who succeed,” he says.

2023 will be rich with opportunities for new construction companies

“Always remember that in the construction industry, a better tomorrow is just a one certificate away.”

As the industry picks up steam again, 2023 will be rich with opportunities for new construction companies.

Small businesses are sure to achieve some success provided they take care, performing the necessary risk management in order to overcome any challenges and provide high quality work to clients. 

SA’s landfills are filled with construction waste

When it comes to the dilemma of South African landfills running out of space, all relevant role players must acknowledge the significant impact of the construction industry.

By the Institute of Waste Management

of Southern Africa

According to Mpendulo Ginindza, President of the Institute of Waste Management of Southern Africa (IWMSA), many local landfills are filled with construction waste rather than household waste.

“In spite of the fact that recycling construction waste is more expensive and it takes up more space in landfills, in some cases waste service providers don't pay more to dispose of it. We really need to pay attention to our landfills and find new and different ways to dispose of this kind of rubble.”

Enforcement, rather than legislation, is the crux

Ginindza defines construction waste as rubble, like broken concrete, ceramics, wood, metals, and bricks, and construction debris, which includes tiles, plaster, roof material, doors, and pipes.

"Construction waste generally consists of materials used to build and then becomes waste during demolition or renovation of buildings, roads, bridges, and other similar structures. It is all considered debris."

She further explains that construction waste is heavier, bulkier, and takes up more space than other sorts of waste, primarily household waste, which is a significant problem.

Despite the use of modern waste management technologies, Ginindza asserts that landfilling is still South Africa's most dependable waste management option at the moment.

“But when not properly managed, landfills provide a number of health problems to local communities through air pollution, leachate outbreaks, vectors carrying diseases, and odorous gas. There are already quite a few landfills that don't meet the minimum standards. The South African waste legislation is adequate; it is the application and enforcement that seem to be a challenge.“

But what do countries that get it right do differently? And how can South Africa learn from them?

"They have a separate landfill for construction waste and there are reuse options for the debris to reduce what goes to the landfill," Ginindza says. "They also have screening or sorting facilities on site, and sorting can also be done at the source."

To create permanent change, role players need to explore reuse options, to then reduce the amount of waste that is landfilled.

Focus on now and future

Ginindza says South Africa should start with a focus on both short and long-term solutions.

“An immediate change would be to separate general waste from construction waste. To create permanent change, role players need to explore reuse options, to then reduce the amount of waste that is landfilled.”

She adds that while it is true that landfill airspace appears to be decreasing throughout South Africa, major changes cannot be made to the current waste system.

That means the only real solution would be through consistent and gradual changes.

“The first step would be using smart technical knowledge and approaches to maximize airspace. Waste should be diverted for fast, practical gains. This can be done by increasing the efficiency of the current landfill systems, using dynamic compaction techniques, researching different expansion levels, finding alternate waste diversion methods, and choosing appropriate waste-to-resources programmes."

Ginindza concludes by emphasising that the construction industry produces a lot of waste and that it needs to recognize that it has a significant role to play in resource management.

“They need to support the waste industry by fostering the principles of 3Rs: Reduce, Reuse, and Recycle.” 

Fintech is a path to democratised financial services

Fintech has played a significant role in democratising access to financial services across Africa in the past decade.

By Thabiso Foto, Chief Financial Officer, Founders Factory Africa

Improved access includes the usability and quality of these services, with most fintech solutions targeting the underserved population, including the youth, women, low-income earners, rural communities, and SMMEs. These groups have faced many barriers to accessing banking, credit, savings and investment solutions from large banks and other financial institutions.

By solving some of Africa's biggest challenges, we are not only creating impact but also new business models, markets and sectors that will deliver positive commercial outcomes.

are fintechs, including OkHi, a smart-addressing and verification platform that identifies customers based on their mobile number and GPS. Zazuu, meanwhile, is building an end-to-end money transfer marketplace that lowers the cost of remittance payments into Sub-Saharan Africa.

EasyEquities’ investment platform has democratised retail investments

They

are not only solving financial inclusion for individuals but also for companies as well.

Access to formal bank accounts has increased because of fintech

According to the IFC, in 2011, only 23% of Africans had access to a formal bank account. In the decade since, that number has grown to 43%, much of which can be attributed to the fintech, and mobile money solutions developed since 2011.

By bringing more people and businesses into the financial system, not only are we improving household incomes and well-being, but we're also creating a new group of consumers and producers that will contribute to GDP growth.

For example, in 2021 Kenya is reported to have a 83.7% financial inclusion in services and products, a jump from 26.7% in 2006, largely driven by new financial technology and innovations, particularly in mobile money and mobile banking.

Founders Factory Africa, to date, has supported 57 startups since inception in 2018. Of these, 27

EasyEquities is a great example of an investment platform that has democratised retail investments by lowering barriers for first-time investors. By fractionalising shares, they made them more affordable, removed minimum thresholds for the initial investment amount, simplified the language of investments and made the platform super easy to use for the first-time investor.

Six years since its creation, EasyEquities now boasts more than 1.6 million users with platform assets of R37 billion, reported revenues of R214m (up 24% from 2021) and profit before tax of R80m. Purple Group, the parent company, reported a 92% increase in headline earnings per share in a down market, and a significant portion of this attributable to easy equities.

Financial inclusion is not just an "impact" story. It benefits everyone. EasyEquities is making great strides in enabling more South Africans to start building wealth through investments and ultimately narrowing the wealth gap in South Africa.

Serve an underserved need in the market

The success of these fintech startups has been driven by their ability to meet an underserved need in the market. They are not only solving financial inclusion for individuals but also for companies as well.

Large banking institutions have, to date, partnered with or acquired fintechs to improve the distribution of their financial products to markets they have not been able to reach previously while increasing their share of revenue.

Large commercial banks are competitively trying to retain market share, with fintech companies challenging their previously moated positions. In response to these fintech pressures, large corporates are engaging in M&A activity for various reasons, including access to disruptive intellectual property and tech products, scarce tech talent, and gaining speed to market.

In South Africa, Capitec, South Africa's thirdlargest bank by market cap and among the 20 largest banks in Africa and the Middle East as of December 2022, added EasyEquities to its banking app in 2020.

Innovative solutions to increase access, quality, and usage of financial services

For SMMEs and startups, which are traditionally considered risky and are either excluded from traditional financial institutions or allowed access to these services at exorbitant costs, fintechs have been at the forefront of developing innovative solutions to increase access, quality, and usage of financial services.

In 2020, Founders Factory Africa invested in Asaak, a Ugandan fintech startup that partners with mobility and e-commerce platforms to make

motorcycle ownership easier for riders who earn a living by operating boda bodas (motorcycle taxis).

That same year, Asaak granted loans up to $419k; in 2021, this grew to $2.1m, and in 2022, they reported loan disbursements of $6.9 million. In the last 3 years, Asaak has disbursed more than 11,000 loans to microenterprises that traditional credit checks would have otherwise screened out. By leveraging technology and applying responsible and innovative tools for assessing creditworthiness, they have achieved this success while maintaining a 95% collection rate, better than industry standards.

Systems-thinking approach is required

While we have seen strides in innovation and financial inclusion since 2010, there is more work to do.

According to the Global Findex Database, the gender gap in mobile money account ownership is slowly closing globally, but other markets are lagging, especially in MENA.

Sub-Saharan Africa reported a 12% gender gap in account ownership in 2021, while North Africa and the Middle East reported a 13% gap, twice as large as the developing economy average and three times higher than the global average.

Meanwhile, in East Asia and the Pacific, the gap is 3% and 7% in Latin America and the Caribbean. Around 75% of African tech startups shut down before they raise a Series A round due to lack of funding, and we still have a $330 billion funding gap in MSMEs in Africa.

To address the above gaps, a systems-thinking approach is required to challenge the status quo, shift mindsets and explore transformative interventions across stakeholders, that improve economic participation by all members of society. 

LEADING ADVISORY FIRM, SkX RELAUNCHES ITS EXTERNAL AUDITING CAPABILITY

With over 20 years of experience specialising in audit, advisory and consulting services, SkX (previously SekelaXabiso), was established through the combined expertise of two highly qualified teams of professionals with vast experience and impeccable credentials.

The combined knowledge and business acumen of SkX directors put the firm in an ideal position to deliver world-class, clientfocused business solutions to a growing range of clients in both the private and public sectors.

Lindani Dhlamini, co-founder and CEO at SkX says that the organisation has been one of a few successful transformation stories in South Africa and a beacon of hope for Broad-Based Black Economic Empowerment.

“We represent a truly African firm reflecting the South African demographics in an industry that is dominated by international corporations,” she says, adding that “our return to external audit allows us to contribute to authentic transformation in this landscape, in that we are 100% black-owned and 50% womenowned, a commitment that very few in our industry can claim.”

“The mandatory auditor rotation regulations which become effective in the current year 2023, require companies to rotate auditors every 10 years. Given the fact that the assurance market is highly concentrated in terms of the entities at the client’s disposal, we saw an opportunity to position ourselves as a homegrown firm that is truly transformed and can offer potential clients more options.”

“As a homegrown and indigenous firm with multidisciplinary capabilities, we are able to leverage our expertise ranging from ESG solutions, supply chain management, corporate finance, to information technology consulting, amongst others,” she says.

Dhlamini laments that SkX’s success has been underpinned by their relentless commitment to adding value to clients.

He is a Registered Auditor (RA) with more than 20 years’ experience in auditing, advisory and corporate reporting, and is one of the founding members of the Financial Reporting Standards Council (FRSC) and a former member of the IRBA Committee for Auditing Standards.

The long list of high-profile clients which is now housed within SkX is a testament to the firm’s combined strength, its customerfocused approach and excellent service.

SkX boasts a diverse list of blue-chip clients in the public and private sector that the firm has served over the years, including Nedbank, Old Mutual, Harith General Partners, National Empowerment Fund (NEF), Harmony, Rio Tinto, Foskor, Telkom, MTN , BCX, Airports Company South Africa, Transnet and Metrofile amongst others.

The diverse client base has enabled SkX to develop deep skills in sectors such as financial services, ICT, mining, transport & logistics, and the public sector at large.

Dhlamini credits SkX’s accolades to the firm’s diverse people.

“We believe our success has been primarily due to the calibre of people we bring into our organisation,” she says.

“Our business is guided by our values, which are underpinned by ethical leadership. At SkX, we are solutions-driven and we strive to consistently work with our clients to find lasting and impactful solutions.”

“Our firm has demonstrated that we are resilient, having thrived through the COVID-19 pandemic when other firms could not survive.”

“We are proud of our work, the talent of our people, the depth of their experience and our ability to respond to our client’s needs. We are truly pleased to relaunch our External Audit services,” Dhlamini concludes.

Lindani Dhlamini | CEO

Dumisani Manana | Director External Audit

Women in tech: progression hampered

A survey reveals Covid-19, cost of living crisis, skills shortages and lack of mentorship have negatively affected women’s career development in the past two years.

The survey reveals that parity for women in technology-related positions and industries is still a way off and suggests that Covid-19 has had a major role to play in blocking women’s advancement, along with a skills shortage, and that women are further hampered in their progression by a cost-of-living crisis and lack of access to funding.

The survey entitled, ‘A deep dive into challenges & opportunities for women’s tech careers and women-led enterprises across Asia, Europe and Africa’, attracted respondents from those three regions, with 45% of respondents who live and work in Africa, 38% based in Europe and 17% in Asia.

The survey, conducted by global tech event Africa Tech Festival and tech news portal Connecting Africa in conjunction with London Tech Week and Asia Tech X Singapore, is part of a new annual benchmark survey mapping barriers faced by women in business, perceptions around why they cannot move forward, as well as potential solutions and opportunities to bridging the equality divide.

Employment situation impacted by the cost-of-living crisis

The survey found that over half (56%) of respondents believed that when it came to the recent pandemic and to economic challenges in general, it was women who missed out on work opportunities, were forced to scale down work and take time off to care for children, as well as undertaking more household chores.

26% of the respondents believe women are more likely than men to have been denied access to financial support from governments, whilst a further 26% perceive women as shouldering most of the burden of childcare or care of other dependants in their households whilst juggling work responsibilities.

These compounded the challenges for women

with a little over two-thirds of European and Asian women respondents' employment situation impacted by the cost-of-living crisis. However, that number increases to almost 81% of African women. The cost-of-living crisis seems to have a bigger impact in Africa than in Asia and Europe.

Working more than one job is increasingly commonplace – 15% revealed they used to be self-employed or own a business but have now taken another job whilst running their business on the side, with 21% of African respondents confirming they are now working two or more jobs, a greater proportion than their counterparts in Europe and Asia.

Whilst women still experience gender bias in the tech sector, overall, unemployment in the tech ecosystem was found to be less than other surveyed industry sectors, with just 2% of women tech workers across the three regions targeted made redundant over the past 24 months. 12% of those respondents are now working full time when they used to be unemployed and a further 16% are now working full-time up from their part time roles.

73% of women respondents across the three continents have seen their employment situation in the tech sector impacted by a lack of career development opportunities, with 32% revealing they had a pay loss and/or haven’t received a promotion for more than 24 months, although this could be due to the pervading economic climate.

Lack of funding and support for women in tech

The survey shows that women are still a long way from achieving equality when it comes to obtaining funding. Having a greater amount of women-focused business events and awards is perceived as one of the most powerful initiatives, which has helped women-led start-ups get better access to funding over the last 24 months. This is closely followed by more women in tech being

championed in the press. African women, however, seem to struggle the most, with 19% saying it is now significantly more difficult to access funding.

Other factors that could lead to better support for women-led business and to encourage more women to enter the field, include the presence of more women-led venture capital funds and womenfocused accelerator programmes.

Underlining this, and on a continent that is increasingly reliant on the start-up ecosystem for economic sustainability, Africa is where women (41%) struggle the most to launch a new business, whilst 68% of respondents believe skills shortage to be the biggest obstacle to women entering the sector.

Sadly, 40% of African women respondents believed it was more difficult for women to secure a pay rise in tech, whilst 41% said it was more difficult for women to achieve senior leadership or board positions.

Need to empower Africa's young women to follow paths into STEM careers

Commenting on the reality of the situation in Africa, Paula Gilbert, Connecting Africa Editor, said: "Africa is making strides towards more gender parity in the tech and telecoms industry but there is still a lot that needs to be done to have true equality in the sector. When it comes to investment, the proportion of funding going to femalefounded and female-led start-ups in Africa, remains incredibly low and representation at a C-suite and board level remains skewed towards male leaders.

“We need to focus from the grassroots up and empower Africa's young women to follow paths into STEM careers by providing better funding, access to skills programmes and mentorship opportunities. That said, there is no silver bullet to cure this problem, it needs to be approached on all sides to break down the biases that women face on a daily basis and break the cycle for the next generation."

Need to be more mentorship programmes for women

Speaking to Gilbert’s point, women would like to see better visibility and promotion of STEM career opportunities for women to help more women break into and thrive in the tech industry. This would help achieve more gender equity with their male counterparts in the sector, as well as more equal pay between genders and better flexible work opportunities.

Women also believe that there need to be more mentorship programmes for women, as well as opportunities to participate in panel discussions and debates and the development of female role models, which will assist in encouraging more women to enter STEM related businesses.

James Williams, Director, Events at Connecting Africa, Informa Tech, agrees women should be given more representation saying: “In recent years, many African nations have led the way in female representation and empowerment, from government through to enterprise sectors but there’s no doubt there is some way to go to achieve gender parity across tech and telecoms.

“That said, given the successes we witness at Africa Tech Festival each year, I truly believe it’s an area Africa can lead the world in, and we are pleased to play our small part in making that happen.”

Given that women bore the brunt of the parenting role and household care, women also believe that more support at work for parents and having flexible working hours and arrangements would help level the playing fields. 

African women, however, seem to struggle the most, with 19% saying it is now significantly more difficult to access funding

New approach to address critical skills shortage Technology:

South Africa’s shortage of critical skills has been well-publicised, leading to organisations turning to offshoring of talent to ensure that they are able to conduct their technology-driven projects.

By Jessica Hawkey, MD at redAcademy

However, forward-thinking companies are now taking an innovative approach that sees them working with strategic, long-term partners to develop the scarce skills that suit their specific business requirements and their own tech stack, while also completely addressing their IT backlogs at the same time.

Technology has become a crucial part of today's organisations regardless of what areas of business they are involved in. While business leaders are having to take a more strategic view toward tech enablement, they are hampered by a severe lack of talent, with the rate of demand growing faster than they can bring in skills.

As an example, local jobs portal, CareerJunction, points out that businesses and recruiters are having a particularly difficult time in finding skilled talent in a variety of IT roles, including software development.

This lack of talent is seen as an even bigger obstacle to the success of local businesses than more visible issues such as loadshedding and governance issues, which can be overcome. One of the ways in which businesses have sought to address the problem is through offshoring, or the practice of looking abroad to hire skills to work on their technology projects. This, however, comes with its own set of challenges.

Apart from uncertainties stemming from exchange rate fluctuations, which can have a detrimental impact on company finances, offshoring potentially results in organisations working with foreign-based individuals or teams who are not familiar with a business’s work culture or technology stack, or might even be working for competing organisations from other parts of the world.

There might be no line of sight into whether the solutions being offered by offshoring providers are developed uniquely for South African customers, or whether what they get is the same solution that is being provided to all their customers operating

in similar environments. Then, there is also the risk of the loss or leakage of an organisation’s intellectual property.

As technology continues to permeate all aspects of the organisation, and forms a core part of their strategy, simply offshoring work without having any kind of strategic partnership will make companies overly reliant on offshoring providers and could develop into a significant business risk in the future.

This lack of talent is seen as an even bigger obstacle to the success of local businesses than more visible issues such as loadshedding and governance issues, which can be overcome.

Long-term partners, not suppliers

Rather than only focusing on South Africa’s skills shortage, organisations have to look toward creating tangible solutions. What needs to be addressed as a matter of urgency is the slow pace of change, and high cost of education, which is a greater barrier to developing the critical skills that are required. Not getting this right, especially in light of the risks highlighted, is simply kicking the can down the road.

It’s becoming clear that what local businesses need are not suppliers, but long term partners that can help them sustainably address their skills challenges by taking an innovative approach to sourcing and developing talent. They also can’t all go fishing from the same pool of talent; they need to do something different and this requires being able to view South Africa’s huge youth population as an opportunity to close the technology skills shortage gap.

However, any youngster who has applied for a job knows that great importance is placed on workplace experience. But, without a job to start with, how do you gain experience? This is a conundrum that has raised much debate in the country, so much so that President Cyril Ramaphosa, in his latest State of the Nation Address, again called on private companies, government departments and State Owned Entities to remove the work experience requirement for young people seeking entry-level positions.

Of course, private sector companies are not simply employment agencies, but are looking for ways in which employees can immediately add value to their business. So then, how do they match their requirements, with the dire need to tackle the country’s youth unemployment crisis? It is here that innovative approaches to outsourcing and skills development have a crucial role to play.

Developing in-demand skills

To address these challenges, organisations such as redAcademy are placing the focus on developing the skills that are in demand by businesses rather than just an academic qualification that leaves the youth with no workplace experience at the end. By working closely with businesses, the curriculum can be tailored to ensure that youngsters have an understanding of an organisation's workplace

culture and its preferred technology stack while also getting to work on actual projects for the business.

Taking this approach doesn’t simply help develop skills; it means that these youth have been playing an active part in whittling down the businesses IT backlog and that they are familiar with the organisation and its activities by the time they finally join as employees at a later stage. Businesses for their part only pay for IT projects delivered, while standing to benefit from reduced recruitment costs, building a pipeline of talent and can ensure that their succession planning strategies come to fruition.

It is important to note that this is not simply a corporate social responsibility project that the South African private sector needs to be engaged in. Taking the partnership approach to skills development is not just about delivering the minimum specification at the lowest possible cost, but working closely with an organisation that understands their business and can help it grow. Viewing the country’s youth as a tremendous opportunity to be harnessed is crucial to the future of corporate SA.

Not only can we heed the President’s call to give youth experience, but can go well beyond that and potentially turn South Africa into a globally competitive country from a technology skills perspective. 

redAcademy is an innovative skills and experiential learning hub that specialises in teaching coding and technology skills. By collaborating with South African businesses facing a massive skills gap, our purpose is to build a sustainable tech talent pipeline for the future.

redAcademy has a clear goal: to give carefully chosen, talented South Africans the opportunity to sprint into their IT careers. By giving Sprinters the opportunity to work in a live environment and gain experience on our clients’ own tech stack, we work closely with industry-leading senior developers and our client partners to ensure that Sprinters have the soft skills and work-readiness to step into a career in the tech industry. Through these strategic partnerships, our Career Sprint is designed to fast-track careers in the real world.

For more information, visit www.redacademy.co.za

5 reasons to get ‘psyched’ about executive psychometric assessments

According to Forbes, executive failure rate can be as high as 70%1. Research by McKinsey Senior Partners Keller and Meaney reveals that 75% of executives consider themselves unprepared for a position because of inadequate onboarding processes.

Others said that formal development processes were inadequate. Furthermore, failure can also be attributed to a misalignment between job demands and executive preference and ability. Needless to say, the stakes are high when hiring a leader for your organisation.

Here is the good news: Psychometrics can assist in a more vigorous hiring and development process when filling a key leadership role, ensuring a more holistic picture of the executives you want to hire, their fit for the role and what their development areas are. Psychometric assessments are empirical tests that are used to objectively measure an individual's personality traits, intelligence, abilities, behavioural style, and aptitude.

Why would you get psyched about it? Well, it’s an effective, reliable, and valid researchedbased tool to ensure you recruit the best possible person for the position. Using assessments can much improve your risk when hiring for a key position. To ensure a positive hiring or development process, assessments can be gamified. Yes, it’s like you are playing a game, while assessing various competencies like numerical and verbal reasoning, your creativity, inductive and deductive reasoning and more.

Psychometric assessments are essential to get an unbiased and inclusive picture of your candidates, leading to informed and confident hiring decisions. Furthermore, you can use these assessments for onboarding, coaching and development of your high potential managers.

Key benefits using psychometric assessments when hiring business leaders:

1. Psychometric assessments provide detailed information about candidates’ strengths, weaknesses, preferences, and abilities, allowing you to make informed decisions about their fit for a specific role.

2. Deep insights into (strategic) ability, habits and potential are gained, which are not necessarily clear when interviewing a potential candidate.

3. Executives can gain a better understanding of how their personality traits and preferences may impact their performance and how to manage their behaviour to improve results.

4. Assessments can help leaders play to their strengths and identify their ideal work environment and how to better collaborate with their teams.

5. Results can be used to create tailored development plans for executives to hone their skills and reach their potential, improving your organisations’ results.

AIMS SA now includes assessments on final candidates with every search project. Contact Ashleigh Ball for details. ashleigh@aimsinternational.co.za

When is it time

to bring in a BPO partner?

Unpredictable by nature, it can be tricky to anticipate growth or predict the direction a business will take in the future. For company founders, there are many factors to consider when evaluating the prospective survival and expansion of their business: the number of product lines, distribution channels, workforce size and Key Performance Indicators (KPI) targets.

By Tennille Bell, General Manager: Sales at Programmed Process Outsourcing (PPO)

These need to be considered against the backdrop of the overall business strategy as well as economic and technological means. Building and running a business is far from easy, which is why it makes sense to bring a Business Process

Outsourcing (BPO) partner on board sooner, rather than later.

BPO means business growth support

BPO does not mean externalising portions of the business by handing control over to a third-party provider. BPO means bringing a capable partner into the business and trusting them to provide the support necessary to increase productivity, introduce new product lines and manage the organisation’s workforce.

This single BPO partner becomes a pivotal part of the organisation and provides the flexibility required from a human capital management and labour perspective. They do this by assuming all responsibility for the administrative burdens that come with business growth so as to enable seamless development. Handing over noncore business processes to a reputable, reliable BPO provider, means that business leaders can take back their time, and spend it on more productive pursuits, such as exploring new revenue opportunities and focusing on customer satisfaction.

Timing is everything

This raises the question: when is the best time to bring a BPO partner into the business? The answer: as soon as possible. However, this isn’t always feasible so the second best time to bring a BPO partner on board to outsource non-core business functions is when the business needs to:

• Reduce or lower its costs.

• Mitigate or reduce risk.

• Expand teams without the hassle of recruiting and training internally.

• Focus on strategy and critical business matters.

• Grow fast and increase productivity output (both start-ups and mature companies).

At this point, it is necessary to weigh up the benefits and costs of outsourcing with pros and cons of continuing to insource the relevant processes by maintaining internal departments. To do this, it is helpful to understand how and why BPO will have a positive effect on the business in line with the company’s specific goals.

Shifting back to strategy

Too much time gets sucked up by the minutiae of running a business. Most people didn’t start a company so they could spend their days overseeing disciplinary hearings, approving payrolls or conducting countless recruitment interviews. They started a business to do what they love, and to make money doing it. It takes time and money to run a business, along with experience, knowledge, patience and strategic planning. No matter the size of the business, having a team of people who can translate your goals into results can make all the difference.

This is the strategic reason behind partnering with a BPO provider, and this decision will allow business leaders to focus solely on perfecting core business functions, and the work that matters most in accelerating the growth of the business faster and easier.

By outsourcing to a specialist BPO, businesses gain access to immense industry expertise, from human and industrial relations to legal expertise, through to operational and financial expertise, without the need to recruit and hire internally.

A BPO provider exists also to provide flexibility of labour resources to the business, without any of the stress and hassle of having the additional headcount on the books and managing the associated Industrial Relations (IR) and Human Resources (HR) processes. This gives businesses the ability to scale up and down as necessary, in order to meet seasonal and fluctuating demands.

It’s a numbers game

Bringing a BPO on board is a cost-effective means of achieving more with less, by reducing overhead costs and saving valuable time. Fixed costs (salaries and so forth) become variable costs directly linked to output and performance.

The relationship between company and BPO provider is governed by Service Level Agreements (SLAs) that contain clear KPIs. What happens from the moment a business decides to outsource a noncore operational function? Their chosen BPO provider comes in to re-engineer that business function in order to streamline operations and increase output.

A more efficient way of working is established by the BPO, and from there, the BPO monitors processes continuously to refine efficiencies even further. This results in boosted productivity, enhanced utilisation of resources and decreased operational costs. Better still, it results in increased profits and enhanced risk mitigation.

Keeping up with technology trends

Digital evolution shows no signs of slowing down. Technology is improving daily, and it’s hard for businesses to keep up with the pace of change. Today, every business relies on customer experience and there needs to be a seamless alignment between people and processes in order to facilitate a positive customer experience.

By joining forces with a BPO, companies gain access to the latest technology and tailored solutions for their businesses, applied by trained and skilled professionals. A BPO partner worth their salt will utilise the power of technology to help businesses stay on top of trends and deliver an experience that meets and exceeds customer expectations. 

Bringing a BPO on board is a cost-effective means of achieving more with less, by reducing overhead costs and saving valuable time.

for a B-BBEE verification Risks when preparing

Preparing for a B-BBEE verification can be a daunting task. If done incorrectly, it can have a major impact on the B-BBEE status of the organisation and it may either end up with a lower B-BBEE status than expected or face fronting practice charges, warns the team from the BEE Chamber.

The BEE Chamber is a group of specialised B-BBEE consultants and advisors offering support to build its clients’ B-BBEE practices to a level of excellence by using the tools of continuous support and engagement.

Mariëtte van Wyk, a Technical Specialist at the BEE Chamber, has a solid understanding of both the Codes and the B-BBEE Act. She says there are two main risk areas to focus on when preparing for a B-BBEE Audit.

“A B-BBEE verification is the validation of the proof of the claim that your company is making pertaining to the level of transformation in your company. If you do not have a good B-BBEE rating, your clients will not be scoring as high on their procurement element scorecard, and subsequently, they might decide to replace you with an alternative supplier. This is one of the reasons why it’s important to look at your verification and fronting practice risks,” she says.

These two risk areas are important to focus on when preparing for a B-BBEE verification, and when they are a priority throughout the year, an organisation will benefit.

Verification risk

A verification risk for rating agencies relates to the measured entity misstating their B-BBEE score, and the misstatement not being identified during a B-BBEE verification.

The verification manual defines a verification risk as, ‘The risk that the verification agency could arrive at an inappropriate conclusion in determining the scores based on one or more scorecard elements being materially misstated. This is the risk that the scorecard elements are materially misstated prior to verification and the risk that the Verification Agency will not detect such misstatement.’

If you do not have a good B-BBEE rating, your clients will not be scoring as high on their procurement element scorecard, and subsequently, they might decide to replace you with an alternative supplier.

“A verification risk for a measured entity is different in that it is the risk that the expected outcome of a verification differs from the final B-BBEE certificate and report issued by a rating agency as a result of not being able to sufficiently and appropriately substantiate initiatives claimed when submitting a claim sheet to the rating agency,” explains van Wyk.

An example would be if internal training was claimed but there is no document that substantiates the number of hours spent on training, who the trainer was, or the topic of training.

“Although all parties involved in the training can confirm what took place, none are able to provide concrete proof of the factors considered in costing internal training. In such an instance a training register or logbook would have sufficed as evidence of who was involved, and the time spent,” says van Wyk.

Another example could be that evidence submitted for verification confirms that an employee was taking part in a learnership programme during the measurement period. Based on evidence submitted the rating agency accepted

the claim. Whilst conducting interviews with the employee, the B-BBEE rating agency finds out that, even though the employee attended some classes, the training programmes were stopped due to the employee’s high workload and not having time available for assessments or creating portfolios.

“In this example the company would have paid for the learnership upfront, meaning the costs were incurred, and they would have received a learnership agreement signed by the relevant parties as proof of enrolment,” says van Wyk.

“What they did not consider is that the learner dropped off the programme and therefore does not adhere to the definition of a certified learning programme. After conducting the interview, the rating agency would disallow the claim made by the measured entity and points would be lost for the learner.”

Fronting practice risk

A fronting practice is linked to the misstatement of information or a claim. The result of such a misstatement leads to an incorrect score being claimed. The most common example of a fronting practice is linked to the preferential procurement element and sworn affidavits for certain suppliers.

An incomplete or incorrectly completed sworn affidavit makes the document invalid. if the invalid sworn affidavit is being used as evidence of a suppliers B-BBEE status, it is considered a misstatement of a claim.

“It is vital that the team responsible for the collection of supplier’s B-BBEE statuses are fully briefed on what a valid B-BBEE certificate or sworn

affidavit looks like as well as which sectors have different requirements or templates relating to sworn affidavits. B-BBEE rating agencies are obliged by the B-BBEE Act to report suspected fronting to the B-BBEE Commission for further investigation,” van Wyk adds.

Another example would be incorrectly classifying individuals as Black. When classifying an individual as Black, the definition of Black according to the B-BBEE Act needs to be kept in mind. South African citizenship does not automatically result in a person being Black for B-BBEE purposes.

As per the B-BBEE Act, the Definition of “Black People” is as follows: “black people” is a generic term which means Africans, Coloureds and Indians:

(a) who are citizens of the Republic of South Africa by birth or descent; or

(b) who became citizens of the Republic of South Africa by naturalisation,

(i) before 27 April 1994; or

(ii) on or after 27 April 1994 and who would have been entitled to acquire citizenship by naturalisation prior to that date

“Ensuring that individuals responsible for gathering evidence and submitting claims to your B-BBEE rating agency is competent to identify the various risks, is key in mitigating the B-BBEE verification risks described above. And in instances where competent resources are not available, it is best to outsource the verification preparation function to a team of consultants,” concludes Van Wyk.

More info?

For more information on the fundamentals of B-BBEE and Verification preparation, visit the BEE Chamber website at www.bee.co.za or call 011 726-3052.

When classifying an individual as Black, the definition of Black according to the B-BBEE Act needs to be kept in mind.