African Leader May 2023 by SundayTimesZA

WWW.BMFONLINE.CO.ZA

PRESIDENT RAMAPHOSA’S ERA

The positives and negatives

THE BMF ANNOUNCES IT’S FIRST ALL-FEMALE PRESIDENCY

UNPACKING THE JUST ENERGY TRANSITION INVESTMENT PLAN

In conversation with

LINCOLN MALI SERVE, EMPOWER AND TRANSFORM

50YEARS OF THE BMF ADVANCING SOCIOECONOMIC TRANSFORMATION IN SOUTH AFRICA

A BLACK MANAGEMENT FORUM PUBLICATION ISSUE 58 | MAY 2023

4 FROM THE EDITOR

After 29 years of democracy, the time has come for decisive action on Eskom and the economy. South Africa is in a deep economic crisis with a worse outlook than during the “lost decade” before the COVID-19 pandemic, when the gross domestic product per capita did not grow.

EDITORIAL CHAIRPERSON’S NOTE

As Africa continues to face a variety of complex challenges, there has been growing recognition of the need for effective leadership that is grounded in both rules and values.

BMF SPECIAL ELECTIVE GENERAL

MEETING

A new era of diversity and inclusion for the BMF.

THE MANAGING DIRECTORS NOTE

BMF EVENTS

An overview of the BMF Policy Conference held on 3 November 2022 at the Gallagher Convention Centre under the theme “Realising a Broad-Based Black Economic Empowerment Future”; and a look at the Achievement Awards gala dinner held on 4 November 2022 where Tsakani Maluleke, Auditor-General of South Africa,

ISSUE 58 | May 2023 | WWW.BMFONLINE.CO.ZA

and Lincoln Mali, CEO of Lesaka Technologies Inc., were the keynote guest speakers.

IN CONVERSATION WITH

Lincoln Mali shares leadership lessons for African development within the private and public sectors.

THE BMF’S GENDER EMPOWERMENT JOURNEY

For the first time in its history the BMF has elected an all-female presidency.

20 GENDER PARITY IN THE WORKPLACE

We unpack why employers must promote an inclusive and supportive working environment.

22 ECONOMIC OUTLOOK

A country in crisis: our economy just keeps going from bad to worse.

24 SMMEs

A critical look at the National

26 SMALL BUSINESS GROWTH

Small businesses play an important role in driving economic growth and employment.

28 SKILLS DEVELOPMENT

The economy’s engine room needs a tune-up, and addressing the high unemployment rate is a priority. We look at four ways to support the growth of small businesses.

30 ENERGY

Ensuring a secure supply of energy that is fair and equitable: unpacking the Just Energy Transition Investment Plan.

33 OP-ED: POLITICAL LEADERSHIP

An assessment of the political strength of the African National Congress to lead South Africa beyond the next elections.

34 OP-ED: THE PRESIDENCY

An analysis of what will define President Cyril Ramaphosa’s next term of office

28 20

3 AFRICAN LEADER

BLACK MANAGEMENT FORUM PUBLICATION ISSUE 58 MAY 2023 LINCOLN MALI SERVE, EMPOWER AND TRANSFORM PRESIDENT RAMAPHOSA’S ERA The positives and negatives THE BMF ANNOUNCES IT’S FIRST ALL-FEMALE PRESIDENCY In conversation with 50YEARS OF THE BMF ADVANCING SOCIOECONOMIC TRANSFORMATION IN SOUTH AFRICA UNPACKING THE JUST ENERGY TRANSITION INVESTMENT PLAN

CONTENTS 18

DECISIVE AND IMMEDIATE ACTION IS REQUIRED

Aer 29 years of democracy, the time has come for decisive action on Eskom and the economy. South Africa is in a deep economic crisis with a worse outlook than during the “lost decade” before the COVID-19 pandemic, when the gross domestic product (GDP) per capita did not grow. In 2022, GDP per capita was lower than it was in 2007. From 2023 to 2025, GDP per capita will decline, says the Reserve Bank.

Following a visit to South Africa, the International Monetary Fund said: “ e near-term growth outlook has deteriorated. Real GDP growth is projected to decelerate sharply to 0.1 per cent in 2023 mainly due to a signi cant increase in the intensity of power cuts, as well as the weaker commodity prices and the external environment. In the medium term, growth is expected to rebound, though only to about 1.5 per cent per year, with income per capita likely to stagnate as a result.” is outlook has disastrous implications for unemployment. According to Stats SA, there were 11.9 million unemployed people during the fourth quarter of 2022. e country had unemployment rates of

70.4 per cent for youth, 47.6 per cent for Africans and 51.4 per cent for African females. On this trajectory, South Africa is heading towards a second lost decade until 2030.

Incredibly, there is no plan to get us out of the crisis. e ANC seems to have given up on being in power and does not want to win the next election. How else can one explain that the 2023 budget said the social relief of a distress grant and the Presidential Employment Stimulus, which will bene t about nine million people this year, will be stopped at the end of March 2024, a couple of months before the national election.

ELECTRICITY AND ECONOMIC RECOVERY NEEDED

e only way out of the crisis in the short term is for Eskom to x its existing plants. e intensity of power blackouts subsided a little a er the departure of former CEO Andre de Ruyter. But they return with a vengeance Eskom when stage 6 load shedding on April 12. the energy availability factors fell back to 51.3% during the 14th week of the 2023. e EAF is now the most important macroeconomic indicator in the short term.

A er a decade of implementing austerity and structural reforms without success, the country needs a new macroeconomic policy framework. ere must be a six per cent GDP growth target binding on National Treasury and the Reserve Bank. e government must spend into the economy the di erence between the 2024 growth forecast and the target – about R200-billion –to get the economy growing. e alternative is a downward spiral that will create an economic wasteland by 2030.

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EDITORIAL COMMENTARY 4 AFRICAN LEADER ISSUE 58 | MAY 2023

After a decade of implementing austerity and structural reforms without success, thecountry needs a new macroeconomic policy framework.

RULES- AND VALUES-BASED LEADERSHIP

Rules-based leadership emphasises the importance of following established procedures, regulations and laws. Values-based leadership is rooted in ethical and moral principles that guide decision-making and behaviour. ese principles apply to the leadership of countries and of organisations.

Rules-based leadership is crucial for ensuring that institutions and individuals are held accountable for their actions. It provides a framework for decision-making and behaviour that is transparent, consistent and predictable. is is particularly important in Africa, where corruption, nepotism and abuse of power are pervasive problems that undermine governance, economic growth and social stability. By promoting the rule of law, leaders can help to create a level playing eld where everyone is subject to the same standards and expectations, regardless of their social status or position of power.

However, rules-based leadership is not enough on its own. It must be complemented by values-based leadership grounded in ethical and moral principles. Values-based leadership emphasises the importance of integrity, honesty, transparency and accountability and provides a moral compass that guides decision-making and behaviour. My conversation with Lincoln Mali in this issue’s cover story explores the lessons he has learnt and seeks to pass on to a younger generation of leaders on the African continent. Our country, our organisations and the citizens of our continent are looking for leaders who demonstrate a commitment to the common good.

Values-based leadership, however, is not always easy to implement. It requires leaders

to demonstrate a willingness to listen, learn and adapt to the needs of their constituents. It also requires leaders to hold themselves accountable to the same ethical and moral standards they expect of others. In many cases, this may require leaders to make di cult choices that prioritise the common good over their personal interests.

THE HOW, WHAT AND WHY OF THIS LEADERSHIP STYLE

Several actions can be taken to promote rules- and values-based leadership in Africa. First, it is important to strengthen institutions and systems that promote the rule of law, such as independent judiciaries, anticorruption agencies and independent media. ese institutions can serve as a check on the power of the executive and ensure that everyone is subject to the same standards and expectations. e role of organisations such as the Black Management Forum is also important to this e ort. To be e ective, however, the organisation must rst demonstrate its commitment to rules- and values-based leadership. Set the example and meet the standard.

Second, it is essential to promote a culture of transparency and accountability in government and public institutions. is can be achieved through measures such as open data initiatives, citizen engagement and public audits. By providing citizens with access to information and opportunities to engage with their leaders, transparency and accountability can help to build trust and promote social cohesion.

ird, it is vital to invest in leadership development and training programmes that promote both rules- and values-based leadership. ese programmes can help equip leaders with the skills, knowledge and values to e ectively navigate complex challenges, engage with their constituents and promote social and economic development.

E ective leadership is essential for resolving the challenges facing Africa today. While rules-based leadership is important for ensuring accountability and transparency, values-based leadership is equally important for promoting integrity, inclusivity and social cohesion. By promoting both rules- and values-based leadership, Africa can build strong, resilient societies that are better equipped to overcome the challenges of the 21st century.

While this issue of African Leader presents the thinking around many of the issues we face in South Africa, the solution to those challenges is only sustainable in stable, cohesive, collaborative and empowered communities. ey require e ective, sel ess and honest leadership. Most importantly, they demand that we all play our part in holding each other accountable to the rules we have set and the values, ethical and moral principles we share.

EDITORIAL CHAIR’S NOTE 5 ISSUE 58 | MAY 2023 AFRICAN LEADER

CUMA DUBE, chairperson of the African Leader editorial board, shares that as Africa continues to face a variety of complex challenges, there has been growing recognition of the need for effective leadership that is grounded in both rules and values

Cuma Dube IMAGE: SUPPLIED

A NEW ERA OF DIVERSITY AND INCLUSION FOR THE BLACK MANAGEMENT FORUM

The Black Management Forum is proud to announce the appointment of its new presidency following an elective special general meeting held on 15 April 2023

The Black Management Forum (BMF) has appointed leading female business strategist and academic Dr Sibongile Vilakazi as its new president following a special elective general meeting held at the Protea Hotel in Midrand on Saturday, 15 April 2023.

Dr Vilakazi holds a Doctor of Philosophy (PhD) in organisational development and diversity management and has worked for global research agencies and brands such as Procter and Gamble (P&G), Nedbank and Unilever.

In her rst message to the members of the BMF, Dr Vilakazi expressed her excitement about the appointment and her commitment to promoting diversity and inclusion while ensuring the BMF assumes centre stage on all transformation matters and leads on policy issues.

A DRIVING FORCE

“It is a privilege to lead such a prestigious organisation that has played a role in shaping the socioeconomic transformation of South Africa and led the development of black

FLYING THE FLAG FOR WOMEN

Newly elected BMF president Dr Sibongile Vilakazi is not the ﬁrst female president of the organisation. Former BMF president Nolitha Fakude, currently president of the Minerals Council South Africa and chairperson of Anglo SA management board, was elected BMF president in 2003. She held the position until 2006.

However, this is the ﬁrst time the BMF has two women in the presidency. The appointment of Dr Vilakazi and her deputy, Lilly Moabi, reﬂects a progressive organisation wholly committed to transformation, and provides women with hope for a more gender-equal world.

managers in the corporate space. I take great pride in the responsibility bestowed upon me and look forward to driving the organisation in the right direction,” says Dr Vilakazi.

“It also gives me a great sense of achievement that the new leadership team comprises very capable women leaders who have proven their mettle in various roles before they were elected,” she adds.

ALL-FEMALE LEADERSHIP

Dr Vilakazi is joined by Lilly Moabi as deputy president, con rming the rst all-female leadership team for the BMF. Moabi is a quali ed Professional Director (PD)SA and a medical technologist. She has a National Diploma in Biomedical Technology and a Financial Management certi cation.

As the BMF moves into this new era of diversity and inclusion, we look forward to the innovative ideas and leadership that the new all-female presidency will bring.

We invite all stakeholders to join us in welcoming the new leadership team and working together to achieve our common goals.

BMF SPECIAL ELECTIVE GENERAL MEETING 6 AFRICAN LEADER ISSUE 58 | MAY 2023

IMAGE: SUPPLIED

As the BMF moves into this new era of diversity and inclusion, we look forward to the innovative ideas and leadership that the new all-female presidency will bring.

Dr Sibongile Vilakazi Lilly Moabi

THE BMF NORTH STAR

The BMF continues to advance its mandate by advocating for meaningful economic empowerment. We are cognisant of the historical paradox confronting African black professionals in corporate South Africa. Although we are a societal majority, we remain a minority in senior and executive management positions. is minority in management levels is under consistent exclusionary practices that force it to adopt pecuniary coping mechanisms.

e BMF, having had a half-centenary of senior management experiential knowledge, understands that African senior managers are o en sceptical about the environment in which they operate. is environment is still not adequately prepared to accommodate and absorb them. erefore, retention becomes a signi cant challenge as they continuously migrate from one organisation to another to grow their capabilities and competencies. is movement is driven by an overwhelming urge to take control of their career development and profoundly impacts how corporate South Africa should view the senior cohort of black professionals.

UNDER-REPRESENTATION STILL CONTINUES

e BMF objectives provide purpose to our e orts to ensure appropriate recruitment, selection and advancement of black professionals into corporate South Africa to achieve equitable dispensation. Yet three decades into transformative legislation, black professionals and, particularly, women, remain under-represented in executive and senior management positions in the private sector.

e 2019 PricewaterhouseCoopers (PwC) report reveals that only 3.31 per cent of chief executives of JSE-listed companies are women.

Equally, the 22nd Commission of Employment Equity (CEE) annual report indicates that 63.2 per cent of the white population cohort are in top management, 10.9 per cent is Indian population, 17 per cent is black and 5.9 per cent coloured population.

Consequently, we can draw signi cant conclusion from the Jack Hammer Executive Report 2015, which noted that the top 40 companies in South Africa continue to be led by white males in their 50s, and there is an increase in foreign CEOs. When observing the present circumstances, the situation has not changed much. is is alarming as it implies that black professionals continue to be systematically prejudiced, and the equitable dispensation of women is moving at a snail’s pace. e BMF believes that corporate South Africa possesses the potential and capacity to move the needle forward and ensure that its priorities equitable diversity.

BLACK EXCELLENCE FOR SOCIOECONOMIC TRANSFORMATION

One of the strategic objectives adopted by the current board is the sustainable development of black excellence. We want to provide capacity building so that we can e ectively enable deliberate socioeconomic transformation. To date, through our in-house programme, the Managerial Leadership Development Programme, we have been able to graduate over 600 black professionals in di erent sectors of expertise, including:

• financial services;

• engineering;

• healthcare;

• law;

• information technology;

• economics;

• mining;

• manufacturing;

• energy;

• agriculture; and

• education.

Furthermore, we have introduced the inaugural BMF Designations, which has three categories: Transformation Director, Transformation Manager and Transformation Professional. is ampli es our strategic objective of sustainable development of black excellence.

e BMF has su ciently prepared its black professionals to be corporate athletes and to play a meaningful and in uential role in corporate South Africa. us, socioeconomic transformation needs to be accelerated in corporate South Africa as it places meaning on B-BBEE policy implementation. It has been the mission and the mandate of the BMF to aid the societal pact in navigating the process of selecting and appointing the required black professionals and executives in South Africa.

We are immensely grateful to our corporate members for the support and commitment that they have provided the organisation over the years. Without this, it would have been impossible to undertake the mission of advancing transformation in South Africa and reaching a signi cant milestone of celebrating half a century of existence.

e late former President Nelson Mandela once said: “I am con dent that the Black Management Forum, which represents a sector of society that formed itself under the most di cult of circumstances and when opportunities were few, has a critical leadership role to play under the favourable conditions of today.”

MD’S NOTE 7 ISSUE 58 | MAY 2023 AFRICAN LEADER

XOLILE KUNENE, acting managing director and head of thought leadership, research and programmes at the BMF, shares that the organisation has consistently modelled its existence on the advancement of socioeconomic transformation in South Africa

IMAGE: SUPPLIED

Xolile Kunene

BMF POLICY CONFERENCE

The BMF Policy Conference was held on 3 November 2022 at the Gallagher Convention Centre under the theme “Realising a Broad-Based Black Economic Empowerment Future (Pathways to an inclusive future for a socioeconomic minority)”. A total of 203 delegates attended the conference, including 26 panellists and BMF delegates from across the country.

In her opening address, acting president Esethu Mancotywa labelled the current South African economy as man-made by policies that created the gross inequalities we see. e BMF Policy Conference creates the opportunity and ability to shape South African policy and legislation. e solution is not to abandon the vision that gave rise to the policies, such as broad-based black economic empowerment (B-BBEE), aimed at redressing the past, but rather to strengthen, deepen, and broaden them for increased e ciency.

Keynote speaker Dr David Masondo, the deputy minister of nance, added that a B-BBEE future for South Africa is one where economic growth is driven by a higher number of black people as owners and managers of enterprises and productive assets, a higher representation of black people in all occupational categories and levels in the workforce and a higher number of communities, workers, co-operatives and other collective enterprises owned and managed by black people.

Minister of Trade and Industry Ebrahim Patel closed o the opening session by pointing out that a key part of the transformation is to change the colonial legacy of our economy through structural change. e structure of the South African economy is characterised by economic concentration in many sectors with a weak small, medium and micro enterprise ecosystem, an export bias of primary commodities in mining and agriculture and

an economy that is a signi cant importer of nal value-added goods. South Africa has a highly carbon-intensive economy and a relatively low savings rate. Patel recommended that, given the contested narratives on B-BBEE in the public arena, it is worth recalling the fundamental rationale for transformation.

e address was followed by panel presentations and discussions, a summary of which is available on the BMF Policy Conference page.

8 AFRICAN LEADER ISSUE 58 | MAY 2023

SCAN TO VISIT THE EVENT PAGE Mandisa Mathobela (facilitator), Mmamoloko Kubayi (Chairperson of Economic Transformation Committee ANC), Joel Netshitenzhe (Executive Director and Board Vice Chair - Mistra), Nyane Nkosi (Chairperson - Land Bank Board) David Masondo Deputy Minister of Finance of South Africa Cuma Dube (facilitator), Portia Derby (Group Chief Executive - Transnet SOC Ltd), Stella Ndabeni-Abrahams (Minister of Small Business Development), Jeremy Lang (Executive Director and CIO - Business Partners), Thembi Manyike (Facilitator), Nompumelelo Mpofu 1(CEO - Airports South Africa), Bonga Mokoena (CEOBDO South Africa), Tabea Nkabide (Senior advisor - AYE) Ebrahim Patel Minister of Trade and Industry of South Africa

ACHIEVEMENT AWARDS GALA DINNER

Attendees of the 2023 Achievement Awards Gala Dinner, the Achievement Awards gala dinner was held on 4 November 2022. Tsakani Maluleke, Auditor-General of South Africa, and Lincoln Mali, CEO of Lesaka Technologies Inc., were the keynote guest speakers. With approximately 433 guests, the event saw the relaunch of the BMF Awards, introducing new award categories aimed at highlighting and celebrating the unique e orts and distinctive works of companies, entrepreneurs and individuals championing transformational change within their organisations and communities. e awards were judged by a panel of industry experts who followed a rigorous process to select the winners. e evening ended with a toast celebrating 10 years of the BMF Young Professionals. e Young Professional structure caters for post-tertiary individuals up to the age of 35. e BMF strives to prepare aspiring managers and entrepreneurs to become fully edged managers in the challenging South African workspace through various programmes and workshops.

LEARN MORE ABOUT THE AWARDS

Special Awards

RECIPIENT

AWARD

Dr Mosibudi Mangena Lifetime Achiever Award

Banyana Banyana BMF Presidential Award

Tshwane University of Technology Student Chapter Branch of The Year

Designations Awards

David Khoza Certiﬁed Transformation Manager

Mangaliso M Madlala Certiﬁed Transformation Manager

Kemi Mathatho Certiﬁed Transformation Manager

Michael Thembinkosi BiyelaCertiﬁed Transformation Director

Kgadi Silas Mashala Certiﬁed Transformational Professional

Tsepo Duma Certiﬁed Transformation Manager

Vusi Vuma Certiﬁed Transformation Manager

Small Business Runway SMME Impact of the Year Award (Category A)

Uyandiswa SMME Impact of the Year Award (Category B)

Sibabalwe Sesmani Young Woman of the Year Award

Kabelo Kgodane Young Professional Award

Dr Nokukhanya Khanyile-Lenake Young Professional Award

Siyanda Siko Manager of the Year Award

IDC Most Transformed Board

MTN Most Transformed EXCO

BMF EVENTS 9 ISSUE 58 | MAY 2023 AFRICAN LEADER IMAGES: SUPPLIED

Congratulations to the following 2022 Achievement Awards winners. Bongiwe Zwane, master of ceremonies Lincoln Mali, CEO of Lesaka Technologies Inc., Charles Molapisi, MTN SA CEO, Councillor Nkululeko Mbundu, member of the mayoral committee for the Department of Economic Development, Siyanda Siko, recipient of the Manager of the Year award, Esethu Mancotywa, BMF acting president, and Auditor–General of South Africa Tsakani Maluleke. Dr David Masondo, Esethu Mancotywa, Dr Mosibudi Mangena, Lifetime Achiever award recipient, Tsakani Maluleke, and Mzwanele Manyi, former BMF president. Ayavuya Madolo toasted 10 years of the BMF Young Professionals. Lincoln Mali (Special Keynote Speaker), Esethu Mancotywa (Acting President), Tsakani Maluleke (Keynote Speaker)

SERVE, EMPOWER AND TRANSFORM

Lincoln Mali’s leadership lessons

There are not many professionals who can claim to have been exposed to the many challenges that must be overcome to be a successful African leader on the continent, in the same way Lincoln Mali can. I would argue, based on my conversation with him, that there are even fewer who can be as insightful and articulate about what those challenges are meant to teach, writes

CUMA DUBE

IN CONVERSATION WITH: LINCOLN MALI 11 ISSUE 58 | MAY 2023 AFRICAN LEADER

Being a leader on the African continent is complicated. Whether it is African leadership exercised in the private sector or African leadership of public entities and civil society organisations. e yoke of African leadership is di cult and the burden is heavy.

Lincoln Mali says the lessons leadership challenges present are quite simple if you pay attention: they are humility, exibility and vision.

Mali is the Southern Africa chief executive o cer of Lesaka Technologies Inc., formerly NET1 UEPS Technologies Inc. Before that, he was chairman of Diners Club South Africa and head of group card and emerging payments (Africa and China) at the Standard Bank Group. He’s the author of the bestselling book, Blazing a Trail: Lessons for African Leadership, where he draws on the re ections from family, friends and colleagues to develop his ideas on the leadership characteristics and techniques that have shaped a new path of leadership he uses to mentor and inspire young leaders. But Mali is not married to concepts or “leadership models” per se. He’d rather not be limited to narrow frameworks and ideological packages around what leadership is, or what cannot be considered leadership and how it should be exercised.

In his own words, the foundation of Mali’s approach to leadership is “in uenced by my teachers, my parents, my sporting coaches and veterans of the liberation movement who came from Robben Island, among others. And the thing that struck me about all these people was humility. It was a sense of sel essness. It was a bigger mission than themselves to serve a higher purpose. It was discipline”.

WHERE IT ALL BEGAN

Mali’s leadership story begins with him as a student leader and a political prisoner at some point. In 1994, he became the spokesperson for the Ministry of Education in South Africa. In an extract from Blazing a Trail”, he tells the story of having worked on the plan to integrate black and white schoolchildren in the formerly

“white

School-going children were bussed in from Khayelitsha to integrate with the children of that community in February 1995. ere, he says, the lessons learnt from the leaders who had in uenced him would be tested by the extreme sociopolitical tensions that characterised our transition to democracy. He writes: “But going through that was necessary. is was a classic case of the di culties of reconciliation and reconstruction; how to manage real and genuine fears from the Ruyterwacht community alongside urgent and legitimate expectations from the Khayelitsha community, all while upholding the rule of law and our Constitution. As a spokesperson in such situations, you can’t be the story; you can’t get caught up in your personal politics and ideology. You can only be the representative of a government for all the people.”

THE TYPE OF LEADERSHIP AFRICA NEEDS

Mali adds that Africa needs leaders who are invested in developing their communities.

“Africa needs leaders who are interested in the stories of those they have been entrusted to lead so they can respond appropriately to their needs. We need leaders through whom more people develop, through whom more people grow, and through whom objectives are realised and goals reached.

“Leaders willing to learn rather than always being the expert and those that truly want to serve rather than be served. Leaders who listen and want to understand more than they speak, direct and ponti cate.”

Mali adds that he wants to be a leader who “wants to build deep lasting relationships”.

FLEXIBILITY AND ADAPTABILITY IN AN EVER-CHANGING WORLD

“One of the many challenges plaguing our continent is a lack of exibility and adaptability in our leaders’ approaches to leadership in a rapidly changing world.”

He adds that leadership is a critical aspect of any society, and leaders are expected to nd solutions to the challenges that confront their constituents. “However, ideological packages and a lack of exibility can limit a leader’s ability to resolve the problems faced by their constituents.”

Mali explains that ideological packages are a set of beliefs and values held by a leader that shape their decisions and actions. While these packages may provide a framework for decision-making, they can also limit a leader’s ability to be exible in their approach to problem-solving. For instance, a leader who holds rigid views on immigration may nd it challenging to address the issue in a way that bene ts both immigrants and citizens. is rigidity in ideology can lead to ine ective policies that exacerbate rather than solve problems.

e world is constantly changing, and challenges are becoming increasingly complex. Leaders must be exible and adaptable to respond e ectively to emerging issues. “However, a leader who is rigid in their approach may fail to recognise the need for change, leading to ine ective policies and solutions,” says Mali.

Mali explains that leaders who are ideologically committed to a particular economic policy may be unable to address the challenges posed by automation and arti cial intelligence. ese technologies are disrupting traditional industries and changing the nature of work. However, leaders who are in exible in their approach to economic policy may fail to recognise the need for retraining programmes, education reform, or the need to provide a basic income to those who are displaced by automation.

It is this type of exibility and resilience Mali says he has witnessed throughout the continent. Africa has, and needs more, “leaders in communities, not driven by positions, status or recognition, but by a higher purpose to make a di erence in the lives of the people in their communities,

12 AFRICAN LEADER ISSUE 58 | MAY 2023

community” of Ruyterwacht in Epping, Cape Town.

The foundation of Mali’s approach to leadership is “influenced by my teachers, my parents, my sporting coaches and veterans of the liberation movement”.

school, churches or tribes”. It is here, Mali explains, he has seen leaders who can recognise the changes in their worlds, and work to adapt to those changes, helping others to do the same, despite those who “lead” them. “It is those ordinary people in every community on the continent that exemplify the leadership values and traits I’ve been learning from a young age, and these lessons I hope to pass on to other young African leaders today. It is in the experiences of those people that the true African leadership story may be found.”

THE AFRICAN STORY

Mali’s vision for the continent is not some grand state of development. Nor does he seek to impose a worldview on those that look to him for leadership. He merely wants to live the values passed on to him by those who came before him and “sell them in my global interaction with others. While Africa may be culturally diverse, our value systems are not di erent from one another”.

“Leadership is a critical aspect of African societies, and African value systems provide a unique framework for leadership that has been shaped by centuries of tradition and experience. African value systems emphasise communalism, and a sense of collective responsibility, which can be harnessed as e ective leadership tools,” he says.

Communalism is a core value of African societies that emphasises the importance of collective action and shared responsibility. is value has signi cant implications for leadership as leaders are expected to be accountable to their communities and work collaboratively with their constituents. “Leaders who embrace communalism prioritise the wellbeing of their community above their individual interests and are more likely to foster a sense of trust and loyalty among their constituents,” Mali explains.

A sense of collective responsibility is a core tenet of African value systems. It premises that Africans work together to address societal challenges. “ is value expects leaders to mobilise their constituents to work together towards shared goals. Leaders who prioritise collective responsibility tend to be more collaborative, inclusive and participatory in their leadership style, which fosters a sense of ownership and pride among their constituents.”

A CULTIVATED LEADERSHIP FOR AFRICA

The challenges we face as a continent, Lincoln Mali says, are complicated. Our continent has a diverse range of cultures, languages and political systems that present unique challenges for leaders. To effectively address these challenges, leaders must possess a combination of nuance, ﬂexibility and humility. Mali explains:

Why nuance?

Nuance is essential because it allows leaders to understand the complex and multifaceted nature of the challenges they face. Leaders who possess nuance can navigate the intricate social and political structures of their countries, identify the root causes of problems and develop targeted solutions that address the speciﬁc needs of their communities.

Why ﬂexibility?

Flexibility allows leaders to adapt to changing circumstances and respond to new challenges as they present themselves. Flexible leaders can adjust their strategies, policies and priorities to meet the evolving needs of their communities, which can help to build trust and foster a sense of ownership and pride among their constituents.

Why humility?

Humility is perhaps the most important characteristic for leaders as it allows them to acknowledge their limitations, listen to feedback and learn from their mistakes. Leaders with humility are more likely to work collaboratively with their constituents, seek out diverse perspectives, and incorporate feedback into their decision-making processes. This can help build trust, promote inclusivity and ensure leaders remain accountable to their communities.

Leaders who can navigate complex social and political structures, adapt to changing circumstances and acknowledge their limitations are better positioned to provide effective solutions to the challenges facing their communities. By embracing these characteristics, leaders can foster a sense of trust, inclusivity and accountability among their constituents, which is essential for building strong, resilient societies that can overcome the challenges of the 21st century.

“My biggest passion is to work to develop the next layer of leaders to be more conscious and more aware of the pitfalls that lie ahead when you are given a title, when you have access to a bit of money, when you have some people following you. It is easy to fall into the same trap that has befallen others who have gotten into power-monger situations, corruption, and nepotism,” Mali explains.

To mitigate against all these pitfalls, Mali proposes “a bigger emphasis on ethics and values”.

“Empower people and they will solve their own problems. Invest in young people and they can change the world,” he concludes.

IN CONVERSATION WITH: LINCOLN MALI 13 ISSUE 58 | MAY 2023 AFRICAN LEADER

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Lincoln Mali says the lessons leadership challenges present are quite simple if you pay attention: they are humility, exibility and vision.

WHERE IT ALL BEGAN

“white

THE TYPE OF LEADERSHIP AFRICA NEEDS

Mali adds that Africa needs leaders who are invested in developing their communities.

Mali adds that he wants to be a leader who “wants to build deep lasting relationships”.

FLEXIBILITY AND ADAPTABILITY IN AN EVER-CHANGING WORLD

“One of the many challenges plaguing our continent is a lack of exibility and adaptability in our leaders’ approaches to leadership in a rapidly changing world.”

12 AFRICAN LEADER ISSUE 58 | MAY 2023

community” of Ruyterwacht in Epping, Cape Town.

The foundation of Mali’s approach to leadership is “influenced by my teachers, my parents, my sporting coaches and veterans of the liberation movement”.

THE AFRICAN STORY

A CULTIVATED LEADERSHIP FOR AFRICA

Why nuance?

Why ﬂexibility?

Why humility?

To mitigate against all these pitfalls, Mali proposes “a bigger emphasis on ethics and values”.

“Empower people and they will solve their own problems. Invest in young people and they can change the world,” he concludes.

IN CONVERSATION WITH: LINCOLN MALI 13 ISSUE 58 | MAY 2023 AFRICAN LEADER

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BUILDING AN AFRICAN POWERHOUSE

In the same way that China and India seized the opportunities created by global growth to unleash rapid industrialisation and economic expansion, Africa’s time is now. And the key to unlocking its potential as the next great economic powerhouse lies in the next great boom industry: electric vehicles (EVs).

of cer of the Moti Group

GUILDING A LEGACY BRAND

Since its beginnings as a family-owned business, the Moti Group has seen impressive growth over the past 18 years. A private family-owned investment holding group of companies, the Moti Group has accumulated a diverse portfolio of assets in, among others, mining and metals beneﬁ ciation, property, aviation and ﬁ nancial products.

still in its infancy, just 120 000 electric vehicles were sold worldwide in 2012.

According to the International Energy Agency (IEA), when the industry was still in its infancy, just 120 000 electric vehicles were sold worldwide in 2012. Less than a decade later, more than 120 000 were being sold every week and by 2022, 10.5 million new batteryelectric vehicles and plug-in hybrids were delivered – another astronomic leap of 55 per cent year-on-year, as reported in a Business Day article.

55 per cent year-on-year, as reported in a surprising yet Mogajane, the former Treasury and new chief executive

Given its abundance of mineral resources, all that’s needed for African businesses to begin competing in the global arena is for enterprising leaders to harness the power of soaring demand for electric vehicles and lithium-ion batteries. And one such ﬁgure leading the charge on behalf of South African enterprises is a somewhat surprising yet easily recognisable face in international circles: Dondo Mogajane, the former director-general of the National Treasury and new chief executive ofﬁcer of the Moti Group.

Moti steps down from the organisation,

Now, as former leader and founder Zunaid Moti steps down from the organisation, Mogajane has been tasked with guiding the Moti Group into a new era.

Having built the organisation into one of South Africa’s most successful enterprises, Zunaid Moti is ready for his next chapter. Through his philanthropic venture, Moti Cares, he now intends to play a greater role in socioeconomic development and community upliftment while simultaneously focusing on his Zimbabwe-based operation, African Chrome Fields. Meanwhile, Mogajane has taken up the reins at the Moti Group and is leading its transformation from a family business into a leading African corporate.

A NEW ERA

Frequently asked about his decision to end his time at Treasury and leave his 23-year career in the public sector to cross the line and join the private sector, Mogajane simply notes that he was ready to join other businessmen at the coalface

Having built the organisation into one of South Africa’s most successful private sector, Mogajane simply of the economy.

It’s Africa’s time to rise, unlock its potential and shine, writes the DONDO MOGAJANE, chief executive of cer of the Moti Group

Dondo Mogajane

“After having the honour to serve at the pinnacle of the public sector, I was ready for a new challenge and to roll up my sleeves in the private sector. The Moti Group was the perfect opportunity, especially as a black-owned business with interests in so many different sectors,” he says.

“We have set some very ambitious goals for the group over the next ten years, but we’re already making progress in implementing new structures and further strengthening our corporate governance policies.

eing on the other side of ﬁnancial regulations now, I better understand some of the challenges, but I’m enjoying the opportunity to make a direct contribution to economies through business growth and job creation.”

AN AFRICAN MINING LEADER

With Mogajane at the helm, one of the group’s lofty goals for the next decade is to see its name listed among Africa’s top 20 mining companies – beginning with expanding its lithium mining operations in Zimbabwe. The group is already ﬁnalising its partnership ith a globally renowned battery manufacturer based in China that boasts a 37 per cent share of the EV battery market. “This partnership perfectly illustrates our vision for the future,” he says.

“We may be a relatively small business in terms of our operations, but we’re ready to play on a bigger international stage and be recognised as a major black business partner within the southern African region. The mining sector, particularly, has always been dominated by a few large multinational conglomerates. We

FAST FACT

The Moti Cares Foundation and African Hero are socioeconomic development initiatives created and executed by Zotex Holdings. Zotex belongs to the Moti Group, a superset of companies based in Johannesburg.

believe it’s time for more black players to enter the space.”

The project’s potential is clear. While South America boasts about 58 per cent of the world’s lithium compared to Africa’s small 5 per cent share, as reported by African Business , Africa’s lithium pegmatite deposits remain largely unexplored. And for Zimbabwe, a country still reeling from the catastrophic economic damage wrought during the 1990s and 2000s, its natural abundance of lithium may just be the lifeline needed to drive socioeconomic development and place it back onto a more positive trajectory.

Notably, the value of the electric market, according to Smart Energy International, is forecast to reach $7-trillion by 2030 and $46-trillion by 2050. Meanwhile, rising demand for EV batteries has seen the price of lithium carbonate soar. Prices reached record highs in China (the world’s largest EV market) of $41 925 a tonne in December last year, according to a Reuters report – a veritable gold mine for a country currently ranked as the orld s ﬁfth largest lithium producer. Additionally, amid the country’s ban on exporting unprocessed lithium,

companies, such as the Moti Group, with a strong track record in mining are perfectly positioned to develop a local lithium processing plant. So, although there are still signiﬁcant obstacles ahead, including ongoing sanctions that have deterred numerous other foreign investors, Mogajane is optimistic about the project’s future.

“I’ve had over 15 years of experience in the international ﬁnance orld and at the World Bank, so I understand what Zimbabwe needs to join the global stage. From a humanitarian perspective, the country urgently needs investment and development – any small contributions can go a long way,” he notes.

“Ultimately, economic empowerment and socioeconomic development are key to our company’s ethos as a black-owned African business. We believe that our operations not only need to be profitable, but also benefit surrounding communities and play a meaningful role in transformation to be truly sustainable. “That said, empowerment can’t be about tokenism. Black businesses also have to be willing to demonstrate their efficiency, competency and willingness to become larger players if they want to continue winning new opportunities and partnerships for growth – which is what we have done.”

MAINTAINING AN ETHOS OF EXPANSION AND EMPOWERMENT

Mogajane points to the success of the Kilken Imbani Joint Venture plant, a platinum group metals tailings retreatment plant adjacent to the Amandelbult Platinum Mine near Thabazimbi in the Limpopo province. Using tried-and-tested modern otation technology, the plant recycles the waste created by the Amandelbult mine and extracts valuable minerals such as platinum, palladium and rhodium – a “green mining” process that results in more environmentally sustainable mining byproducts and reduces the size of tailings for storage.

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15 ISSUE 58 | MAY 2023 AFRICAN LEADER

“We may be a relatively small business in terms of our operations, but we’re ready to play on a bigger international stage and be recognised as a major black business partner within the Southern African region.” – Dondo Mogajane

Kilken Platinum, a Moti Group subsidiary, is a 70 per cent partner in the venture, which it operates in conjunction with Imbani Minerals. Through their combined efforts, the plant has steadily grown its operations and output over the past 17 years.

Following its latest expansion plans, the plant’s production capacity will soon increase by 15 to 20 per cent.

Another achievement since Mogajane joined the Moti Group has been the introduction of a mentorship programme for young metallurgical engineering graduates, giving them the chance to learn under the plant’s core management team. Through this programme, the group aims to grow a pipeline of talented and deserving future plant managers.

“Many businesses underestimate the contribution youth can make or the importance of giving them an opportunity to learn and prove themselves. But these youth are ultimately the future of our businesses – this is why it’s critical to bring young people into companies and show them the skills and qualities needed to be good leaders.

“As business leaders, we need to emphasise empowering our own people and staff, not just through mentorship, but throughout our operations and culture.”

Employing the same approach as its Kilken operation, the group hopes to establish a mentorship programme in Zimbabwe. Additionally, it aims to develop the necessary supporting infrastructure in Zimbabwe, such as schools and clinics, for staff and surrounding communities to thrive.

ABOUT THE MOTI GROUP

The Moti Group is built around strong and experienced leaders from diverse professional backgrounds. Founded in 2005, the group employs hundreds of people across its various businesses in South Africa and Zimbabwe. Moti Group boasts an incredible track record of achievements in the business world. Its phenomenal growth can be attributed to a blend of strategic mergers and high-quality acquisitions, as well as identifying untapped opportunities for new business ventures.

The group enjoys a strong reputation for innovation, with world-class operations and leading technology. It is committed to socially responsible investments that beneﬁt economies, people and the environment, emphasising sustainable development in every part of its business.

NEW SOLUTIONS TO OLD OBSTACLES

While the group has many ambitious plans for its lithium operations, Mogajane acknowledges that there are several signiﬁcant impediments on the path between the company and its goal of becoming the next African mining leader or playing a role in realising the next African renaissance.

Perhaps the most glaring issue is inadequate infrastructure, ranging from the vital energy, water and transportation networks needed for businesses to succeed to the educational and healthcare facilities required for sustainable socioeconomic development and inclusive growth.

For example, according to the latest Africa Infrastructure Development Index, South Africa ranked fourth on the continent with a score of 80.19 points out of 100. By contrast, Zimbabwe received a paltry 26.23 points – a worrying sign, considering South Africa’s infamous infrastructure challenges.

Undeterred, Mogajane states that the group has developed a unique solution in its African Hero project. This is a socioeconomic development initiative created and executed by subsidiary Zotex Holdings. The project aims to recycle and renovate old shipping containers, combining them with cutting-edge technology to create schools, clinics and even stores that can easily be deployed to any area in Africa.

These containers not only offer greater longevity and ease of movement than traditional brick-and-mortar buildings, but are also signiﬁcantly cheaper, ma ing them a highly attractive alternative for retail groups, development partners and government entities.

This concept is particularly remarkable given that, according to the African Development Bank Group, increasing a country’s stock of working infrastructure by one per cent can likewise add up to one per cent to the gross domestic product. For countries such as Zimbabwe, this solution could therefore represent a welcome glimmer of hope for speeding their economic revival.

The Moti Group’s next strategic focus area ill be energy, speciﬁcally renewables, as it seeks to overcome the continent’s infamous energy challenges and support the global low-carbon energy agenda.

“We are extremely interested in supporting the just transition away from

16 AFRICAN LEADER ISSUE 58 | MAY 2023

All that’s needed for African businesses to begin competing in the global arena is for enterprising leaders to harness the power of soaring demand for electric vehicles and lithium-ion batteries.

fossil fuels and assisting in the ﬁght against climate change. This is the way of the future, and as an African business, we hope to help lead the charge and address regional supply chain shortages. There are so many opportunities for local companies to get more involved and begin doing things ourselves rather than relying on overseas partners or suppliers,” he explains.

“So, although it may not happen immediately, renewables and especially solar power are a natural next step once we have completed consolidating our mining and core operations. We have an abundance of sunlight, and this should be captured to fulﬁ l our energy needs.

THE LEADERSHIP WE NEED

His advice to other African political and business leaders is simple, but sage.

“Second, the African Continental Free Trade Area is very important, as African countries should be trading more among themselves, leveraging their strengths and exchanging knowledge. Their intellectual property should remain in Africa to build new, innovative businesses that beneﬁ t our local communities and create jobs.

“Finally, we need to nurture and retain our own talent through building more resilient educational institutions and giving graduates opportunities. We also need to harness the experience of our African diaspora spread out across the world and encourage them to come and make a difference here at home. We must recognise the untapped potential that we, as Africans, have and not look down on ourselves.

Scan

this QR code to go directly to

+27 11 888 8888

reception@moti-group.com

www.moti-group.com

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EV OUTLOOK 2022

REUTERS REPORT

SMART ENERGY MARKET FORECAST FOR ELECTRIC VEHICLES AFRICA INFRASTRUCTURE DEVELOPMENT INDEX

“First, we cannot simply pay lip service to peace. Stability is critical to realising Africa’s growth potential, which is why we cannot afford to lose focus on peace efforts,” he says. the

Moti Group website.

For more information:

“Ultimately, Europe’s time has passed, and Asia’s growth will eventually reach the point of saturation. Africa is the next growth pocket and our time is now. We have the people and the natural resources – it’s simply time to put them to work.”

WILL THE BMF’S LOOMING HALF-CENTURY BE THE CATALYST FOR GENDER EQUALITY?

FARAH ALLY re ects on the BMF’s commitment to promoting gender equality

fetch them, which possibly discouraged full participation of women in the politics of the organisation’s leadership race.

Past BMF presidents would be the rst to acknowledge there has never been a scarcity of women leaders in the organisation; its founding members included women. However, because of the democratic nature of the organisation, those with viable ideas for the time win the day and get elected. For instance, in 1993, eodora Mgidi was deputy president and contested the president position and lost to Lot Ndlovu, an already established leader in corporate South Africa, who was considered a better contributor to transformation ideas.

The BMF is an inclusive organisation, respecting all voices and that women have the same power as men. e organisation values ideas above all else because it is a thought leader, according to founding member Eric Mafuna.

e BMF was founded on the back of women volunteerism and commitment to the idea of a transformed society. Women birthed the organisation because they always did the important things men could not do, such as public relations, which was mainly the forte of women at the time.

ALL WAS NOT FAIR IN THE PRESIDENTIAL RACE

e majority of the o ce bearers who drove things in the background were women. But women felt they were not ready to be president of the organisation

because it was a tedious and risky position for the longest time. e apartheid police targeted past BMF presidents, and the probability of being incarcerated was always high. However, there were also unspoken practices that made it di cult for women to compete fairly for the position, even if they were interested in running. Elections were held at annual general meetings (AGMs) and no lobbying was allowed.

Men were bolder and lobbied before the AGMs. Men used their position outside the BMF to lobby for the position inside the organisation. e power of their character and reputation to lead elsewhere was used to lobby for their readiness to be the president of the organisation. Yet, the organisation was always aware and preached that women need to be part of the presidency. Meetings also ran deep into the night, and women had to arrange for their husbands or partners to

embakazi Mnyaka lost to Bonang Mohale in 2013, and in 2015, Koko Khumalo lost to Mncane Mthunzi. In 2021, Tasneem Fredericks lost to Andile Nomlala, who was contesting for his second term.

DEVELOPING FEMALE LEADERS

e BMF has made strides in an attempt to focus on the development and support of its female members. e gender desk was created in 2019 to drive the BMF’s gender agenda.

ere is a longstanding collaboration between the BMF and Duke Corporate Education through the Women in Power programme.

is programme addresses the challenges women executives face in their management and leadership

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Farah Ally

roles and provides practical insights, tools, frameworks and leadership competencies to increase their impact and create lasting personal and professional change.

e Management and Leadership programme (MLDP) also includes women. ese initiatives aim to develop our women into the BMF-type leader we aspire to be.

e BMF is very happy and proud to unleash this type of female leader to the world and position her for corporate opportunities. Yet this female leader is still not ready or good enough to lead the very organisation that has seen t to develop her with skills and abilities to conquer any corporate out there.

WOMEN NEED TO BE CHAMPIONED

If we accept that the BMF is a microcosm of the broader society, it makes sense that the same trend of minimal female leadership is observed in society and the workplace in general, a er 29 years of democracy. e 2020/2021 Commission for Employment Equity (CEE) annual report shows there was an insigni cant increase of 0.5 percentage points in the representation of female leaders in top management between 2018 and 2020. e report shows that males are over-represented in top management positions in all sectors of the economy.

At senior management, there was an insigni cant increase in the representation of females between 2018 and 2020. is shows that the intent is there, but not appropriately managed for e ective outcomes. What is disturbing and somewhat justi es why the BMF has focused mostly on race over the years is the observation that there has been hardly any increase in the representation of black and coloured females at senior-level positions since 2018. e marginal increase has been driven by white and Indian female representation at this level.

e bold competition for top positions that characterise leadership races does not appear to suit women’s style of competing, which is more subtle. Women seem to seek evidence and a rmation that they are the right person to lead above all others. Someone has to identify and champion their cause based on a proven track record of good leadership. is is di erent from men who

put themselves forward and express that they want the position the most and therefore are more deserving of the position.

Interestingly, these behaviours are informed by societal norms of survival, where a man typically hunts while a woman gathers. ese fundamental di erences in how males and females behave under varying circumstances are critical to an organisation such as the BMF, which champions transformation and the diversity agenda. Diversity is about embracing di erence in its entirety, so it’s not enough for the organisation to claim to be inclusive when it comes to ideas, but then not inclusive in its fundamental processes and traditions of power distribution and power sharing.

It is evident that the essence of the BMF is shaped by the broader male-controlled society, hence the processes and traditions favour male ways of being, disadvantaging women. Provincial and branch structures need to encourage and support the development and advancement of our female members in preparation for the leadership opportunities that will present themselves at board level and ultimately the presidency. Female members need the assurance that they will be supported on their leadership journeys in the BMF.

ese women need to step up and start taking leadership positions in branches and at provincial level. is must become a priority as the urgency has been lacking for way too long. It cannot be encouraging for any young women when she sees that those before her are still having this conversation about the advancement of women into the pinnacle positions of the organisation and remain unable to break through that proverbial glass ceiling. e organisation’s traditions perpetuate the idea of a male as a leader, but the time has come for this to be discouraged.

Space must be created for both a gatherer-type and a hunter-type leader to emerge organically by enabling the

processes used to elect such leaders. A new succession process that assists democracy must be cra ed and embedded in the organisation’s constitution. If the BMF can get this right internally, it can begin to model it for other organisations and society, thereby solidifying the organisation’s position as a thought leader in driving transformation and socioeconomic development.

WILL THINGS FINALLY MOVE IN FAVOUR OF WOMEN?

On 15 April 2023, the BMF held a Special Elective General Meeting to elect a new president and deputy president. is was a historic day for the BMF. On this day, members made the decision to bring about a change that the organisation so desperately needed – an all-female presidency led by Dr Sibongile Vilakazi (who is only the BMF’s second female president in its history, a er Dr Nolitha Fakude who was elected in 2003), with Lilly Moabi as deputy president. is historic achievement is the result of the progressive men in the organisation being deliberate and deciding that they would champion the cause of an all-female presidency. e men understood that women are needed to take the BMF to its former glory. e new journey for the all-female-led presidency will not be an easy one, but what these female leaders must know is that they will enjoy the support of the board, the members, stalwarts, stakeholders and friends of the BMF.

But even with this historic change, we must continue paying attention to the gender agenda because when you stop paying attention and being intentional, even the brightest lights will dim and eventually fade away. Let us remember, history not celebrated becomes history forgotten, history forgotten could easily become history and legacy denied.

THE BMF’S GENDER EMPOWERMENT JOURNEY 19 ISSUE 58 | MAY 2023 AFRICAN LEADER

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Farah Ally is the BMF KwaZulu-Natal’s provincial chairperson.

A new succession process that assists democracy must be crafted and embedded in the organisation’s constitution.

GENDER EMPOWERMENT IN THE WORKPLACE IS MORE THAN A MORAL OBLIGATION

PAMELA STEIN, partner, and JAMIE JACOBS, associate, from Webber

Wentzel, share why employers must promote an inclusive and supportive working environment

The term “gender empowerment” was developed to describe the process of increasing the power and in uence of women in society while recognising the importance of including men and nonbinary individuals in the process. People from marginalised genders, including women, nonbinary individuals, and members of the LGBTQ+ community o en face signi cant challenges in their professional lives.

Women make up a large portion of the working-age population – exceeding that of the male population. Despite this, women and people from marginalised genders remain under-represented in positions of authority and power. is disparity continues to be of great concern as women and nonbinary individuals have a signi cant contribution to make to the economy. A report published in October 2022 by StatsSA titled Gender Series Volume IX: Women Empowerment, 2017–2022, highlights that women in South Africa still face big challenges, and empowerment remains a critical issue across all sectors in South Africa.

CHALLENGES AND THEIR IMPLICATIONS

e various challenges that women and nonbinary individuals face in the workplace

include discrimination based on their gender identity, which can take the form of prejudice, harassment, or unequal treatment. Pay disparity has also recently been highlighted as a major concern in this regard, and it is compounded by unequal opportunities in the workplace. People from marginalised genders are at a higher risk of violence and abuse, including sexual violence, domestic violence and hate crimes. is can have signi cant physical, psychological and emotional e ects and impacts their ability to perform in the workplace. According to the StatsSA report, women are more likely to be unemployed than men and are less likely to participate in the labour market. is data con rms that despite the Employment Equity Act 55 of 1998 being in operation for more than 20 years, its primary objective of gender (and racial) equality in the workplace has a long way to go.

AFFIRMATIVE ACTION OBLIGATIONS OF EMPLOYERS

e Employment Equity Act (EEA) imposes a rmative action obligations on employers aimed at promoting gender equality and eliminating gender-based discrimination in the workplace. Designated employers have a legal obligation to set employment equity targets that include proportionate representation of women at all levels. Job requirements must be continually assessed,

and elements that may discriminate against women and nonbinary individuals must be removed. Employment policies or practices cannot discriminate against marginalised gender groups.

Given the historical background and socioeconomic landscape of South Africa today, it is not surprising that gender discrimination is o en coupled with racial discrimination. To address this, employers should implement a rmative action measures based on multiple intersecting grounds so that people from marginalised genders who are the least represented in the workplace and face both gender and racial discrimination can participate meaningfully in the workplace.

Goal 5 of the United Nations’ Sustainable Development Goals promotes the attainment of gender equality in all spheres of life, including the workplace. Goal 8 calls for

Pamela Stein

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Designated employers have a legal obligation to set employment equity targets that include proportionate representation of women at all levels.

sustainable and inclusive economic growth through the provision of decent work to all individuals. In general, work is considered decent when it pays a fair wage and guarantees a secure form of employment and safe working conditions.

EMPLOYER RESPONSIBILITIES

Employers have a responsibility to address gender-based violence and sexual harassment in terms of the Code of Good Practice on the Prevention and Elimination of Harassment in the Workplace, 2022. is involves creating a workplace culture that promotes respect and dignity for all employees and providing training and resources to help employees understand what constitutes gender-based harassment and sexual harassment. Employers should also have clear policies and procedures in place for reporting incidents where such harassment occurs and should take prompt and appropriate action to address any reported incidents. is code of good practice also touches on the role employers can play in assisting employees dealing with domestic violence (a social ill that disproportionately a ects women and nonbinary individuals) through referrals to counselling networks and the possible provision of additional unpaid leave, among other measures. is demonstrates the drive towards promoting workplaces in which employers are alive to the obstacles people from marginalised genders face in society and the impact on their performance in the workplace.

Employers must promote an inclusive and supportive working environment to advance gender empowerment. is can be done through policies that are e ective in prohibiting gender-based and sexual harassment and through the promotion of equal pay for equal work. Di erentiation in pay based on gender is prohibited under section 6(1) of the EEA, and employers are obliged to ensure at all times that they remunerate employees equally where such employees’ work is the same or substantially the same, or equal value is performed.

EQUAL PAY AND FLEXIBILITY

e provisions of the Code of Good Practice on Equal Pay/Remuneration for Work of

Equal Value, 2015, de nes work of equal value as work that is the same, similar, or comparable in terms of skill, e ort, responsibility, and working conditions. It requires employers to conduct a job evaluation to determine the relative worth of di erent jobs and ensure employees are paid fairly, based on the results of that evaluation. e code also sets out speci c steps employers should take to address any identi ed disparities in pay, including providing training and education to employees, negotiating with unions and adjusting pay levels as necessary.

Flexible working arrangements such as work-from-home policies, hybrid working arrangements and part-time work can help women and nonbinary individuals to balance their work and home responsibilities. Employers should promote gender equality by creating a workplace culture that values and respects di erences through initiatives such as diversity and inclusion training and mentorship programmes.

PENALTIES FOR NONCOMPLIANCE

Employers should take heed of the need to empower women not only because it is morally the right thing to do, but also because should an employer fall foul of any of the provisions of the EEA, they may be subject to nes and/or imprisonment depending on the infringement. Reputational damages arising from noncompliance are also a considerable risk. In January 2023, the chief director for statutory and advocacy services of the Department of Employment and Labour announced that JSE-listed companies would be inspected during the rst quarter of this year to monitor their compliance with the EEA, with this year marking the ve-year anniversary for the approval of their a rmative action plans. e chief director warned that the minimum penalty that could be imposed on a noncompliant company is an amount that is the greater of R1.5-million or two per cent of the employer’s turnover. is announcement is timely, given the e ective date of the Employment Equity Amendment Bill is September 2023. e bill introduces measures to accelerate transformation in the workplace.

Gender empowerment in the workplace is a critical issue in South Africa, and employers play a crucial role in its advancement. By taking steps to comply with the a rmative action imperatives set out in the EEA and the codes of good practice, creating an inclusive and supportive working environment, promoting equal pay, providing opportunities for professional development and addressing gender-based and sexual harassment, employers can help to break down the barriers that prevent women and nonbinary individuals from achieving socioeconomic empowerment and advancement.

GENDER AGENDA 21 ISSUE 58 | MAY 2023 AFRICAN LEADER

THE CODE OF GOOD PRACTICE ON EQUAL PAY/ REMUNERATION FOR WORK OF EQUAL VALUE GENDER SERIES VOLUME IX: WOMEN EMPOWERMENT, 2017–2022 REPORT

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Jamie Jacobs

A COUNTRY IN CRISIS

shed since 2007. It was also nine times more than the 1 352 GWh shed during the much longer period when Zuma was president.

ere were no power blackouts during seven of the “nine wasted years.” Since 2018, the power blackouts have cost the economy R1.1-trillion based on a gazetted cost of unserved energy of R87.75 per kilowatt hour.

A er three years of outgoing CEO Andre de Ruyter’s ruinous leadership, Eskom’s power stations are a wreck. During the year to end-March 2018, Eskom had an energy availability factor (EAF) of 78 per cent.

Five years ago, South Africa experienced a short-lived wave of “Ramaphoria.” ere was optimism before and a er his election as African National Congress (ANC) president on 18 December 2017 that his investor-friendly policies would herald the start of a “new dawn” a er “nine wasted years” under Jacob Zuma. e rand appreciated 20 per cent against the dollar to R11.50 on 26 February 2018 from R14.40 on 15 November 2017. “Ramaphoria” had dissipated on nancial markets by early May 2018 as the rand depreciated to about R12.60 against the dollar, the same level as the day a er he became ANC president.

NO NEW DAWN, ONLY DARKNESS

In September 2018, a er news that the country was in a recession, e Observer, a weekly British newspaper, published a

story with the headline: “How Ramaphoria turned into Ramageddon”. It cited grim economic statistics – low gross domestic product (GDP) growth forecasts, rising unemployment and a likely downgrade by ratings agencies. Political analyst and author Ralph Mathekga told the newspaper: “ e economy is supposed to be his strong point … but there is just no con dence. e story of the new dawn is just no longer credible.”

Five years later, it is clear that Ramaphosa’s presidency has been a disaster for the economy. We should be talking about “ ve wasted years” in addition to the “nine wasted years.” With the most severe power blackouts in history and a shocking outlook for GDP growth, the economy is now in a worse situation than it ever was under Zuma. From 2018 to 5 December 2022, according to the Council for Scienti c and Industrial Research statistics, Eskom shed 12 200 gigawatt hours (GWh) of energy. is was equivalent to 84.8 per cent of all the energy

In a presentation to parliament’s portfolio committee on public enterprises, Eskom said it had an EAF of 53.3 per cent during the week that ended on 22 January 2023. e EAF statistics for the worst-performing plants were Tutuka (33.3 per cent), Kusile (24.7 per cent), Duvha (20.7 per cent) and Hendrina (17.9 per cent).

SHRINKING GDP, HIGH UNEMPLOYMENT AND GLOOMY INVESTMENT PROSPECTS

Under Ramaphosa’s presidency, the economy has gone from bad to worse. South Africa had a lost decade from 2009 to 2019, during which GDP per capita did not grow. During the nine quarters until the rst quarter of 2020 – when the COVID-19 lockdowns started –quarterly GDP growth, according to StatsSA in December 2020, was less than the growth of the population, according to the Reserve Bank. ere was no growth during the two quarters until March 2020. e economy was collapsing before the lockdowns.

In April 2020, Ramaphosa announced a R500-billion “stimulus package”, which was allegedly worth 10 per cent of GDP. But if one looks through the smoke and mirrors of the package, the direct state contribution –higher government spending and foregone tax revenues – was R27-billion, equivalent to only 0.5 per cent of GDP compared with a world average of 10.6 per cent.

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Our economy just keeps going from bad to worse, writes DUMA GQUBULE

With the most severe power blackouts in history and a shocking outlook for GDP growth, the economy is now in a worse situation than it ever was under Zuma.

e Reserve Bank says GDP declined by 6.3 per cent in 2020 and increased by 4.9 per cent in 2021. With the economy expected to have grown by 2.3 per cent in 2022, GDP per capita in 2022 was lower than in 2019. e Reserve Bank has forecast three more years of declining GDP per capita from 2023 to 2025 – 0.3 per cent in 2023, 0.7 per cent in 2024 and 1 per cent in 2025. By 2025, GDP per capita will be lower than it was in 2006. On this trajectory, South Africa will de nitely have a second lost decade from 2020 to 2030.

When will this nightmare end?

THE WAITING GAME

In his rst state of the nation address in February 2018, Ramaphosa announced summits to increase investment and employment. In 2019, the government launched a R100-billion infrastructure fund. But there were seven out of nine quarters of declining gross xed capital formation (GFCF), a measure of investment, until the rst quarter of 2020. Despite hosting four investment summits where companies made pledges of R1.1-trillion, GFCF plunged to 13.1 per cent of GDP in 2021 – the lowest since 1946 when the Reserve Bank started collecting statistics — from 16.4 per cent in 2017.

A public sector investment strike is the main reason for the decline in total investment. Data from StatsSA. shows that from 2016 to 2021, investment by general government declined by 26.4 per cent. From 2015 to 2021, investment by state-owned corporations plunged

by 50 per cent. A er four years, the infrastructure fund has no money. In his 2018 state of the nation address, Ramaphosa said the Youth Employment Service (YES), a private sector initiative, would create one million internships in three years. But ve years later, the YES has created only 100 000 so-called work opportunities. It is not clear how many young people still have jobs.

In October 2018, Ramaphosa hosted a job summit where stakeholders pledged to create 275 000 jobs a year. But since he became president, the number of unemployed people has increased by 2.7 million to 11.9 million, according to StatsSA. e unemployment rate has increased to 43.1 per cent from 36.3 per cent. In six state of the nation addresses, Ramaphosa has talked about the need for a social compact to grow the economy. During the 2022 address, he said there would be one within 100 days. We are still waiting.

OUT OF MONEY, OUT OF IDEAS?

A er so long, there is still no mobilising vision and plan for the economy. Each state of the nation address is a random mishmash of projects whose selection depends on the whims of the president and his speechwriters. ere are no macroeconomic or social policy targets. Ramaphosa’s view is that the state does not have money. So the private sector

must provide all the investment. But private investment does not kickstart the economy, according to Keynesian economics 101. Private investment follows GDP growth. e idea that the state has no money is absurd. A sovereign state that issues its own currency cannot run out of the currency it issues. Also, as modern monetary theory economist Stephanie Kelton asks: “Does a currency-issuing government ever need to borrow its own currency from anyone?” South Africa also has a vast public sector balance sheet that includes assets of R2.4-trillion at the Public Investment Corporation, foreign exchange reserves of more than R1-trillion and cash of R332.9-billion in October 2022. Its debt is not high by international standards, even when benchmarked against similar upper-middle-income countries.

In his seventh address to the nation, Ramaphosa showed that he had run out of ideas. None of the interventions required to x Eskom necessitate a state of disaster. e nation had its say on social media about the da idea of having a minister of electricity. ere should be no budget constraint for Eskom. e government must ring-fence the legacy assets in Eskom One and spend whatever it takes to end the power blackouts. National Treasury and the Reserve Bank should take over the entire Eskom debt to give it a nancial runway to x its plants and invest in the transmission grid.

If it buys diesel for the next two years, brings back the four units at Kusile earlier than planned and focuses on increasing the EAF, Eskom can end the power blackouts within 12 months. e government must create Eskom Two to build new capacity. Like a proper country, there must be a permanent line item in the national budget – about two per cent of GDP per year – to build new capacity. South Africans can then stop talking about electricity and develop a mobilising vision and plan for the economy, which has a six per cent GDP growth target that is binding on National Treasury and the Reserve Bank.

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IMAGES: POOKPIIK/ISTOCKPHOTO.CO.ZA, AJ PAULSEN/ISTOCKPHOTO.CO.ZA

The Reserve Bank has forecast three more years of declining GDP per capita from 2023 to 2025.

WILL THE NISED PLAN WORK?

DINEO FAKU looks at the criticism levelled at the National Integrated Small Enterprise Development Strategic Framework master plan

Under pressure to grow the economy and create jobs, the cabinet approved the National Integrated Small Enterprise Development (NISED) Strategic Framework (master plan) for implementation in November last year. e master plan is a strategy geared at supporting businesses with 50 or fewer employees, including start-ups and rural and township enterprises. At the heart of the plan is making it possible to grow formal micro, small and medium size enterprises (SMMEs) and improve the participation of informal, micro and small enterprises (MSEs) in the formal economy.

SLOW GROWTH OF SMALL BUSINESSES

Small businesses are struggling to grow a er the nancial shock of the global nancial crisis of 2008 and the unprecedented COVID-19 pandemic and subsequent lockdowns of March 2020. e plan concedes that the lack of monitoring and duplication of e orts by the government has also contributed to the slow growth of small businesses.

“Research and data to monitor SMME performance remain elusive at the national level, resulting in the ill-informed design of programmes and support to match SMME needs and opportunities, both nancial and non nancial. is continues to result in low survival rates of SMMEs and stagnant growth,” states the plan.

e 1995 White Paper on Small Business Development, which estimated that 800 000 SMMEs were operating in the economy, was a major tool through which government aimed to support small businesses. In the years following the white paper, the growth of SMMEs stagnated. e master plan cites a 2018 estimate showing that less than 300 000 formal SMMEs provided formal employment. It also said there were between

600 000 to 800 000 formal enterprises, including sole-proprietor-owned businesses, registered for tax in 2018. “In the informal economy, it is estimated there are between 1.2 million and 1.5 million survivalist or informal type enterprises,” the plan states.

NO REAL SUBSTANCE

Critics of the plan say that like many of the other e orts by government, the master plan lacks any implementation mechanisms. e Small Business Institute claims that the plan amounts to a further layering of untested solutions to a problem not well understood. It says there is no evidence that the plan has adequately reassessed all the assumptions upended by recent events, for example, the impact of the COVID-19 pandemic and the July 2021 civil unrest. “ ese are glossed over when they actually warrant a re-evaluation.”

Luthando Nondaba, policy advisor at the National Employers Association of SA, says businesses are frustrated with the master plan because all its objectives have been heard before. “Government has remained principally unsupportive of the private sector, even with the current laws and strategies destined to be replaced by the dra NISED. All these initiatives appear to be mere lip service with no clear implementation mechanisms,” he says. e plan acknowledges that the government cannot solve all the problems facing small business and, with the tightening scal space, proposes leveraging of wholesale nance through government support to build market entrants.

ACCESSING FUNDING A BIG CHALLENGE

However, Black Business Council CEO Kganki Matabane says access to funding remains a serious stumbling block for small and medium enterprises, especially those owned by black people and black women. “ e biggest funding challenge is to raise what is called ‘skin in the game’ or own contribution, which is usually around 10 per cent. For example, even if you manage to raise say R100-million from a funding institution, you are still expected to pay R10-million from your pocket. e majority of black people don’t have such amounts, due to our discrimination history, while most white people have inheritances and relatives or friends who can assist them,” says Matabane.

Matabane also says the two main reasons SMEs are not growing are a lack of funding markets and procurement opportunities.

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“Government has remained principally unsupportive of the private sector, even with the current laws and strategies destined to be replaced by the draft NISED.” – Luthando Nondaba

Kganki Matabane

“Big business doesn’t support SMEs, especially black ones, and the government does not pay SMEs on time or at all. All actions are against the growth of SMEs and are working contrary to the National Development Plan (NDP) 2030, which recognised that to grow the economy and create jobs SMEs must be prioritised and supported,” he says, citing the NDP’s projection that 90 per cent of jobs will be created in small and expanding rms by 2030.

A 2019 study by the World Bank’s International Finance Corporation (IFC) on South African small businesses found access to markets, nance and skills to be some of the biggest barriers to small business growth. “Increasing nancial inclusion for South Africa’s small businesses requires support from nancial institutions and the government,” the IFC’s study reports.

Mlungisi Zungu, who has owned a fruit and vegetable business since 2020 in Ntuzuma, KwaZulu-Natal and was a ected by the civil unrest in July 2021, says accessing funds is a struggle. “Funding is critical for small business people. It is a stumbling block. You may have an idea and want to start a business, and you go everywhere, but you become stuck because of funding. Many ideas have died because funding was not available. I managed to fund myself in the business and then the riots happened,” Zungu relates.

e Small Enterprise Finance Agency (Sefa), the main government nance arm

for nancing micro, small and medium enterprises and co-operatives, says consumer indebtedness has increased over the last decade, and access to credit for SMMEs remains limited.

Sefa CEO Mxolisi Matshamba says the lack of collateral, particularly by the businesses owned by historically disadvantaged individuals, is one of the problems facing black business. “High administrative costs of small-scale lending, the perception that risk is high in lending to SMMEs, and their lack of collateral and nancial records are some of the main reasons for lenders not tapping into this market,” he explains. e government has introduced various development nance initiatives to increase the supply of small business nancing, including the establishment of Sefa, the National Treasury Bounce Back Scheme, various incentive schemes administered by di erent government entities and corporate enterprise and supplier development programmes.

Matshamba says that since Sefa’s establishment in April 2012, it has approved loans to the value of R12.68-billion, disbursed R13.9-billion into the South African economy, supported 600 061 SMMEs and co-operatives and facilitated 797 804 jobs. Sefa’s Khula Credit Guarantee scheme has provided guarantees worth R3.5-billion, assisting over 15 000 SMMEs, and created and maintained over 100 000 such enterprises.

According to a 2017 Organisation for Economic Cooperation and Development study, the portion of bank business lending allocated to small businesses in South Africa is relatively low at around 26 per cent, compared to about 36 per cent in Turkey, 40 per cent in Brazil, and 63 per cent in China. However, Banking Association managing director Bongiwe Kunene says banks are committed to providing funding for small businesses and are South Africa’s largest SME funders.

BANKS ARE DOING THEIR BEST

Kunene cites BASA’s 2020 State of SME Lending Report, which states that the value of bank loans to small businesses increased from R164.5-billion in January 2020 to R167.8-billion in December 2020.

e volume of loans increased from 1 101 500 to 1 077 109, over the same period, Kunene adds. “It is clear that the perception that banks do not want to lend to small businesses is incorrect. Bank lending is strictly regulated to help ensure that depositor’s funds are lent in a responsible manner and not put at undue risk of not being repaid,” she explains.

Kunene says anti nancial crime legislation requires banks to “know” their customers, and for businesses to be tax compliant, among other requirements. “As a result, banks are o en not able to lend to small businesses that cannot provide adequate nancial records and collateral.

is is among other administrative and information requirements needed for banks to make informed and regulatory-compliant lending decisions. ese challenges o en apply speci cally to informal businesses that make up 60 per cent of SMEs, according to a 2020 Finscope survey.”

She says that where banks cannot provide funding because of these challenges, they o er non nancial support programmes to small businesses, including accounting packages to help SMEs manage their books. “Most banks have enterprise development programmes that provide business training and management advice to small businesses, including suppliers. According to the 2022 Transformation in Banking Report, banks spent R1.21-billion on supplier development,” says Kunene.

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IMAGES: SUPPLIED

Mxolisi Matshamba Bongiwe Kunene

SME FINANCING IS THE KEY TO LONG-TERM DEVELOPMENT

South Africa’s small business nancing landscape and the contribution of small businesses to economic growth are deteriorating. e Global Entrepreneurship Monitor reports that South Africa had a higher rate of entrepreneurial activity when compared to other developing nations in 2020. However, it has since slipped behind Latin Americana and the Caribbean and is performing less favourably against the sub-Saharan average. In 2022, the total early-stage entrepreneurial activity rate in South Africa was 17.49 per cent, suggesting an ine cient ecosystem for small business development in South Africa.

Access to nance remains a signi cant challenge for small businesses in South Africa.

e 2022 World Bank Doing Business Index ranked South Africa 84th out of 190 countries in terms of ease of getting credit, indicating that obtaining credit for small businesses in South Africa is still di cult and time-consuming.

Despite these challenges, small businesses continue to play an important role in South Africa’s economy. According to the Small Enterprise Development Agency, small businesses account for around 36 per cent of South Africa’s gross domestic product and employ around 47 per cent of the workforce.

THE CHANGING FINANCING LANDSCAPE

Customer expectations around small business nancing have changed, with a growing demand for faster and more accessible nancing options. In response, nancial institutions are turning to technology to streamline the small business lending process and o er new, innovative products. For example, some lenders use arti cial intelligence and machine learning to automate

the loan application and underwriting process, while others o er new products such as revenue-based nancing and crowdfunding.

Additionally, the rise of ntech start-ups and alternative lenders has disrupted the traditional small business nancing landscape, o ering new options for small businesses. ese companies o en have lower overhead costs and can o er more exible and personalised nancing options than traditional banks. is may bode well for small business nancing in South Africa, provided that reforms to public policy around small business nancing are improved.

Public policy can play a signi cant role in helping the small business nancing sector respond to the changes if the following reforms are pursued.

1. Streamlining regulations and reducing bureaucratic red tape. Complex and burdensome regulations can deter potential lenders from entering the market and limit access to nancing. Public policy that simpli es regulations and reduces bureaucratic red tape can encourage more lenders to participate in the small business nancing sector and make it easier for small businesses to obtain funding. e government could implement policies that make it easier to access nance, such as improving credit information systems and reducing the cost of lending.

2. Supporting alternative nancing models. Public policy that supports the growth of alternative nancing models can help increase access to nancing for small businesses. is might include creating

regulatory frameworks that support innovation and experimentation in the sector or o ering incentives for ntech start-ups and other alternative lenders to enter the market.

3. Creating public-private partnerships. Public-private partnerships can help bridge the nancing gap for small businesses by leveraging the strengths of both the public and private sectors. For example, the South African government could partner with private sector lenders to o er loan guarantees or other forms of nancial support to small businesses.

4. Investing in small business development. Public policy that invests in small business development can help increase the number of viable small businesses in South Africa and, in turn, increase demand for nancing. is might include providing training and mentorship programmes for aspiring entrepreneurs or o ering tax breaks or other incentives for businesses that invest in the development of small businesses. Public policy reform is vital for creating an enabling environment for small businesses to access nance and succeed.

Small businesses play an essential role in the economic growth of developing countries, so the small business nancing sector is crucial. It provides entrepreneurs with the funds to start and grow their businesses, creating jobs and generating income in the process. Moreover, small business nancing can help increase productivity, competitiveness and innovation, which can lead to long-term economic growth.

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The small business nancing sector is undergoing a reset due to changing market conditions and technological advancements. Small businesses play an important role in driving economic growth and employment.

By CUMA DUBE

Public policy reform is vital for creating an enabling environment for small businesses to access finance and succeed.

IMAGE: OLIVIER LE MOAL/ISTOCKPHOTO.COM

UPSKILLING THE YOUTH AND GROWING SMALL BUSINESSES

Sean James knows how to keep cool. It’s his business to know. He and his family own a small refrigeration and air-conditioning company in Cape Town with 34 permanent sta . Over the years, James has recruited and trained young people to become quali ed technicians. Businesses such as James Refrigeration and Air-Conditioning (James Refrigeration) o er on-the-job training for young artisans, many who start their rst jobs with rudimentary knowledge about their eld or no knowledge at all.

THE VALUE OF ARTISANAL SKILLS

ese small, medium and micro enterprises (SMMEs) are hubs for acquiring trade skills, whether it be learning how to x an air-conditioner or how to detail an oak cabinet. ese are the types of artisanal skills that young people learn and get better at through experience. In the context of high youth unemployment – youth between the ages of 15–24 years recorded the highest unemployment rates of 61.0 per cent (according to StatsSA’s Quarterly Labour Force Survey Q4:2022 report) – SMMEs have the potential to create jobs and contribute to a thriving society where more people have the knowledge, skills and opportunity to participate fully in the economy.

SMALL BUSINESS CAN’T DO IT ALONE

is potential is evident in the data: more than 60 per cent of all employed people are working in businesses that have fewer than 50 sta , according to a report by Youth Capital, a youth-led campaign with an action plan that combines data with young people’s lived

stories to shi gears on youth unemployment. However, it hasn’t been a smooth ride for everyone, and James’ business is a good example of why. Ideally, James Refrigeration should be getting state-sponsored incentives for hiring and training young people, but this is not happening. And not for lack of trying.

Even though the administrative hurdles standing in the business’ way may di er from those blocking other small companies, the fundamental issue is that these incentives are di cult to access. At their core, these schemes are meant to support businesses to grow and, in turn, hire more young people. But are they working as they should? Not quite. Youth Capital is digging into quantitative evidence and analysing

qualitative data to better understand what is going wrong and how to x things.

HOW TO BRIDGE THE GAP

As an advocacy campaign focused on young people’s roadblocks to employment, we regularly speak to South Africans about the factors holding them back from nding economic opportunities. We quickly realised that small business owners are also coming up against their own challenges. Bringing these two sides of the employment story into focus helped us surface key policy and systems changes that can be implemented immediately. In this article, we summarise the ndings of a national survey, the Bridge the Gap report, which we conducted with SMMEs.

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Our economy’s engine room needs a tune-up, and addressing the high unemployment rate is a priority. Youth Capital’s KRISTAL DUNCAN-WILLIAMS and CLOTILDE ANGELUCCI share four ways to support the growth of small businesses

SMMEs have the potential to create jobs and contribute to a thriving society where more people have the knowledge, skills and opportunity to participate fully in the economy.

Natalie Lakey is a restaurant owner based in Cape Town.

1. Enable a thriving environment e Employment Tax Incentive, Sector Education and Training Authorities and Broad-Based Black Economic Empowerment are examples of state-led e orts to support businesses in developing a skilled workforce by incentivising the training and hiring of young people. However, our research shows that a minority of small businesses have made use of these available incentives. First, many small businesses are not aware of what is available to them or how to access these perks. Second, those that do know are nding it di cult to access them because of red tape. Decision-makers must intentionally engage with small businesses to develop measures that can stimulate SMME growth. If incentives are the right vehicles for growth, then they must cater to the needs of small business owners, some of whom require information, administrative support and assistance to access these nancial perks.

2. Address the mismatch in expectations and skills

When Youth Capital speaks to business owners and young people, we nd their expectations are sometimes misaligned from the onset. On the one hand, many employers expect a new hire with relevant quali cations to grow in their role gradually through experience. On the other hand, the average new employee is hoping for rapid career progression. Employers also expect young hires to have critical skills and attributes that enable them to “hit the ground running” with limited supervision and managerial support. But the South African reality is that two out of ten young people (aged 15–34) live in households without an employed adult, so they have little exposure to the world of work and employed role models. And, even if they did, certain skills are honed through mentorship, training and support.

To close these gaps, small businesses must work with colleges and training centres to ensure their curricula meet industry needs and that their coursework o ers young people a realistic picture of what employers expect.

3. Boost hiring practices

Business owners o en complain about being unable to nd the right t for the job.

At face value, one would assume the problem is due to a de cit of suitable candidates, but the issue lies in how candidates are recruited. For instance, employers admittedly do not always identify the skills they are looking for, and this is not clearly communicated to prospective employees through job adverts and job descriptions.

In her experience as head of talent at ntech start-up MamaMoney, Bentolina Nnadi recommends writing job speci cations that include the skills required and targets to be achieved during a new hire’s probation period. ese inclusions can take the guesswork out of the interview process. Even if the candidate doesn’t have the necessary experience for the job, they may have transferable skills that meet the employer’s expectations. Once a suitable candidate is appointed, a structured and supportive onboarding programme will help them nd their feet in the business. ey must have access to information about the company’s structure and culture, working hours, dress code and phone usage guidelines, among others.

4. Expand the role of youth employment programmes

We nd that small businesses rely heavily on traditional word-of-mouth referrals.

is trend is con rmed by our research showing that employers o en “ask around”,

relying on their professional contacts and past employees to nominate candidates to ll vacant positions. While word of mouth allows small businesses to save on recruitment costs, they are making appointments based on an exclusive pool of candidates – this doesn’t help to bring new people into the labour market.

Many job seekers don’t always know where to look for employment opportunities, particularly when they don’t have friends or relatives who can connect them to the world of work. is is why existing skills development initiatives should promote inclusionary recruitment practices. For instance, the Cape Innovation and Technology Initiative rolled out a Digital Career Accelerator to teach young people the skills they need for a career in the technology space.

Between 2016 and 2019, small businesses in South Africa created more than 1 800 jobs a day, according to our Bridge the Gap report. With great potential for growth, bridging the gap between young jobseekers and SMMEs must be an economic priority. is requires commitment and co-ordination from government, youth development organisations and business owners. At the same time, we must continue to create platforms for small companies and young people to share their challenges and nd solutions together.

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If incentives are the right vehicles for growth, then they must cater to the needs of small business owners.

IMAGES: SUPPLIED

Hairdresser training at Africa Hope Collective, Cape Town.

Every developing country is now faced with the challenge of nancing its developmental needs in a world with renewed climate priorities. For South Africa, that challenge is ever more complicated by its over-reliance on fossil fuels while facing an energy crisis. e reliance on coal-generated power is not only an issue related to meeting the energy demand of our economy, but also because millions of people countrywide rely on the coal industry for their livelihoods – from mine workers in the coal mines and truck drivers that transport the coal to our power stations to our energy-intensive industries that need

Transition Investment plan

a secure supply of energy to maintain the millions of jobs they’ve created. Our current energy systems have negative externalities. ese are costs, borne by communities and the environment, that are associated with the way we meet our energy needs. e need for a just energy transition arises from the fact that the current energy systems based on fossil fuels have negative impacts on the environment, public health and the climate. However, transitioning to renewable energy systems requires signi cant changes in the energy sector, which can result in job losses, economic disruption and social inequalities if not planned and implemented carefully.

A just energy transition seeks to ensure that the costs and bene ts of the transition are distributed fairly across all stakeholders. is includes providing support to workers who may lose their jobs during the transition, investing in communities that are dependent on the fossil fuel industry and ensuring that the transition bene ts marginalised groups, such as low-income households and local communities. A just energy transition refers to the process of transitioning from fossil fuel-based energy systems to renewable energy-based systems in a way that is fair and equitable for all stakeholders, including workers, communities and future generations.

THE PLAN’S AIMS AND INITIATIVES

South Africa’s Just Energy Transition (JET) Investment Plan was launched in September

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A just energy transition seeks to ensure that the costs and benefits of the transition are distributed fairly across all stakeholders.

CUMA DUBE unpacks South Africa’s Just Energy

ENSURING A SECURE SUPPLY OF ENERGY THAT IS FAIR AND EQUITABLE

2021 to transition the country’s energy sector to a more sustainable and just system. e plan has a budget of approximately $10-billion (R185-billion) and is expected to create over 300 000 jobs.

e plan includes several key initiatives, such as the installation of 11.8GW of new renewable energy capacity by 2030, the establishment of a Green Hydrogen Fund to support the development of a green hydrogen economy and the development of a Social Just Energy Transition Framework to ensure that the transition is equitable and bene ts all South Africans.

e plan also includes measures to address the negative impacts of the transition on workers and communities currently dependent on the fossil fuel industry. ese measures include a Just Transition Fund to support workers who may lose their jobs during the transition and the development of alternative economic opportunities for communities that are dependent on the fossil fuel industry.

Overall, the JET Investment Plan is a comprehensive strategy to transition South Africa’s energy sector to a more sustainable and just system while ensuring that the transition bene ts all South Africans.

South Africa’s largest trade partners are taking signi cant steps to combat climate change and encourage a just energy transition through measures such as carbon pricing, emissions reduction targets and nancial support for developing countries. ese actions could have important implications for South Africa’s energy transition and economic development.

FINANCIAL MARKET IMPACT

e need for a transition to a low-carbon economy and a just energy transition is having a signi cant impact on the nancial markets as well. Developing countries, such as South Africa, should be aware of these changes and respond appropriately to manage transition energy risks. Here are some of the key changes happening in the nancial markets:

• Climate-related nancial regulations. Regulators are introducing new rules that require nancial institutions to identify and manage climate-related risks

in their investments. ese regulations could impact the availability and cost of nancing for high-emitting industries and companies in developing countries.

• Increase in green nancing. ere has been a surge in green nancing, such as green bonds and sustainability-linked loans, which are speci cally designed to finance low-carbon projects. Developing countries should leverage these financing options to fund their transition to low-carbon economies.

• Divestment from fossil fuels. Investors are increasingly divesting from fossil fuel companies due to climate risks, which could a ect the valuation of these companies and limit their access to capital. Developing countries that rely on fossil fuel exports should be aware of this trend and explore alternative sources of revenue.

• Carbon pricing. Carbon-pricing mechanisms, such as carbon taxes and emissions trading systems, are being implemented in many countries to incentivise emissions reductions. Developing countries should consider implementing their own carbon-pricing mechanisms to help fund their transition to low-carbon economies.

• Disclosure requirements. Investors are increasingly demanding climate-related disclosures from companies. is could impact the reputation and nancial performance of companies that do not take climate risks seriously. Developing countries should ensure that their companies are transparent about their climate risks and opportunities. e nancial markets are undergoing signi cant changes due to the need for a transition to a low-carbon economy and a just energy transition. e Just Energy Transition Investment Plan is South Africa’s attempt at responding to these changes to attract investment, mitigate against energy transition risk and exploit transition nancing opportunities in a way that doesn’t stall our development and disrupt our economy.

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SA’S JET INVESTMENT PLAN

IMAGES: SUPPLIED

The need for a transition to a low-carbon economy and a just energy transition is having a significant impact on the financial markets.

JET Investment Plan governance structure

THE FUTURE OF THE ANC

Political commentator SAM MKOKELI assesses the political strength of the African National Congress to lead South Africa beyond the next elections

Due to what it says is

“South Africa’s broken politics”, a recently established think-tank, the Rivonia Circle, has kicked o a campaign that will culminate in representation on the ballot paper in 2024. “It is because of political decay, corruption and incompetence that we have a declining economy, high unemployment, corruption and crime that an o en-corrupted police leadership can do little or nothing about”, it says about the Rise Mzansi campaign.”

“Millions no longer trust the government, parliament, political parties and political processes because they have been disappointed by empty promises and unaccountable representatives and leaders for many years,” the new organisation says.

COLLECTIVE ACTION

e Rise Mzansi campaign is the outcome of research and workshops pointing to the need for a new “political movement”, says Songezo Zibi, Rivonia Circle chairman. In November, the Rivonia Circle held a gathering of community and regional organisations, serving as the event that gave birth to the Rise Mzansi campaign.

e events saw prominent grassroots organisations and pressure groups such as Treatment Action Campaign and Abahlali Basemjondolo taking part. United Democratic Movement leader Bantu Holomisa and African National Congress (ANC) veteran Reverend Frank Chikane delivered a video message to a conference that had more than 400 physical participants and hundreds joining online.

e Rivonia Circle has worked with several grassroots organisations and received a boost when Chikane, a veteran from the United Democratic Front of the 1980s, delivered a message about the need for social mobilisation. Chikane was speaking in his capacity as chairman of

the Defend Our Democracy Campaign. He talked about the troubling trends of “lawlessness and instability” that had taken root in South Africa in the last 15 years, eventually manifesting as threats to economic development and democracy. Fighting lawlessness and instability requires actions instead of lamentation, he said.

“ e corruption has gone beyond any single party. It has gone to community levels, local governments, and provincial and national. And there’s no single party that can deal with this issue. at’s why I believe we need South Africans to act together. Collective action would produce results and quick results, for that matter,” he said.

Various smaller organisations have sprung up in many parts of South Africa, giving the ANC a run for its money. One of the most notable is the Forum 4 Service Delivery, which has grown in the North West. It remains to be seen if these organisations can work together as a united front or if they will remain fragmented forces within the opposition ranks.

OPPORTUNITIES FOR THE OPPOSITION

e political landscape demonstrates a lot of opportunities for opposition parties.

e Democratic Alliance (DA) may be an appealing option should the ANC fall below 50 per cent and need allies to regain power. So will the Economic Freedom Fighters (EFF). Groups such as the Rivonia Circle or Maimane’s Build One SA (Bosa) may also be strategic options for the ANC. ere is the outside chance that all the opposition parties gang together to keep the ANC out of power by establishing a minority

government. at “anything but the ANC approach” we saw around 2016 when the ANC lost control of Nelson Mandela Bay, Johannesburg and the City of Tshwane in one fell swoop. Such coalition arrangements are generally unstable. Instability may be the only certainty in our uncertain political terrain for the next few years.

Zibi will step away from the Rivonia Circle to be part of the campaigners on the political movement. e Rivonia Circle, a nongovernmental organisation, would carry on with its work as a think-tank. “ e discussion about a political movement always comes up, especially when people see the solutions that are on the table. e question of implementation also comes up, basically, who’s going to do it, because there’s a disconnection with the political actors. So, we felt that we need to bring all of those people together,” said Zibi.

Rivonia Circle commissioned research in 2022 that showed the ANC’s support at 41 per cent if an election were held today. is vulnerability is also being sensed by parties such as the EFF and Action SA. Last year, former DA leader Mmusi Maimane established Bosa, a new political party. Its chairperson is Mkhuseli Jack, a prominent Eastern Cape activist from the 1970s and 1980s. He is also the deputy mayor of the Nelson Mandela Bay municipality, representing the Abantu Integrity Movement (AIM) he founded. Jack has not le AIM, but is involved in Bosa as a confederation of organisations.

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Rivonia Circle commissioned research in 2022 that showed the ANC’s support at 41 per cent if an election were held today.

The ANC elective conference.

IMAGE: ALAISTER RUSSELL/SUNDAY TIMES

FIVE YEARS ON … AN ANALYSIS OF THE RAMAPHOSA ERA

What will de ne President Cyril Ramaphosa’s next term of of ce? Political commentator SAM MKOKELI shares his views

President Cyril Ramaphosa probably breathed a sigh of relief over the December holidays, having emerged victorious at the African National Congress (ANC) national conference. His re-election strengthens the belief and expectation that he will be encouraged to make bold decisions on policy reforms during his second term as ANC president and as head of state, following the 2024 general election. However, a few curved balls are expected.

DECLINING MEMBERSHIP

e ANC faces some organisational crises that may make it hard for Ramaphosa to propel it far enough. e party has lost over 330 000 members in the last ve years, spread across all provinces (bar the Western Cape, which saw a small growth in membership). Mpumalanga recorded the most signi cant decline, followed by the North West and Free State. ese provinces’ losses are signi cant as this is where the bulk of former president Jacob Zuma’s support came from, in addition to his home province of KwaZulu-Natal. KwaZulu-Natal is down from 332 000 members to 128 000.

e trends may point to serious ANC decay and a failure to revive it following the departure of Zuma and the premier league provincial barons who ran these provinces with a dictatorial streak. ese declines could have serious implications for the ANC. About 20 per cent of its national votes come from

KwaZulu-Natal.

and Zuma’s ability to stoke tribal ames, the ANC could see more turmoil in that province, a ecting its performance in both provincial and national ballots.

(IFP) resurging in

e ANC has a tough road ahead of the 2024 elections. Several pundits do not see it regaining the numbers it had in the past – it garnered 57.50 per cent of the national vote in 2019. It will come up against a resurging Economic Freedom Fighters and new entrants, including Rise Mzansi, a platform incubated by Rivonia Circle, a recently established think-tank. Last September,

former Democratic Alliance leader Mmusi Maimane launched Build One SA (Bosa), marking an o cial return to active politics. Outcomes of recent byelections showed an ANC in decline. More signi cantly, there’s a trend where the IFP is picking up votes in KwaZulu-Natal, where the ANC is in turmoil. e ANC in KwaZulu-Natal was one of the biggest losers at the Nasrec conference, having failed to get a single leader among its ranks elected to the ANC’s top seven.

LOSING FAITH AND FACE

e problem of social disconnection continues. e organisational report presented at the conference said voters were “fast losing faith in the ANC’s ability to govern e ectively and meet their needs for services”. e 2021 local government elections saw ve million voters, who had voted for it in the previous municipal

34 AFRICAN LEADER ISSUE 58 | MAY 2023

With the Inkatha Freedom Party KwaZulu-Natal

The ANC might have to find new sources of funding and also sell some of its prized real estate assets.

President Cyril Ramaphosa

elections, stay away from voting for the party.

e “core set of issues” a ecting support for the party, as shown by the ANC’s ongoing own research (with that of other institutions), were trust (based on performance by government and party, highlighted in 2020), social wellbeing, a better life for all (most cited in 2020), services (relevant in local government elections), and ghting corruption (“impactful in 2019”).

Only nine per cent of eligible voters in the 18–19-year-old bracket was registered to vote in 2021 (down from a high of 46 per cent in 1999, 35 per cent in 2014 and 20 per cent in 2019). is declining registration rate was also re ected in the 20–29 age bracket: 68 per cent in 1999, 54 per cent in 2024, 52 per cent in 2019 and 40 per cent in 2021.

e ANC has also struggled since the introduction of the Political Party Funding Act, a strict regulatory framework for how parties raise and use donated funds. It should come as no surprise should the ANC propose a signi cant amendment to the act before the 2024 elections. In particular, the foreign funding cap may be increased to R5-million or more if the ANC wishes. at increase would allow signi cant donations from governments such as China, its ruling party, or supporters from places such as the UAE.

FINANCES UNDER PRESSURE

It is worth noting various points from the treasurer general’s report of ANC nances over the last ve years:

• e ANC ran a de cit of R245-million over the period (which would have been higher if COVID-19 had not constrained operational activities).

• Donations of some R1.9-billion had been received.

• Some private sector donors were reluctant to fund the ANC a er the publication of the State Capture Commission report.

• e ANC’s share of funding via the IEC has been reduced by some R20-million annually a er it amended its funding formula.

• A review of the Political Party Funding Act should secure higher funding levels from the government.

As a result of a dire nancial crunch, the ANC might have to nd new sources of

funding and also sell some of its prized real estate assets. e nancial report reveals the party has spent R2.1-billion in the ve-year reporting period up to November 2022. e report contains proposals aimed at helping to cover running costs and tackle growing debts.

e ANC is considering selling properties, including the storied London building at 28 Penton Street, one of its international bases during the apartheid era, and an o ce building in Dar es Salaam, Tanzania.

Paying salaries and running election campaigns were the most signi cant expenditure items, together with advertising and events. e report states that the party has lost donors since it became a legal requirement in 2021 for political parties to declare donations regularly. “Many of our donors who do not want their identities disclosed have stopped their funding,” it says, pointing to the impact of high-pro le corruption controversies during the nine-year Jacob Zuma presidency that ended in 2018. Di culty in raising su cient funds has resulted in the “inability” to cover expenses, pay salaries and service debt, states the report.

One person close to the discussions, who spoke on condition of anonymity, said the ANC’s executive might call on the ANC-led national parliament to amend funding legislation and increase the annual funding cap of R15-million rand. Currently, donors must disclose all donations above R100 000, and each individual donor can only donate a maximum of R15-million. e party might be able to get larger donations from countries such as China if the cap was increased, said the person.

POLICY CHANGES TO BOOST POPULARITY?

Alongside Ramaphosa, a few other politicians are probably happy with the conference outcomes. ey include Gwede Mantashe, who came back as chairman. at means that with his renewed political

clout as the minister of minerals and energy, he will be more assertive in government circles. Another one is Paul Mashatile, the elected party deputy president. e ANC is considering moving state-owned enterprises (SOEs) from the public enterprises department to their line departments to improve e ciency. Policy recommendations by the ANC traditionally are incorporated into government policy. “Delegates were asking if we can ensure that state-owned entities are put into the line department for policy and co-ordination,” said the head of the party’s economic transformation committee, Mmamoloko Kubayi.

e Treasury views SOEs as a major risk to the scal framework. It has introduced a strategic equity partner into SAA, enabled private generation of electricity, and is planning private participation in the freight rail sector to increase competition, boost e ciency and reliability, and reduce costs for customers. e committee did not discuss the establishment of a holding company that would oversee major SOEs, which was mooted previously by the presidential review committee headed by Riah Phiyega and the presidential SOE council..

ose who monitor politics and markets feel that the composition of the National Executive Committee is important for the wider balance of power within the ANC leadership and Ramaphosa’s exit risk.

e list of elected NEC members favours Ramaphosa, but includes former nance and public enterprises minister Malusi Gigaba and Bathabile Dlamini, part of the team that opposed Ramaphosa’s re-election. Considering all the signs that the ANC is not in good health, it would be di cult to expect it to get an outright victory in 2024. How does it prepare to face coalition negotiations, and how should a multiparty government work? ese obvious questions seemingly did not materialise at the Nasrec conference, judging by how mum the party has been in the a ermath of the conference.

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Considering all the signs that the ANC is not in good health, it would be difficult to expect it to get an outright victory in 2024.

IMAGE: GCIS