Business Update Issue 13 by Yes Media

BUSINESS

A publication for progressive business

MISMANAGEMENT • WRONGDOING • MISCONDUCT CORRUPTION • NEPOTISM • BRIBERY EDUCATION

LOCAL BUSINESS

Taking a different view of Black Economic Empowerment in SA

Big retail stores are taking over the townships

ENTREPRENEURSHIP

RETIREMENT FUNDS

Important lessons learned from successful small businesses

It’s your right to know about your pension fund

Issue 13 | 2018

TG MESSAGE

New Beginnings Meet your new Treasurer General, PAUL MASHATILE. This is what we know about him

aul Mashatile was born on 21 October 1961 in Geraldsville, Pretoria (Tshwane). He was an active participant in the liberation struggle as far back as his youth, when he was a member of the Congress of South African Students (COSAS). He co-founded the Alexandra Youth Congress (AYCO) in 1983 and was elected as its first president. At the age of 23 he was elected as the Assistant General Secretary of the United Democratic Front (UDF), Southern Transvaal Region, and later became the UDF’s General Secretary from 1989 until the unbanning of political parties in 1990, when the UDF was dissolved. As a result of his involvement in the struggle against apartheid, he was harassed by the security police, who also attempted to assassinate him. He was eventually detained without trial for four years, from 1985 to 1989, when the State of Emergency was declared by the government. During this time he embarked on an 18-day hunger strike as part of a nationwide protest. Mashatile took a leading role in re-establishing the structures of the African National Congress (ANC) and the South African Communist Party (SACP) when these organisations were unbanned in 1990. He was appointed General Secretary of the SACP in Gauteng. He was also appointed as the ANC Branch Organiser in Alexandra and Branch Chairperson for the SACP. He also served on the Interim Leadership Group of the ANC in the

Pretoria-Witwatersrand-Vereeniging (PWV) region (of the former Transvaal). He was later appointed as Head of Political Education for the ANC PWV region. In 1992 he was elected as Provincial Secretary of the ANC, a position he held for six years, working with Tokyo Sexwale as Chairperson of the Gauteng Province. In 1994 he became a member of the Gauteng Legislature and was appointed Leader of the House, serving exofficio in the Gauteng Cabinet. In 1996 he was appointed MEC for Transport and Public Works in Gauteng. He went on to hold numerous positions in the Gauteng government, handling the portfolios of Safety (1998 – 1999), Housing (1999 – 2004) and Finance and Economic Affairs (2004 – 2008). In 1998 he became Deputy Chairperson of the ANC in Gauteng and in 2007 he was elected Chairperson of the Province, a position he still holds today. After the resignation of the Premier of Gauteng, Mbhazima Shilowa, in 2008, he took over as Premier of the province. After serving 17 months as Deputy Minister of Arts and Culture, he was appointed as Minister of Arts and Culture in the South African Parliament in November 2010. He is currently the MEC for Human Settlements and Cooperative Governance in the Gauteng Legislature. Mashatile studied at Alexandra High School and holds a Diploma in Economic Principles from the University of London. 1

CONVENOR’S MESSAGE

Chief Albert Luthuli House 54 Pixley Ka Isaka Seme Street Johannesburg

Editor Daryl Swanepoel Managing Editors Alwyn Marx and Sharon Preston Art Director Justine Kerr Copy Editing & Proofreading Loren Shirley-Carr and Lynne Yates Contributors Lebogang Maille, Divya Singh, Vernon Subban, Jonathan Salant, Deven Govender, Clement Marumoagae, William Gumede, Vuyisile Msila, Chantelle Gladwin, Vuyisile Msila, Andille Ntingi, Tatenda Zingoni, Tim Hughes, Zakhele Buthelezi, Dylan Weyer Cover image Gallo Images/Getty Images/iStock Business Update is published by Ballyhoo Media. Opinions expressed in Business Update are not necessarily those of Ballyhoo Media, the ANC or Progressive Business Forum. No responsibility can be accepted for errors, as all information is believed to be correct at the time of going to print. Copyright subsists in all work in this magazine. Any reproduction or adaptation, in whole or in part, without written permission of the publishers is strictly prohibited and is an act of copyright infringement which may, in certain circumstances, constitute a criminal offence.

Publisher Ballyhoo Media: a division of Ballyhoo Trading CK No: 2007/207595/23 14 Sixth Street, Parkhurst, Johannesburg, South Africa, 2193 PO Box 3125, Parklands, 2121 Tel: 086 111 4626 Fax: 086 670 6429 www.ballyhoomedia.co.za

Message from the Editor This issue focuses on, inter alia, the importance of transforming the township economy, which is vital to the upliftment of our people. The presence of big retail stores in the townships has had a dramatic impact on the township economy. The introduction of these multinational enterprises disrupts the local way of doing business, and it will require a concerted effort to support the development of township entrepreneurs, especially local SMMEs. In this issue of Business Update we open up this important discussion. On a different, but equally important issue, the cover story focuses on the ethics of whistleblowing and the requirement that transparency and openness are never compromised. In an age where corruption has become intolerably high, it is of utmost importance that the ordinary person in a business or institution should retain the right to inform his or her superiors or relevant authorities of wrongdoings in the workplace, without fear of victimisation. With the aforementioned two, somewhat challenging, topics in mind, I would like to leave you with these points of wisdom from Indian activist Mahatma Gandhi: “There are seven things that will

destroy us: • Wealth without work • Pleasure without conscience • Knowledge without character • Religion without sacriﬁce • Politics without principle • Science without humanity • Business without ethics”. We trust that you will enjoy this issue of the magazine and we await your comments for future issues. Enjoy the read!

Daryl Swanepoel

Printed by Creda Project Manager Clinton Thomas | clinton@ballyhoomedia.co.za Financial Manager Anup Govan

COVER STORY

The ethics of whistleblowing

Images: Gallo Images/Getty Images/iStock

When it comes to reporting irregular conduct, people are still often very afraid to talk about what they see going on. DIVYA SINGH considers the social implications of whistleblowing

COVER STORY

his story could have had many titles. Promising contenders include Whistleblowing: A Practical Lesson in Courage; or Whistleblowing: The Epitome of the Curate’s Egg; or, inspired by the dramatic, Whistleblowing: The Good, the Bad and the Really Ugly. Whatever we call it, the reality is something else entirely. (This is where you, the reader, are invited to imagine a big screen, hear the music and visualise Clint Eastwood walking into town.) Behind him comes Imraan Mukkadam, the whistleblower in the Pioneer Foods case; Mrs M who was fired by the Department of Justice for blowing the whistle on corrupt colleagues in the KZN Masters Office; Roberta Nation who was dismissed by the State Security Agency after reporting alleged fraudulent activity in the SSA’s medical scheme; Solly Tshitangano who was dismissed by the Limpopo Department of Education after reporting internal irregularities which led to the Limpopo textbook scandal; Jimmy Mohala and Samuel Mpatlanyane who were both killed in 2009 whilst trying to expose collusive practices in the building of the Mbombela football stadium; the whistleblower in the Trillian case, Kantha Padayachee, who was suspended from her job by the

Department of Health, KwaZulu-Natal in 2010 after blowing the whistle on a major tender irregularity; Tertius Carstens who was dismissed by Parmalat; and most recently, the SIU Integrity Officer, Bongani Mpungose who faces disciplinary action after reporting management to the AuditorGeneral for fruitless and wasteful expenditure; and the list could go on… this makes one realise that the last-identified title, Whistleblowing: The Good, the Bad and the Really Ugly, is, in fact, much more real than simply dramatic. However, whatever the title, the starting point in discussing the subject of whistleblowing remains the same: Openness and transparency are the cornerstones of democracy and, flowing from this, South Africa has a constitutionally protected right to freedom of expression. One example of this right in practice is whistleblowing, which makes it clear that when an employee sees something wrong in the workplace, ‘the law’ (Protected Disclosures Act, 2000) requires that it be reported; and, of course, society should expect no less, but this appears not always to be the standard. There is no dispute that today we see a commercial and corporate world in the throes of what may properly be described as an ‘ethical

revolution’ – policies, committees, structures and reports all focused on ethics and ethical best practices; yet, notwithstanding the raft of paper and often quite considerable spend, when it comes to reporting irregular conduct, people are still often very afraid to talk about what they see going on… because there are still organisations that continue to target persons who blow the whistle. This is borne out by the 2016 South African Business Ethics Survey (SABES) conducted by The Ethics Institute, which found that whilst respondents indicated that more cases of misconduct were being observed in the workplace (as compared to the 2013 SABES results) and that there was definitely a greater ‘awareness’ of available hotline services, using the services and reporting generally had decreased significantly since the 2013 survey results, from 64 percent in 2013 to 48 percent in 2016. According to the 2016 report, 36.2 percent of employees said they feared victimisation from the employer; 32.2 percent believed that nothing would be done with the report; and most alarmingly, 15.4 percent feared for their personal safety. What is of material concern about these results – in addition to the fact that the law appears not to be the reality of the workplace – is the rather bleak picture

TYPES OF WHISTLEBLOWING

Internal Whistleblowing

is made to someone with the organisation

Personal Whistleblowing

External Whistleblowing

is blowing the whistle on the offender. Here the charge is not against the organisation or system but against the individual

for an external issue not directly affecting one as an individual

COVER STORY

HOW SOUTH AFRICA VIEWS CORRUPTION BY AREA 100 90 80

Percentage

70 60 50 40

20 10 0 Increased Decreased Stayed the same

WC 82.6 4.3 13.0

EC 69.1 13.7 17.2

NC 79.7 9.0 11.3

painted of organisational cultures and, more especially, the absence of trust in management to do the right thing. Align these findings with the results of PricewaterhouseCoopers’ 2016 Global Economic Crime Survey, which indicates that South African organisations report higher rates of economic crime than both continental and global counterparts, but with 69 percent of respondents claiming victimisation compared with the global average of 36 percent. The reality is that economic crime in the workplace will often remain hidden unless someone within the organisation reports the misconduct. The expanded definition of ‘employee’ in the Protected Disclosures Amendment Act, 2017 may assist to some extent in that it includes persons currently and previously employed by the business, as well as independent contractors. Former employees more than independent contractors have little fear of occupational detriment and may thus be more inclined to report irregularities in the business. On the negative side, this perceived 6

FS 75.6 14.4 10.0

KZN 66.0 19.2 14.8

NW 81.6 5.9 12.5

advantage only becomes relevant after the employee has left the organisation – but still, it is a step in a more positive direction. The PwC Survey shows a picture of South Africans wanting to do the right thing, but where the organisational environment does not support a climate of trust and integrity, there is an increasing likelihood that the scourge will go unchallenged. One might therefore be forgiven for suggesting that that legislators missed an opportune moment in the amendment to the Protected Disclosures Act, 2000 to create a more empowering workplace environment for employees wanting to report organisational misconduct when they failed to specifically criminalise the failure by management to reasonably protect persons reporting irregularities from any occupational detriment. The amendments do, however, also introduce another significant development with regard to the extended list of offices to which a protected disclosure may be made. The Protected Disclosures

GP 69.3 15.6 15.1

MP 75.8 8.3 15.9

LP 68.6 16.7 14.7

RSA 71.9 13.6 14.5

Amendment Act is certainly an enhancement on what was already a relatively sound piece of legislation, but with the many cases involving aggravation to whistleblowers in the public domain, where the previously good laws did not provide adequate protection against occupational detriment, a real dilemma for many potential whistleblowers is: Do I take the road of public good over personal safety and security? Stated otherwise, the conflict becomes a fundamental challenge of selfless versus selfish interest. In many such instances, the answer to the quandary will be dictated by organisational culture; where the employee experiences a strong ethical culture, the likelihood of him/her reporting misconduct is far greater than in the instance where the organisation is perceived as having little or no inherent ethical culture, and where management is seen to ‘only look out for itself’. Today, research and anecdotal evidence confirm that a significant proportion of employees want to be certain that organisational leadership will walk

COVER STORY

the ethical commitment before they place their individual security at risk. In an attempt to encourage whistleblowing, organisational policies often make provision for ‘confidentiality’ or even ‘anonymity’. Both provisions are good, because they facilitate a less public opportunity for reporting, especially for employees afraid of being identified and targeted. In practice, however, anonymity has not been the silver bullet to promote reporting. Heightened levels of distrust in the organisation/management ‘to do the right thing’ result in even the anonymous tip-off and hotlines being distrusted by employees. Also, once an investigation is underway, several things can happen. For example: • Either the facts are such that based on the information shared, the whistleblower becomes identifiable – and a good example of this is what happened in the Trillian case; or • The person’s identity may need to be revealed, at least to the investigators; or • If the matter goes to a disciplinary hearing, there may then be a need for the whistleblower to give evidence to ensure successful prosecution. An important ethical dilemma to be confronted by business, therefore, is whether notwithstanding promises made in the excitement of promoting the function of reporting, organisations have the necessary controls in place to absolutely guarantee and protect the anonymity or confidentiality of the whistleblower? It is critical for the integrity and sustained trust in the process that business is conscious of over-promising and underdelivering. A more honest approach would be for business to inform potential whistleblowers from the outset that their identities will only be kept confidential to the extent practicable, possible and permissible by law. In this way, the whistleblower is immediately informed of the parameters and does not enter the fray with a false sense of security. In the zeal to protect the

whistleblower, one must, however, be equally cognisant of the fact that anonymity may invite irresponsible reporting, which may be motivated by malice, self-interest or a simple disregard for probity. And, because the organisational policy dictates that all whistleblower reports must be investigated, the impact on the accused can often be devastating. The Protected Disclosures Act, 2000 provides that protection will apply only if the disclosure is made in good faith, the reporter reasonably believes that the information disclosed is true or substantially true, and the reporter does not make the disclosure for purposes of personal gain. Thus, in CWU vs MTN, the Labour Court confirmed that a WB’s protection is not unconditional and where an employee makes a disclosure in order to embarrass or harass the employer, it would not satisfy the ‘good faith’ requirement. In short, a disclosure not based on fact (as opposed to unfounded allegation or mere rumour) will not be protected by the courts. In order to further mitigate against the risk of unfounded reports, the UN Report on Whistleblowing recommends that the whistleblower must be required to submit evidence or information to support reasonable belief that the misconduct has occurred. Whilst there is obvious merit in this approach, it could also be an unintentional constraint, as experience shows that not all whistleblowers are able to produce documented evidence. The Protected Disclosures Act, 2000 does not make this a requirement, but the 2017 amendments have strengthened the protection against malicious reporting providing that where a reporter is found guilty of malicious reporting, it is an offence carrying a fine or imprisonment up to two years – section 9B. Without unnecessarily belabouring a point, it is interesting that failing to protect a whistleblower against occupational detriment is not criminalised, but malicious reporting is. A practical dilemma for business

is how they will deal with competing employee rights where, on the one hand, confidentiality is promised, but there is an equally clear policy provision that malicious reporting will be sanctioned. At what point will the veil of confidentiality be lifted – after a full investigation into the maliciously reported incident is concluded, or will it be safe to penetrate the veil after a preliminary investigation indicates prima facie that the original report may have been bounded by malice? Another ethical conundrum is the issue of rewards: Should business and society actually be rewarding people simply for doing the right thing? Also worthy of consideration is whether the whistleblower’s integrity is compromised when there is a reward for raising the alarm? The debate on rewards for whistleblowing is like the proverbial curate’s egg – good in parts and bad in others – and different international jurisdictions have strongly inclined in both directions. The USA favours the rewards system; in 2014, the Senate Committee in Australia recommended that a rewards system be investigated; the Bank of England and the UK Whistleblowing Commission opposed the reward system, noting vehemently that it undermined the moral stance of a genuine whistleblower and resulted in a negative portrayal of whistleblowers. The Protected Disclosures Act, 2000 makes no reference to rewards. The question of rewarding whistleblowers is a discussion on its own, but perhaps one could start with acknowledging that whistleblowers act for a greater public good rather than individual benefit, but often experience individual prejudice. The notion of a reward for acting may be the catalysing influence that inclines a potential WB to take the chance and speak out because it provides, at least, a measure of personal security against some of the detriment of blowing the whistle. Also, when one balances pragmatism against idealism, and recognises that informants sometimes receive 7

COVER STORY

WHICH PUBLIC SERVICE EMPLOYERS DO SOUTH AFRICANS CONSIDER CORRUPT? 66%

People working in the police service Home Affairs officials Officials awarding public tenders

37%

People working in the judicial services 16%

Officials awarding business tenders

16%

People working in the public education sector

rewards for information, what makes the whistleblower’s position different? Perhaps one of the greatest dilemmas when contemplating the moralities of whistleblowing is ‘the paradox of good’. If one were compelled to make a choice between loyalty and honesty, who would you rather have on your team? Children are consistently taught not to be ‘tattletales’; but we also teach them ‘to always tell the truth’. This must create confusion, because justice and honesty perforce dictate that any act of wrongdoing must be reported, but how does one always do that without being labelled a tattletale? In organisational dynamics, value statements often highlight loyalty, linking it with the conceptual model of organisational culture and teams; whilst the honest employee often asks questions and sometimes raises uncomfortable issues. Research studies also present interesting conclusions on the role of ‘culture’ and ‘socialisation’ as a determinant of behaviour. There seems to be some level of consensus in the literature that Western individualist behaviour is more focused on justice as a 8

36%

Officials issuing business building permits

People working in the public health sector

Source: HSRC SAS 2011

38%

14% 11%

primary trait, whereas African and Asian collectivist thinking favour the importance of community and concomitantly loyalty. This is not an absolute rule and there is often considerable blurring of commitment between the two principles dictated by the circumstances. An interesting ethical construct on behaviour is how one would react if the offending party were a professional colleague or someone unknown as opposed to a close friend or family who would suffer prejudice were you to blow the whistle. Life is filled with difficult choices and sometimes we follow and sometimes we lead, prepared to take the road less travelled. Most whistleblowers are no different – they are not looking for attention or motivated by self-aggrandisement; rather they are ordinary people with a moral compass that does not allow them to avoid the misconduct that they have identified. They have reached that defining moment where ‘enough is enough’ (their personal tipping point). Experience shows that it takes no moral courage to sit silently behind one’s desk watching

bad behaviour perpetuate, but whistleblowing calls upon many virtues, not least of all being courage. So, as you prepare to turn the page, ask yourself one last question: Are you willing to place your life and personal reputation at risk for a cause you believe is just; or is it easier to turn a blind eye?

Divya Singh Questions? divyas@stadio.co.za

What makes a good regulation? The proliferation of regulation is not necessarily a public good â&#x20AC;&#x201C; it can be a public cost, says TIM HUGHES

Images: Gallo Images/Getty Images/iStock

LEGAL

ifting a takeaway pack of regulation off the shelf of international agencies, stenciling ‘Made in South Africa’ on the label, packaging it for the legislature and serving this up to the public for consumption amounts to dilatory regulation-making. Whereas the stated purported benefits of regulation are enshrined in the memoranda of enabling legislation, their potential negative consequences of effects never are. In South Africa, given our socioeconomic pathologies, the costs and consequences of bad policy can be catastrophic. The intentions of regulation may be deemed to be progressive and benign, but good intentions are not enough. Thus, the government has recognised the importance of regulatory impact assessments and, more recently, socioeconomic impact assessments prior to the development of policy, legislation and regulation. Regulation-making should be conducted in a sober, informed and objective manner. Yet, too often the process is characterised by shortterm concerns that may enshrine long-term consequences. Moreover, once implemented, rushed regulation may take decades to unwind at great public cost, something that South Africa can ill afford. A few basic questions should give pause when developing new regulation. First, is the regulation needed? Is there a public (rather than specific or sectorial) need that is not being met by existing measures that necessitate new regulation? Regulation-making is a costly exercise and on these grounds alone, every proposed regulation should be scrutinised against existing provisions and the question asked: ‘Do we need it, or can we implement and enforce existing regulation better?’ This is not an insignificant point. The proliferation of regulation is not necessarily a public good – it can be a public cost. When bad, it constitutes a public ill. The proliferation of regulation may suggest that either the existing policy is not being implemented, or is not being properly

enforced. Until a full, comprehensive and properly measured impact assessment is completed, the generation of new regulation merely serves to mask or misdiagnose the underlying problem. Second, while the costs and benefits of new regulation may not be measurable with Newtonian accuracy prior to development, the potential costs of new regulation need to be fully considered through scenariobuilding, modelling and some form of regression analysis. New regulation has to be evaluated in terms of the relationship between variables, where a change in one independent variable – increased taxation, say – may have an effect on the dependent variable, say investment or illicit trade. Third, the most important element to regulation-making is the requirement for wide consultation with all stakeholders. This is a core principle not only of good regulation, but of representative and participatory democracy of the sort that is enshrined in our Constitution in letter and spirit. Tim Hughes is a South African consultant who has just completed a postgraduate degree at Cambridge University.

Tim Hughes Questions? timhughes@dipolocom.com

The importance of SMEs in business development

Images: Gallo Images/Getty Images/iStock

WILLIAM GUMEDE looks at the impact on various South Korean economies of SMEs playing an important role, and shows South African SMEs how to follow suit

he great manufacturing revolution in East Asian developmental states such as South Korea, Taiwan and Singapore after the Second World War spurred inclusive growth, wealth and industrialisation. It was fueled in large parts by small and mediumsized businesses (SMEs). SMEs generally have a greater ability than large companies to boost economic growth, reduce inequality and slash poverty. Supachai Panitchpakdi, former Secretary 12

General of the UN Conference on Trade and Development (UNCTAD), underlined the importance of SMEs in development, “SMEs are a source of employment, competition, economic dynamism and innovation. They stimulate the entrepreneurial spirit and the diffusion of skills. As they enjoy a wider geographical presence than large companies, they also contribute to better income distribution,” he said. Many of the large conglomerates in East Asia started as SMEs,

such as Taiwan’s Ace Computers and LG in South Korea. Those East Asian developmental states determinedly focused on exportoriented manufacturing SMEs that were either part of the supply chains of larger export-orientated private and public companies, or SMEs that directly focused on exporting and export manufacturing themselves. These countries analysed global demands, tailored their exports to meet these demands and then diversified the composition of

BUSINESS – SMEs

their output, and upgraded their technology as global demands changed. As they successfully upgraded their economies and increased their skills, the SMEs shifted to produce more technology intensive value-added products.

South Korea

In East Asian developmental states, SMEs provide more than 80 percent of the country’s jobs. South Korea’s post-war industrialisation was led by big business, its large industrial conglomerates, in combination with state-owned enterprises (SOEs), focused initially on building heavy industries for export. In South Korea, SMEs are linked to the supply chains of major private companies and SOEs; they amount to 99.9 percent of all companies and employ 90 percent of all employed in the country. One third of all South Korean manufacturing is produced in SMEs. A quarter of foreign investment by South Korean firms is done by SMEs. During its rapid export-led growth, South Korea identified, through its industrial policy, manufacturing areas where SMEs could specialise and compelled the large conglomerates to bring SMEs into their supply chains to produce the inputs, services and products. SMEs were focused on producing for export. The country established industrial parks specifically for SMEs to manufacture products. The Korean Credit Guarantee Fund provided cheap finance to SMEs and guaranteed them loans provided by the private sector. The country’s Small and Medium Industry Corporation promoted SMEs’ innovation, technology and efficiency, and SMEs were given tax exemptions by the government. In the late 1970s, many former employees of large corporations started their own SMEs to supply the inputs, products and services for their former employees. The large corporations encouraged this trend; they provided financial support, access to the necessary technology and gave SMEs long-term contracts. By 1990, manufacturing value added

products, services and technology provided by SMEs in South Korea contributed to 46 percent of the economy and 64 percent of employment. In fact, South Korea’s burgeoning motor vehicle industry, electronics and machinery industries are all a result of SMEs’ contribution to manufacturing. According to South Korean government figures in 1988, SMEs contributed 60 percent to production in the motor vehicle industry, 40 percent in electronics and 38 percent in machinery. After the Asian financial crisis of 1997, the South Korean government introduced venture capital to support SMEs engaged in technology, R&D and focused on export.

Many of the large conglomerates in East Asia started as SMEs, such as Taiwan’s Ace Computers and LG in South Korea Japan

In Japan, SMEs account for 99.7 percent of all companies, 70 percent of all employees and more than 50 percent of the manufacturing sector. Japanese SMEs have created new industries, value added manufacturing and job creation. About 25 percent of Japanese SMEs are global exporters. Most of Japan’s SMEs are subcontractors of large corporates. Japan’s Small and Medium Enterprise Agency calls the country’s SMEs the “hidden strength” of the post-Second World War economic miracle. Most of Japan’s provincial and rural towns are economically supported by SMEs, including the retail, construction and service industries. Japan’s state-owned Japan Finance Corporation (JFC) provides support loans for the start-up of SMEs or for overseas expansion as well as safety net loans for SMEs suffering temporary downturns. The JFC also provides unsecured low interest loans to SMEs. Japan’s stateowned credit guarantee corporations provide guarantees to private banks for SMEs’ debt obligations. In

addition, SMEs get tax exemptions. The Japanese government provides free alternative dispute resolution to SMEs in dispute with larger corporates. Japan has a Small Business Fusion Foundation that brings related SMEs together to exchange ideas, new technology and new innovations.

Singapore

Currently, SMEs make up 99 percent of all firms in Singapore. Singapore’s growth path following independence was led by a combination of stateled development combined with attracting multinational companies. Multinationals were carefully selected to build up specific industrial sectors in return for generous tax concessions, but had to use SMEs in their supply chains, transfer technology and know-how. SMEs provided the inputs, products and services to SOEs and multinational firms. Because of their partnership as suppliers to multinational companies, they secured new technology, knowhow and skills. The Singapore government also concentrated heavily on expanding infrastructure – using it as a catalyst to industrialise. By 1997, SMEs employed 72 percent of all workers in Singapore and contributed 58 percent of value add to products. In 1985, Singapore experienced a recession and the government set up an Economic Committee to propose a new industrial path. It proposed focusing on broadly fostering entrepreneurship, using SMEs as a vehicle in a new industrialisation path to bring about innovation, adapt technology and spearhead growth. As the Singapore government feared that foreign multinationals would leave, it made a huge effort to foster indigenous SMEs focusing on exports. The government set up the Singapore Productivity and Standards Board (PSB) to support an export-orientated SME strategy. The PSB supported SMEs to access finance, quality personnel, new technology and new markets. A SME Master Plan in 1989 proposed reducing administrative hurdles, 13

BUSINESS – SMEs

Percentage of SMEs in Asian Countries South Korea 99.9%

Singapore 99%

Japan 99.7%

Taiwan 98%

improving the business environment and increasing financial assistance to them. In 2000, the government, in consultation with the SME industry and development finance institutions, proposed an update on the 1989 SME Master Plan, a new 10-year plan, SME 21: Preparing SMEs for the 21st century. The plan improved technology learning by linking SMEs with research institutions, providing market intelligence about technology trends and venture capital funds. The strategy used Japan’s Small Business Fusion Foundation as inspiration; this brought related SMEs together to exchange technology, ideas and new learning. The Local Enterprise Technical Assistance Scheme (LETAS) fund paid up to 70 percent of the costs so that SMEs could partner with local experts over a designated period to ease the costs of upgrading their operations. State-owned research & development centres tested new technology, innovations and ideas of SMEs; this was also funded by LETAS. The Singapore government has pushed for SMEs to professionalise their management. It has provided scholarship, through the Economic Development Board, whereby talented graduates can work at SMEs that are chosen as ‘promising local enterprises’. SMEs also get funding for training 14

employees through the government’s Skills Development Fund – getting back a part of the costs for training.

Taiwan

In Taiwan, SMEs make up almost 98 percent of all companies. SMEs employ 78 percent of the workforce. SMES account for 99.4 percent of all new companies formed. Taiwan’s industrialisation focused on export-led growth, with stateowned entities and SMEs driving development. Initially in the 1950s, the government pursued an importsubstitution strategy, but changed to export promotion in the ‘60s. Taiwan emphasised labour-intensive export manufacturing done by SMEs and homeworkers. In the ‘60s, Taiwanese SMEs focused on export, under the slogan ‘the living room as the factory’. Export SMEs received subsidised export loans, and laws were flexible to allow exporters to thrive. The government introduced tariff rebates for exporters, cut custom duties and made it cheaper to buy inputs abroad. In 1982, at the height of Taiwan’s industrial growth, manufactured exports from SMEs made up 75 percent of the country’s total exports. Taiwanese SMEs are linked informally as part of a network and provide inputs, manufactured and processed goods to large companies. Since the late 1980s, when Taiwan

successfully upgraded its economic structure, many of its labourintensive export manufacturing companies shifted abroad. The country’s export bicycle industry, run by SMEs, started in the 1970s, with the government selecting it as a new labour-intensive manufacturing sector to build. When the government started the petrochemical industry in the ‘60s, using the state-owned China Petroleum Company, it ensured that a network of local SMEs provided the inputs, rather than one company. Every year the Taiwanese government selects 50 of the best SMEs and provides them with additional branding, marketing and technology. Taiwan also runs programmes called ‘One Town, One Product’, whereby the SMEs in the town produce product for export; ‘Start-Up Taiwan’ encourages the establishment of new SMEs by providing cheap funds, technical support and mentoring; and there is also a dedicated focus on supporting female-led SMEs. In almost all of these East Asian developmental states, SMEs in the same sector or location or those producing the same product often form close associations, where they exchange new technology, share know-how and ideas. In some cases, SMEs in the same location producing the same product or

BUSINESS – SMEs working in the same sector come together in partnership with government agencies, Development Finance Insitutions (DFIs) or higher education institutions to share infrastructure and pool synergies, leverage and knowledge to increase efficiencies. Recently, many of the East Asian developmental states have increasingly used a combination of government-based venture capital, private venture capital and angel capital to fund new SMEs. In some cases, successful established businesspeople have taken an equity stake in a promising SME and have provided technical assistance to that particular business.

South Africa

South Africa needs the political will to make SMEs the centre of industrialisation, economic growth and employment creation. Its focus on creating big black industrialists or looking for large industrial projects or investment by large foreign investors is also wrong and outdated. Furthermore, when government officials talk about business, they mostly mean ‘big’ business rather than SMEs. Many ANC-aligned policymakers, civil society activists and progressive scholars have not taken SMEs seriously either as a job spinner, industrialisation tool or as an antipoverty mechanism. There is often also an ideological opposition to SMEs, with those lukewarm about SMEs saying it is “neoliberal”, World Bank/IMF and Westerndonor driven. Black South Africans will have to end the social stigma associated with starting SMEs, where people think it is preferable to secure a desk job in an established business or government. Many South African SMEs, especially those established by blacks, are set up out of necessity. The challenge is how to turn SMEs established out of necessity to specifically pursue business opportunities – the state will have to provide the financial means and support. This will also ameliorate the calculated business risks for people wanting to start a new SME venture. Currently, South African SME policy is not aligned to industrial policies; it appears to be ad hoc and

stand-alone. SMEs are not going to develop by magic – they need to be carefully nurtured through industrial policy, supporting institutions, accessible finance and training, especially vocational and technical training. A new SME policy must rest on three pillars. Firstly, SMEs should manufacture new products, new services and new technology that the country needs, but does not have, and stimulate new types of industries. Secondly, SMEs must be integrated into the supply chains of public and private corporates. Thirdly, a big part of SME strategy should be to focus on export, and perhaps initially to export specifically to other African countries and new unexplored emerging markets. The challenge for SMEs is not to sell cheap imported products, which is currently the case and which creates little value; this does not have the important multiplier impact on the economy, which creates broad-based employment. SMEs should be the anchor of BEE strategies. It should be compulsory to have SMEs as BEE partners; with SMEs as part of the supply chains of private and public companies, BEE will have a much broader base and will enhance its multiplier impact on job creation and poverty alleviation. The essence of South Africa’s industrial, trade and development policies must be to support SMEs’ export-led growth based on changing global demands. This will mean that South Africa analyses global demands, tailors SMEs’ exports to these demands and then diversifies the composition of SME export output, and upgrades their technology as global demands change. Linking SMEs to the supply chains of local large private and public companies, and focusing them on manufactured exports and services the world wants, will engineer the soughtafter, value added manufacturing and processing that the country requires, which will create mass jobs, slash unemployment and reduce inequality. Getting SMEs to manufacture new products and provide new services based on local and global demand will necessitate

training and access to finance and markets. State-owned and private financial institutions should make it easier for SMEs to access finance with technical help. Government and the private sector must provide training, mentoring and institutional support. Government must also secure new markets, especially in Africa and emerging markets, for SMEs’ products and services. Administrative red tape that hampers SMEs should be abolished. Government should pay SMEs that do timeous work for them. The withholding of R5 billion in VAT refunds by SARS is a typical example of a government action destroying SMEs. SMEs in the same sector or same location or those which produce the same product should form close associations to exchange new technology, share know-how and ideas. Government should pursue the cluster approach, whereby these SMEs come together in clusters in partnership with government agencies, DFIs or higher education institutions to collaboratively share infrastructure, pool synergies and leverage and knowledge to increase their efficiencies. William Gumede is Associate Professor at the School of Governance, University of the Witwatersrand. His latest book is Restless Nation: Making Sense of Troubled Times.

William Gumede Questions? william.gumede@wits.ac.za 15

Images: Gallo Images/Getty Images/iStock

SA ECONOMY

A step in the right direction for black businesses Enterprise and Supplier Development (ESD) is speeding up the development of black businesses, says ANDILE NTINGI

f all the pillars of Black Economic Empowerment, Enterprise and Supplier Development (ESD) provides the best hope of launching thousands of marginalised black entrepreneurs into the upper echelons of the South African economy. 16

The idea behind ESD is to train black business owners to competently run their enterprises sustainably. Once this has been achieved, these businesses are plugged into the supply chains of large, white-controlled corporates to supply goods and services,

thereby opening markets previously closed to them. South Africaâ&#x20AC;&#x2122;s BEE legislation is incentivising private sector companies to open up their supply chains to black-owned firms in return for earning points on their BEE scorecard. BEE scorecards are a requirement

SA ECONOMY

when bidding for tenders in the public and private sectors. A low score makes a bidder less competitive against companies that are more technically capable, price competitive and BEE compliant. In the old BEE legislation, ESD played second fiddle to black equity ownership, which stifled entrepreneurship. As a result, black entrepreneurs could not contribute significantly to growing the economy, generating employment and expanding the tax base. Instead, black entrepreneurs were reduced to being passive minority shareholders, earning dividends in companies they knew very little about running. The revised BEE scorecard was introduced in 2015 as part of ushering in new BEE codes of good practice to replace the 2007 version, which failed to grow black businesses and boost local manufacturing. Thus ESD (40 points) carries heavier weighting in the revised BEE scorecard than equity ownership (25 points) and other pillars of broad-based BEE, such as skills development (20 points), management control (15 points) and socio-economic development (5 points). A closer look at the revised scorecard reveals that corporates and established medium-sized companies will have to increase their procurement of goods and services from black suppliers to collect maximum BEE points. The heavy emphasis on ESD will curb the old enterprise development practice of training black businesses but starving them of opportunities to quote for work in the private sector. Under the new empowerment regime, where ESD rules the roost, we are likely to see a spurt in BEE transactions in the SMME space, where non-BEE compliant companies will have to look for black partners to avoid losing out on lucrative government tenders and corporate contracts. The focus on developing black suppliers is a step in the right direction for the South African economy and its industry supply chains. This will grow and diversify supplier bases, introducing

much needed competition, thereby reducing costs of goods and services for corporate and government buyers. Where buyers rely on few suppliers, it has been argued that such suppliers hike prices by 30 to 60 percent because they enjoy a monopoly position in the marketplace.

The focus on developing black suppliers is a step in the right direction for the South African economy and its industry supply chains However, there is another school of thought that believes that opening the door to untried suppliers to replace known, trusted suppliers poses a risk to the operations of large corporates, as new businesses are vulnerable to failure in their formative years. However, this risk can be mitigated by conducting due diligence on the new suppliers to ascertain their competencies and capacity to deliver the required goods and services prior to awarding them contracts. Beyond the due diligence, new black suppliers can also be gradually phased into the supply chains of corporate buyers through dual sourcing, whereby a small percentage (say 20 percent) of a single product is procured from a new supplier and the remaining 80 percent from the known, established supplier. Over a period of time, the corporate increases its sourcing from the new supplier as it becomes confident in its ability to provide a very reliable, uninterrupted service. Dual sourcing can also be complemented by coaching and mentoring to increase the chances of the commercial sustainability of new suppliers. Whatever the case, there are many strategies that can be implemented to grow black suppliers as their continued marginalisation more than 20 years into South Africa’s democracy is no longer politically acceptable and could destabilise the country down the line. Now is the time to kill two

birds with one stone – to increase competition in supplier markets, whilst broadening economic participation. It is encouraging to see that the government, which spends R500 billion annually buying goods and services, is working towards taking the lead in increasing market access for black businesses. Black suppliers may receive a major shot in the arm from the soon-tobe unveiled Public Procurement Bill, which may introduce the long-awaited preferential tender set-asides where a portion of government contracts are ringfenced for black bidders. Enterprise development experts have recommended that government include a clause in the procurement legislation that forces state buyers to commit to three-year supply agreements when procuring from SMMEs to support long-term sustainability of small businesses, since unexpected cancellations of contracts usually lead to small business failure. The revised BEE codes contain a clause that commits private sector companies to threeyear supply agreements when sourcing goods and services from black suppliers.

Andile Ntingi is the Chief Executive and Co-founder of GetBiz, an e-procurement and tender notification service Questions? andile.ntingi@gmail.com 17

Agricultural land reform the way forward HARRY GWALA AGRI is harnessing the potential for growth in agriculture to solve the growing food security dilemma and narrow the gap between rich and poor. By DYLAN WEYER

midst ever-increasing uncertainty in South Africa, identifying the potential for growth is an imperative, and seeking out innovative strategies to harness that growth is crucial. Agricultural land reform in South Africa presents such an avenue, with vast tracts of unproductive land and both established and aspiring farmers with willing talent and an equivalent 18

amount of goodwill, which, if combined, can tackle the growing food security dilemma and decrease the gulf between the rich and the poor in our country. On the basis of this and the need to address the injustices of the past, Harry Gwala Agri was created by established commercial farmers and supporting partners in the district of the same name in southern KZN.

Their mission statement explains: â&#x20AC;&#x153;As commercial farmers, we realise that we cannot farm alongside others who are unable to do the same because of past injustice. Harry Gwala Agri was formed in response to this. We are a project and relationship-driven, nonprofit company that aims to advise, facilitate, skill and fund passionate developing farmers, whilst adhering

BUSINESS PROFILE

to strict standards of corporate governance and accountability. “In the spirit of Ubuntu, we know that we can’t help everybody, but we believe that everybody can help somebody. In practical terms, this means that Harry Gwala Agri (HGA) hopes to unlock the resources held by commercial farmers and other stakeholders (knowledge, networks, skills and funding) and channel these towards selected agricultural projects. By customising our support to the unique demands of each project, we aim to make a difference.” To safeguard the sustainability of any initiative that aims to tackle land reform effectively requires that those involved be aware of its

social, environmental and political complexity. The best approach thereafter is a holistic one. With this in mind, the HGA board incorporates members from diverse backgrounds and skill sets, including several successful commercial farmers, lawyers, a psychologist, a chartered accountant, a biochemist and an environmental scientist. The board is chaired by John Bredin, an Ixopo dairy farmer and former Chairman of dairy company Clover. HGA came about after long and hard negotiations initiated by Mr Bredin to flesh out the mission statement. It is made possible through the monthly contributions made by commercial farmers from four farmers’ associations in the

district (Highflats, Mount Currie, Zwartberg and Ingwe). HGA acknowledges that there are needs to be met across disparate scales. Where success is achieved through supporting projects, however small, this will promote further success. Established farmers across the district have tried to address the districts’ inequalities and have invested in aspiring farmers in their neighbourhoods. However, due to the demands of their own occupations, they have been unable to devote the necessary time to ensure lasting change. Appreciating this challenge, HGA supports these existing projects and learns from those that have 19

BUSINESS PROFILE taken place in the past and the success stories that have already emerged. One such success story involves Mr Douglas Strachan and the Mazabekweni community near Highflats in the Harry Gwala District. This communityâ&#x20AC;&#x2122;s story started from a pilot project and ultimately became a two-year Masters research project involving seven households, mostly female-run. The project was undertaken by three employees on the Strachanâ&#x20AC;&#x2122;s farm. They used the principle of farmerto-farmer extension, whereby acquired skills and experience are passed on to other households which have expressed an interest in cultivating their own home patch. To date, this project has been rolled out to roughly 50 households in Mazabekweni alone, and spread to neighbouring villages when they heard about their success. Mazabekweni has boosted its food security, enjoys the satisfaction of putting home-grown food on the table and is benefitting from reduced reliance on purchased goods. The community shares the benefits of a hammer mill which locals can use at a fee.

Mr Strachan and the Mazabekweni community

Mr Strachan has now worked with his neighbouring community for the last eight years, after a staff member asked for assistance with her home garden plot. He agreed to help, on condition that the household use his alternative farming method and allow other community members to come and observe the process. Mr Strachan provided goat-proof fencing, tools, seeds and manure to establish the crops. He taught them agro-ecological techniques such as non-inversion tillage of planting pits using garden forks and rotational strip cropping of dryland crops such as maize, beans, sweet potatoes as well as butternut. Mr Strachan is now using the same approach to help communities that live on the farm he grew up on in the Umzimkulu area, which was incorporated into the Tranksei in the 1980s. He describes the unmistakable look of satisfaction on peopleâ&#x20AC;&#x2122;s faces when they have successfully put food on their own tables and the pride and selfconfidence that comes with that. On the other end of the spectrum are the emerging farmers who

have already succeeded on some level and who are looking for support in order to up-scale their enterprises. HGA endeavours to partner these farmers with those who might offer skills development where it is needed or identify opportunities for partnerships within the private sector.

Mentorship projects

Mrs Ngcobo and the members of her trust had a desire to establish a commercial farm in the Swartberg area and were told by the District Land Reform Committee that in order to acquire financial support for this process, they needed to elicit the help of a mentor. While in the TWK co-op one day she asked a gentleman how she could go about this, to which he responded that his father, Robert Williamson, might be interested, which he was. The Celokuhle Timber Dairy Farm Trust has now been in effect for 10 years (Mr Williamson has been involved for five). They are currently milking between 80 and 100 cows, have 239 head of beef, wand timber and have garnered support from the Agribusiness Development Agency, which is assisting with the

BUSINESS PROFILE

development of a new dairy and the installation of a pivot. In a similar fashion, Rob Stapylton-Smith, Vice-chairperson of HGA and a successful dairy farmer from Eastwolds near Creighton, has been mentoring his neighbour, Ducky Ngcobo, for 10 years. To date, Mr Ngcobo is milking 150 cows; he traded in his taxi business to be involved in agriculture. He is currently making changes to his 120-hectare farm: Road infrastructure is being put in place along with fenced camps for rotational grazing and a water reticulation system. Elsewhere, Beesie Stone of the Ixopo area has worked closely with the community that has settled on his former farm. He offered to mentor a number of people including Mr Gehla, who wanted to farm cabbages. The common thread between these projects is that the impetus to be involved in agriculture, be it on a subsistence or commercial scale, has come from the aspiring farmers themselves, and the involvement

of the established farmers has been a process of channelling this enthusiasm and energy and providing the skills, guidance and financial support where necessary and where possible to bring about success. These are examples of sharing knowledge and experiences across the bounds of colour. They are testament to the potential that can be realised through joining hands and turning the soil in the Harry Gwala District. Speaking at the launch of HGA in March this year in Creighton, KwaZulu-Natal Agricultural Union’s (KWANALU) president, Andy Buchan, said the following, which is very pertinent to HGA’s beliefs: “An initiative like this reinforces my belief that there is sufficient goodwill in our communities to facilitate the transformation necessary to improve the livelihoods of every individual in our sector. “The solution to the issues confronting the agricultural sector rests with us, the people on the ground. The sustainability of these types of initiatives will rest on a

genuine desire to be a catalyst in the transformation of lives – not only in agriculture. It needs to be built on relationships of trust over time, and not merely a motion of ticking the box or window dressing.”

Dylan Weyer Questions? dylanweyer@gmail.com

LOCAL ECONOMY

A different view of Black Economic Empowerment Are we looking at BEE correctly, through a lens in focus? Or are we trying to enrich our friends and families at the expense of this great country? DEVEN GOVENDER, CEO of LionPride Investment Holdings, answers these questions

e can look back at our wretched past and all the woes of colonialism and whine about it. Unfortunately, that gets us nowhere, other than navelgazing, swirling our beer and a hangover the next morning. Since the dawn of our democracy, hope was high and we thought that we could wipe the slate clean and start again… not so easy. The polarity of the haves and the have-nots was palpable, and the neophyte government (led by one of the true statesmen of his time) needed to level the playing fields or at least give us the impression that it was being levelled. Corporate South Africa flocked to give opportunities to the new power brokers. Deals were probably being cut in smoke-filled rooms at the end of CODESA, and the ‘sunset’ clauses filled with goodies for the political influential. This was like offering a kid a choice of sweet on his firstever visit to the sweet store and left

many salivating for more. The government, especially during the second democratically elected presidency, needed to force the issue of transformation through charters and the law. The unintended consequences of these actions live with us today, two decades later. A small percentage of South Africans have benefited, whilst the vast majority trundle on, often feeling things have gotten worse. Are we looking at Black Economic Empowerment (BEE) correctly, through a lens in focus? Or are we trying to enrich our friends and families at the expense of this great country, which has spawned Nobel Laureates, medical marvels, world champions and, more recently, technological visionaries who are changing the way we live? Systems theory tells us that a complete system will have inputs and transformations that result in outputs. The government has tried to solve the problem by managing the 23

LOCAL ECONOMY

outputs of the system. A well-known politician once said: “I’ve not joined the struggle to be poor” (he is now a billionaire); and this has become the ‘mantra’ or ‘gold standard’ of most people joining the government where just about everyone seems to be moonlighting. I would like you to reconsider a different definition of BEE – along the lines of teaching a man to fish rather than giving him a fish. True BEE is when every child who enters the school system leaves it being able to read with comprehension and is numerate. Some of you reading this may say this is patronising, or even colonialism disguised as paternalism. Nothing can be further from the truth especially when you consider this: Research conducted by Nicholas Spaull of Stellenbosch University reveals that in 2003, 1.1 million children entered Grade 1, and 12 years later, only 530,000 sat for the matric exam. Let’s just pause here… 570,000 young South Africans have not made it (for myriad reasons) to their matric year. The social cost of this amount of people not having access to acquire basic skills will put a burden on the state for years to come as well as a permanent skills deficit. Of those who sat for matric, 400,000 passed, which gave us a less than 75 percent pass rate – and we give ourselves a collective pat on the back. However, of those who pass, only 150,000 qualify to enter university. Just think about that: 1.1 million smiling faces enter school at age six, and, of those, 150,000 will have an opportunity to enter university. So, roughly 13.5 percent of those entering the system make it through with a pass good enough to get into tertiary education. That is indeed a damning indictment on the most valued system managed by the South African government. The Bill of Rights has ensconced the right that access to basic education shall be available to all 24

South Africans. Our country has one of the highest rates of public spending on education in the world, at about 7 percent of GDP, and it ranks as the highest priority of government spending. So Treasury, in allocating some R204 billion to education in the 2015/16 budget and roughly R640 billion over the next three years, realises that the engine to economic growth comes from education. To create further impact, Treasury also funded the National Education Collaboration Trust (NECT) to the tune of around R300 million. Sadly, although the intent is well founded, most of the funding went to the hiring of consultants (worse still, most of the money seems to be spent on travel and accommodation of those consultants), and this initiative has fizzled out with very little sustainable impact.

“I would like you to reconsider a different definition of BEE – along the lines of teaching a man to fish rather than giving him a fish. True BEE is when every child who enters the school system leaves it being able to read with comprehension and is numerate” An educated workforce drives innovation, creativity and productivity – all of which are catalysts to growth and, ultimately, job creation. An excellent case study remains that of South Korea. In 1960, with a per capita income of US$80 (and a negligible GDP), South Korea has grown to a per capita income of more than US$25,000 (and a GDP in excess of US$1 trillion). A well thought through 25-year programme in education has seen South Korea become one of the world’s largest exporters of technology, and has

seen many consecutive years of economic prosperity. Back in South Africa, with all this money thrown at the system, why are the outcomes so little? Are we throwing good money after bad? If we unpack this, we might look at the dismantling of apartheid education structures like technical schools, teacher and nursing training colleges, the trial and error of different curricula (I’m pretty sure that we are likely to change again), and the list goes on as to why things went so horribly wrong over the past 22 years. We are at risk of putting 750,000 people a year into the social grant pool. These people emerge from their school years either semior illiterate, with little or no skills and no hope. This is the breeding ground for people to turn to drugs and crime, which, in turn, spawns a whole other set of social disorders. Is this a hopeless case? Do those of us who can afford it send our children to private schools, and hope for the best at the tertiary level? In South Africa there are some 25,000 government schools, with about 12 million learners. It is estimated that 5,000 of these schools are what is considered fully functional and the balance hobble along with little help from formal structures. Corporate South Africa takes a keen interest in education, as this is the source of its future leaders, management, technical experts etc. Corporate and Social Investment (CSI) see companies actively involved in education with an eye on identifying future talent, as the war on talent escalates. As stated earlier, systems theory looks at inputs, transformations and outputs. Rather than measure the outputs (matric pass rate) we need to focus on the quality of the outputs. (Anecdotal: an employer recruiting for roles was surprised that many of those interviewed had passed matric without being able to read with comprehension, given the case study they had to complete.)

LOCAL ECONOMY

The inputs into the system are young, curious, eager minds that must be continuously stimulated and challenged. Other inputs will be the curriculum, quality of teaching, facilities, principal and teacher support etc. Consider the earlier statistics – 20,000 school principals are responsible for schools that are considered less than fully functional. For now we won’t go into the minutiae of why, what or how this is possible. Let us use this as a given and accept we have a very big problem. Now what? A large part of my career has been spent as a strategy and management consultant, assisting companies solve complex problems. The educational crisis (and I openly call it that as we can produce as many as 750,000 people every year with no prospects of a better life) is not a lost cause. Taking a business view of the problem, we could introduce some organisational structure at school level. An example of lack of organisational structure comes via an anecdotal example where 47 people, including the security guard, reported to the school principal. Of the 5,000 functional schools, all have strong governing bodies, with specialist support in IT, HR, finance and fundraising to support the principal. An unintended consequence of social mobility is that we tend to leave the townships and move to the suburbs (myself included), and the township schools have no access to the skills we have acquired. Our children are in suburb schools or private schools, so we join the PTA of ‘our new school’, leaving our past in the township. The solution is not provided with a magic wand; it is going to take time to stop this ‘Titanic’, and even more time to change direction, but it can be done. Organisational structure and principal support are they key issues, as are clear roles and accountabilities between the principal and his team, and between the principal and the administrators.

Respect the principal and his/her team as they face the tremendous challenge of managing their relationship with district and provincial teams. The school of the future should be the bedrock of each community in South Africa. Education is the single largest leveller of socio-economic injustices. This is relevant to many peoples of the world, like in India for example, where their biggest export is the human capital, and where people are able to transgress not only social and economic barriers but also international and national ones.

• Fourthly, support is required for teachers in preparation of classroom material. There have been a number of innovations within the technology space that can be embraced to provide this support, including receiving more collaboration and copetitioning. • Lastly, develop a support system for learners. Make it cool to be in school, where learning is fun and enjoyable. Find practical ways to use science and maths in our daily lives, rather than repetitive learning without understanding.

So do we need to reinvent the wheel? My suggestion is, let’s start with what we have. Looking at the functional 5,000 schools in the South African public school system, all is not lost. An approach we can follow may include: • Firstly, a community programme making the school the epicentre of the community. Respected and revered, this will be the key for driving our future innovators, scientists, leaders and respectable citizenry. • Secondly, create an environment that allows the principal of the school to succeed. This can be done in numerous ways, as mentioned earlier: proper organisational structure, clearly defined roles and accountabilities at school and a strong school management committee. Leadership is also the key to success, as is mentorship for the principals, which will then generate a feeling of control over their ‘organisations’. • Thirdly, at the Departmental level, understand the roles and accountabilities. Move the discussion from one of command and control, to support and excellence. Create a monitoring dashboard that will drive success and behaviour towards support rather than ridicule and hopelessness.

Whilst many may say the above is all the ‘soft stuff’, this is indeed the ‘stuff’ needed without significant changes to the curriculum or investment in capital. It usually takes a generation (roughly 25 years) to make a significant change in a population. We’ve been through our first generation post-1994, and fully understand what does not work. Now is the time to knuckle down and deliver on the next generation’s dreams... true Black Economic Ewmpowerment.

CEO of LionPride Investment Holdings, Deven Govender Questions? deveng@lionpride.co.za

RETIREMENT ISSUES

It’s your right to know CLEMENT MARUMOAGAE discusses a retirement fund member’s right to information relating to their pension savings

n terms of section 32(1)(a) of the Constitution of the Republic of South Africa, 1996, ‘everyone has the right of access to any information that is held by another person and that is required for the exercise or protection of any rights’. The ‘entitlement’ to access information is a constitutional imperative which is given effect to by the Promotion of Access to Information Act 2 of 2000 (hereinafter referred to as ‘PAIA’). Among others, section 9 of PAIA enables access to ‘any information that is held by another person and that is required for the exercise or protection of any rights’. In the context of retirement funds, this deals with information relating to members’ 26

pension savings and the manner in which their contributions are invested which is held by their retirement funds and managed by boards of management. These funds are crucial to enable retirement fund members to plan adequately for their retirement. In this article I take a look at the fragmented regulation of the South African retirement industry, which contributes to the manner in which information may be provided to retirement fund members. I also discuss the duty placed on the boards of management to provide their members with the necessary information relating to their retirement funds. I address the type of information that boards of

management should provide.

Regulation of the retirement industry

There are various statutes that regulate retirement funds in South Africa. Retirement funds that have been created for employees who are working for private companies are regulated by the Pension Funds Act 24 of 1956. Should members have disputes with these retirement funds, including failure by a particular fund to provide its member with the necessary information, the member may approach the office of the Pension Funds Adjudicator to force such fund to provide the required information [Mantsho v Managing

RETIREMENT ISSUES Director of the Municipal Employee Pension Fund and Others (37226/14) (2015) ZAGPPHC 408 (26 June 2015)]. The office of the Pension Funds Adjudicator was established in terms of section 30B of the Pension Funds Act, which states that only members of retirement funds that are regulated by this Act can lodge their complaints with this office. In terms of section 30D of the Pension Funds Act, the Adjudicator is empowered to resolve pension-related disputes in a procedurally fair, economically and expeditious manner. In terms of section 30K of the Pension Funds Act, legal representation is not allowed at the proceedings before the Adjudicator. It is important that when a retirement fund member has any complaint relating to, among others, the retirement fund refusal or failure to provide the necessary information, the member must lodge a complaint immediately. This is because in terms of section 30I (1) of the Pension Funds Act, ‘[t]he Adjudicator shall not investigate a complaint if the act or omission to which it relates occurred more than three years before the date on which the complaint is received by him or her in writing’. The procedure for lodging a complaint is clearly stated on the Pension Adjudicator’s website, https://www.pfa.org.za/ Complaints/Procedure%20for%20 Lodging%20a%20Complaint/ Procedure%20for%20lodging%20 a%20complaint%203.pdf, which also has the necessary complaint forms in most South African languages. There are other funds that are not regulated by the Pension Funds Act. Retirement funds such as the Transnet Pension Fund, Post Office Pension Fund and the Government Employees Pension Fund are regulated by their own legislation. These retirement funds are not subject to a specific dispute resolution tribunal, such as the Adjudicator’s office, and most of the disputes arising from their members are dealt with directly by the funds. If a member has a dispute, they are entitled to approach the office of the Public Protector, who deals with maladministration of public entities.

Duty to provide information

Section 7D(c) of the Pension Funds Act places a duty on the retirement fund board of management to ‘ensure

that adequate and appropriate information is communicated to the members and beneficiaries of the fund informing them of their rights, benefits and duties in terms of the rules of the fund, subject to such disclosure requirements as may be prescribed’. While other statutes regulating retirement funds referred to above do, to some extent, provide the powers of the boards of management of retirement funds that they established, they are nonetheless silent on such boards’ duty to provide information. Nonetheless, it can be argued that such a duty is a constitutional duty, which is aimed at advancing retirement fund members’ rights to access information. As such, it is implied in these rules. If retirement funds do not provide the necessary information, and a member contributes to a retirement fund regulated by the Pension Funds Act, then the member can approach the office of the Pension Funds Adjudicator for relief. However, if members’ retirement funds are not regulated by the Pension Funds Act, as the law stands, they do not have the option of approaching a specialised Pension Funds Adjudicator. This will be challenged in future, because it differentiates between retirement fund members on the basis of their membership and is thus potentially unconstitutional. Perhaps the most practical method is for those members of retirement funds who cannot approach an Adjudicator to approach the civil courts. This may be preferable to approaching the office of the Public Protector, who might not be able to immediately respond to their complaints, as their financial resources are limited.

enlighten retirement fund members about the growth of their pension savings; this would enable them to better plan for their retirement. From such a statement, members would be able to determine the amount they are likely to receive upon their retirement (see Pension Fund Circular PF NO. 86 of 1995). It is also important for all retirement funds to regularly request that members update their personal details and those of their dependents. Retirement funds should ensure their members correct any information that may change. Retirement funds should also regularly provide their members with the ‘[p]rocedure to be followed in the event of an enquiry or complaint and to resolve disputes, should any arise’ (see para 7 of the Pension Fund Circular PF NO. 90 of 1997).

Conclusion

It is important for retirement funds to inform their members about some of the benefits that are provided to them. For instance, the Pension Funds Act makes provision for those retirement funds that it regulates to provide housing loans to their members. Over and above this, retirement funds should also inform their members about the need to preserve their benefits when they are forced to leave their employment before their retirement age and the tax implications involved. It is crucial for retirement funds to also provide full information relating to the procedure for claiming retirement benefits and the time period within which such benefits will be paid.

Information that should be provided

Retirement funds should provide their members with benefit statements that clearly illustrate the investment performance of their contributions and where such contributions are invested. The Pension Adjudicator in Wentworth v GG Umbrella Provident Fund & Others [2009] 1 BPLR 87 (PFA) in pars 23-29 determined that ‘it is reasonable that members should be provided with benefit statements once every year’. Benefit statements contain crucial information to

Clement Maruwmoagae Questions? clement@gaeattorneys.co.za

WE’RE HERE TO HELP Vela cash Loans CC is a micro-lending business that was formed and registered in 1998. It’s founding member is Mr Mbulelo Welcome Kozana who is from Ngqeleni in the former Transkei region of the Eastern Cape Province. The business started to operate in 1999 with a staff membership of 7 including the founding member and it operated from a single branch, now it has a staff membership of 165 of all age group, ethnicity, gender and religion including the physically challenged. It now has 6 branches in and around Mthatha. The business’s main objective is not only proﬁt making but also the social development of our clientele which is mainly based and situated in rural areas. Our social responsibilities among others including assisting in and sponsoring community projects; renovating and building schools and church halls and also giving out donations. For an example, in 2009 we renovated and also built additional classroom at Poni Junior Secondary School, Dumasi Admin. Area in Ngqeleni and the cost was +R300 000 in 2010 we built a church hall for the Mdeni Circuit of the United Methodist Church in Ngqeleni at a cost of +R400 000.00. Currently we are building a community hall in the Dumasi Admin. Area in Ngqeleni.

No 76 madeira street, Mthatha, 5099

Vela Cash Loans

T. 047 532 4374 | 047 531 4148

Cyber law and mobile applications ALEC VEITCH, Senior Associate at Schindlers Attorneys, and JONATHAN SALANT, a Candidate Attorney at the company, discuss general legalities that need to be taken into consideration when creating or developing applications for mobile devices

he cyber industry of mobile application development for smartphones and tablets applications has gained exponential growth over recent years. A report compiled in 2015 by American venture capital firm Kleiner Perkins Caufield & Byers revealed that over half of South Africaâ&#x20AC;&#x2122;s Internet traffic came from mobile devices. The report further revealed that there are currently approximately 23 million smartphone users in South Africa. These numbers continue to grow and as a result have created a massive market for the development of mobile applications. Mobile apps developed in South Africa have transformed 30

into immensely lucrative business platforms that continue to grow. Examples include SnapScan, which allows you to pay at stores using your mobile phone; MarkitShare, which is designed specifically for estate agents to increase lead volumes, sales performance and secure sole mandates; and PriceCheck, which allows you to compare millions of products, across thousands of stores. Although an exciting and inviting industry to enter into, one must always be mindful of the legal formalities and/or consequences that may be applicable to an appâ&#x20AC;&#x2122;s design and implementation. It is impossible to cover every single aspect of the law

that may be applicable to all mobile apps because their functions and purposes differ. Here, we touch on a number of general legal aspects that a creator or developer of a mobile app should bear in mind.

Applicable legislation

There is a variety of legislation that can apply to a mobile app at any one time. For general purposes, we will discuss the Consumer Protection Act 68 of 2008 (CPA), the Electronic Communications and Transactions Act 25 of 2002 (ECTA), the Copyright Act 98 of 1978 and the Protection of Personal Information Act 4 of 2013 (POPI).

CYBER LAW The Consumer Protection Act (CPA)

The CPA has been enacted to promote and advance the social and economic welfare of consumers in South Africa. It affects mobile apps in numerous ways, such as the implementation of the app, and advertising and selling goods and services via the app. Accordingly, a person launching a mobile app must be aware of the requirements before launching it to consumers. The CPA also provides strict requirements regarding the wording of content within the app. Advertisements must be in plain, understandable language, the price of goods or services must be clearly displayed, and the trade description of the goods or services must not be defined in a way that would mislead the consumer. If the app is constructed so that it acts as an agent between a retailer and the consumer, for example, it must be clearly disclosed to the consumer who the intermediary – the app – represents. It is essential that any and all mobile apps be accompanied by complete and comprehensive terms and conditions of use, to protect both the end user and the app’s creator. It is also vital that these terms and conditions comply with the CPA: they must not be unfair, unreasonable or unjust, nor must there be prohibited terms as described in the CPA. Failure to adhere to these requirements will result in penalties being imposed on the owner or developer of the app.

Electronic Communications and Transactions Act (ECTA)

E-commerce law has been codified in the ECTA, which facilitates and regulates electronic communications and transactions, and is thus pertinent to mobile apps. The ECTA regulates things such as making sure the consumer can review the entire electronic transaction, correct any mistakes and withdraw from the transaction before finally placing an order within the app. A consumer has the right to a ‘cooling off period’ where they may cancel any order done through the app within seven days of receiving the goods or services, or within seven days of ending the contract. The customer can do this without reason and

without penalty, and the only costs that may be levied are the direct costs of returning the goods. Any payment made prior to the customer cancelling the agreement must be refunded within 30 days. The ECTA further stipulates that a supplier making use of a mobile app must use a sufficiently secure payment system with reference to accepted technological standards. A supplier may not accept payment directly from the consumer; this is prohibited for security reasons. The supplier must employ a payment gateway provider, and hold a merchant bank account that authorises the supplier to accept debit and credit card payments through the app. Also, an SSL certificate is necessary to establish a secure connection with the browser through several visible trust indicators.

Copyright law is particularly important to ensure the developer maintains ownership of their Intellectual Property. In terms of section 21(1)(a) of the Copyright Act, copyright ownership shall vest in the author. The Act’s definition includes an author in relation to a computer programme, or the person who exercised control over building the computer programme. It is, thus, essential that any person who conceptualises a mobile app specifically contracts terms that regulate ownership of the Intellectual Property associated with the app. This ensures that ownership of the coding involved in creating the app remains with the person who has come up with the idea, and not with the coder or developer who was hired to build the app. The coder and/or developer should sign a Non-Disclosure Agreement (NDA) before starting work as a safeguard to prevent them from reproducing the app, or anything similar, once their work with the copyright owner is done.

is being collected, that the personal information will not be kept for any longer than is necessary for achieving the purpose for which the information was collected, and that the integrity and confidentiality of the information is secured through safeguards.

Conclusion

It is apparent that mobile apps and the shift into an e-commerce society have created boundless opportunity for the creation of successful businesses. This is not, however, without a number of legal obstacles. This article only briefly touches on the legislation and legal aspects that can affect one’s mobile app business. One should always be aware of all the relevant legal requirements associated with developing and implementing an app before investing time and capital in a venture that may not be legally feasible. Bear in mind that it is also necessary to ensure that all rights relating thereto are sufficiently protected. It is, therefore, advisable to seek legal advice before embarking on such a venture to overcome the legal obstacles that are likely to occur.

Senior Associate, Alec Veitch Questions? veitch@schindlers.co.za

Protection of Personal Information Act

When a person signs up for a mobile app and personal information is given, it is crucial that the information provided is limited to what is necessary for its specific purpose. The consumer must be informed that his/her personal information

Candidate Attorney, Jonathan Salant Questions? salant@schindlers.co.za

Images: Gallo Images/Getty Images/iStock

SA ECONOMY

Transformation of the township economy is vital to upliftment LEBOGANG MAILE discusses the concern about big retail stores taking over the townships, resulting in the decline of retail enterprises owned by local entrepreneurs

e have had the honour of making a formal submission to the Competition Commission’s public hearing on the Retail Sector Market Inquiry held in our province. It was heartening to learn that the provincial government was the only arm of the state that participated in these watershed hearings. Our submission was dedicated to the memory of the 1976 generation that left an indelible mark on our history. Their unflinching dedication in demand of social justice also changed the course of our history. Our participation in the hearings was crucial to contribute to a transformation discourse of the township economy, as the proliferation of big retail stores into the townships has remained unsolved. The proliferation has also had an adverse impact on township retail enterprises. Of significant importance in our participation was to achieve the following objectives: • Create a platform for structured discussions regarding the impact of big retail stores on the township economy and pave the way for future structured policy and programme interventions; • To collectively develop

programmes (public and private) geared at restoring local ownership of the retail space and regulation of uncompetitive geographic practices by big national and international retail stores. During his maiden State of the Province address, Gauteng Premier David Makhura made this clarion call, “We are determined to revitalise and mainstream the township economy by supporting the development of township enterprises, co-operatives and SMMEs that will produce goods and services that meet the needs of township residents”. Since the 1994 democratic dispensation, the retail landscape has witnessed significant structural changes, leading to a massive presence of big retail chain stores in the townships such as Shoprite, Pick n Pay, Spar and Cambridge Food, that have invested massive capital in the townships and, as a consequence, displaced the local retailers that in the past kept the local economies vibrant. Another feature has been the takeover of local grocery stores by foreigners. Research by the University of Johannesburg’s Centre for Competition and Regulation showed 33

SA ECONOMY

a handful of large chain stores hold over 70 percent of the national market share. This limits the alternative options that suppliers and consumers have and confers substantial market power to big supermarket chains. These high levels of concentration are also indicative of barriers to entry and expansions faced by new entrants, diminishing the propensity for effective competition, which has farreaching implications for consumers, suppliers as well as emerging small township entrepreneurs. The levels of concentration are particularly barring to historically disadvantaged entrepreneurs who want to enter the retail space. This is against the backdrop of increased wage income in township households, the high consumption rate of the middle class, the spending power of the working class through social grants transfers, and the rise of the rental market, which supplements incomes and contributes to denting extreme poverty in the province. The Gauteng Department of Economic Development roadshows for the Gauteng Township Economy Revitalisation Plan (in 65 townships) have helped the government and its partners to craft a concrete policy response beyond the generalisation of typical township business. The roadshows also revealed critical and common challenges facing township entrepreneurs, which include, among others: • Proliferation of foreign-owned businesses, particularly within the retail sector; with scant regard for the laws of the country, and thereby driving locals out of business through cartels, vertical ownership and collusion with wholesalers and bazaars; • The lack of market access and information, which makes it difficult for township entrepreneurs to thrive; • This is a call for the government to deal with monopoly pricing that makes it a barrier to enter certain markets through lobbying the Competition Commission, among other regulatory bodies. There are about 150 townships in Gauteng; they account for between 34

70 to 80 percent of the population. Townships have long been characterised by spatial inequalities and underdevelopment as a result of our apartheid past and legacy. In his seminal research, Professor Patrick Bond noted that cities have developed for a while at the expense of the townships and that there is no mutual and beneficial relationship between cities and townships. Furthermore, he points out the unequal relationship between the economic core and the periphery peri-urban areas, where townships are consumption centres with limited production capacity.

The retail landscape has witnessed significant structural changes, leading to a massive presence of big retail stores in the townships The ability of township grocery stores to compete in the retail space alongside big retail chain stores is fast becoming a serious concern. It has led to what others call “irresponsible competition” dominating a specific local geographic market. Township grocery stores are severely under pressure from big chain stores that are encroaching on low-income markets that the township-owned grocery stores have been serving for decades. It is within this context that the need to regulate this encroachment becomes a prerequisite and necessary act. The retail sector, unlike other industries, does not have a transformation charter that sets out targets to be achieved, consistent with most sectors that have initiated charters in accordance with Broad-Based Black Economic Empowerment regulations and targets. The technical recession presents an opportunity for a different model of development and investment for working class townships and communities. It is not acceptable that black townships continue to be consumption centres

for white monopoly capital goods, without tangible developmental outcomes while communities where malls are located remain an epitome of unemployment, poverty and social inequality. Social inequality demands collective action, and retailers cannot be announcing increased profits while citizens from their trading sites are trapped in economic exclusion and income inequality. Perpetually building the township economy on the back of consumption or a debt-driven economy amounts to economic racism. Our inability to transform the face of our townships, which were previously used as a reservoir of cheap labour by big conglomerates, into centres of economic boom and prosperity will only serve as an indictment of the ANC’s historic Morogoro National Consultative Conference assertion that “to allow the existing economic forces to retain their interests intact is to feed the root of racial supremacy”. First published in the Business Report of the Sunday Independent on 18 June, 2017. Reprinted by kind permission of the writer.

MEC for Economic Development, Agriculture, Environment and Rural Development, Lebogang Maile Questions? castro.ngobese@gauteng.gov.za

021 7616211| Email: info@iacsa.co.za iac-sa

IACSA

IAC Institute of Accounting and Commerce

www.iacsa.co.za

RECOGNISED CONTROLLING BODY FOR ACCOUNTING PROFESSIONALS & TAX PRACTITIONERS The Institute of Accounting and Commerce (IAC) is more than a professional institution. It is home to a family of like-minded accountants and tax professionals who strive towards utilizing their skills-base more effectively,

THE IAC OFFERS THE FOLLOWING PROFESSIONAL DESIGNATIONS: ACCOUNTING • Independent Accounting Professional (Reviewer) (IAP) • Financial Accountant in Practice (Registered Accounting Ofﬁcer) (FAP) • Financial Accountant in Commerce (FAC) • Technical Accountant (Bookkeepers) (TA) TAXATION • Certiﬁed Tax Practitioner (CTP) • Associate Tax Practitioner (ATP)

while further developing their qualiﬁcations and careers. Since 1927, we have provided professional education and advancement of our members who seek not only a dynamic future, but also a secure one.

ACADEMIC QUALIFICATIONS AND PRACTICAL EXPERIENCE TO BECOME AN IAC ACCOUNTING PROFESSIONAL A completed NQF level 7 accounting qualification with the same evaluation as an IAC diploma, and that the qualification is recognized by the IAC. The qualification must have the following core subjects: • Financial Accounting (3) • Income Tax (in terms of SA legislation) • Company Law (in terms of SA legislation) • Auditing (1) or Internal Auditing (2) Practical Experience: To have gained a minimum of three years, articled or learnership training, under the guidance of a registered Accounting Professional or six years practical experience at a management or supervisory level.

Start in the garage

Images: Gallo Images/Getty Images/iStock

TATENDA ZINGONI reveals some of the lessons he has learnt from small businesses

ENTREPRENEURSHIP

he Internet abounds with many stories of businesses that were started in garages, bedrooms or other unusual places. Companies such as Apple, Microsoft and Amazon are some of the companies that had their genesis is these unlikely places. In my reading of different entrepreneurship and business material, this recurring theme made me pick up certain lessons which I thought an entrepreneur will find helpful. These are applicable regardless of the stage one finds themself i.e. conceptualising ideas, start-up, growth etc.

1) Start where you are with what you have

I have heard well-established entrepreneurs saying, “If you keep finding reasons why you can’t start, then you are not an entrepreneur.” An entrepreneur does not wait for perfect conditions to start something. Once you’ve identified a problem or a need, assessed that you can provide a solution to the problem and people are willing to pay for the solution, forge ahead. You don’t have to wait until you have a well-crafted business plan. If you do not start, you will not know whether something can work. Starting in the garage implies using whatever you have at your disposal and not making excuses.

2) Start with who you have

We often take people around us for granted. I always refer to a conversation I had with a close friend about what takes place at braais, where people stand around the braai talking about how the meat is cooking and comparing this braai to previous ones. Often, they never discuss anything else; they don’t ask each other how they are or about their lives. The answers to issues you might be having might be right there, with those people around the braai. Friends and family can offer advice, give access to connections/networks, assist with certain skills for your enterprise (for low fees or for free) and even help in lending you some funds for your entity.

3) Keep your costs low

The allure of wanting to create an impression that ‘you have arrived’

because you’re now running your own enterprise is the downfall for many businesses. Entrepreneurs like Jeff Bezos of Amazon started in the garage in order to keep costs low. Instead of rushing out to rent office space, use what you have at your disposal. Initial meetings with suppliers or clients can be easily conducted at their offices or at coffee shops, public libraries etc. You don’t need to rush to buy an office printer, for example, when you can make do with using print shops. In fact, you might need to take a step back to examine if you ‘really need to print’, or whether things can be done electronically/online.

4) Set up systems and processes while starting out

One of the hassles that comes with being an entrepreneur is having to wear multiple hats at the same time. You might need to carry out various roles – product developer, business development manager, sales person, marketer and financial manager – all at the same time. Although this is okay in the early days, this is not sustainable. As you start operations, document the Standard Operating Procedures (SOPs) you use as you go about these different roles. By doing this you set the stage for developing a system where someone can come in and take over from you. This will free up your time so you can focus on what is essential, which is growing the business. From the SOPs, job descriptions can be developed and you can decide what can be done inhouse and what can be outsourced.

limited or constantly at loggerheads with you. How many times have you heard about people who constantly clashed with their bosses because they were ‘too ambitious’ and then went on to start their own ventures? You don’t want to be counted among those who that are not entrepreneurial. A good exercise to do is to look at an entity which is at the peak of the industry you are in (or similar), look at the things they have in place and see how you can emulate (not copy) them. Do things such as company registration, getting tax clearance certificates, developing a corporate identity: logo, branding, stationery etc. Get accreditations and clearances that are important for your business to set it up for growth. Start in the garage, but be global in your thinking! Tatenda S Zingoni is the Founder and MD of IDI Group Holdings (Pty) Ltd. Identify Develop Implement (IDI) focuses on research, consulting and strategy. Mr Zingoni and his team of Associate Consultants have extensive experience in both the public and private sector across multiple industries. The team has conducted work focused on Business Support and Coaching, Monitoring and Evaluation, Industrial Development Zones, Agriculture Value Chain Analysis, Engineering and the Built Environment, Education, Mining and Healthcare. Contact Mr Zingoni on tatenda.zingoni@idigroupholdings.co.za

5) You can start small but think big

Although you might ‘start in the garage’, have a bigger vision. One of the differences between you and founders of those multi-billion dollar businesses is your vision. If all you hold as your goal is to be able to provide for your family, you will not be as demanding on your business or expect it to do more. For some people, the goal might be to be the biggest in their neighbourhood, section, surburb or city... you will not grow beyond your vision. As the visionary you should have big, scary, audacious goals. If you think small, the team you bring on board might find themselves

Tatenda Zingoni Questions? tszingoni@gmail.com 37

BUSINESS

Captive markets provide a surplus of opportunities ZAKHELE BUTHELEZI offers advice on how to capture an audience that will make a difference to your business

BUSINESS

hat is a captive market? Let’s consider Gautrain commuters, who take approximately one million trips each month. Or the more than 50,000 students on the UJ (University of Johannesburg) campus, the 25,000odd students at UCT (University of Cape Town), the passengers on the MyCiTi bus system who take approximately 0.4 million trips each month across Cape Town and its surrounding areas. There are also the 46,000 employees and contractors at Eskom who report for work every day across the company’s various business centres and operating locations. Let’s not forget the high volume of travellers on the 590km N3 between Durban and Johannesburg, travelling in from 500 to 1,600 vehicles in each direction on a single section of the highway in any given hour any day of the year. Each of these spaces, corridors and hubs of activity make up a distinct captive market with its own characteristics and, more interestingly, buying power. To put the power of a captive market into context and the opportunities that exist in that market, and find out how to exploit that market, we should take a look at some of the 40-odd commercial radio stations in South Africa and see if we can learn something from them, particularly those commercial radio stations that have the lion’s share of advertising revenue (an income that totalled about R4.5 billion in 2015). These radio stations include 94.7 (Highveld Stereo), Jacaranda FM, East Coast Radio and Metro FM. Remember, the revenue income from advertising makes up about 90 percent of total revenue for all the country’s radio stations, commercial and community. The question is: how did 94.7, Jacaranda FM and the likes of East Coast Radio get to the top in terms of commercial success ahead of competitor stations? If you ask the founders of any of these radio stations, you will probably get a well-polished response about vision and market segmentation, and if you ask the station’s current management, they will give you management speak with a lot of truth in it. But, whatever they 40

say, you still won’t have a grasp of how these stations made it to the top. So what, in essence, makes these radio stations claim the lion’s share of commercial revenue income? It’s the difference in their strategy that can be summed up in one simple phrase: taking advantage of the surplus economic opportunity presented by captive markets, and the buying power of various types of captive markets. East Coast Radio’s strategy is easiest to explain. It’s a Durban-based station that airs in the city and surrounds. Durban is home to an extremely affluent Indian population. The station took this into consideration when looking for advertisers, and identified thousands of Durban’s commercial nodes and business hubs. By targeting their captive market, East Coast Radio became the most popular station in Durban. Highveld Stereo and Jacaranda FM also identified and targeted extremely lucrative captive markets. This model has become a blueprint for succeeding as a radio station. Now let’s take another captive market, the student population at any given university campus. These students fit into different categories of captive audiences, and to cater for them, the campuses have various services and offerings, including fast food outlets and cafes, bookshops, stationery stores… Each university council has a management policy regarding the conditions and duration of tenure for various business operators located on campus. These businesses can obtain rights to operate on a campus on a fixed term basis that can be renewed, or on a term that suits the university and the type of operator. Exploiting the buying power of an accessible captive market is a worthwhile consideration for any business that wishes to grow long term. Currently, most economic benefits available in sizeable captive markets such as the CBDs of major cities and other commercial hubs are taken up by businesses with enough capital to gain market entry. But, there are numerous captive markets that remain untapped, sometimes because they are inaccessible, and at other

times because nobody has thought of an opportunity to capture that market. In other countries, like Tanzania for example, captive markets are exploited by small businesses with a knack for creativity and operational flair: an example is the 440km A7 and B129 stretch of road between Dar es Salaam on the coast and the city of Dodoma, located inland. In fact, this geographic setting is comparable locally to the N3 corridor between Durban and Johannesburg. In Tanzania, hawkers hop onto buses travelling between the two locations and sell their wares to passengers. In South Africa, hawkers cannot do this legally, so this is not a viable option for them. In South Africa, captive markets and the economic opportunity they present have been well exploited by some, to measurable advantage (like the commercial radio stations mentioned above). However, the concept of captive markets is not exploited by most small and medium businesses. There are opportunities to tap into these captive markets if you have the foresight and creativity to come up with a business plan. Recommended read: Fooled By Randomness: The Hidden Role of Chance in Life and in the Markets – by Nassim Nicholas Taleb

Zakhele Buthelezi Questions? zakhele.buthelezi@chevron.com

B-BBEE Level 1

ISO 9001:2015

Steering and Assisting International Companies based in South Africa with a range of Locally Produced Electronic Equipment.

CALL US ON

WRITE TO US AT

VISIT US AT

T+27 (0) 12 661-6295 F +27 (0) 12 661-3990

P.O. Box 10150, Centurion, 0046, South Africa

32 Panorama Road, Rooihuiskraal, Ext 1 Centurion, 0154, South Africa

EMAIL US ON General info@sos-ind.co.za Webmaster webmaster@sos-ind.co.za

FIND US AT GPS Position 25° 53´08.1 S 28° 09´25.1 E

Images: Gallo Images/Getty Images/iStock

LEGISLATURE

How to cancel a residential lease CHANTELLE GLADWIN, Partner at Schindlers Attorneys, and RENAND PRETORIUS, a Candidate Attorney with the company, explore cancelling a residential lease, and explain the proper procedure necessary when terminating a residential lease as a result of a breach by a tenant

Two types of notice periods

It is important to distinguish at the outset between two different and important notice periods. The first is relevant when trying to cancel a lease before the agreed fixed term of the contract has run its course. Let’s call this the ‘early termination notice period’. Sometimes leases have these clauses and sometimes they don’t. If there is no such clause, then the lease cannot (save for in situations where the Consumer Protection Act or Rental Housing Act apply) be cancelled early, unless both parties agree to this. The second notice period becomes relevant when a landlord or tenant has breached the lease, and the other party wants to give written notice for the breach to be remedied. Failure to remedy the breach in the stipulated time period will entitle the innocent party to cancel the lease and, where relevant, claim damages suffered from the offending party. Let’s call this the ‘breach notice period’.

Court days vs calendar days vs business days

Before delving into the applicable acts, it is also important to note that leases usually refer to calendar days, meaning every day on the calendar, including weekends and public holidays. The Consumer Protection Act specifically refers to business days in section 14, meaning that you must ignore weekends and public holidays. Sometimes laws or leases will refer to court days, meaning you only count

days that court is open and sitting, although references to court days will be few and far between in lease situations. Where the types of days are not defined, you must regard them as being calendar days, and include weekends and public holidays.

The Rental Housing Act

The Rental Housing Act provides that if a tenant remains in occupation of the properly after the period defined in a written lease expires, the lease will continue to run on the same terms and conditions as contained in the written document, save that the duration of the lease will be only one month (i.e. a month-to-month lease situation will arise). In these circumstances, the Rental Housing Act expressly provides that the notice period for cancellation by either party is one month. This applies only to situations where a landlord wants to stop the lease from renewing for another month – it does not apply to the landlord cancelling as a result of the tenant’s breach. The Rental Housing Act does not stipulate how many days the breach notice period must be.

The Consumer Protection Act

The Consumer Protection Act applies to the supply of goods and services within South Africa. This Act expressly defines residential accommodation as a service, which affects residential leases. The application of the Act 43

LEGISLATURE is only excluded in two cases; firstly, where the residential lease is concluded between two juristic entities and where the lessee has an annual turnover or asset value of more than R2 million; and secondly, where the lessor is not leasing the property in the ordinary course of business. This Act provides that a consumer (i.e. a tenant) can cancel a fixed term agreement (i.e. a lease) for any reason whatsoever – which may be entirely unrelated to a breach by the supplier (i.e. the landlord) – by giving the landlord 20 days written notice of the cancellation. In the event that the tenant elects to cancel the lease before the lease would otherwise have ended in the ordinary course, then the landlord is entitled to a ‘reasonable cancellation penalty’, the guidelines for which have been provided for in Regulation 5 of the Consumer Protection Act. Some landlords simply charge the tenant for the whole amount that would otherwise have been owing in terms of the lease had it run its full term. This is not necessarily the correct approach. Regulation 5 expressly draws the parameters of ‘reasonableness’ in this regard and lists a number of notable factors, including: the length of the notice period by the consumer; the reasonable length within which the landlord would be able to procure a new tenant; and general practice of the industry. Looking at the factors holistically, it is clear that between one and two months rental would amount to a reasonable penalty, along with any further damages, claims and outstanding rentals incurred during the course of the lease. A landlord, on the other hand, can only cancel a tenant’s lease if the tenant has breached the lease, and if after having given 20 business days written notice to the tenant to remedy the breach, the tenant has failed to do so. This is critical, because it applies despite what the lease says – it thus overrides the provisions of the lease (or the common law, which would have applied if certain important provisions of the lease agreement were accidentally not agreed upon). Consequently, the Consumer Protection Act only deals with the breach notice period and not the 44

early termination notice period. Days calculated in terms of section 14 of the Consumer Protection Act are business days, meaning you ignore weekends and public holidays. The Consumer Protection Act also expressly states that where its provisions conflict with those of any other law, the law that gives the consumer (the tenant) the most protection will override the other. This is critical for reasons discussed below.

Common law

Common law is relevant because it is the ‘default’ position that ‘kicks in’ when the parties omit to reach agreement on certain terms of a lease. In fact, this occurs quite often. For example, the parties might forget to agree on how many days written notice is required for a tenant to make good a breach before a landlord can cancel, or how many days/months notice must be given if either party wants to terminate the lease before its natural end. In terms of our common law, when notice is given to terminate a lease agreement, the notice must run for the duration of a calendar month, meaning that notice cannot be given from 15 April to 14 May for example, as it needs to be given from the first of any particular calendar month until the last day of that particular calendar month. In addition, our common law provides that notice periods coincide with the rental payment intervals; meaning that if you pay rent every month, the notice given must be at least one month in advance. In relation to the breach notice period, if the parties fail to agree on this, the law provides that it will be a ‘reasonable’ period. What is ‘reasonable’ depends on the facts of each case, and the court will decide this. So, if the parties agree that the lease can be terminated by either one of the parties before its natural conclusion, but they forget to stipulate how long the early termination notice period must be, then the answer is that at least one calendar month’s written notice is required to bring about an early termination of the lease by either party, and it must be given from the first of the month to the end of that month. This is subject to the proviso that this notice period is

considered ‘reasonable’ – each case is to be judged on its own facts.

Conflict of laws

Because there are so many laws that apply to residential leases in any given situation, it is often difficult to determine the number of days that must be given for breach and cancellation notice periods. The common law will always be subservient to any legislation that has been subsequently enacted to deal with a particular problem. Any legislation enacted that deals with the problem in general will normally be subservient to legislation subsequently enacted to deal with the problem specifically. To confuse the matter further, the Consumer Protection Act (which is not specific to leases) says that if its provisions conflict with any other law, the law that provides the most protection to the consumer will apply.

Several questions arise:

1. If your lease says seven days’ breach notice is required, but the Consumer Protection Act says 20 business days’ written notice is required to cancel the lease, how do we reconcile the two? 2. Is it still possible to cancel a lease after the ‘third strike’ (i.e. third breach) by a tenant, without giving further notice, as many leases provide for, in light of the Consumer Protection Act? 3. If a lease agreement (either oral or in writing) does not specify the early termination period, does the Consumer Protection Act ‘kick in’ and result in a situation where the lease is not prematurely terminable by a landlord at all, and is only terminable on a breach by the tenant?

# 1: Breach notice period and cancellation period

Firstly, look to the provisions of the lease itself. Most leases contain a breach clause, which indicates a period of a number of days that are necessary to be given as notice to the tenant of a breach. If there is no breach period specified, it will be a ‘reasonable period’ in terms of the common law. If you give notice of the breach, and it is not remedied

LEGISLATURE in the breach notice period, this means that you can take action to sue for whatever is owed or even issue summons and attach the tenant’s goods by evoking your landlord’s hypothec, but you cannot cancel the lease and evict. The reason for this is that you need to have given 20 business days’ written notice to cancel the lease (and therefore to evict, because you can’t evict without having cancelled the lease) in terms of the Consumer Protection Act. So, if you ultimately think that you would like to or need to cancel the lease and evict, you can only do this after 20 business days’ written notice has been given – during which time the tenant has failed to remedy the breach. Many landlords include both time periods in their breach notice, saying that if the breach is not remedied in seven calendar days (or whatever number of days is stipulated in the lease, or whatever number of days is reasonable in terms of common law), then they will take action to recover amounts owing; but if the breach is not remedied in 20 business days, then the lease will be cancelled and the tenant evicted. This way you give one notice, but it is valid for both time periods and the tenant is adequately warned of the consequences of noncompliance, as well as how and when he needs to remedy the breach to avoid those consequences.

#2: Third strike clauses

These are clauses in a lease that provide that once a tenant has breached the lease (usually with specific reference to late payment) three times, the landlord is entitled to cancel the lease without further notice to the tenant, In instances such as these, the landlord would not give the tenant a third opportunity to remedy the breach, but would simply send a cancellation letter. However, it is questionable whether this is legally permissible in light of the Consumer Protection Act, which provides that the landlord may only cancel the lease on 20 business days’ written notice, and after the tenant has failed to remedy the breach. It thus seems that these ‘third strike’ clauses are no longer legally valid. In the author’s view, this is a grave injustice to landlords, because

it means that they are forever doomed to accept late payments and other breaches of the lease by their tenants. Provided that the tenant remedies the breach with the 20 business days’ notice period, the landlord will not be entitled to cancel. The only way to get rid of a pesky tenant in such a situation would be to allow the lease to run its full course and ensure cancellation without further renewal.

#3: Is there an early termination period if the lease does not specify, and what is it?

1. If the parties have agreed that there is an early termination period applicable and on what that notice period is, then either party can cancel by providing the requisite notice to the other side. This will apply as long as the lease is not affected by the provisions of the Rental Housing Act – i.e. where the written lease expired and the parties continued with the lease on a month-to-month basis thereafter. 2. If the lease is a month-to-month lease as contemplated in the Rental Housing Act, then it can only be terminated by either party by providing one full calendar month’s written notice. 3. If the parties did not contemplate that early termination would be permissible, then it is not an option – other than as provided for in clause 3.2 above, which is more a refusal to renew the lease than an early termination of the lease. 4. If the parties have agreed that there is an early termination period applicable, but they have not agreed what that notice period is, then common law will kick in and one full calendar month’s notice should suffice – provided this is ‘reasonable’ in the circumstances. 5. In some instances, the Consumer Protection Act will be applicable – which means that if there is an early termination clause providing for termination by agreement where the tenant has not breached the lease agreement, the landlord will be precluded from giving such notice by virtue of section 14 of the Consumer Protection Act, which stipulates that fixed term

agreements can only be cancelled on 20 business days’ written notice where the tenant has actually breached the agreement and where the breach has not been remedied. However, it appears that this will only apply where the Consumer Protection Act is more beneficial to the consumer than the other laws that apply to the same scenario. This is because the Consumer Protection Act provides that where there is a conflict with its provisions and any other law, the law that is the most beneficial to the consumer will apply. The authors believe that this is an unreasonable situation for the legislature to have created for the property industry, as it creates massive uncertainty as to when early termination clauses will be upheld, because what is beneficial to the consumer in one instance may be prejudicial to the consumer in another. Hopefully, the courts will give guidance on how to navigate this mess soon – but, until then, take care when relying on early termination clauses as they may be invalidated by the Consumer Protection Act.

Conclusion

Consult an experienced property attorney before sending breach and/or cancellation and/or early termination and/or renewal or non-renewal notices to ensure you don’t find yourself supplying your tenant with accommodation (and paying them damages) for unlawful eviction.

Partner, Chantelle Gladwin Questions? gladwin@schindlers.co.za Associate, Renand Pretorius Questions? pretorius@schindlers.co.za

Images: Gallo Images/Getty Images/iStock

Goods in Transit Insurance: a South African perspective How Goods in Transit Insurance (GIT) protects the products your business is responsible for while in transit. By VERNON SUBBAN

outh Africa has a largely transport-intensive domestic economy created by the need to move goods from ports to inland centres of commerce. The transport sector can be viewed as one of the key contributors to our competitiveness in the global market. At any given time, there is a considerable volume of goods on our roads as the largest percentage of our freight relies on this mode of transport. For those numerous businesses whose bottom line is dependent on goods arriving safely from one point to another, this can become a daunting task. Goods in Transit Insurance will protect the goods your business is responsible for while in transit against loss, theft or damage. 46

What is GIT Insurance?

The moment those trucks or vehicles carrying precious goods leave a business premises and get onto our countryâ&#x20AC;&#x2122;s roads, they become vulnerable to numerous risks. Since the first recorded truck hijacking occured around 1989, it has become a multibillion rand business for criminals. Coupled with other perils and hurdles, this could lead to devastating financial loss for these businesses. Goods in Transit Insurance (GIT) covers goods against loss, damage or late delivery, while they are in transit from one place to another or being stored during that journey. It includes transportation of your own goods from your business premises to your

client as well as goods delivered on consignment. So, if you are a haulage contractor or transport operator, then your clientâ&#x20AC;&#x2122;s goods are also safeguarded while on consignment (goods are considered to be on consignment for the entire transit period even if the buyer/consignee settles cash on delivery). The amendments to the National Road Traffic Act 1996 in 2015 require that transport operators provide evidence that both the vehicles and goods to be transported on our roads are insured for damages that may occur. The transport operator also needs to have a written declaration of the nature and quantity of goods being transported. Critics have commented on the vagueness of this

BUSINESS INSURANCE amendment; however, cognisance needs to be taken of its attempt to address issues of compulsory GIT/ vehicle insurance and the issue of overloading. So current agreements and standard trading terms would need to incorporate the terms of the new amendment, especially in respect of who is responsible for loss or damage to goods in transit in the business transaction.

What does GIT Insurance cover?

The following goods that are transported within South Africa are generally covered by GIT Insurance: • Raw materials; • Goods and materials in the process of being manufactured; • Goods that belong to someone else for which your business is responsible; • Ropes, chains and packaging material used to transport goods; • Loss of goods due to a fire or accident; • Loss or damage caused by theft or hijacking. The GIT cover extends to include, among others: • Deterioration of refrigerated stock: In the event of transporting perishable goods that are dependent on refrigeration, it becomes essential to add this aspect due to possible losses from cooling malfunctions. • Cover in other African countries: Should your delivery routes extend across the country’s borders, this needs to be specified on your policy as it will ensure that you have cover should anything untoward occur in a neighbouring country. • A certain period of storage is covered during the course of transit provided that the vehicle is kept in a locked building and there is evidence of forced entry. This cover is essential when there are any unexpected delays, but will not cover planned storage. The nature of the transport/logistics industry today dictates the necessity for bespoke GIT Insurance policies, considering the number of exclusions in standard policies. GIT Insurance will provide uninterrupted cover from

the moment goods are loaded at your premises, or the manufacturer’s or producer’s premises, to the moment it is delivered to the client.

Do you have the correct GIT cover?

You could be a large fleet cross-border transporter or a one-man ownerdriven outfit, but whoever you are, you need to ensure that you have the right GIT Insurance cover. The most important aspect to consider is to make sure you are insured for the maximum possible value of your goods being transported. Opting for an average amount would certainly lower your premiums, but would result in you being paid out for undervalued goods in the event of a claim being made. Be familiar with packaging, loading and unloading terms and conditions as these could also influence the outcome of a claim. Your policy conditions need to be checked for exclusions like unusual loads, for example ammunition and other hazardous goods, so that they can be included if needed. There will be a raise in premium as the cost of GIT Insurance is directly dependent on the level of risk. Weight-rated restrictions may also apply. Goods that are left unattended will be excluded from cover, so drivers need to be educated on the importance of vigilance while goods are in transit.

safe and uneventful delivery. Transport companies that transport high target goods, such as electrical gadgets, computers and other soughtafter items, generally dispatch two drivers to ensure an uninterrupted trip. Due care and precaution needs to be taken when packing and unloading goods as well. Continuous innovation in telematics has become critical to the success of monitoring goods in transit through our road networks with resultant cost savings. Insurers offer reduced premiums for compliance with comprehensive risk management programmes and also offer bespoke GIT Insurance as a value adding service to businesses.

Conclusion

Road transport remains an essential service that drives our economy and ultimately affects our everyday life. It is the dominant way we move large volumes of goods from one point to another in southern Africa, although capital and labour intensive. Ensuring that goods in transit arrive safely at their destination, therefore, becomes the lifeblood of many businesses. Goods in Transit Insurance will continue to safeguard these businesses from catastrophic financial losses as a result of hijackings, theft, mishandling and other factors, keeping them part of this burgeoning aspect of the economy.

Risk management – a vital aspect of GIT

With the value of goods that are lost or stolen in transit soaring and clients demanding perfect order fulfilments, risk management for businesses in the transport and logistics industry cannot be over-emphasised. Goods owners need to choose reputable carriers/transport operators who have strategies in place to minimise losses, including, among others, strict driver management programmes. For example, drivers who transport hazardous materials, livestock and refrigerated trucks need to be specifically licenced to do so. Delivery routes need to be carefully planned to have minimal stops before delivery. Tachographs allow transporters to monitor drivers’ vital activities, as they are ultimately the kingpins to a

Vernon Subban Questions? vernon@subban.co.za

BOOK REVIEW

Decolonising Knowledge for Africa’s Renewal Compilation of discussions and philosophies from various experts on pan-Africanism, decolonisation of education and a resulting African-focused one Author: Edited by Prof Vuyisile Msila Reviewer: Sharon Preston

n 2015 and 2016, South African higher education students stood up to demand not only a free education, but also a decolonised, African-focused one. The calls for decolonisation of knowledge are the ultimate call for freedom. Without the decolonisation of knowledge, Africans may feel that their liberation is rudimentary and that their efforts to shed Western dominance have all come to naught. Over the years, various African leaders, including Steve Biko, wrote about the need to decolonise knowledge in Africa. The call for decolonisation is largely being equated with the search for an African identity that looks critically at Western dominance. Biko sought for black people to understand their origins; to understand black history and affirm their black identity. These are all embedded in the struggle to decolonise and search for African values and identities. The contributors in this book discuss several connected themes that define what Africa and the diaspora require for a society devoid of colonialism, one that is ready for a renewed Africa. “The discussions we develop and the philosophies we adopt on pan-Africanism and decolonisation are due to a bigger vision and for many of us the destination is African renaissance,” they write. Everyone has a role to play in realising African Renaissance – government, churches, universities, schools, cultural 48

organisations all have a role to play in this endeavour. The contents include: • Tradition and Foundation for African Renaissance – Polycarp Ikuenobe • African Philosophy and African Renaissance – Vuyisile Msila • A critique of Africanised Curricula in Higher Education: Possibilities for the African Renaissance – Mago Mndawe • Internationalisation and Africanisation – Jacqueline Witthuhn • The Pan-African Identity: Why conflict and community identities continue to undermine collectivism – Wendy IsaacsMartin • The Double-edged Sword: African languages under siege – BXS Ntombela • Towards Africa’s Renewal: Decolonisation, Black Consciousness and the youth – Vuyisile Msila • Democratising and Sustaining the Development Process in Africa: Some basic concepts and options – OJ Obodozie • The Struggling Urban Woman: Gendered identities (re) defined and (re) interpreted in new social environment – Vuyisile Msila • Inventing Mythologies, Rational Conflict in a State of African Polity – Saba Saakana • Offerings of Women in the Transformation of African Higher Education – Collins Potokri

Prof Vuyisile Msila, who edited the book, is the Head of the Institute for African Renaissance Studies at Unisa. His research focuses on general leadership and management as well as professional development of principals. He has also conducted research in African leadership models and has a keen interest in the Africanisation of the curriculum.

ORDER INFORMATION The book can be purchased from Knowledge Resources: Ground floor, Yellowwood House, Ballywoods Office Park, 33 Ballyclare Drive, Bryanston. Contact 011 706 6009, orders@knowres.co.za Available online at: www.kr.co.za

SCHOONOORD DRY clean & laundry

Schoonoord dryclean and laundry has been servicing the hospital and minning sectors with drycleaning and laundry services since 1988, steered by Mr Kwalepa Moloma. An exclusive personal service, reliable pick up and delivery and the impeccable attention to detail and finish have meant that scdl dry cleaning company has been rated the best in sekhukhune, and now we want to branch off to different provinces.

P.O. Box 511 Sekhukhune Limpopo 1124 | 91 Main Road Schoonoord 1124 T 013 260 1030 | F 013 260 1640 | C 082 457 7095 | E Info@Sdcl.co.za Web www.sdcl.co.za