Business Update Issue 17 by Yes Media

BUSINESS

A publication for progressive business

BUSINESS IN THE TIME OF COVID-19 ECONOMY 2020 A window into the impact of the novel coronavirus on the local and global economy

TRADE IN CHINA South Africa looks to lure more investment from China in a bid for revitalisation

RECLAIM THE STATE Government is acting to rebuild the ethical foundations of the state

CYBER RESILIENCE The digital world has taken business to new frontiers of advancement and of threat

Issue 17 | May 2020

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Contact: Tebogo Ratlabala Cell: 083 754 4192 Email: info@casnan.co.za

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EDITOR’S MESSAGE

TOWARDS THE RELAUNCH OF SOUTH AFRICA’S ECONOMY In these unprecedented times, business unusual has taken on a whole new meaning. The Covid-19 pandemic has disrupted business as we know it, indeed life as we know it, and sent the global economy into a deep recession. South Africa has not escaped this crisis. In weighing up the cost to lives and livelihoods, President Cyril Ramaphosa has been highly praised the world over for his timely and correct handling of the pandemic. Through a hard lockdown and slow lifting thereof, we have stemmed the

flow of the virus, allowing much-needed time to prepare for what looks to be an extremely challenging time ahead. Let’s face it, from the downgrades and business closures, to the rapidly increasing unemployment figures and hunger crisis, things do not look good. But there is hope; we are a resilient people. The government has secured a R500-billion stimulus and relief package to address the social and economic fallout. There have been interest rate and tax cuts and increased liquidity in the financial system. In this edition of Business Update, we unpack the new normal and what this means for the future of business in South Africa.

A strong theme running throughout is the role of SMMEs in relaunching the economy. The takeout is that these small businesses have the potential to lift us out of this quagmire, if the right measures are taken to curb the impact of Covid-19 on SMMEs and break down barriers impeding small business. We need to use this crisis to rethink economic policies to put SMMEs, and the country, back on a growth path. Enjoy the read!

Sasha Muller

Editor Sasha Muller

Managing Editors Alwyn Marx and Olivia Main

Chief Albert Luthuli House 54 Pixley Ka Isaka Seme Street Johannesburg

Art Director Clare Schenk

Contributors

Publisher

Joanmariae Fubbs, Tony Healy, Tim Hughes, Jeff Jayson, Ulrich Joubert, JP Landman, James Maposa, Clement Marumoagae, Sisa Njikelana, Felix Nkunjana, Lisa Schmidt, Mapula Sedutla, Vernon Subban, Kyle Venter, Tatenda Zingoni

Yes!Media Suite 20-301B Waverley Business Park, Kotzee Road, Mowbray, Cape Town PO Box 44383, Claremont 7735 Tel: +27 21 447 6467 www.yesmedia.co.za

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Shutterstock.com Business Update is published by Yes Media. Opinions expressed in Business Update are not necessarily those of Yes 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.

National Sales Manager Jan Weiss

Project Sales Crosby Moruthane, Tatenda Musonza, Reginald Motsoahae, Henry Musoke

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20 Contents

8 Cover story Small business is crucial to the relaunch of South Africa’s economy after the massive global recession brought on by Covid-19. By Joanmariae Fubbs

40 Small business Advice from the Small Business Site on how getting a customer’s attention and starting a venture on the right foot are key to building a solid company. By Mapula Sedutla

16 Economy A sobering look at the impact of Covid-19 on the global economy. By Ulrich Joubert

46 Skills development It’s never too late to learn valuable entrepreneurial skills that could make your business thrive and give you the edge over competitors. By Tatenda Zingoni

20 Investment South Africa is looking to China for bilateral trade to reignite the economy and increase foreign investment. By Felix Nkunjana 24 Empowerment Broadening participation in economic renewal must go hand-in-hand with empowerment for the participants in policies and programmes. By Sisa Njikelana

26 Government Rebuilding the ethical foundations of the state will take time and deliberate action. By JP Landman 30 Labour Law What are apprehensions of bias and what part do they play in the arbitration arena? By Tony Healy 36 Corporate reputation This is not only important for the bottom line; the very sustainability of a company depends on it. By Tim Hughes 38 Cyber insurance The Fourth Industrial Revolution has plunged us into a digital world, where threats to business abound. By Vernon Subban

48 Retirement Funds Make the time to understand the laws and rules of your retirement fund or you could be in for an unpleasant surprise. By Clement Marumoagae 52 Tourism The tourism industry is demanding stricter rules for Airbnbs, resulting in the proposed Tourism Amendment Bill. By Lisa Schmidt and Kyle Venter 54 SMME Development Valuable guidance on making money by developing your enterprise. By James Maposa 58 Human resources The recruitment industry worldwide is getting a big shake up, by bringing job seekers and companies face-to-face. By Jeff Jayson 62 Book review The Entrepreneur’s Playbook: from Rookie to Rainmaker in Seven Steps by Sandy van Dijk and Lesley Waterkeyn offers actionable advice for entrepreneurial success.

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TG MESSAGE

SMALL BUSINESS AT THE FRONTLINE OF ECONOMIC GROWTH ANC Treasurer General, PAUL MASHATILE, says small and medium businesses are the backbone of any thriving economy that benefits the many and not the few

ne of the immediate tasks identified by President Cyril Ramaphosa in his State of the Nation Address was to place the South African economy on a path of inclusive growth. Central to this task is the need to build a resilient and growing small and medium enterprise sector. Small firms are a vital ingredient for inclusive growth. They are key drivers of employment creation, including for the low skilled. They enable innovation and productivity and they contribute in strengthening local economies. In recognition of the critical role that the small businesses sector plays in building an inclusive economy, government has introduced a number of measures to support the sector. These include initiatives to expand access to finance and markets. They also include ongoing efforts to improve the ease of doing business for small firms as well as the establishment of incubators across the country. In the State of the Nation Address President Ramaphosa announced a set of targeted measures to provide substantial additional support and opportunities to small and medium businesses. It was announced that plans are underway to designate 1 000 locally produced products that must be procured from small businesses. New regulations are now in place to enable investigation and action against abuse of buyer power and price discrimination to help even the playing field for small businesses and emerging entrepreneurs.

The Procurement Bill, which will soon be tabled before Parliament, offers enormous benefits for small and emerging businesses. Government efforts to cut the cost of data will also benefit small businesses. Small-scale farmers will receive support from the accelerated land reform programme; in the form of training, finance, extension services and implements to enable them to become successful farmers. Small and medium businesses also stand to benefit from the extensive list of shovel-ready projects which will be implemented through the Infrastructure Fund. These projects are in areas such as student accommodation, social housing, independent water production, rail freight branch lines, embedded electricity generation, municipal bulk infrastructure and broadband roll-out. The president also announced partnerships with the private sector to develop blended financing options and attract skills needed to prepare and execute infrastructure projects. This will not only increase the pool of funding available for infrastructure projects but also the skills base that small and medium firms can draw from, especially when dealing with mega infrastructure projects. As part of placing our economy firmly on a path towards inclusive growth, the State of the Nation Address made definitive commitments to fix the fundamentals of our economy, deepen economic reforms, tackle the pressing

problem of youth unemployment, accelerate land reform and build a capable and ethical state. The speedy and successful implementation of all these commitments will benefit small and medium enterprises in as much as it will benefit the economy and our society in general. Entrepreneurs and small business owners also stand to benefit from the decisive measures announced by the president to reduce the time it takes to register a company to one day, as well as measures to deal with inefficiencies and congestions in our ports. Part of the work we must do to build a resilient and growing small and medium business sector is to strengthen efforts aimed at promoting and encouraging an entrepreneurial spirit and culture in our country, specifically among young people. Equally, as we continue to attract new domestic and foreign investment into our economy, we must seriously consider how to better showcase the investment potential of our countryâ&#x20AC;&#x2122;s small and medium businesses. This will help small and emerging firms to attract additional investment, especially from the private sector. We must also be unrelenting in our call that government and the private sector must pay small businesses on time for work done. We must do all of these things because small and medium businesses are the backbone of any thriving economy that benefits the many and not the few.

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BUSINESS IN THE TIME OF COVID-19 Measures to combat the impact of Covid-19 on SMMEs and to break down barriers impeding small business from reaching its full potential are crucial to the economyâ&#x20AC;&#x2122;s relaunch, writes JOANMARIAE FUBBS. In fact, small business is the future!

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COVER STORY

he far-reaching lockdown measures to contain the spread of the coronavirus (Covid-19) are having a significant impact on the economy of South Africa. All businesses are facing rigorous challenges as society reorders itself, but it is the SMME sector that is more vulnerable and is experiencing the greatest pressure from the pandemic. Yet this sector is critical to our economic revival once the Covid-19 crisis subsides. Globally, more than 95% of operational enterprises are SMMEs employing between 60-70% of the working

population. In Africa, small businesses contribute up to 60% of all employment. Indeed, the National Development Plan (NDP) identifies small, medium and micro enterprises as the vehicle to create 11 million jobs, thereby contributing 60-80% of our GDP. That Covid-19 has been devastating to the economy is without question. Statistics South Africa has just released the results of a rapid response survey conducted in the two-week period from 30 March to 13 April 2020. A total of 707 businesses in the formal sector responded to the survey, outlining the pandemic’s impact on turnover, trading, workforce, imports and exports, purchases, prices and business survival. According to the report, five in six businesses experienced a drop in turnover over the reference period. Eighty-five, or 4% of businesses reported turnover below the normal range. Respondents in the construction, real estate and other business services as well as the transport industries were the most affected by lower than expected turnover. At least 42,2% of respondents indicated they are not confident that they have the financial resources to continue operating through the Covid-19 outbreak. When asked how long business can continue without turnover, 54% of respondents indicated that they could survive without turnover for one to three months. Half of the businesses surveyed have temporarily closed their doors – the industries reporting the highest percentages of temporary closure or paused trading were construction, manufacturing, trade and mining. A second survey covering the period 14-30 April 2020 includes additional questions that provide further insight into the impact of the Covid-19 pandemic, and the survey scope was also expanded by including the agriculture and hunting sectors. However, one of the limitations of this qualitative survey is that micro businesses are excluded. Nevertheless, it found that 89.6% of respondents reported that business turnover was below the normal range: ❱ 47,9% indicated temporary closure or paused trading activity ❱ 508 of responding businesses with

All businesses are facing rigorous challenges as society reorders itself, but it is the SMME sector that is more vulnerable and is experiencing the greatest pressure annual turnover less than R2-million indicated that they have temporarily closed or paused trading ❱ 8,6% have permanently ceased trading ❱ 36,4% reported the laying off of staff in the short term ❱ 45,6% expected their workforce size to decrease in the two weeks following the reference period ❱ 32,9% indicated that prices of materials, goods or services purchased increased more than normal ❱ Access to financial resources: 38,3% indicated a decrease, while 37,7% indicated access to financial resources remained the same ❱ 30% of businesses responding to the survey indicated that they have applied for financial assistance using government relief schemes ❱ 29,7% indicated they can survive less than a month without any turnover, while 55,3% can survive between one and three months ❱ 50,4% of the workforce were unable to meet business demands, and 35,7% of the workforce were able to meet business demands (the rest reported “not sure”) ❱ A majority of respondents (56,3%) indicated that their businesses would be operating during the level 4 lockdown period. Despite these depressing statistics, Government had already laid out plans to energise the SMME sector. In the State of the Nation Address (SONA), President Ramaphosa committed the Presidency to drive a comprehensive plan to create two million jobs within the next ten years.

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COVER STORY

During the Second Investment Conference in November last year, President Ramaphosa reiterated his call for the upscaling of SMMEs to diversify South Africa’s economy Noting that young people must be prepared for the jobs of the future, he confirmed that the private sector has committed to invest R840-billion in 43 projects over 19 sectors, with the resultant creation of 155 000 jobs in the next five years. During the Second Investment Conference in November last year, President Ramaphosa reiterated his call for the upscaling of SMMEs to diversify South Africa’s economy. The President emphasised the need for access to finance, information and infrastructure and the revitalisation of the township economy. Minister of Finance Tito Mboweni echoed this view. In his paper titled Economic transformation, Inclusive Growth and Competitiveness: Towards an Economic Strategy for SA, he called for the critical role of SMMEs to be acknowledged as the immediate goal for the country and not as a mediumterm goal. At the World Economic Forum (WEF) in Davos in February this year, for the first time a white paper was tabled in support of SMMEs. The paper titled Toward Common Metrics and Consistent Reporting of Sustainable Value Creation champions the small player and attempts to shift the big boys away from shareholder capitalism towards stakeholder capitalism. In South Africa, small businesses generated more than a quarter of total turnover in business services, trade and community, social and personal services in Q1 2019. Examples are dry cleaning services, veterinary clinics and hairdressers which are part of community social and personal services. Then there are

the business services which include lawyers and estate agents. Trade includes local corner cafes. Tourism also offers small business a variety of opportunities which include tourism guiding, retail products, laundry and cleaning services and rentals. Less complex sectors such as transport and tourism have considerable scope for business start-ups and growth. They also have enormous potential for job creation. South Africa has the largest tourism economy in Africa – this sector having indirectly contributed 1.5 million jobs (9.2% of South Africa’s employment) and R425.8-billion in 2018. Tourism contributes more than 20% to the country’s gross domestic product (GDP). It also pays about 6% of corporate taxes. SO, WHAT NEEDS TO BE DONE? Barriers to entry must be lowered to address the distorted patterns of ownership through increased competition and small business growth. If we pursue this, then disclosure guidelines under the Companies Act should be reviewed to ensure larger businesses disclose the time it takes to pay small businesses in the supply chain. The innovative Companies Act mechanism, namely the Social and Ethics Committee, should have mandatory reporting requirements related to this. One way to overcome the failure of both the public sector and the private sector to settle invoices within 30 days of being submitted, is the automatic addition of interest on outstanding invoices after, say, 30 to 60 days. This would help overcome the high failure rate of SMMEs arising from this problem. Especially now under the pressure of Covid-19 on SMMEs, public sector departments and entities are called upon to monitor the payment cycle to businesses. The office of the Auditor-General’s compliance audits of government departments and entities will ensure sufficient oversite of such payment periods. Until now, businesses could respond to these queries under the confidential or proprietary section.

This would also address one of the major challenges small business faces, namely poor cash flow, which is listed by several agencies including the Small Enterprise Development Agency (SEDA) and the Small Business Institute (SBI). Given the shift away from corrupt questionable behaviour of both the public and the private sector and towards ethical, efficient and effective business practices, then the Metrics of Consistent Reporting of Sustainable Value Creation would be a sharp instrument to bring about accountability and good governance. The SMMEs would be a major beneficiary of such changes in business behaviour. The rigorous and robust oversight by Parliamentary Portfolio Committees is especially important, given the increased challenges from Covid-19 facing SMMEs. According to the survey by the Small Business Institute, as many as 40% late payments were written off as bad debt, given the reality of being paid on average 101 days after the 30-day government target. This further demands the modernisation of network industries to promote competitive and inclusive growth. The implementation of a focused and flexible industrial and trade policy to promote competitiveness and facilitate long-run growth is vital to such economic fervour. This will all be underpinned by promoting export competitiveness and harnessing regional growth and opportunities. This policy also implements our AfCFTA commitments. The government and the private sector have both responded positively to the impact of Covid-19 on the survival and viability of SMMEs, through tax relief measures, grants and low-interest loans as well as deferrals. Tax relief measures that will directly benefit SMMEs from May 2020 include a four-month skills levy development holiday, which will provide relief estimated at R6-billion. The fast-tracking of value-added (VAT) refunds will give temporary relief from the benefits that arise from unlocking the tax refund faster and immediately easing cash flow. Instead of monthly filing, SMMEs will file every second month, taking the cutting administration costs.

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In the first set of relief measures on automatic tax deferrals, tax compliant businesses will be able to defer 20% of their employees’ tax liabilities over four months, ending July 2020. This proportion of employees’ tax will increase to 35%. An increase in the employment tax incentive amount provides for a wage subsidy of up to R500 per month for every employee who earns R6 500. This amount will be increased to R750. These measures are designed to relax pressure on cash flow. The outsourcing of all kinds of business processes and data management from advanced economies to third-party providers, offers other opportunities for rapid growth for countries like South Africa. Services have traditionally not featured strongly in development countries’ strategies. Their production and consumption often takes place within the same territory. This means that trade in services is usually local. In an attempt to encourage the growth of small businesses, government proposes to review the small business tax regime, the VAT threshold and turnover tax. In his National Budget Speech in February 2020, Finance Minister Tito Mboweni said the government intended to broaden the corporate income tax base. In this regard, labour-intensive growth must be prioritised through agriculture services and a focused and flexible industrial and trade policy must promote competitiveness and facilitate long-run growth. The promotion of export competitiveness and harnessing regional growth and opportunities is then expected to be implemented under this strategy. During her budget speech in 2019, Minister for Small Business Development Khumbudzo Ntshaveni hit the nail on the head by not simply acknowledging access to affordable finance as a critical impediment to small business sustainability, but also identifying the four fundamental determinants that negatively impact on financial access. These fundamental determinants are worth mentioning again as many South Africans, especially small business stakeholders, have never heard of the

Small Enterprise Development Agency (SEDA) and Small Enterprise Finance Agency (SEFA). Thus, targeted communication by government becomes imperative. For at least a decade, analytical economists in South Africa and public representatives through their Parliamentary Constituency Offices and engagement with residents in the community, have known this, but this is the first time these fundamental determinants will be focussed on strategically with determination. The four fundamental determinants are: ❱ Location of business support service and time taken to approve funding applications ❱ Requirements imposed on SMMEs ❱ Complexity of application forms ❱ Cost of finance. Fortunately, Minister Ntshaveni’s commitment to small business has ensured that the Department of Small Business Development has begun improving communication about the support and services these agencies provide and the department’s programmes, including the funding instruments available. More good news for small business is that the department has decided to provide SEFA and SEDA services through all the incubators and LED units of municipalities. In turn, the incubators and LED units will be supported by the regional offices of the Small Business Development agencies. The training of LED officers and staff will proceed where the President has launched the District Development model. Meanwhile, the department is engaging with SALGA on a national roll-out programme. Small Business can also apply for SEFA funding online at www.sefa.org.za. Given that innovation and technology a re being driven by the youth and create more small business opportunities, the Small Business and Innovation Fund (SBIF), which falls under SEFA, is geared to fund 100 000 young entrepreneurs including an emphasis on women. Then there is the implementation of the reimagined industrial strategy: An Innovation Fund will be capitalised with R1.2-billion over the next three years.

To encourage the growth of small businesses, government proposes to review the small business tax regime, the VAT threshold and turnover tax

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COVER STORY

Industrial business incentives worth R18.5-billion will create and retain approximately 56 500 jobs. An additional R107-million is reprioritised for the refurbishment of 27 industrial parks in townships and rural economies. A sum of R6.5-billion is allocated for small business incentive programmes, of which R2.2-billion will be transferred to the Small Enterprise Development Agency. Together with the Department of Trade, Industry and Competition, Small Business

Development is considering various proposals from ITAC related to scrap steel and poultry. Small business bears the brunt of the costs of doing business, which this budget also addresses, to boost productivity growth and reduce the cost of doing business by, for example, using the BIZPortal which, as Minister Mboweni put it, provides a streamlined way to register a new business with the CIPC, SARS, the UIF and the Compensation Fund in one day.

As mentioned earlier, small business is agile enough to adopt the digital age as South Africa continues to embrace the Fourth Industrial Revolution. Perhaps more significantly, the youth are in their natural element in this digital age. Regulation is intended to create freedom for business, especially small businesses, to operate effectively while ensuring workers are not mistreated. Furthermore, regulations also offer protection of minority shareholders.

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COVER STORY

However, the challenges arise when regulation does not take account of the limitations of small business. The Public Preferential Procurement Act is one of the few pieces of legislation which does protect small business. The intention of the Broad-Based Black Economic Employment Act is also not only the promotion of an inclusive economy but also to protect the small business. Given an enabling environment which effectively communicates information about the support and services available to small business, the growth of SMEs could contribute a massive 42% of the GDP. SMEs have, what I call a King Shaka set of skills, which made him one of Africa’s, if not the world’s, greatest generals. It is the unique combination of speed, surprise and concentration. Translated into the business environment, this means SMEs are small enough to make speedy decisions and to ﬂuster bigger enterprises, which even lose their

momentum and innovation as they still struggle to capacitate their staff. Small business can break down barriers impeding it from reaching its full potential and create jobs. The relaxed regulations in the energy sector emphasises that government knows it needs to create an enabling environment for small business development to achieve its full potential, and the market needs to acknowledge the critical role that entrepreneurs and small business play in driving economic growth. There is general recognition of the importance of youth. President Ramaphosa reiterated the expansion of the National Youth Service to take on 50 000 young people every year and governments support of techenabled platforms for self-employed youth in rural areas and townships. Filling another gap will be the workbased internships for graduates of technical and vocational programmes. Incubation centres to support youthdriven start-ups will concretize government’s commitments.

What needs to be done, therefore, is to ﬁnalise and implement the stated programmes to ensure economic rejuvenation. The country has an arduous road ahead. But the sine-qua-non is: Small Business is simply the future!

JOANMARIAE FUBBS

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AN ECONOMIC OUTLOOK FOR 2020 Keeping in mind that the lockdown due to Covid-19 is not only affecting the South African economy, but most economies of the world, ULRICH JOUBERT looks at a likely scenario of how our economy will play out over the next year

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ECONOMY

he South African economy remains an open economy, with exports and imports comprising more that 50% of the total economy. Therefore, it is to a large extent influenced by international trends. This is the situation in 2020 and will be in subsequent years. At the beginning of 2020, there were high hopes that the South African economy would show an improved growth rate compared with the dismal 0.2% achieved in 2019. It was based on the assumption that world economic growth could improve in 2020, as the trade friction between the US and China subsided following the signing of a trade agreement between these two superpowers in December 2019. In 2019, growth of the Chinese economy was adversely impacted by the trade dispute between China and the US. Following the trade agreement, it was hoped that China would show improved growth in 2020 and as the major trading partner of South Africa, this would also benefit growth of the domestic economy. Given a good summer rainfall season, it was also anticipated that the agricultural sector, which had shown strong negative figures in the first quarter of 2019, would add to an improved outlook for 2020. When the central government budget was delivered on 26 February, the problems caused by the coronavirus were regarded as a distant problem affecting China and some other countries. The budget, however, showed that we faced a credit downgrade by Moody’s Investor Services by the end of March as the budget deficit was too large and economic growth too slow, while no new major policy adjustments to rectify these problems, were announced. At the time of the budget, Moody’s was the only major international credit rating agency which still had South Africa on investment grade. In March everything changed, and the coronavirus became a threat to the South African community. On 26 March, the shock to the economy came as it was put under an initial lockdown period of three weeks, which was eventually extended to five weeks. On Friday night 27 March,

Negative growth of approximately 6.5% is forecast for the US, for the UK about 9%, for the Euro Area 7%, for Germany about 6%, for Japan more than 7% Moody’s downgraded the economy to sub-investment. The total lockdown is an immediate shock to the economy and causes a ‘sinkhole’, where economic activity comes to an almost total standstill, causing total disruption of economic activities which in many cases cannot be rectified. For example, the money of the international tourist who is prohibited from crossing our borders, will never be spent in South Africa and is lost forever – even if he or she arrives next year. The lockdown is not only affecting the South African economy, but most economies of the world. Whereas positive growth of at least 2.5% was forecast for the world economy at the beginning of the year, it is currently anticipated that negative growth of almost 5% will be realised in 2020. All the major economies of the world are forecast to show negative growth rates in 2020. Negative growth of approximately 6.5% is forecast for the US, for the UK about 9%, for the Euro Area 7%, for Germany about 6%, for Japan more than 7%. Fortunately, for our most important international trading partner, positive growth of just more than 1% is currently forecast for 2020, but is of course much weaker than the almost 6% positive growth of 2019. Most forecasts indicate that 2021 could see positive growth of about 6% for the world economy, but this is from the very low base of 2020. It is forecast that most economies will therefore fall into a deep recession in 2020.

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ECONOMY

To prevent them from falling into a prolonged deep depression in subsequent years, central banks have, where possible, cut interest rates drastically and increased liquidity in the financial system by buying financial instruments, like government bonds. At the same time, governments embarked on massive spending programmes as well as some tax cuts in an effort to stimulate some economic growth and prevent economies from falling apart. It must be realised that the current situation is without any precedent. When a normal physical war is fought, it actually stimulates the economy, because those things that are destroyed during the war are replaced. In the current war against the invisible virus that travels fast and is not even prevented from spreading during lockdown periods, a big hole develops in the economy and activities and money flows come to a complete standstill.

Currently, forecasts for the domestic economy indicate that it could have a negative growth rate of between 6% and 16% in 2020 The international environment changed completely from the positive growth that was forecast at the beginning of the year to the negative trends experienced at the moment. It is assumed that the severest negative growth will be felt in the second quarter, but that the second half of the year could show better growth trends. However, it is clear that the coronavirus will not disappear, even if the lockdowns ease in coming months. The only real solution to the Covid-19 pandemic is to find a vaccine, but that could happen only in 18 months’ to two years’ time. SOUTH AFRICAN LOCKDOWN In the meantime, South Africa has a very serious problem in the sense that it wants to protect its peoples’ lives against the impact of the medical pandemic, while the lockdown of the economy, currently and

in the long term, adversely affects the livelihoods of people. The risk remains that if the lockdown lasts too long and the economy collapses, more people could die of hunger than of the virus. Currently, forecasts for the domestic economy indicate that it could have a negative growth rate of between 6% and 16% in 2020. This very wide divergence between the various forecasts indicates the extent of uncertainties that are present at the moment. These uncertainties are related to the period of lockdown, the severity of lockdown on specific sectors of the economy, the number of employees that will lose their jobs, the number of small, medium and large companies that will not survive the lockdown, the impact on consumer behaviour, even after the lockdown has come to an end. Given the poor outlook for the economy, the Reserve Bank cut interest rates aggressively and indicated that they could be cut even further in the rest of the year. Unfortunately, given the fiscal situation, government is limited in its ability to provide more assistance to the various sectors of the economy, employees who have lost their jobs or are unemployed or to the beneficiaries of the welfare payments. Notwithstanding the restrictions on its finances, government decided to embark on a handout of R500-billion. This additional expenditure as well as the financial support of R400-million to the Cuban government, puts government finances under more strain. At the same time, government tax revenue will also be less than budgeted for as the economy weakens. These developments indicate that the budget deficit will exceed the figure announced in the February budget by far and increases the risk for further future credit downgrades. To finance these deficits, South Africa needs foreign financing as well and therefore approaches international institutions, like the World Bank or the IMF for funding. Fortunately, indications are that the deficit of the current account of the balance of payments could be much smaller than in previous years and will need smaller inflows of short-term foreign capital to finance these deficits.

At the same time, inflation is expected to perform very well and could drop to levels of just more than 3% on average during 2020 and even less that the 4.5% target rate of the central bank in 2021. It therefore allows the Reserve Bank to pursue an accommodative monetary policy and cut interest rates without fear that it would push inflation too high and impoverish the poor even more. The current lockdown, however, indicates that many companies, especially small- and medium-sized companies, will not survive the lockdown. This indicates at the same time that unemployment is likely to rise sharply in the rest of the year and even into 2021. Forecasts indicate an unemployment rate of more than 30% in the rest of 2020. Sectors which are severely affected and unlikely to recover quickly are tourism, aviation, sport and property markets. Some, like the property market, could change permanently if people decide that they could rather work from home, than to travel to and from work on a daily basis. This could eventually also affect the car industry, if households decide that they do not need two vehicles any longer. Only the really financially strong airlines will survive the current lockdown period. THE FUTURE The coronavirus disrupts the world economy as well as international and local financial and commodity markets. This disruption could last until 2021, given the fact that the virus will still be around, with a vaccine possibly only available in 18 months’ time. Fortunately, people are able to adapt to new circumstances and those that survive the virus and the lockdown period will carry on with their lives and their current or new businesses. However, economic realities do not change even during a period of lockdown and politicians, medical professionals or the virus, cannot escape these realities. Hopefully the current crisis will force political parties, government, trade unions and businesses to rethink economic policies in an effort to put the domestic economy once again on a growth path and regain the growth potential which has been lost in the past few decades.

Ulrich Joubert.indd 18

5/22/20 10:49 AM

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5/20/20 8:09 PM

TIME TO LURE EVEN MORE INVESTMENT FROM CHINA Look East is probably the basis of the advice emanating from forums established by President Cyril Ramaphosa to help him guide the SA economy out of the doldrums, says FELIX NKUNJANA

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5/22/20 11:00 AM

INVESTMENT

The diplomatic relations between the governments of China and South Africa date back 20 years

outh Africa is looking to China, the world’s second-biggest economy, as it seeks to reignite Africa’s most developed economy projected to grow only 0.6% in 2019. The diplomatic relations between the governments of China and South Africa date back 20 years. Both are part of the Brics bloc of countries which have a combined GDP of US$15-trillion (R223-trillion). South Africa is regarded as the top destination of Chinese investment on the African continent, with bilateral trade valued at US$39.17-billion in 2017, which subsequently grew 11.18% to over US$43-billion in 2018.

Chinese ambassador to South Africa, Lin Songtian, stated that the combined existing and planned direct Chinese investment in South Africa reached over US$25-billion in accumulative terms by June 2017. This was spread across the manufacturing, processing, mining, finance, energy, tourism, commerce, trade and services sectors. This was a much-needed shot in the arm for the SA economy, which grew 0.8% in 2018, spurring President Cyril Ramaphosa to appoint investment envoys in his ambitious quest to raise US$100-billion in new investments over the next five years.

The investments were expected to address the country’s staggering unemployment rate of 29%, the dehumanising poverty problem and entrenched inequality – South Africa continues to carry the embarrassing badge of being one of the most unequal societies in the world. The local economy declined 3.2% or R56-billion in the first quarter of 2019, but rebounded 3.1% in the second quarter after the key mining, manufacturing and trade sectors picked up and averted South Africa slipping into a recession. South Africa’s slow economic and infrastructure development has been largely blamed on mismanagement. The state capture commission, headed by Deputy Chief Justice Raymond Zondo, has heard evidence of how the Gupta family, who are former president Jacob Zuma’s personal friends, used their close proximity to the former ANC leader to raid the public purse and set up a parallel government aimed at advancing their own business interests. Meanwhile, Ramaphosa told international investors at the Financial Times Africa Summit in London last year that state capture may have cost SA over R500-billion. Others estimate the figure to be well over R1-trillion. In June 2019, following Ramaphosa’s state-of-the-nation address, South African and Chinese businesses signed a record 93 economic and trade pacts valued at over R27-billion. The president said the cooperation agreements would help “boost production, growth and jobs in the local economy”.

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5/22/20 11:01 AM

INVESTMENT Chinese companies with notable investments in SA, Africa’s economic powerhouse, include appliance and electronics manufacturer Hisense; and vehicle manufacturers Faw and Baic, which both have production plants at the Coega special economic zone in Nelson Mandela Bay in the Eastern Cape. In 2007, the Industrial and Commercial Bank of China acquired a 20% stake in Standard Bank, Africa’s biggest lender by assets, for about US$5.5-billion. These investments, among many others, have helped to stimulate the economy and create much-needed jobs. On the mining front, Chinese investors agreed to build a US$10-billion metallurgical complex in the country by 2019. The complex would be a stainless-steel plant, a ferrochrome plant, and a silicomanganese plant, according to the Mining Indaba. Despite these investments, however, South Africa still has a long way to go in terms of attracting more foreign direct investment from China. Economist Mike Schussler said the country was not doing enough work in attracting more Chinese businesses to invest in the country. He also bemoaned the fact that South Africa had fallen two places to rank 84th on the World Bank’s Doing Business Report for 2020, which was released on 23 October last year. South Africa, however, was ranked fifth among African countries. “The fact that we are ranked 84 does not bode well for us. We’ve got to make business confidence go up,” said Schussler. The RMB/BER Business Confidence Index slipped from 28 to 21 in the third quarter of 2019, reaching its lowest level since 1999, as concerns about the state of the economy escalated. “We need to tell foreigners that they can come into the country and that South Africa is open for business.” The government needed to cut bureaucratic red tape and relax BEE regulations that scared away investors, added Schussler. Nelson Mandela University political analyst Ongama Mtimka said there was a “very strong and clear agenda” by China to strengthen relations with Africa.

“There have been a lot of strong investments in the continent, driven both by private and state-owned businesses in China,” said Mtimka. “The turnaround times of Chinese investments from decision-making to breaking ground are faster. Their investment is not only in capital alone, they are investing in specific projects like factories. They are also interested in the mining sector.” However, there is a quid pro quo in that China needs access to resources, and South Africa and other African countries need Chinese investment.

There is a quid pro quo in that China needs access to resources, and South Africa and other African countries need Chinese investment

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5/22/20 11:01 AM

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SEEDING SMMES FOR

ECONOMIC REVITALISATION SISA NJIKELANA unpacks a new paradigm for transforming South Africa’s economy through mobilising entrepreneurs, multi-stakeholder engagement and intensifying productivity

ccording to Albert Einstein: “Insanity is doing the same thing over and over again and expecting different results.” An economy undergoing transformation has to (ideally) change fundamentally, develop and grow in keeping with the transformation imperatives of the country – in this case, South Africa. It is clear that what this proposes is a paradigm shift

from the previous strategies, methods, programmes and approaches we have used in an attempt to revitalise our economy, without derogating from current efforts. Previous efforts to transform our economy were made with admirable commitment by some, and half-heartedly by others. Lamentably, some have gone to great lengths to undermine these

noble efforts. Committing to and driving economic recovery and revitalisation is all very well but will be unsustainable if it is not transformative in its content and character. It is high time that appropriate firm action against those undermining our economic transformation is consistently implemented. Participation in the renewal has to devolve to the most local setup,

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5/22/20 11:06 AM

EMPOWERMENT with as much involvement of as many entrepreneurs as possible – broadening economic participation must not only be considered when the economic climate is conducive. However, keenness to mobilise participation in such endeavours must be integrated with empowerment for the participants in economic policies and programmes. Flow and exchange of ideas and solutions is vital; nobody has the right to monopolise these important steps in the process. The recent and current attempts with regards economic revitalisation, though commendable, are unfortunately not crafted to involve those who stand to benefit the most – and so, exacerbating the risk of unsustainability. Furthermore, such flow and exchange of ideas cannot be meaningful without conscious efforts to share relevant information, including transparency on how large corporates are empowering SMMEs and cooperatives Whilst respect for the rule of law must be upheld, government must ensure that vulnerable economic sectors, especially micro-businesses, are protected with relevant policy, legislation and programmes. Multi-stakeholder engagement is another crucial aspect to intensify at all levels and spheres in our country – an effort that the PBF should champion to its utmost. We can draw lessons from the Gauteng model of localised engagements with entrepreneurs by provincial government. The intensification of productivity improvement – in both the private and public sectors – coupled with deepening of its implementation, cannot be left to chance. It is time for stakeholders in both sectors to not only commit themselves, but also to roll up their sleeves to ensure that productivity is markedly grown in all sectors, in rural and urban areas as well as at national level. A global view on productivity is that productivity growth is a crucial source of growth in living standards, as it means more value is added in production, resulting in more income being available to be distributed. Here is an interesting analogy: Regarding energy efficiency as the first fuel, by the time a watt is added, one watt has already been saved. It is therefore logical that

before a rand of investment is added – due to investment drive – one rand should be saved through productivity! At firm or industry level, productivity benefits can be distributed in different ways – to the workforce through better wages and conditions, shareholders through increased profits and dividend distributions, customers through lower prices, the environment through more stringent environmental protection, and governments through increases in tax payments. However, this applies to employers who are well-disposed to such attributes and not to those single- and narrow-mindedly focused on attainment of the ‘bottom line’. The PBF is undoubtedly compelled to intensify engagement and mobilisation of its members, who need to further mobilise the rest of the business community with regards economic revitalisation. Affiliation to the PBF comes with an obligation to become an agent of change, rather than a passive recipient of benefits. The BRICS option, global as it may seem, needs more intensive exploration, given the vast markets within it, although competition is just as intensive. Not only should we engage more rigorously with BRICS, we should also draw lessons from the various member countries on how they have consistently and sustainably developed their economies. Diversification, as part of township and rural economic transformation, especially towards small-scale manufacturing, coupled with skills enhancement must be made meaningful by compelling government to respond to local calls and initiatives should there be any. Strengthening SADC economic integration brings prospects of broadened and immediate markets closer. While this may appear out of reach, it should be seen as a long-term goal that needs to be addressed sooner rather than later, given South Africa’s existing affinity to neighbouring entrepreneurs. Economic solidarity amongst those who stand to gain from economic transformation has never been so much needed. SMMEs and cooperatives, in avoiding the risk of isolating themselves, have a duty and, one might say, an obligation to work hardest in ensuring such economic solidarity.

With current economic solutions, economic booms and successes will be persistently cyclical, periodically lapsing back into economic meltdowns. Inadvertently, small enterprises being the most vulnerable, will always bear the brunt – hence the imperative for them to make conscious efforts to unite their campaigns on economic revitalisation and sustained growth. Sharing the above ideas, some of which may appear rather idealistic to some, is inspired by the desire to think outside the box and try solutions that will be sustainably effective. Furthermore, undertakings by economic experts and the leadership need to be buttressed by the core players in our economy: the entrepreneurs. We need to be frank too about our lethargic behaviour in taking initiative and our over dependency on the government and political leaders to act, while we only respond as recipients. Very few people are acting differently to this leprotic tendency. If we do not commit ourselves as agents of change, let us then be clear we have no right to retain the term economic transformation in our vocabulary as committed citizens of our beloved country. Collective will and determination by both the business community and government is essential, given its potential to unleash vital energy that may be latent among us. Plentiful as the ideas above may sound, there is an urgent need to mobilise implementation. In the words of Madiba, “It always seems impossible until it’s done.”

SISA NJIKELANA Questions? email sisanjikelana@gmail.com

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5/22/20 11:07 AM

ACT 1: RECLAIM THE STATE JP LANDMAN replays the actions government has taken thus far to rebuild the ethical foundations of the state as a crucial step towards revitalising the economy

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5/22/20 11:22 AM

GOVERNMENT

‘J

ust do something’ is the cry now rising from all over South Africa, a plea to the president and government in general to take some action to break the logjam in which the country finds itself. Confidence is low, growth sluggish, and emigration high. It is useful to replay what has been done. The Ramaphosa administration has set itself two tasks: to rebuild the ethical foundations of the state and to revitalise the economy. The two topics are too much to cover in one note, so I will discuss ethical renewal in this note (Act 1) and assess economic renewal in the next one (Act 2). CLEANING UP AND REBUILDING ETHICS The country first and foremost had to be reclaimed from the forces of state capture. Ramaphosa appointed four commissions of enquiry to help with the clean-up offensive. Two are still in session (the ubiquitous Zondo Commission and the Mpati Commission into the Public Investment Corporation or PIC) and two have finished their work. Between these commissions, the four have sparked considerable action – a lot of which we have already forgotten. FREEING CRITICAL INSTITUTIONS It is useful to remember that both the erstwhile number one and number two in SARS, Tom Moyane and Jonas Makwakwa, are gone. So is the embarrassing former head of IT at SARS, Mmamathe MakhekheMokhuane, who made such a spectacle of herself on national television that she publicly apologised for it. That is not all. In the last week of July 2019, three SARS executives were suspended. The clean-up continues. The EFF and the Public Protector are fighting a rear-guard action against SARS renewal with old allegations of rogue units and attacks on new SARS Commissioner Edward Kieswetter. He is forging ahead unperturbed and can leave the Public Protector to the courts. At the National Prosecuting Authority (NPA), the erstwhile top three have also departed. One is fighting her dismissal in court and two have appealed to Parliament not to be fired. The departure of the three has freed the NPA and it is being rebuilt.

The new director, Shamila Batohi, who has experience at the International Criminal Court in The Hague, has returned to South Africa to take up the baton. Batohi took office in February last year. In March, a special investigative unit focusing on cases arising from state capture revelations was formed. In May, Batohi brought in well-known corruption buster Hermione Cronjé, who returned to South Africa with valuable international experience to lead the new unit. A senior advocate from the Cape Town Bar, Geoff Budlender, has been appointed as strategic advisor to this unit. Batohi also reappointed Willie Hofmeyr as head of the asset forfeiture unit after he was side-lined three years ago. I wrote last year that 2020 will be the year of prosecutions and I explained why at the time. I maintain this view. Over at the Hawks both the former head and acting head have been fired and replaced by the soft-spoken and highly regarded general Godfrey Lebeya. His influence is showing: two captains and a warrant officer from the Hawks were arrested for bribes. In Durban both the mayor and a councillor have been arrested by the Hawks and have appeared in court (with the usual tweet from Nkosazana Dlamini-Zuma supporting the mayor and her supporters protesting outside the courthouse). Two senior officials from the Durban Metro were also arrested. A mayor of Newcastle was arrested for an alleged political murder; as was a former mayor of Endumeni for alleged conspiracy to murder. In the Free State nine civil servants and a director of a company were arrested and charged – one for interfering with the work of the Hawks. In Mpumalanga a former local ANC chief whip was arrested for corruption and fraud. The Hawks are clearly at work. In Limpopo the VBS report claimed the scalps of five mayors who resigned; a further four were fired and another three were suspended. In the North West three mayors resigned, one was suspended, and three have taken legal advice to try and avoid dismissal. Public opinion counts – especially in the run-up to an election. At the SAPS a deputy-commissioner has been fired and six officers of general

The Ramaphosa administration has set itself two tasks: to rebuild the ethical foundations of the state and to revitalise the economy or brigadier rank have been charged. As recently as last week seven junior officers were arrested for selling confiscated goods back to hawkers. In a significant ruling in July, one of the ‘untouchables’, former Head of Crime Intelligence Richard Mdluli, was convicted of several charges for offences committed 21 years ago in 1999. The wheels of justice turn slowly, but they turn. (This is what John Block, the former ANC strongman in the Northern Cape, also discovered – after many legal manoeuvres he is now serving a 15-year jail sentence.) THE UBIQUITOUS SOES The SOEs are still burning cash and their balance sheets are shocking, but on the ethical front a lot has happened. At Eskom, former big bosses Brian Molefe, Anoj Singh and Matshela Koko are gone. Molefe has also been pursued by Solidarity and must now repay R10-million to the Eskom Pension Fund. Lifestyle audits were conducted on 365 Eskom managers, resulting in 44 cases being referred to the Special Investigating Unit. More than 1 000 disciplinary cases were instituted, and 116 employees decided to resign, including 14 senior executives. Of 25 employees who had ‘business interest in suppliers dealing with Eskom’, seven resigned and the rest terminated their interests. Eskom has experienced a serious clean-up. A year after the notorious Hlaudi Motsoeneng was dismissed from the SABC, three of his erstwhile henchmen are gone too.

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5/22/20 11:22 AM

GOVERNMENT

(The verbose Hlaudi failed with court challenges to regain his job and then went on to fail again in his election efforts to get into Parliament.) In an important self-initiated report published last year, compiled by veteran journalist Joe Thloloe, the broadcaster laid bare political interference in its editorial policy. Former minister Faith Muthambi complained she was ‘rubbished’ in the report – this could not have happened to a nicer person. Expect further fallout from the Thloloe report. The PIC saga is still ongoing before the Mpati Commission, but a new board is already in place, the CEO and two senior executives are gone, and several have been suspended. In an important break with the past, cabinet reversed the practice of a politician chairing the board. Under new chair Reuel Khoza’s experienced leadership and rocksolid integrity, the PIC will, with a little help from the Mpati Commission, be cleaned up properly and will head in a new direction.

In his second stint as Minister of Finance, Pravin Gordhan, desperately tried to get rid of the former Zuma acolyte, Dudu Myeni from SAA. She is now gone, as are several former senior executives. Everybody can see how the once-mighty have fallen. For SAA, there is only the small matter of staying afloat. At Transnet, five executives departed, including the CEO, and eight more have been suspended. At Denel, the CEO, finance chief and chair are all gone. Both Denel and SAA have new boards. It may not be enough to save them financially, especially Denel, but action has been taken against weak ethics. CABINET Perhaps the biggest clean-up took place in cabinet. Ramaphosa inherited a cabinet of 36 ministers. There are now 28. The number of government departments has been reduced from 40 to 35. There are 36 committees in Parliament. Traditionally the Select Committee on

Public Finance (Scopa) has an opposition party member as chair. That is the case again in this Parliament. SO WHAT? • Part of Ramaphoria was the belief that the bad guys would lose. That is certainly happening. • People who were once untouchable have fallen from grace for all to see. Some have even been convicted already. • The process is not over, with the Zondo Commission still in session and almost weekly revelations of appalling behaviour. • Getting convictions in court is very different from revealing things at a commission. Despite this, many people have already fallen on their swords. • Civil society organisations have helped in this clean-up and this speaks volumes for South Africa’s democratic activism. • In the next edition we will focus on the second priority of the Ramaphosa government – economic renewal (Act 2).

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5/22/20 11:23 AM

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5/20/20 3:09 PM

WHEN THE IMPARTIALITY OF A COMMISSIONER IS DISPUTED Apprehensions of bias occur frequently at the CCMA and bargaining councils. Let’s face it, in every arbitration hearing there is a winner and a loser – and some are sore losers at that, says TONY HEALY, labour law expert at Tony Healy & Associates

ommission for Conciliation, Mediation and Arbitration (CCMA) and bargaining council commissioners must conduct arbitration impartially and in an unbiased fashion. When there is a perception of bias, a party can challenge the offensive conduct. This is precisely what occurred in a recent Labour Court case between Dorothy Khosa v City of Johannesburg & 2 others (Case no: JR135/16). As noted in the judgment, “The main grounds for this review is that it is contended that the commissioner failed to apply his mind, committed misconduct, was biased, committed a gross irregularity and/or acted unreasonably or unjustifiably and/or irrationally, in that he descended into the arena of the conflict between the parties and thus prevented himself from assessing with due impartiality the credibility of the witnesses and the probabilities relating to the issues”.

It was further argued that: “In support of these grounds, (the applicant contended) that the commissioner failed to respect the roles of the parties’ respective representatives and assumed to himself the role of leading evidence and conducting cross-examination; that he failed to conduct the arbitration proceedings in a fair, consistent and even-handed manner; that the nature and scope of the commissioner’s interventions were such that he failed to afford the parties a fair hearing and that his conduct gave rise to a reasonable apprehension of bias.” Apprehensions of bias occur frequently at the CCMA and bargaining councils. Let’s face it, in every arbitration hearing there is a winner and a loser. The losers can be prone to blaming a one-eyed commissioner for the loss, rather than face up to the fact that they may have simply lost on the merits or demerits of their case.

The judgment also quoted Baur Research v Commission for Conciliation, Mediation and Arbitration and others as follows, “What this means is that where it comes to an arbitrator acting ultra vires his or her powers or committing misconduct that would deprive a party of a fair hearing, the issue of a reasonable outcome is simply not relevant. “In such instances, the reviewable defect is found in the actual existence of the statutory prescribed review ground itself and if it exists, the award cannot be sustained, no matter what the outcome may or may not have been. Examples of this are where the arbitrator should have afforded legal representation but did not or where the arbitrator conducted himself or herself during the course of the arbitration in such a manner so as to constitute bias or prevent a party from properly stating its case or depriving a party of a fair hearing.

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5/22/20 11:34 AM

LABOUR LAW

When there is a perception of bias, a party can challenge the oﬀensive conduct “The reason for reasonable outcome not being an issue is that these kinds of defects deprive a party of procedural fairness, which is something different from the concept of process related irregularity.” [2014 (35) ILJ 1528 (LC). So, had the commissioner “descended into the arena of the conﬂict between the parties and thus prevented himself from assessing with due impartiality the credibility of the witnesses and the probabilities relating to the issues”? Not so, the court held. On the contrary, it was held that: “The commissioner was, on a holistic consideration of the record, even-handed

and consistent in his approach in relation to questioning witnesses. He did not seek to undermine (applicant’s) case in soliciting the information he did. There is in the circumstances, no basis on which to conclude that a reasonable apprehension of bias arose. “(The applicant) had the onus to show that the commissioner acted mala ﬁde and in breach of his duties so as to afford City of Johannesburg an unfair advantage. She failed to do.” The judgment continued that: “I believe that the commissioner conducted the arbitration proceedings in a fair and proper manner. Where he intervened in the proceedings, it was simply for the purposes of clarity and to steer the process.” *This article ﬁrst appeared in Talent 360 and is published with the kind permission of the author.

TONY HEALY Questions? Call 0861 115 375 or email info@tonyhealy.co.za

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5/22/20 11:34 AM

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5/25/20 11:54 AM

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5/25/20 11:54 AM

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5/25/20 10:54 AM

ADVERTORIAL

ounded on a collective mission to deliver tangible solutions to the underprivileged, destitute and needy, Mgiba Group Holdings is the brainchild of seasoned professionals who have integrated their expertise and skills to offer accessible service delivery, attuned to the National Development Plan of 2030 and the United Nations. SUSTAINABLE DEVELOPMENT GOALS We are deliberate in our aim to be a leading collaborative partner in public and private sector service delivery through atypical design-focused, tailor-made application-based innovative solutions that are befitting to the communities we serve. With a geographical footprint panning Port Elizabeth, Johannesburg, Pretoria and Polokwane, the group is comprised of five subsidiaries focused on technology and innovation, human capital solutions, branding, engineering and science, construction and property development. MGIBA CONSULTING This subsidiary is aimed at fostering a sustainable social, economic and environmental culture in the fields of engineering, natural science and the built environment by providing crossfunctional and dynamic skills – primarily in project management, civil and structural engineering, environmental, geotechnical, hydrogeology and GIS. Mgiba Consulting is dedicated to providing African solutions to world problems. Our services have been utilised by the NHBRC, South African Department of Water and Sanitation, The Mvula Trust, Roads Agency Limpopo and various municipalities. MGIBA TECHNOLOGIES Founded on the core values of creating new benchmarks, Mgiba Technologies offers the full range of innovative IT management: from bespoke software development, specialised ICT recruitment and placement, business analysis, enterprise architecture, ICT hardware sales and support.

We strive to create impactful, futureorientated cost-effective technological solutions. Our client base includes Standard Bank, Multichoice, Liberty and Limpopo Provincial Government. MGIBA COMMUNICATIONS Challenging the perceptions of human resources, Mgiba Communications is guided by the principle of serving people. Providing end-to-end people solutions through business development, full scope personnel recruitment, industrial relations, and temporary employment services. Our client base includes Telkom, M4Jam, Mercer and Exxaro. TTR INFRASTRUCTURE DEVELOPERS Founded on the premise of transforming and impacting development on the continent by delivering basic services to underdeveloped regions within the continent, TTR is driven to provide unmatched solutions in the construction and engineering sector. Services offered include: general building construction (low-cost housing, schools, industrial and office buildings), civil engineering construction (roads and storm water, water and sanitation, bulk earthworks, structures and concrete works) and fencing (precast walls, perimeter fencing, security gate manufacturing and installation). We have worked with the Eastern Cape Department of Human Settlement, Kou Kamma and Gateway Airports Authority. TTR BRANDING Determined to help give businesses a lasting first impression, TTR Branding is a one-stop shop for all printing and branding solutions, from inspiration right through to market reality. Providing tailored, brand specific, strategic ethical design solutions is our core function. Creating lasting brand perceptions and building strong identities from logo concept and design to marketing collateral design, production and printing. Our services include signage (indoor and outdoor), print media on all scales (small, medium, large) and embroidery.

“We strive to create impactful, future-orientated cost-effective technological solutions. Our client base includes Standard Bank, Multichoice, Liberty and Limpopo Provincial Government” Our clients include Pringle of Scotland, Limpopo Provincial Government and South African National Parks. We are dedicated to providing futureorientated solutions that have humanity and the environment at their core. We pride ourselves on the diverse and extensive competencies of our skilled professionals, who are passionate about being active catalysts of developmental change and innovation on the African continent. Through Mgiba Group Holdings, positive impact is guaranteed as we collaborate and pursue projects with purpose. We are positive about the future of Africa and adamant about being the drivers of the change we want to see, by building collaborative partnerships between public and private sectors and offering exceptional services that exceed expectations as we tailor-make solutions that have all stakeholders at heart. We believe inclusive economies will champion good business on our continent. Mgiba Group, entrepreneurial by nature and intrepid by design. We envision a resilient, relevant and responsible future for Africa through accessibility, mobility and ingenuity. FRANK MOKGOLOBOTO Questions? frank@mgibagroup.com

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5/22/20 2:16 PM

A COMPANY’S GREATEST INTANGIBLE ASSET A positive corporate reputation is not only important to achieve a company’s core objectives, it is a key component of competitive advantage, writes TIM HUGHES, Managing Director of ReadDillon

“I

t takes 20 years to build a reputation and five minutes to ruin it. If you think about that, you’ll do things differently.” Warren Buffett, widely regarded as the world’s greatest investor, followed up his aphorism with a warning to companies in whom he invested. “Lose money for the firm and I will be understanding. Lose a shred of reputation for the firm and I will be ruthless.” ESKOM, Steinhoff and BOSASA all evoke negative sentiment among the public. These home-grown South African disaster stories share much in common with international corporates such as Enron, Arthur Andersen and the Weinstein Company, whose reputations lie in tatters. If one views the British royal family as a form of corporate enterprise, it is

clear that Prince Andrew’s association with disgraced Jeffrey Epstein has damaged the institution’s centuries-old ‘corporate reputation’. A positive corporate reputation is arguably a company’s greatest intangible asset and one that enhances share value, allows for a product premium, solidifies customer loyalty and tends to attract higher calibre staff. But like all loose and over-used terms, ‘corporate reputation’ is protean, contested and not amenable to parsimonious definition. Moreover, with the proliferation of the academic study of the field (there now exists an academic journal of corporate reputation and an entire school dedicated to its research housed at Oxford University), there is no

single accepted definition. Nonetheless, Charles J. Fumbrun’s broad definition is helpful. It holds that, “A corporate reputation is a collective assessment of a company’s attractiveness to a specific group of stakeholders relative to a reference group of companies with which the company competes for resources.” Importantly, this definition highlights the relative and evaluative nature of corporate reputation. In other words, it is not just a company’s owners, executives and employees that rate a company, but rather a raft of external stakeholders that convey and confer corporate reputation. These include: customers, media, regulators, service providers and indeed all of those making up the company’s value chain.

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CORPORATE REPUTATION

Corporate reputation is built on a valuation of the track record a company has earned over time. Past actions may be seen as the best predictor of future, but not always. Internationally, great companies such as Hewlett Packard, Boeing, Coca Cola, BP, Volkswagen and even Johnson & Johnson have all encountered challenges to their hardearned positive corporate reputations due to issues ranging from unethical behaviour, to product failures, poor governance and accidents. Here, it is important to disaggregate the impact of accidents or sabotage (such as airline crashes and deliberate interference in a product line such as Tylenol), with how a corporate responds to these catastrophes.

Indeed, a corporate reputation need not be permanently (let alone terminally) damaged by an accident and in time can, in fact, be enhanced by how it responds to a crisis. A positive corporate reputation is not only important to achieve a company’s core objectives, it is a key component of competitive advantage. Good corporate reputation does not evolve naturally, however. Rather, it is a complex and organic phenomenon that requires dedicated and purposive action daily. Building a good corporate reputation is not a nice to have in the contemporary business world, it is intrinsic and must be hotwired into the DNA of a corporate entity. Moreover, a positive corporate reputation is not solely the responsibility of executives and management (although they must lead by example), but must be embraced and embedded within the ethics, behaviour, customer interface and daily activities of all employees, whether skilled or unskilled, formal, unionised or casual. Yet, just like social licences to operate, corporate reputations need to be constantly reviewed and renewed, not least because the dynamics and threats to reputation are ever-changing. Tobacco companies recognised this some years ago and corporates such as Philip Morris International are leading the way into the research and production of new generation, harm-reduced products. Alcohol and fast food companies are following suit. Multinational enterprises face particular challenges not only because of 24-hour time zone scrutiny, but most importantly due to the range of legislative, regulatory and cultural jurisdictions in which they operate. Global behemoths such as Nike, Google and Facebook encountered such challenges and have struggled to come to grips with their perplexing complexity. Today, corporate reputations have never been so vulnerable and subject to challenge. This is in part due to the power, range, scope and accessibility of social media. When, for example, a customer takes the extraordinary step of protesting against a life insurance company’s repudiation of a claim by dragging the deceased’s body into the company’s reception

area in a body bag, this extreme action and image will go viral. No amount of advertising can expunge this image and the public sympathy for the anguish that must have lay behind this shocking action. The message is about the power of one. Anyone with a smartphone and access to social media can highlight, attack and damage the reputation of any of the world’s largest corporates in an instant. Social media is a democratic leveller and one that is used and sometimes abused by people seeking to expose a bad corporate practice. It is a genie that, once released from the bottle, is practically impossible to cap. Yet arguably the greatest looming threat to corporate reputation is that of climate change adaptation. Increasingly, legislators, regulators, customers and investors (including sovereign wealth funds) are scrutinising closely the reputation of corporates with respect environmental sustainability. We are seeing carbon taxes being charged against new car invoices and a metric of the carbon emitted printed on the tickets of airline ﬂights, but inevitably climate change will propel the decline of certain industries and the demise of corporates who do not or cannot adapt. Mining houses and the cement sector, for example, are now working intensively to reduce their carbon footprint to ensure their global sustainability. The message is clear, corporate reputation is not only about enhancing the bottom line, but increasingly about the very sustainability of the company itself.

TIM HUGHES Questions? Tim.hughes@readdillon.com

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5/22/20 11:39 AM

THE INTERNET:

A RISKY YET REWARDING BUSINESS Sage advice from VERNON SUBBAN on keeping your business safe from cybercrime and adopting a cyber resilient approach to the digital world

he Internet has taken businesses from the physical world, where fire, theft and floods were causes of catastrophic damage, into the digital world, where cyberthreats and -attacks have the potential to be equally as destructive. The adoption of artificial intelligence (AI), machine learning (ML) and cloud computing sees businesses steering a data driven economy and proliferating opportunities for growth. However, combined with the Internet

of Things (IoT), where connected devices speak to each other in industry and business, the digital world also brings with it an increase in cyber risks – those internal and external risks that compromise the integrity of a business’ information technology systems, leading to unthinkable financial losses. It could be that one employee who presses the wrong link on an email or hackers from any part of the world who target the vulnerabilities of a business’ hyperconnectivity.

A NEW TAKE ON CYBER RISK MANAGEMENT Global cybercrime statistics and surveys ranked data breaches and cyberattacks in the top five global risks and further ranked them alongside environmental risks as high impact, high likelihood risks. The magnitude of cyberattacks and data breaches in 2018 reveal that we in Southern Africa were very much included in all of this. Given the strong online presence of businesses today, no geography is left unscathed by cybercriminals.

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CYBER INSURANCE Cyber resilience is all about being proactive and leaving being reactive on the side lines. It’s about business continuity and having processes in place that seamlessly switch to alternate devices should there be a breach. Durability needs to be epic; businesses need to continue running even if hit by a cyberattack. Security measures need to still be in place even while the business is in disaster recovery mode. Cyber resilience ﬂows from cybersecurity as part of a robust risk management programme, and it allows businesses to get back on their feet again. It’s a way to maintain productivity during disruption. Some strategies for businesses to remain cybersecure and resilient: • Understand the cyberthreat landscape – the highest percentage of hacking attempts on businesses are initiated via email, so email security becomes paramount. • Implement proper password management policies, like two-factor authentication. • Limit access to sensitive information. • Create regular backups of important information – have sound policies in place. • Ensure reliable data recovery, as properly archived information becomes invaluable when challenged with a ransomware attack – the most common attack strategy on SMEs. • Install an onsite ﬁrewall. Some insurers use ‘Hack yourself First’ as a strategy to build risk management programmes when assessing vulnerabilities in the network system. • Cloud computing offers potential for new approaches to guard against disruption of networks. It makes room for an ‘always on’ strategy – moving away from reactive recovery measures to a more proactive resiliency-centred one. • Education of employees becomes paramount, as the best cybersecurity programmes become meaningless if staff are uninformed. The cyber vigilance culture should cascade from top management down to all employees. Breaches of data security deals with more than just loss of a business’ infrastructural capacity, it also delves into the realm of real criminality leading to fraud, extortion and ultimate shut down of a business. Cybersecurity and -resilience practices managed with the right insurance cover can keep a business prepared and safe.

CYBER INSURANCE NOW SEEN AS MUST-HAVE PURCHASE Increasing stringency of data protection legislation – Protection of Personal Information Act 2013 (PoPI), together with the Cybercrimes Bill locally, and internationally Europe’s General Data Protection Regulation (GDPR), to name a few – emphasises that data, like traditional stock requires both physical protection and insurance against theft or loss. Ultimately, businesses need to ensure protection of clients’ privacy as legislated or face regulatory fines. The consequence of a cyberattack could be heavy on the business’ wallet: no business can survive the resultant network downtime, loss of revenue, loss of data, loss of competitive edge, legal defence for compromised data, reputational damage and reduce the impact of the breach without cyber insurance. The common misconception is that a cyber-induced business interruption and costs for temporary arrangements are covered under the general business policies. These policies require tangible damage in order to trigger them, so instead, a ransomware attack or IT department’s error falls in the domain of cyber insurance. WHAT CYBER INSURANCE COVER INCLUDES • Event management (managing and mitigating the cyber incident): data liability –costs for defence and damages caused by the breach of clients’ personal or corporate data; notification and monitoring costs, fines and investigation costs – covers expenses for disclosure of data breach to clients as legislated and fines for data breach; public relations and other services; forensic investigations, legal consultations, identity monitoring of victims of the breach. • Access to expert consultants: including digital forensic investigations, data recovery and IT risk management, team for reputational risk and specialist legal assistance. • Network business interruption cover: covers operating expenses and loss of income when business operations are interrupted due to consequent network failure.

• Breach of data protection by outsource company: insured business is covered for legal obligations of data breach by their contracted outsource company. Cyber insurance is by no means a replacment for best practices in cybersecurity and -resilience. Rather, it serves as a retainer for incident triage and forensic services, crises communications/ public relations, business interruption and the like. It’s an integral part of the business risk management model. Unpreparedness for cyberattacks of any size is seen as one of the biggest risks a business could face alongside the attack itself. Strategy in place should also include a disaster recovery or business continuity plan. CONCLUSION All businesses are vulnerable to cyberattacks, frighteningly labelled as one of the greatest business threats today. So, whether your business is a Fortune 500 company or the largely unrecognised backbone of the South African economy, an SME, the threat is omnipresent. Businesses need to look at the future with a lens of proactive cyber risk response management and steer away from a more reactive response strategy. Armed with a new cyber risk posture, innovative operating models, businesses will continue in a risk aware culture, making resilience to cyber risks a non-negotiable. It is impossible to be bulletproof against a cyberattack but being prepared is invaluable in keeping the business doors open.

VERNON SUBBAN Questions? Vernon@subban.co.za

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5/22/20 2:18 PM

BIG STRATEGIES FOR

SMALL BUSINESS THE SMALL BUSINESS SITE offers a guide to winning over customers and kicking off a small business venture in South Africa. It’s not as complicated as you might think…

HOW TO GET YOUR FIRST 100 CUSTOMERS

n the late 1980s, the movie Field of Dreams told businesses everywhere a disastrous lie: “If you build it, they will come.” While the sentiment was great, the reality is that your business is not a single baseball diamond in a field of corn – it is one of many brilliant ideas looking to catch the customer’s attention. One of the biggest mistakes many start-ups make is sitting back and waiting for the sales to roll in after they’ve worked incredibly hard on their launch. Building a business is hard work, and the effort you’ve put into creating your brand, products and website was worth every moment. But now you need to take the next step, towards your customers, to catch people’s attention, inspire engagement and develop trust. This is how…

10 WAYS TO GET THE CUSTOMER’S ATTENTION There are several methods you can use to encourage customers to find your store and start shopping. While some will require extra investment, others are either free or fairly affordable and only require time, effort and commitment to ensure success. Here are some of the steps you can take to catch those first 100 customers, keep their attention, and then catch 100 more: 1.NETWORK Networking remains one of the most powerful tools in the business arsenal

today. Start with your own network of family and friends, tell them about your new venture, and then ask them to spread the news. You’d be amazed at how many sales can come from these connections, and how quickly the news can spread. 2. BE SOCIAL Do research into the social media platforms that your chosen customers are most likely to favour and then set up business profiles. Facebook, Instagram, LinkedIn and Twitter are powerful resources that can help you build your business slowly through intelligent messaging and careful content curation. Join groups that suit your niche and then slowly start contributing to the conversation and promoting your brand – if the page allows it. For example, if you sell dog toys, look for groups that focus on pets. Then use paid-for advertising and competitions to enhance your exposure further down the line. 3. START A BLOG Blogging does more than share your views and build engagement, it also improves your organic search ranking. When consumers are looking for certain products on a search engine, you will have a better chance of being found if you have regular blogs on key topics with the right keywords. Focus on the latest trends, new applications, tips and tricks, and more that are interesting

to your readers and will give people a reason to visit your site, even if they weren’t planning to buy anything. 4. CREATE A NEWSLETTER Email marketing is an excellent digital tactic that not only drives customer acquisition and retention, but makes them feel as if they are part of a community. As your list of newsletter subscribers grows, you will find it easier to generate sales through discounts, specials and links to products or your blogs. To build this newsletter list, you need to encourage people to subscribe through your website. Offer them discounts, give them rewards, and create an ecosystem that makes them feel that, by joining your newsletter, they are part of something special and important. 5. CREATE A LUNCH SPECIAL Create a discount code that’s only eligible for your launch period and promote it across all your social media platforms. This increases the chance that you will get people’s attention and make a sale. You can do anything from offering them a free item, to saving them a percentage on the sale. You can also use your newsletter to run regular competitions that will get your name out there and your customers excited. 6. BUILD STRATEGIC PARTNERSHIPS Collaborating with other people can really help you leverage one another’s networks

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SMALL BUSINESS

to build business and generate sales. Consider working with brands that are either like-minded or non-competitive and that already attract the kind of people you’d like to see come to your business. You can then work with these partners to run shared competitions and offers, to send sample products, or to advertise on their mailing lists. 7. MAKE PAYMENTS SIMPLE, MOBILE AND EFFICIENT Nothing chases people away faster than a bad payment process. They’ll get second thoughts, give up and go somewhere else. Don’t lose shoppers in the check-out

process, especially not today when you have access to so many solutions that will help you make everybody’s life a lot safer and easier. Optimise your checkout process by removing unnecessary steps, especially on a mobile device, and make purchase completion as simple as a few clicks. Also don’t ask for more details than is absolutely necessary – their billing information and shipping info alone is fine. 8. ENGAGE IN DIGITAL MARKETING This doesn’t have to be an expensive investment, you need only a few hundred rands every month to spend on paid-for advertising to your target market.

“The sales won’t roll in just because you’ve built the website or opened your virtual doors, you need to do some legwork to get customer attention,” says payments expert, paygate. 41

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SMALL BUSINESS This can help your brand get noticed on the search engines which is very helpful when you’re starting out. Work out your budget, target your traffic with clickable, text-based ads that appear in specific search results – Google Ads can help you rank for c ertain keywords and phrases – and your customers will see you when they’re looking for what you sell. 9. REACH OUT TO INFLUENCERS It’s easy to dismiss influencers as people who simply live on social media for attention, but they can actually be powerful tools in your arsenal. You don’t need to aim for the big guns, either. Focus on niche, micro influencers who talk directly to your target market and who can use your products, review them honestly, and talk about them with their audience.

You can pay for them to use your product, or you can work with them as partners, it will depend on the influencer and the size of their following. Influencer platforms in South Africa include Webfluential, Continuon, and newcomer, Humanz. 10. GO OFFLINE No, this doesn’t mean taking all your hard work off the internet and into the streets. It means that you shouldn’t discount the value of establishing real connections with real people. Networking at relevant events, spending time talking to the people who would be your customers, exploring other sales options through brick and mortar partnerships – all these offline options can add immense value to your business.

For example, a pet supplies shop could ﬁnd partnering with a local shelter and opening a pop-up shop there on Saturdays to be very lucrative.

CONCLUSION Every business starts with zero customers in the beginning – yes, even Amazon. Getting the ﬁrst 10 or 100 customers is often the hardest. But don’t feel overwhelmed by the hard work that lies ahead, rather be inspired by how it will help you to learn more about your customers, your market, and your business. Once you have the ﬁrst 100 customers, you’re on your way to success, this is just the hard bit at the start. Explore, try different methods, fail, try again – adopt a strategy that works for your business and keep on tweaking it as your business grows.

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Anyone with a valid identification document can start a business in South Africa and with the right guidance, the registration process should be an effortless experience

WHAT TO KNOW BEFORE STARTING A BUSINESS IN SOUTH AFRICA

he rise of highly successful start- ups and entrepreneurs in the last few years have led to many South Africans wanting to start their own small businesses. Unfortunately, for many, the journey ends with the idea of being an entrepreneur, because the process of registering in South Africa may seem too complicated and expensive. But is this really true? Or is it simply this preconceived idea that’s leaving potential entrepreneurs with broken dreams. When starting a business, you need to have certain documents and structures in place, however, the process is not a complicated one. Anyone with a valid identification document can start a business in South Africa and with the right guidance, the registration process should be an effortless experience. DO YOU REALLY NEED TO REGISTER A BUSINESS IN SOUTH AFRICA? Yes. No matter the size of your company or the amount of profit your business makes, registering it can offer numerous legal benefits, such as asset protection and the ability to raise equity capital, and will simplify admin processes in the future.

WHICH TYPES OF COMPANIES CAN REGISTER IN SOUTH AFRICA? Profit, non-profit, public and private companies can all be registered in South Africa. IS THE PROCESS OF REGISTERING A BUSINESS IN SOUTH AFRICA REALLY THAT COMPLICATED? Not at all. If you follow the correct steps, your business can be registered in just a few days. WHAT ARE THE STEPS TO REGISTER A BUSINESS? Start by reserving a name for your business It is important to choose a unique name for your business; one that has not yet been registered. You should also secure the domain name of your business. This will give credibility to your business and reserve the space online for when you are ready to launch a website. You can easily search for names on 1-grid’s website. Simply scroll to the search bar, type in your ideal name, as well as two alternatives, and press search. They will show you if your name is available and if not, will offer you alternatives.

Have the right documents Many people think that you need a stack of documents to register a business, but this is not the case. With 1-grid, you simply need the following: • Identification document (ID) of the incorporator or the director of the business • A certified copy of the ID. Once 1-grid has this, they will complete the entire registration for you. It’s that simple. SHOULD I REGISTER WITH THE SOUTH AFRICAN REVENUE SERVICES (SARS)? All businesses have to be registered with SARS and comply with their regulations. This will require you to have a tax number for your company. When you register your company using 1-grid, they ensure that you receive a tax number and that you are registered with SARS. WHEN IS REGISTERING FOR VAT COMPULSORY? You do not have to register for VAT immediately. You can voluntarily register for VAT if your business’ income exceeds R50 000 over a 12-month period. It becomes compulsory if your income exceeds R1-million in a 12-month period. WHEN STARTING A BUSINESS SHOULD I HAVE A BANK ACCOUNT? Having a bank account for your business is a SARS requirement. A business bank account will ensure that personal and business transactions are separated for better bookkeeping. Starting a business in South Africa is not as complicated as you may think. With the right guidance and advice, you can register your new business in just a few days and begin to reap the benefits.

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WEBSITE: www.srs-gt.com | EMAIL: info@srs-gt.com PG43.indd 38

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KEY SKILLS FOR SCALING THE ENTREPRENEURIAL MOUNTAIN TATENDA ZINGONI, Development Economist and Senior Researcher at Birguid, highlights the importance of having the right skills on your journey to the entrepreneurial summit

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SKILLS DEVELOPMENT

he entrepreneurial journey is one replete with a mountain of learning. Before you begin down this road, you need to ask yourself whether you will be comfortable with wearing multiple hats, i.e. administration, procurement, marketing, sales, to name a few. Through my own professional and entrepreneurial journey, I have discovered that there are certain skills which stand out as crucial to a successful venture. Without these skills, the road will be longer and harder than it needs to be: • Project management • Research and analysis • Communication: writing and presentation • Selling. Being clued up in these areas of business will give you the edge over less knowledgeable competitors and a better chance of surviving (and thriving) in the small business arena. Let’s look at these in detail. PROJECT MANAGEMENT In simple terms, project management has to do with the coordination of resources with the intention to fulﬁl desired outcomes. And by resources, I mean the all-encompassing aspects of the business such as people, materials, time and money. The entrepreneur has to be a virtual master at project management in order for their venture to be a winner. RESEARCH AND ANALYSIS It is imperative that entrepreneurs do their homework thoroughly before embarking on any venture. Going in blind is a risk-intensive exercise that has left many a budding entrepreneur empty handed at the end of it. This is where research and analysis come into play, encompassing the process of gathering information, comparing the information (i.e. supplier prices) and making decisions based on such information.

COMMUNICATION Writing The process of documenting processes in your organisation, communicating internally or externally, is an important one to undertake. Many entrepreneurs experience limits in their growth potential due to continuing with carrying the load of doing most (if not all) of the roles previously mentioned. Documenting standard operating procedures (SOPs) enables entrepreneurs to pass on some of the roles to others (internally) or externally (outsourcing). It is difﬁcult to get someone to carry out a task for which there is no clear guidance – thus the importance of SOPs and other documentation. Presentation The ability to present is paramount for entrepreneurs to ensure they can communicate their thoughts, intentions, vision and/or strategy to different stakeholders. Like writing, the ability to gather your thoughts and clearly articulate them enables buy-in for whatever endeavours the entrepreneur will be embarking upon. SELLING Of all the skills, this is the one I consider to be the most important. This is, however, one of the most overlooked skills. Selling is not just about trying to convince someone (customer) to part with their money for something (product and/or service). Whenever you are trying to convince someone to adopt a viewpoint/perspective, you’re selling. When you begin to see selling through this lens... you’ve bought into what I’m selling to you. Often you hear people saying, “I’m not buying into what you are saying”, or “I need everyone’s buy-in for this to work.” The use of such terms in our everyday diction highlights the

The entrepreneur has to be a virtual master at project management in order for their venture to be a winner importance of pitching and selling. Whenever you need to motivate why something should be done for you, this is a sales process underway. As an entrepreneur there are many touchpoints whereby your selling skill needs to be put to use – selling your vision to your employees, pitching for funding from investors, amongst many other instances. CONCLUSION If you’ve been getting more and more strung out while reading through the above list because you don’t (or think you don’t) possess these skills, you can relax – it’s never too late to learn. And there are many free and paid resources which offer the opportunity to develop and sharpen your skills. Video streaming platforms, massive open online courses and courses offered by universities and colleges are at your disposal thanks to the Internet and many who have gone before you.

TATENDA ZINGONI Questions? tatenda.zingoni@birguid.co.za

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5/25/20 12:26 PM

KNOW YOUR RETIREMENT FUND RIGHTS CLEMENT MARUMOAGAE warns retirement fund members to get savvy about the ins and outs of their benefits to avoid unexpected consequences (and not the good kind!)

he importance of retirement fund members not only understanding the law regulating their retirement funds but also the rules that govern such funds, cannot be overstated. Lack of understanding of the law and the rules inevitably leaves members in shock when certain provisions of the relevant law or clause in the rules are implemented in relation to their retirement benefits. For instance, employees who are accused of causing financial loss to their employers may be confronted with a situation where their employers seek to make good on their loss from employees’ retirement benefits. Here, we look at circumstances under which employers can be compensated for loss suffered due to employees’ misconduct from the employees’ retirement benefits. UNPACKING OCCUPATIONAL RETIREMENT FUNDS IN SA In South Africa, retirement funds are divided into six categories: pension, provident, retirement annuity, preservation, umbrella and deferred benefit. The focus in this article is mainly on occupational retirement funds – in other words, pension funds and provident funds – which can be categorised as either defined contribution funds or defined benefit funds.

A defined benefit pension scheme is basically a retirement fund scheme that is created by the employer or its sponsor wherein employees are promised a determinable monthly benefit when they retire, which is somewhat guaranteed or predetermined by a formula based on the employee’s period of service, their salary history and their age, rather than depending directly on an individual employee’s investment returns. According to the High Court “a defined benefit fund is a pension fund whose pension benefits are determined in accordance with a formula contained in the rules of the fund and which are underwritten by the participating employer. If the investments made by such a fund performs well, members do not benefit proportionately. However, if the investments perform poorly, members have the advantage that their pension benefits remain guaranteed by the employer. The employer carries the risk of the investments and the members’ pension benefits are secure”. It is essential for employees to know whether their retirement fund is a defined contribution fund or defined benefit fund in order to ascertain the risks associated with it, and most importantly, whether their benefits are guaranteed or not.

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RETIREMENT FUNDS

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RETIREMENT FUNDS

Contrary to popular belief, employers do not own retirement funds, but are merely associated with these financial instruments to assist their employees to save towards their retirement. Various retirement funds are regulated by different pieces of legislation. While all retirement funds operating in the private sector are generally regulated by the Pension Funds Act 24 of 2019 (PFA), some of the retirement funds in the public sector such as the Government Employees Pension Fund are regulated by their own legislation, in this case, the Government Employees Pension Law Proclamation 21 of 1996. THE RULES Apart from the law that regulates retirement funds, all retirement funds have rules that govern them. These rules provide for different aspects affecting members such as death benefits, disability benefits, pension deductions, how members can exit from the funds, payment of benefits and transfer of benefits. Employees who are members of retirement funds should familiarise themselves with their rules in order to understand the type of benefits promised to them by virtue of their employment as well as when these benefits become due. But most importantly, it is imperative for employees to understand whether their retirement fund is a pension fund or a provident fund. Usually, with a pension fund, when an employee retires, they will be paid one third of their benefit and the remaining two thirds will be used to purchase an annuity, which will be paid on a monthly basis. With a provident fund, members are able to withdraw the entire benefit as a lump sum. However, there are provident funds that make provision for their members to purchase either a living annuity or life annuity with an insurer when they retire. Employees need to familiarise themselves with the law and the rules that regulate their specific retirement fund. Generally, retirement benefits are not reducible, transferable or executable (see section 21 of the Government Employees Pension Law and section 37A of the PFA). These provisions provide protection to retirement benefits from creditors and, in particular, protect

pensioners from being deprived of their source of income in their retirement. However, employees whose retirement funds are regulated by the PFA must take note of section 37D(1)(b)(ii) of the PFA, which says “… one of the exceptions to the general rule, and allows a fund to deduct any amount due by a member to his employer, and pay that amount to the employer, as compensation for any damage caused to the employer as a result of any theft, fraud, dishonesty or misconduct on the part of the member”. Section 37D(1)(b)(ii) of the PFA is not an instrument that employers could use to unilaterally deduct amounts from their employees’ retirement benefits. This provision is only applicable when an employer has suffered loss that can be attributed to the employee concerned – it is meant to enable compensation for employers for the loss they suffered from their employees’ theft, fraud, dishonesty or misconduct within their workplaces. There are several instances which are not covered by this provision though, such as instances where employers seek to recover money lent to their employees, over payment or erroneous payment to the employee and employees’ refund of performance bonuses. THE TWO CONDITIONS FOR WITHHOLDING BENEFITS Retirement funds can only withhold employees’ retirement benefits when either of the two conditions in section 37D(1)(b)(ii) of the PFA has been met. First, section 37D(1)(b)(ii)(aa) of the PFA dictates that the member must have admitted liability to the employer in writing. This entails the employee acknowledging in writing that they caused loss to the employer and that they are liable to compensate the employer for the loss suffered. Second, in terms of section 37D(1)(b)(ii) (bb) of the PFA, in order for the retirement fund to withhold the member’s retirement benefit, the employer must have obtained judgement for payment of a debt against the employee in a civil or criminal court – a magistrates or high court. Once this order has been granted and submitted to the retirement fund, it must pay the amount stated in the order to the employer.

It is essential for employees to know whether their retirement fund is a defined contribution fund or defined benefit fund In terms of section 300 of the Criminal Procedure Act 51 of 1977, a criminal court can order the accused to pay compensation to the complainant where the offence committed caused damage to or loss of property. If the employer secures a conviction together with the order of compensation, this can be provided to the retirement fund to compensate the employer from the employee’s retirement benefits. IN CONCLUSION Once they have instituted legal proceedings, employers can immediately request retirement funds to withhold employees’ retirement benefits, particularly when employees have left employers’ workplaces and so, are eligible to receive these benefits. While retirement funds can be withheld while cases against employees are still pending, employees’ benefits cannot be withheld indefinitely. Retirement funds are not permitted to withhold members’ benefits where there are no cases pending against them.

CLEMENT MARUMOAGAE Questions? clement@gaeattorneys.co.za

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Central Reser vations info@machailodge.co.za

Accounts & General Admin accounts@machailodge.co.za

Complaints & Compliments mosesmachai68@gmail.com

Far East Countr y Lodge

Facilities • 8x Executive suites • 1x Semi presidential suite • 2x Honeymoon suites • 10x Deluxe rooms • 8x Standard rooms • 4x Standard rooms with disabled facilities • 7x 1 Bedroom self-catering chalets (monthly rental) • 4x 1 Bedroom deluxe self-catering chalets • 4x 2 Bedroom self-catering chalets • All equipped with air-conditioners & DSTV • 1x Conference room seating up to 300 delegates • 2x Conference rooms seating up to 30 delegates • Gym facility & free limited Wifi • Fully licenced restaurant & bar • Picnic & swimming pool facilities • 15 minutes drive to Kruger National Park (Phabeni, Kruger & Numbi Gates)

Facilities • 12x Executive Suites • 9x Executive Rooms • 8x Deluxe Rooms • 5x 2 Bedroom self-catering chalets • 8x 1 Bedroom self-catering chalets (monthly rental) • 4x 2 Bedroom chalets (monthly rental) • All equipped with air-conditioners & DSTV • 1x Conference room & wedding facility accommodating 400 people • 1x Conference room seating up to 100 delegates • 1x Boardroom accommodating 16 people • Fully licenced restaurant & bar • Picnic & swimming pool facilities • Massage Therapy (Spa) • Multicultural dance on request • Bird watching & hiking • Shopping mall & office park for your convenient stay • Ideal for day visits to Swaziland & Mozambique that is just a few minutes drive • 40 Minutes to the Crocodile Bridge & Malelane Gate into Kruger National Park

E-mail: hazyview@machailodge.co.za Tel: +27 13 737 8517 or +27 84 727 8517 or +27 81 494 6580

E-mail: infofareast@machailodge.co.za Tel: +27 81 325 1000 or +27 74 860 7256 or +27 79 770 9448

www.machailodgehazyview.co.za

www.fareastlodgetonga.co.za

Machai Lodge, Hazyview

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5/20/20 7:10 PM

ALESIAKAN / SHUTTERSTOCK.COM

COULD AIRBNBS BECOME A THING OF THE PAST IN SA? Schindlers Attorneys Associate, LISA SCHMIDT, and Candidate Attorney, KYLE VENTER, shed light on the longevity and legalities concerning Airbnbs in South Africa

hy is the South African tourism industry up in arms about the latest craze to hit our shores since Uber? Hospitality groups are placing pressure on government to implement laws legislating Airbnbs and to enforce stricter rules on those involved in running them. This has resulted in the proposed Tourism Amendment Bill, which was gazetted on 12 April 2019. However, the Bill has led to questions being raised as to why the legislature is adhering to certain hospitality groups’

demands and placing more rigorous rules on landlords who are utilising an Airbnb business to boost their income. The answer is that the hotel industry in South Africa is losing millions daily, as tourists seem to prefer renting Airbnbs to staying in conventional hotels. Airbnbs allow tourists to get a real taste of what it means to be South African, as Airbnbs are predominantly located in individuals’ homes in residential areas. Furthermore, Airbnbs have proved to be a convenient mode of travel, assisting in fighting tourism overcrowding and

offering competitive pricing, which makes it virtually impossible to resist. While the CEO of the Tourism Business Council of South Africa has claimed that the ‘’stab’’ at Airbnb is not in any way personal, he stands by his argument that Airbnbs need to be regulated. The just of the argument is that Airbnbs are not regulated like other ordinary establishments in the tourism fraternity (i.e. hotels) and thus do not have to adhere to the same uniform rules and standards. Owing to this, Airbnbs are able to undercut their competition by virtue of their

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TOURISM

minuscule operational costs, which the proposed Bill aims to bring to an abrupt end in thenear future. WHAT CHANGES ARE PROPOSED BY THE BILL? The Bill proposes that the Minister of Tourism will be given legislative powers to determine ‘’thresholds’’ with regard to short-term home rentals. The change proposes to come in the form of an amendment to Section 7 of Act 3 of 2014 to include subparagraph (v) – Section 7 of the Tourism Act states the following: (1) The Minister may, by notice in the government gazette and after following the consultation process contemplated in subsection (2), determine – (a) norms and standards for – (i) practising responsible tourism contemplated in section 2(2) (ii) achieving service excellence in the tourism sector (iii) promoting the objects of this Act (iv) the provisioning of tourism information services to the public (v) thresholds with regard to short-term home rentals. The next question on everyone’s mind is what constitutes a short-term home rental. The amendment Bill deﬁnes short-term letting as “renting or leasing on a temporary basis, for reward, of a dwelling or part thereof, to a visitor”. The amendments will allow the Minister, more speciﬁcally government, to place restrictions on the number of nights an Airbnb may host guests, the amount of money an Airbnb and/or landlord may charge and the location of the Airbnb. All of which is argued to be in the interest of “fairness”. Of concern is that the proposed restrictions imposed on Airbnbs could be devastating to those using the platform as a source of income, especially considering that in last year alone, Airbnbs accounted for R8.7-billion and 22 000 jobs.

AIRBNBS AND SECTIONAL TITLE SCHEMES It should be borne in mind that sectional title schemes operate differently to full title households. Instead of individual decisions being the focal point, as in the latter scenario, sectional titles require the collective to decide on the operations within a sectional title scheme. Furthermore, owners and tenants (members) living within a sectional title scheme are obliged to comply with the relevant scheme’s conduct and management rules and may be levied with a ﬁne or penalty (provided that the scheme’s rules provide for same) for failure to abide by the scheme’s rules. Body corporates’ rules frequently contain provisions that prevent short-term letting. This is due to the belief that disallowing short-term letting (Airbnbs) in sectional title schemes will uphold the scheme’s reputation, prevent delinquent tenants or guests, and mitigate any potential security risk, as travellers are not permanent tenants and are often able to escape liability for failure to abide by the scheme’s rules because they enter and leave as they please. This, however, gives rise to a clash of competing interests. On the one hand, you have the landlord and his interest in making money from his sectional title unit. On the other hand, you have the trustees, trying to ensure compliance with the scheme’s rules. It could be argued that preventing short-term letting in sectional title schemes infringes on members’ proprietary rights, as it restricts their use and enjoyment of the property which could otherwise be used to yield a proﬁt. When considering the current economic climate and its stronghold on the general population’s pocket, it becomes more apparent that many landlords may be affected by restrictions placed on letting out their properties. In October 2019, the issue of short-term letting in sectional title schemes was brought before the High Court in the

Body Corporate of the Paddock Sectional Title Scheme No 249-1984 v Nicholl (29534/18) [2019] ZAGPJHC 437 (2 October 2019). In this matter, the body corporates had their conduct rules approved and certiﬁed by CSOS in 2017. The scheme’s rules prohibited short-term rentals for periods less than six months. In this case, the Judge appeared to be of the view that owners in this scheme were, in terms ofthe rules of the scheme, accordingly prohibited from renting out their units to tenants for any period shorter than six months. Consequent to this, the Respondent will be taking this matter on Appeal. CONCLUSION The proposed amendments to the Act could be argued to infringe landlords’ proprietary rights – grounds on which one may dispute the proposed amendments. Notwithstanding, according to the High Court judgement in Paddock Sectional Title Scheme No 249-1984 v Nicholl, landlords should always be mindful of any restrictions on short-term letting that are imposed under their scheme’s conduct rules. Although, if your scheme’s rules are vague or do not prohibit short-term letting, you may continue to use your unit as an Airbnb. If you are restricted from doing so or met with opposition, contact a lawyer who is experienced in property law to assist you in dealing with the matter and lodging a dispute with the appropriate forum for deliberation (i.e. CSOS or Court).

LISA SCHMIDT Questions? schmidt@schindlers.co.za

KYLE VENTER Questions? venter@schindlers.co.za

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5/22/20 2:22 PM

MONEY THAT MAKES SENSE FOR

ENTREPRENEURS Nine points that need to be carefully considered in developing your own enterprise, before youâ&#x20AC;&#x2122;re in a position to put your money where your mouth is, advises JAMES MAPOSA

or those not formally employed, most consider themselves entrepreneurs. A term that says a lot to those who hear you say it. Some may celebrate you as a risk-taker. One who wants to build something out of nothing because you found a gap in the market. Others may call you foolish because you abandoned a secure job and steady income to battle it out in an arena where there are more unknowns than knowns. When being a true entrepreneur is really

about knowing, and backing your knowing with action. The action will come with lessons, some good and others bad. The bad ones are a reminder of how south things can go. The good ones instil confidence that you are on the right path, though the journey will still be, at times, very bumpy. To get to the end of the journey you need proper guidance. I illustrate below a few of the key things one needs to consider when starting and running a successful business:

MULTI-TASK

ONLY BORROW WHEN YOU ABSOLUTELY NEED TO

CONFIRM THE MARKET FIRST

ONLY COMMIT RESOURCES WHEN A DEAL IS SEALED

EMPLY A CHEAP BUT RESOURCEFUL TEAM

NETWORK

INNOVATE AND GROW

PLOUGH BACK AND MANAGE COSTS

DIVERSIFY AND GROW SOME MORE

STEP 1: START WITH THE MARKET No point in thinking of yourself as an entrepreneur without a clearly defined market. If you want to build a million- or billion-dollar business, know that there is a need for your product or service before investing in it. Do as much preparation work as you can, understanding the trends to confirm whether a gap in the market really exists. Find out if the idea you are trying to bring to the fore has been or is being implemented elsewhere. Take time to learn from those who have done what you want to do.

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SMME DEVELOPMENT

Once you have a firm understanding of what you want to do, speak to people you think will be your customers and confirm whether what you want to bring to the market aligns with what they need; shortand long-term. Quantify the need. Confirm what the potential uptake will be. Study existing and potential confirmation, including how you can outcompete them effectively without spending less. No point in breaking the bank on marketing efforts that get you the buzz you are looking for but bankrupt you before your business starts to run.

STEP 2: ONLY COMMIT RESOURCES WHEN A DEAL IS SEALED If the market is confirmed, flesh your idea out. Document the time and effort you are putting into bringing your product or service offering to life. This tallying will benefit you in the future when someone wants to purchase or buy into your business. A fair and well documented valuation of your business from concept to full-fledged business is always great and gives you the leverage you need to stay ahead whenever you are sitting at the negotiation table.

Turn your idea into a service concept that customers can play around with before you go into full production. Get all the feedback you can to convert the product into a more viable output. Something that your potential customer will be willing to pay for â&#x20AC;&#x201C; on the premise that they are gaining instead of losing when making the purchase. Present your business case to all those who care to listen soon after obtaining feedback and getting the result you were looking for from your potential customer base.

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SMME DEVELOPMENT

Always remember that you are an entrepreneur to make money and you should only pour in more resources once you have proof that you are going to make money from your idea. This is usually done through a confirmed order. Once an order has been confirmed by your clients, then it is time to play. STEPS 3-7: ALL ABOUT COMMERCIALISING YOUR ENTERPRISE When starting up a business, you learn how much you can tolerate or do by yourself. To be honest, when you are starting out you often cannot afford another employee. Multi-task. Start each morning with the preparation and review of a daily schedule. Deal with the urgent and important stuff – those that will get you paid sooner – first then move onto the second tier of tasks, keeping your customer happy always. This could sometimes mean, over-delivering. You do not need to do this forever but when you are starting out you need all the help you can get, including a good (more like great) word from those who have engaged with your business. Build equity through being too kind. As your business grows, the profit you will earn may not be enough for you to reorder or increase the number of orders due to a burgeoning client list. To help you meet this demand you may need to borrow money and other resources, which is always tough because as a start-up you are high risk. To manage this risk, the borrower often issues a loan with the highest interest rate. So, only borrow when you absolutely need to – for money generating activities alone. Do not borrow for a top-of-the-range bakkie when a lowto mid-tier bakkie can do the same job. Borrow at a rate that is a fraction of your net profit margin. Negotiate down as hard as you can including maximum window periods before your first instalment is due. Cycle what you have borrowed as much as you can to enable to payoff what you owe with ease. Back to getting an extra set of hands. Talent is hard to find, and great talent is expensive. To avoid a high salary expense, hire a cheap but resourceful team. Whoever you recruit must believe in your dream as much as you do and be

willing to sacrifice short-term earnings and stability for longer term rewards when your business makes it to the big leagues. Be true to your word and deliver on what you promised when the time comes. You will need to invest a lot in training and upskilling the cheaper the team you hire (often recent graduates). When your business has onboarded the ‘right’ team and your operations are ‘adequately’ resourced, your battle has only just begun. One or two clients give you credibility. Many of them keep your business alive. For that you need to network. Travel far and wide, telling people about the difference you’re making through the business. Best way to highlight the power or strength of your business is to be your own customer. I often ask salespeople trying to sell me things whether they have their own item of whatever it is they are trying to peddle. I often lose interest if the salesperson can afford it but does not have it. Remember that word-of-mouth is a powerful, if not the most powerful form of advertising. As you grow, the one thing you are always chasing is more growth. One of the ways to achieve this growth is through innovation. In this regard, innovation should be linked to effectiveness and efficiency. Effectiveness is all about finding ways to get more and more customers to try your product and repurchase it, including referring others to try it out. Efficiency is all focused on doing things faster at a lower cost to obtain the best possible margins. Innovate around maximising your profit, minimising your costs, and endearing yourself to your customers. STEP 8: PLOUGH BACK AND MANAGE COSTS Long-term success is about wise investment. As your business grows, investments such as enabling systems become increasingly apparent. Invest in these systems to optimise your operations and capacitate your business for even more growth. Be prepared by ensuring your business has the capacity to take on this impending growth in a fluid yet beneficial manner. But remember, with investment in systems comes an increase in overhead costs. Do not get choked by

these costs. Manage them in relation to your bottom line. Do not bite off more than you can chew, and in cases where you feel the expenditure will not be necessary long term, ﬁnd a temporary and more affordable alternative. In essence, managing your costs could sink you if you’re not careful, so spend a signiﬁcant amount of time understanding your business, from it being a start-up to where it currently is; only building layers which over time are supposed to protect and not expose your business. STEP 9: DIVERSIFY AND GROW SOME MORE Some might think this a bad idea because most successful businesses are built around a core, and once they start to diversify, they lose their way and often fall into the abyss of oblivion. This is true but in such a dynamic world, all businesses must invest in expanding respective portfolios to ensure they have more ways than one to make a steady amount of income. Within your business, have some sort of research and development team that brings new ideas on a regular basis. These ideas could be your business’ next big thing. The growth chase never stops, and a committee must exist within your enterprise that assesses whether your business can still grow around its core and if new ideas should be explored as potential money earners. Such a stance could bring risks to the table, but growth is all about managing risks; an aspect all entrepreneurs must go through.

JAMES MAPOSA Questions? james.maposa@birguid.co.za

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Lengwati Electrical has been operating for 20 years, with a national footprint as a black economic empowered (BEE) engineering company. We have various branches countrywide in KZN, Gauteng and Mpumalanga, with divisional heads to master our projects in accordance with industry standards. Lengwati Electrical provides qualified electrical engineering services, professional financial discipline, and in-house capabilities. Our vision is to be a world-class leading electrical company in SA and beyond. Our mission is to take customer service to an unprecedented level by putting our customers first. Services we offer: • •

Electrical (LV to HT electriﬁcation) Mechanical (Plant and machinery maintenance and general engineering works)

•

General Building works (AD-HOC)

Professional support services include: •

On-site support

•

Help desk

•

Post-implementation

Lengwati Electrical oﬀers SABS approved services, material and equipment. All work is done in accordance with SANS 10142-1 standards and speciﬁed by industry standards.

Main office Gauteng: 518 Dane Rd, Glen Austin, Midrand, 1685 Postal address: PO Box 11735, Die Hoewes 1, Midrand, 0163 Mpumalanga office: 123 Hurst Street, Clewer, Emalahleni, 1036 KwaZulu Natal office:135 Beach Roads, Amanzimtoti, eThekwini, 0163

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Contact details Tel: +27(0) 11 310 3008 Fax: +27(0) 11 310 3009 Email: info@lengwatielectrical.co.za www.lengwatielectrical.co.za Facebook: Lengwati electrical Twitter: Lengwati electrical

5/20/20 7:22 PM

THE NEW IDEA REVOLUTIONISING THE RECRUITMENT INDUSTRY Now is the time to re-think your recruitment process, says JEFF JAYSON of Incruit Africa. Here, he explains the ground-breaking concept that is shaking up the recruitment industry worldwide

areer Exchange Expo (CEE) is revolutionising the recruitment industry in South Africa. We call it ‘incruiting’ and it’s the quickest, easiest and most effective way of hiring staff in the 21st century. An alternative recruitment model built on inclusivity, involvement, introduction, innovation, interaction, interest, invention, interfacing and in-sourcing. Our concept is simple: at an employment expo, known as a Career Exchange Expo (CEE), job seekers and companies come together face-to-face to find the best fit. The event bypasses the over-filtering of applicants that is often the by-product of hiring through recruitment agencies. CEE is aimed at qualified job seekers, skilled qualified professionals and small, medium and large enterprise companies. In marketing terms, the companies are the clients, the vacancies they advertise are the “products”, the job seekers are the target audience and Career Exchange

is the facilitator and marketer. Career Exchange specialises in service delivery to all industries for qualified and skilled professionals, and for school-leavers and unskilled employees. Potential employers must be fully compliant with the Companies Act and all other legal requirements of the country in which they operate. The concept has proved highly effective in the USA, Europe and Asia. It has been tried and tested, achieving great success for candidates and companies alike for over 28 years. Owing to the uniqueness of the concept in a South African context, CEE will conduct separate goal-orientated workshops for companies prior to, and running alongside, the exhibitions. Workshops for the exhibitors will offer training on how to gain the most from the direct interaction with the candidates. Career Exchange Expo will save time and money for both job seekers

and employers and exhibitions will take place quarterly, starting in Gauteng and later expanding nationwide. The South African economy faces four key challenges namely unemployment, skills shortages, low productivity and high costs. Reports on these shortcomings themselves fall short because they tell us about the challenges, but don’t offer any solutions. South Africa has a talented population. Our higher education facilities are some of the best in the world. Yearly, the country produces graduates, artisans and technicians just waiting to make their contribution to the GDP. Often, they’re left in the cold, hamstrung by a recruitment process that is neither streamlined nor effective. Companies, similarly, don’t reach their full potential as they miss out on those candidates who will fit into their organisation the best. Each and every candidate comes with a different skill set, not to mention personality, attitude and proficiency.

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HUMAN RESOURCES

“We call it ‘incruiting’ and it’s the quickest, easiest and most eﬀective way of hiring staﬀ in the 21st century” Different companies have different cultures and management structures they adhere to. In the corporate environment, it is most certainly not a case of simply placing a candidate with an employer. Making the right match is crucial. Sadly, the recruitment process in South Africa, as it stands, is letting parties on both sides of the employment equation down. What should be a winwin situation, currently is a lose-lose.

The country will only lift itself from the dire situation it finds itself in with happy employees working to their full potential in the offices, factories and plants where they belong. It’s time for a paradigm shift. We therefore present Career Exchange Expos as the ultimate solution to hiring staff in the country. The benefits of the concept include cost savings, shortening of the recruitment process, interviews conducted in a relaxed setting and the opportunity to see a wide range of candidates at the same time. With Career Exchange Expos we can address the countrywide skills shortages. We can assist in finding the right talent for the right position. And we can rectify the continual misalignment between companies and candidates. We do not charge placement fees, thereby saving you a fortune. At our professionally run expos, we facilitate meetings between companies seeking

skilled staff and qualiﬁed graduates aged 22 and up. We also bring school-leavers and unqualiﬁed employees face to face with the companies that might hire them. Overall, we aim to bring professionalism and respect back, and put the HUMAN and RESOURCES back into HR.

JEFF JAYSON Questions? Call 073 391 2005

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INFORMATION SECURITY

STAYING CYBER SAFE IN THE 4IR

ybersecurity is a global concern – everyone is vulnerable as individuals, but more so, are public and private organisations. They cannot afford breaches in their IT environment or being held ransom, as this could have a devastating impact on their business. The threat landscape is constantly evolving. This means organisations may need an all-inclusive approach to review, evaluate and manage the security impact of risks.

When the impacts of an attack are high, most businesses can’t afford to learn the hard way that they have a vulnerability. Organisations need to be proactive and put their environment to the test to identify weaknesses and address security gaps before they become issues. Vulnerability assessment and penetration testing reveals the current state of a business’ network or applications. Interval testing over time can provide increased value, revealing potential systemic issues. NEWCODE, a company that offers information security, risk assessment and assurance services, is specifically structured to meet business and security requirements, with increased risk reduction and streamlined compliance: • Network penetration testing can be approached from an external or internal perspective to target operating systems, open ports and services, and remote access. • Web application penetration testing addresses a specific application, set of applications, or individual modules

that comprise an application to identify common misconfigurations or weaknesses in software design or software implementation. Threat modelling is used to strategise how to attack the surface of an application to compromise data. • Attack simulation services will help an organisation move from speculation to certainty about its vulnerabilities and visibility, detection and response capabilities. Following any of these security testing strategies, a detailed report is prepared describing the vulnerabilities discovered, potential adversarial attack paths, and tactical and strategic recommendations prioritised based on the organisation’s threat profile, business objectives and compliance requirements. Findings can then be used to address skills gaps, evaluate technology, and update processes to improve security and defensive measures across the organisation.

Contact: Mekesh Purasram 031 564 9052 or 0845291361 Address: 877 Chris Hani RD, Durban 4051

East Coast Auto Centre is a fleet maintence specialist. OUR SERVICES INCLUDE:

ADVANTAGES AND BENEFITS OF USING US:

❱ Major repairs and service to light & heavy commercial vehicles ❱ Brake overhaul ❱ Clutch overhaul ❱ Cylinder overhaul Level 1 ❱ Steering and suspension overhaul ❱ Auto electrical Contributor ❱ Aircon repairs and re-gas ❱ CV joint and propshaft replacements ❱ Computer box repairs ❱ Diff and gearbox repairs ❱ Inspection of brakes and adjust ❱ Inspection of cooling system ❱ Comprehensive all-round vehicle check ❱ Auto – valet and steam wash ❱ Preparation for COR and COF tests

❱ Competitive labour rates ❱ Excellent back–up service ❱ Above average turnaround time ❱ Value for money and customer service ❱ State-of-the-art machinery ❱ Competitive towing rates ❱ Free vehicle diagnostics

BEE

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FLEET MAINTENANCE East Coast Auto Centre has embarked on numerous fleet repairs with the following: Wesbank fleet maintenance • Standard Bank fleet maintenance Avis fleet maintenance • Equestra fleet • Ethekwini water and sanitation services • South African Police Services (SAPS) • SANDF AA (automobile association) • All insurance companies

5/25/20 12:13 PM

COMPANY LISTING

Cerimele Construction Company (Pty) Ltd is a company that specialises in the construction of large diameter steel and HDPE pipelines. We undertake large construction activities and we provide successful projects completed on time, of high quality standards. Our company has a CIDB grade 9CE.

Bloemfontein BloemfonteinWholesale WholesaleStationers Stationers endorses endorse onlypremium premium quality branded stationery only quality branded stationery and business machines, servicing the Free the State, and business machines, servicing Northern and Lesotho extensively. Free State,Cape Northern Cape and Lesotho. With a 500sq meter warehouse enabling us to Our 500m² warehouse enables us to distribute distribute viaoffering courier, offering informed timeouslytimeously via courier, informed advice advice through our very helpful and friendly staff. through our helpful and friendly staff.

Contact Details: Tel: 051 – 430 5279 | Fax: 051 – 448 1685 Email: sales3@paco.co.za | sales1@paco.co.za telesales@paco.co.za | gloria@paco.co.za www.bloemfonteinwholesalestationers.co.za

Alarm Installations Off Site Monitoring Armed Response CCTV Installations VideoFied Installations Guarding Services Safety Fence Installations

No. 1, 15th Avenue, Houghton, Johannesburg, 2198 P O Box 52007, Saxonwold, 2132 Tel: (011) 483-0234 | e-mail:eduardo@cerimele .co.za

051 447 0911 info@defensor.co.za 9 Long Street, Hilton, Bloemfontein

F1477 THAMI SHOZI DRIVE AMATIKWE INANDA DURBAN , 4310

Plumbing | Building | Maintenance | Cleaning Waste Removal | Road Works Noma Mbeje (CEO) Tel: 072 480 5879 Email: Nomathemba@dudicontractors.co.za Dingane Mbuthu (Director & Contracts Manager) Tel: 083 335 8849 Email: Dingane@dudicontractors.co.za Blaze Mbuthu (Project Manager) Tell 081 306 8874 Email: Blaze@dudicontractors.co.za

CIDB GRADES: 4CE|2SQ|1GB|1SO|1ME

ADVERTISE IN

BUSINESS

A publication for progressive business

Reach 20 000 subscribers of the ANC’s Progressive Business Forum.

TO ADVERTISE IN UPCOMING EDITIONS CONTACT Tatenda Musonza | tatenda@yesmedia.co.za | 021 447 6467 Crosby Moruthane | crosby@yesmedia.co.za | 067 053 0189

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5/20/20 7:38 PM

BOOK REVIEW

A RUNNING START This invaluable resource, written by SANDY VAN DIJK and LESLEY WATERKEYN, is packed with actionable steps to steer you towards sustainable entrepreneurial success – from the ground up

tarting a business is not for the faint of heart. From the get-go, a budding entrepreneur is faced with the harsh reality that around half of all start-up businesses in South Africa fail within 24 months. As the days, weeks and months tick by, the inevitable questions are sure to appear: When will the customers come? Was this a good idea? What was so bad about working for a boss anyway? Maybe I should just call and say I’m coming back to the ofﬁce. It’s a treacherous journey. But, luckily, not an impossible dream. As the statistics also show, half of everyone who strikes out on their own make it. The difference between those who do and those who don’t might come down to creativity or perseverance (or a sympathetic bank manager). More often, however, it’s simply a case of know-how, which is why The Entrepreneur’s Playbook: from Rookie to Rainmaker in Seven Steps is an invaluable read if you’re setting out on your own.

Written by Sandy Van Dijk and Lesley Waterkeyn, the book runs through the seven stages of business development that must be mastered for a new entrepreneur to achieve sustainable business success. The book presents and explains business basics; teaches the finer points of branding, marketing and sales; discusses finance and leadership; helps you achieve sustainable growth; and ultimately guides you towards making a meaningful contribution to the wider business community. As the name might imply, the book is structured to give readers a running start as they set out to build their businesses from the ground up. It’s filled with real-life examples and specific, actionable advice on how to start an enterprise. And it’s not only for rookies. The content is just as useful for existing entrepreneurs looking to grow and develop their businesses. Sandy van Dijk is the co-founder of Over the Rainbow. She is the COO of Over the Rainbow, a social enterprise

that offers support, training and connections for entrepreneurs. The challenge of starting a business has given Sandy ﬁrst-hand experience of what it takes to be an entrepreneur. Lesley Waterkeyn is the Group CEO at CWDi. Her resume includes steering the company Colourworks from a small print agency to a fully integrated marketing agency. She has over 20 years of entrepreneurial experience and is an active member of the world’s largest peer-to-peer entrepreneurial network, the Entrepreneurs’ Organisation (EO). ORDER INFORMATION The Entrepreneur’s Playbook: from Rookie to Rainmaker in Seven Steps can be ordered from Knowledge Resources Ground Floor, Yellowwood House, Ballywoods Office Park 33 Ballyclare Drive, Bryanston Contact: tel: (+27 11) 706 6009 fax: (+27 11) 706 1127 e-mail: orders@knowres.co.za Available online at: www.kr.co.za

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