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Slaves To Debt: Oh, What We Owe!

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If you want to know of the damage and desperation of debt, just ask 63-year-old Memory Oosthuizen.

Oosthuizen and her partner, Carol, felt the wrath of the 2008 recession when they lost their jobs. Money was tight and the going tough. They used up R750,000 ($56,000) of their retrenchment packages, retirement funds and even took up a second bond on their home to start a car washing business. It ushered in more financial problems.

“The business wasn’t doing so well because money was tight for a lot of people. We had to pay 10 of our staff members and pay our own bills. We also had to pay R25,000 ($1,900) rent at the business premises,” she says.

They turned to credit cards and loans to keep the business running.

“I had three credit cards and my spouse also had three credit cards. We got them so easily. I know that we have to be in control but when you are in a situation like that, it’s so easy to see it as a way out. You can have a credit card without a credit check in just a day. They would call you and say you have been pre-approved, even if you haven’t applied,” says Oosthuizen.

In just a year, the pair racked up R1.2 million ($90,000) in debt. Their landlord took their car washing equipment in lieu of unpaid rent.

“It was the toughest time of our lives. We struggled and had nothing. It was quite a humiliating situation… We managed to get out of debt through debt counselling but it took us years. I never want to be in debt again. Funnily enough, just the other day, I got an SMS from a bank offering me a credit card of R50,000 ($3,800). The banks tempt you by sending you such messages when you are in a bad situation.”

It may be tough to say no, but there is help. The two dug themselves out through debt counselling that is becoming a boom industry.

There is also a volunteer, Nicolette Mashile, who left her nine-to-five job to teach people how to handle money.

“I noticed people sign up for these financial products but they don’t really know what they are, what they will pay out or when they will pay out. I once had a policy with Old Mutual. It was the easiest thing to get into. I just filled in a contact form on the internet, they asked for my ID and all of a sudden I had a policy. The day I wanted to withdraw my money, it was a struggle,” says Mashile.

Nicolette Mashile (Photo supplied)

The worst thing, according to Mashile, is that qualified people are the most vulnerable. They have a salary and qualify for loans.

“A friend of mine wanted to buy a home and she got an approval at 16%. The prime at the time was 10.25%. Banks have a target to reach but remember sometimes it can be at your expense.”

Mashile, a social entrepreneur and self-taught financial literacy educator, says the problem is people don’t learn how to handle money at a young age.

“Most of us grow up in homes where it is cool to be in debt and they perpetuate the idea that everyone is in debt and it’s easy to get loans. Even at the ATM, there are options you can click to get a quick loan. You also find many people who have never had money and all of a sudden, they start working and they have R25,000. Why would they not buy a car? The other issue is that people don’t prioritize. Our attitude towards debt is a problem, we wish it away,” says Mashile.

She says people have to talk openly about debt and money, ask questions before taking credit, read contacts, understand their financial situation and live within their means.

“If you can’t afford something, you can’t afford it. Don’t become a slave to debt. Also don’t agree to interest rates that are high. Remember the bank needs you more than you need it,” says Mashile.

The big picture is frightening.

Statistics from the National Credit Regulator (NCR) show that, in South Africa alone, about 25 million people have active credit records and 10 million are in severe arrears. In the 2015/2016 financial year, total consumer credit in the country amounted to R1.66 trillion ($125 billion), an increase of 2.94% year-on-year.

South Africa saw a shift when government introduced the National Credit Act (NCA), in June 2007, to open up credit to those who struggled to get it. It worked, but problem is, it also steered the country down a slippery slope of debt. South Africa is one of the most over-indebted consumer nations in the world.

“The designers of the NCA naively thought this credit would be spent on ‘wealth creating assets’. What has transpired over the last 10 years is that the increase in mortgages and use of credit in funding businesses has been relatively dismal, and the vast majority of the increase in credit has been in expensive unsecured credit that has been spent on consumption with the recipients having very little, if anything, to show for it at the end of the last 10 years,” says DebtBusters CEO Ian Wason.

Wason says approval rates, for borrowing, have slowly been falling and are currently around 50% with some credit providers having approval rates in single figures. The regulators believe credit shouldn’t be given to those who can’t afford it. What is happening is some credit providers look at their books of business and ignore the individual’s affordability to pay.

“A good example is the furniture sector which tends to have 50% non-performing loans and the difference is those who pay are charged high interest and fees thus in the end making the business profitable. What is deeply frustrating is that the NCR has the power to increase the minimum expenses threshold that the credit providers have to use, currently at around 9% and less, and it has not done so,” he says.

At first glance, South Africans look relatively financially healthy with the debt to income ratio at 74%, compared to the UK at 145%. The difference is, the bulk of this debt, in developed nations like the UK, is backed by bricks and mortar, through mortgages, typically at interest rates around 2% and, in South Africa, unsecured debt is the big boom in town.

“Nearly 50% of South Africans’ debt is in expensive unsecured credit over shorter terms. Of the consumers that approach DebtBusters for help, they are spending an average of 98% of their income on debt repayments,” says Wason.

The World Bank’s Global Findex database found that, between 2013 and 2014, 86% of South Africans borrowed money. According to the survey, which interviewed 150,000 people over the age of 15 from 140 different economies, sub-Saharan Africa had the highest number of borrowers at 54%, with 42% using family and friends as sources of new loans. It’s not always the consumer’s fault. Lack of financial literacy and unscrupulous credit providers are some of the causes of Africa’s personal debt problem.

African Bank was arguably one of South Africa’s notorious biggest lending banks. At its worst, in August 2014, the bank had a loan book of around R60 billion ($4.5 billion). According to the Myburgh Report, the bank was receiving 60 to 80 complaints of reckless lending a month, mostly from debt counsellors, and was granting between 100,000 and 120,000 loans monthly.

That’s not all.

Capitec Bank, founded by one of Africa’s richest people and FORBES AFRICA cover, Michiel Le Roux, recently found itself in the headlines when consumer watchdog, Summit Financial Partners, served the bank with High Court papers. It was about the banks former multi-loan practices which relied on one prime agreement that gave the consumer 12 different payday loans.

“Their product was most certainly illegal in that it was either reckless, because no proper affordability assessment was done, or charged initiation fees incorrectly… Unsecured credit in South Africa charges interest on a fixed rate basis, thereby not affecting the consumer when rates increase. However, interest, initiation and service fees on these payday loans mean the total cost of such multi-loans vary between 150% and 450% making prime rate adjustments immaterial. Capitec has been able to create a few billionaires sitting in Stellenbosch by charging such ludicrous rates on payday loans, since their inception, to the financially ignorant masses who don’t understand the consequences of such high yields. Further, we have many cases where Capitec actually prey on these ignorant, vulnerable groups to get stuck in debt spirals thereby relying on Capitec’s monthly payday loans to stay afloat,” says Clark Gardner, CEO at Summit Financial Partners.

There is more.

In March this year, the NCR announced that it had referred Wesbank, a division of FirstRand Bank, to the National Consumer Tribunal, for alleged breaches of the National Credit Act 34 of 2005, after an investigation found that Wesbank, through its debt collection agents, coaxed defaulting consumers into surrendering ownership of their motor vehicles.

“Consumers are reminded that a credit provider can only repossess a motor vehicle from the consumer if there is a court order authorizing the credit provider to do so,” says Jacqueline Peters, NCR’s Manager for Investigations and Enforcement.

Wesbank says it respects the NCR’s decision to refer the matter to the National Consumer Tribunal, however, disagrees with the conclusions.

“This referral does not constitute non-compliance with the National Credit Act but is instead a result of differing interpretation of the applicable legislation. WesBank has a strong commitment towards achieving fair treatment of our customers and will continue to cooperate with the National Credit Regulator and the National Consumer Tribunal,” it says in a statement.

Small credit providers are also guilty.

In September 2015, the National Consumer Tribunal cancelled the registration of credit provider, Mayibuye Cash Loans, following a lengthy investigation that found the company failed to conduct affordability assessments; to provide copies of pre-agreement statements and quotations; and charged interest and fees in excess of the prescribed rate.

It can destroy lives.

Maybe it’s time you get your head out of the sand.

‘You Can’t Borrow Your Way Out Of Debt’

The tale of an entrepreneur who saw money in the keys that free people from debt slavery. 

Neil Roets (Photo supplied)

Imagine working all your life and more than 98% of your income goes towards debt? Maybe it was that luxury car you knew you couldn’t really afford or that fateful day you said yes to a credit card?

Ten million people, in South Africa alone, plus millions more across the continent, are in severe debt according the National Credit Regulator. On the other side of the coin, smart entrepreneurs have seen a gap.

Neil Roets saw an opportunity to make money, from people without money, when the National Credit Act was introduced in 2007. At the time, he was in conveyancing where he saw the ravages of a tough recession and struggling economy.

“I experienced first-hand how people were struggling to pay their bills and couldn’t get loans. I realized people needed debt counselling so I did a course, and thereafter went on the quest to start Debt Rescue,” says Roets.

Debt Rescue makes a repayment plan, through budget advice and negotiation with credit providers, for reduced payments and the restructuring of debts.

The difficulty for the business was very few people knew about debt counselling.

“Coming out of a legal background, I understood the process but just getting the word out to people, so they know there is help out there, was the most difficult… because of the name, people sometimes think debt counselling is just sitting on a couch and talking but that’s not the case,” he says.

Another problem was people didn’t understand how debt counsellors make money from helping people who are already struggling to pay their bills.

“The fees are regulated and worked out based on what you can afford to pay your credit provider on a monthly basis. After we have worked out what your monthly instalment would be, the first instalment comes to us, and is capped at R6,000 ($450). We also have an aftercare fee of 5% of the amount that needs to go to the credit provider which is also capped at R400 ($30).”

Debt counselling is big business. Debt Rescue, alone, signs close to 1,000 clients a month and employs 110 people. Imagine how much debt that is? Roets feels a lot more people should be under debt review.

“The National Credit Regulator statistics show that 45% of all credit active consumers are over-indebted meaning that they are in areas with at least three payments on one of their accounts. That amounts to more than 9 million credit active consumers in South Africa that can benefit from debt counselling but currently there are close to about 300,000 people under debt review,” he says.

Many of these consumers are in a fix because credit providers are pushing unsecured credit.

“People are financing their lives, and even buying clothes and food, through credit. That’s very worrying because you should never finance your life through credit. If you can’t afford it, you can’t afford it. People forget that if you finance it now, you have to pay it back with interest meaning next month you will be in a worse situation. You can’t borrow your way out of debt,” says Roets.

There may be a business opportunity in the debt counselling industry but Roets warns it needs entrepreneurs of steel, who also understand legal processes.

“There are over 3,000 registered debt counsellors but you only really see the big five companies featuring all over. The process is not easy, you have to form relationships with the credit providers otherwise you won’t get a good deal for your client.”

Debt is not going to go away, in Africa, in the 21st century.

Did you know?

To qualify for debt counselling, you need to be over-indebted as defined by the National Credit Act – that is, you can’t repay your minimum monthly instalments. This is determined by a debt counsellor. While you are on debt review, you can’t take out further debt.

Tips To Avoid The Debt Trap

  1. Say no to a credit card
  2. Check your interest rates
  3. Don’t buy without a budget
  4. Look for best value when making purchases
  5. Don’t finance living expenses and luxury goods with credit
  6. Never take out a loan
  7. Have an emergency fund
  8. Pay bills on time
  9. Save and buy cash
  10. Always read your terms and conditions and understand your contract before signing on the dotted line

Daughter Of Debt

The life of a college graduate who grew up watching her mother pile up debt, and feels the pain 30 years later.

 

Photo by Getty Images

Debt reaches down through the generations. At just 30 years old, Luba Dube* has seen enough debt for three lifetimes. It all started when she was in primary school, when her parents separated.

“At first it was subtle. I remember on payday, my mom would buy us a lot of things and three days later we would be broke again… She would send us to go borrow small amounts like R50, or send us to return money she had borrowed,” she says.

When Dube went to high school, it got worse.

“My sister, at the time, had just started working and wasn’t making a lot of money but a lot of responsibility fell on her. I was a weekly boarder and she even had to pay R250 per week towards my boarding fees.”

Dube realized something was seriously wrong. Her mother never had money. She searched for a way out – there was none. Debt loomed ever larger.

“There were times we had to suddenly move because of unpaid rent… Whenever it was approaching the first of the month, I could see there was a lot of tension and stress in the house. We, as kids, would also get stressed because the landlord would come ask for rent and we would have to open the door when mom wasn’t home. Sometimes she would come home very late at night trying to dodge the landlord and we were the ones who had to answer,” she says.

Older sisters tried to help. They moved Dube’s mother to a cheaper house where she would use one bedroom, and have tenants in two others, so she could pay as little as R1,000 ($75) in rent. It didn’t help.

“Even though the tenants paid rent, she collected the money but it wasn’t going where it was supposed to. I realized that if the relationship with money doesn’t change, it doesn’t matter what we do to try and help.”

According to Dube, the worst thing was that her mother appeared desensitized to borrowing money that she never returned. Her children ended up more worried about the debt than she was.

“She would even borrow someone else’s rent money with the promise to return it, in time, knowing she might not be able to. I have not been able to understand her lack of respect for other people’s money,” says Dube.

In Dube’s view, when her over-indebted mother needs to get money, she tries to get it at all cost. One of the worst examples was when her mother spent close to a R100,000 ($7,500) of her client’s money. She was supposed to put the money in a trust so her client could buy a home. To make matters worse, this was money from a disability pay out.

“These were people’s livelihoods. We just had to do what we could to make sure the people got their money back. I had to borrow money I had no intention to borrow. For a good year, my stuff was on hold so I could pay that back.”

It wasn’t the first time Dube has bailed her mother out.

“Sometimes I have had to say ‘no’ because her relationship with money still hasn’t changed. When I was a kid there was nothing I could do but now, because I’m a grownup, I try to have these conversations with her but it’s very difficult because of the child/parent relationship,” she says.

So, if you are in debt up to your ears, it’s not only you who is suffering; just ask your daughter.

How Your Socks Can End Up Around Your Ankles

Sbusiso Ngwenya jumped for joy when he made the FORBES AFRICA 30 under 30 list with his money-making colourful socks. What you don’t know is that, last year, he lost it all in a dangerous dance with debt.

Sbusiso Ngwenya (Photo by Jay Caboz)

 

It all began, so innocently, with a golden opportunity to put his socks on the shelves.

“I was so excited when Stuttafords gave me the opportunity to list my products. I was so happy I signed the contract out of trust only to find that, by listing my products there, it means that I agree to only buying retail space… I signed a deal I didn’t understand that just emptied my pockets,” he says.

It cost a pretty penny to buy shelf space at Stuttafords, one of South Africa’s top retailers. Sock sales came to about R40,000 ($3,000) a month at best and a mere R2,000 ($150) or R1,000 ($75) at worst.

“There was also a big spend on making sure we market the products and drive traffic to the store. At the time, the store itself wasn’t doing well and less and less people were going there… it was tough but we tried to keep up appearances for it to seem like we are doing well,” says Ngwenya.

It was expensive. He started taking money from his corporate division, that distributes bulk unbranded socks, to finance Skinny Sbu Socks. The problem was he was also living a life of a rock star, traveling, partying and buying gifts for girls; all through the business account.

“Stuttafords was taking a big percentage of the money and all in all, in just a year, all these things cost me R800,000 ($60,000).”

The whole business suffered. He tried to take up speaking engagements to supplement the income. It didn’t help.

“I started borrowing money from friends and family just to survive. I lost my apartment, car and everything. I couldn’t afford the life I was living anymore and my debts kept piling.”

He moved back home, to Tsakane, a township east of Johannesburg, with his grandmother. It humbled him. It was time to start over.

“My sister went out of her way and took a huge personal loan to help me. My uncle also played a huge role in helping me. I needed someone who could look out for the numbers of the business so we didn’t mismanage the money,” says Ngwenya.

His uncle was what he needed. He helped him revive the dying business.

“We did a whole turn around to make sure we build up the business again. I am now very careful with every rand. It was a huge character-building experience that taught me not to rush into things and not to treat a business account as a personal account.”

Together with his uncle, they are also reassessing the business marketing strategy and ensuring Ngwenya concentrates on the creative design of the socks.

“I am happy this happened now rather than in 10 years when I have a family and larger responsibilities.  Someone once said to me ‘you didn’t go to school to study what you are doing. This mistake was your school fees. You needed something that was going to wake you up’. Unfortunately I had to pay close to R1 million ($76,500) for my fees,” says Ngwenya.

Let’s hope he pulls up his socks.

Did You Know?

  • If you default on your debts your credit provider can, and will, take legal action against you which will result in a judgement and can involve an emolument attachment order, or garnishee order as it is more commonly known, where the court can order your employer to deduct a payment from your salary every month to pay your debt.
  • A default will stay on your credit record for six months, and sometimes up to 12 months. Judgements are on there for 30 years unless you repay the debt! If you do repay a judgement then it has to be removed from the bureaus within seven days.
  • If you spend money you don’t have, on things you don’t need, to impress people you don’t even like, maybe it’s time to get help.

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Focus

Lifting The Heavy Veil On Wedding Costs

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With pockets as deep as gold mines, how far are couples willing to go to have the picture-perfect luxe wedding?


The lagoons overlook the snow-white beaches with its swaying coconut trees, embraced by the turquoise waters of the sea in the island nation of Mauritius. It’s a scene straight out of a movie, with a couple cavorting in the distance.

Over 100 guests from South Africa have also gathered on these sands for the weekend wedding of businessman Lebo Gunguluza and his long-term girlfriend Lebo Mokoena. 

The total cost of this union: almost $300,000. 

“I didn’t mind exceeding the budget, because you only do this once,” says new bride Mokoena.

The couple flew over 30 guests and provided them with five-star accommodation at the LUX* Grand Gaube.  Part of the guest contingency included the behind-the-scenes crew for the wedding, as well as the speakers who had to spend four to seven days in Mauritius to prep up.

“We did not want to have a local wedding because we wanted our guests and family to have a different experience. We also wanted our family members who did not have passports and have never flown out of the country to experience a different country,” Gunguluza says.

Snow-white beaches of Mauritius. Picture: Supplied

The weekend celebrations started on a Friday last September with a cocktail meet-and-greet party. Belly dancers who were dressed in floral red and yellow danced the evening away with guests, with a local band taking them to the all-white party on Saturday.

This was just a build-up to the romantic wedding reception with shades of blush, ivory, and gold which was to take place on Sunday at 4PM.

“Every time I think about that day, I want to do it again,” the new bride says.

The couple chose not to have bridesmaids and groomsmen and the guests were encouraged to dress in black and white.

“I didn’t have bridesmaids because it makes you choose between your friends. I felt that if you got an invite to our wedding, you were worthy enough. So, we wanted everyone to be bridesmaids and groomsmen. I think we made it intimate and everybody felt like they were VIPs,” says Mokoena.

Everything fit perfectly as the bride’s two white wedding dresses were designed by Antherline Couture.

For the ceremony, she wore a white ball gown with a diamanté top heavily embellished with beads; while the groom looked dapper in a white tuxedo jacket designed by Master Suit SA.  

The color white was indeed conspicuous.

“I have always felt that white is pure and because I was signing my life away, I felt I needed to be pure, hence I said my husband needed to wear white as well,” she adds.

The lavish white wedding was organized by renowned wedding planner Precious Tumisho Thamaga who ditched her seven-year career in Public Relations & Marketing to become an event planner.

Thamaga organizes events and weddings for affluent clients such as the Gunguluzas.

“They are busy people and they don’t have time to do the administration and the back and forth of vetting in suppliers,” Thamaga says, as she takes over the pain of wedding planning.

Lebo Mokoena and Lebo Gunguluza (middle) with wedding guests in Mauritius. Picture: Supplied

While working in the corporate world, she had attended many weddings that she felt were put together in a way that created a disconnect between the guests and the wedding couple.

“So I saw an opportunity in the fact that there were not a lot of wedding planners that were black,”  Thamaga says. 

She decided to focus on corporate clients in order to turn her passion into a profitable business.

“A lot of people did not expect a black person to be professional and take the business seriously.

“It was not just a hobby or someone helping out a family. It was an actual business and I made sure that I got taken seriously from the onset,” Thamaga says.

In order for Precious Celebrations (the name of her company) to prosper, she had to have a business strategy in place.

“I made sure that I put a lot of time and effort and strategized properly what it was that I wanted to actually focus on, and find a niche [in]. I believed that would separate me from somebody that was already in the industry,” Thamaga says.

However, her job is not always alluring.


Lebo Mokoena and Lebo Gunguluza’s wedding in Mauritius. Picture: Supplied

“When I started in the industry there weren’t so many wedding planners and now it is a different story and everyone thinks it is easy-peasy and it is glamorous,” she says. 

Planning a luxurious wedding takes eight to 12 months and can cost anywhere between R300,000 ($20,813) to R4.5 million ($312,203).

The most expensive wedding Thamaga planned was for a public figure she cannot disclose the name of. 

“It was a destination wedding and the experience from when the guests arrived to the wedding day was memorable. When they arrived, we had a cocktail party and we had activities like canoeing and on Sunday we had an all-white party. [This is] so that people don’t depart on Sunday and may leave on Monday.” 

Only the affluent sign up.

“The smallest wedding that I have had to plan had 80 people and it cost R2 million ($138,000),”  Thamaga says.

She has turned away some clients in the past because their budget was insufficient for the type of wedding they envisioned. 

Thamaga organizes 26 weddings, on average, annually, from countries such as Mauritius, Zimbabwe, Swaziland, Botswana and now she plans on taking her bespoke company global.

One of the unique aspects of her business is that she has maintained a good relationship with the suppliers she has in each country, and has kept her expenses to a minimum.

“The wedding planning-event planning industry is quite lucrative if you do it right. I am not the type that would have too much inventory because I want to feel like the inventory belongs to me; that would limit my creativity,” she says.

“I make sure that I don’t have a lot of expenses, I have coordinators that I have worked with for years and they have full-time jobs.”

Thamaga’s greatest challenge so far was whether or not to outsource other wedding planners when her business was increasing.

“It can be a bit daunting to realize that your business is growing,” she says.

But she opted to remain boutique.

“I had to decide that it is not about the money. I am building an empire where I want a legacy and an ongoing relationship with my clients.” 

She involves her clients every step of the way to bring their vision to an unforgettable reality, and believes that weddings are expensive because of the growing aspirations of the young.

“It is not just in South Africa, it is worldwide,” she says.

Despite the tangible costs of conducting these dream events, the wedding industry in South Africa is largely unregistered as it is a fluid market where services and costs are difficult to track and document accurately.

Fred Elu Eboka, a Nigerian designer who dresses delegates as well as the rich and famous. Picture: Supplied

Africans, no doubt, spend millions per year on costs associated with marital ceremonies. This is the reality of the unregistered wedding industry. Despite the recession and slow economic growth, the wedding industry continues to attract many entrepreneurs to its lucrative opportunities.

As, people never stop getting married.

The Marriages and Divorces report released by Statistics South Africa last May shows an upward trend in civil marriages. Civil marriages increased by 0.6%, from 138,627 marriages registered in 2015 to 139,512 in 2016.

A wedding dress is an important part of a celebration and the bridal couture market continues to show growth.

Wise Guy Reports Database Global Wedding Dress Market Insights, forecast to 2025, states: “The wedding market demand grows continually, and the wedding garments market has notable increase every year. In this case, the competition is also very intense among companies. The involved companies should seize the opportunities to expand the gold mine.”

A previous client of Thamaga’s has spent R200,000 ($13,876) on two wedding dresses and this is nothing for Fred Elu Eboka, a Nigerian designer who dresses delegates as well as the rich and famous. 

He moved to South Africa in 1992 at a time when African designs were not being celebrated globally. 

Twenty years ago, Eboka sold wedding dresses for R15,000 ($1,041) a piece, and now sells for R250,000 ($17,344) a piece, depending on the design. 

“A designer of my caliber in South Africa is undersold because there are people in the United States selling wedding gowns for $250 and I am here selling them for maybe $80, it just doesn’t make sense. It shows that our economy is really bad because a designer of my caliber should be operating on the same level as them, or very close,” Eboka says.

He is a luxury designer. 

“When you think of luxury, it is not just the product, it is not just the textile – it is the whole experience from when you drive in, to when you sit down and have the designer talk to you and learn about your life. The whole artistic process contributes to the cost value of the gown.”

He says that the reason wedding gowns are expensive is because they are meant to be timeless pieces.

“Traditionally, wedding gowns are classical couture. It is not like the normal evening dress that you wear to look beautiful on one night. A wedding dress is like training for the Olympics. You train for them for the rest of your life,” he says.

Eboka also says when designing a wedding gown, you need to take time to know the client, family and their fancies in order to meet the clients’ need.

The material of the wedding gown is usually expensive because he sources the textiles from across the world, and he takes two to three months to create a gown, depending on the embellishments.

Fred Elu Eboka, a Nigerian designer who dresses delegates as well as the rich and famous. Picture: Supplied 

“My designs have a lot of artistry,” he says.

Eboka is a wealthy man but he still believes that the industry is not as lucrative as it could be.

“But we do well, without being arrogant about it… You have to be fully aware of the industry and have the intellectual capacity to understand the potential of the market,” he says.

Pictures are an important element of a wedding because they capture the moment for life.

International award-winning photographer Daniel West meets his clients in a restaurant so he can get to know them better and learn the history of their relationship.

“We, as photographers, need to click with each couple, it is actually vital because we are going to be in their space from the beginning to end.

“So, when we do not gel, we are going to find ourselves in an awkward situation on the day because we, as photographers, are also problem-solvers. We don’t just take pictures on the day,” West says.

His packages start from R18,000 ($1,248) to R60,000 ($4,163) and he says it is because the couple is paying for the quality of the work. His packages include waterproof genuine leather-bound photo albums that he says last a lifetime, as well as 500 images that are both edited and unedited. He also arranges the location for the photoshoots.

“It is more than about taking pictures on the day, anybody can take pictures but the work that I do has more of a boutique feel,” he says.

“You pay to have something like this on the table that will last you a lifetime,” West says.

He does not only take pictures on the day but the photoshoots can take up to three months.

“Each couple that I take pictures of has a different story and that is where I draw my inspiration.”

West says that it takes a while for the business to get to a point that is profitable because photographic equipment is expensive.

“In the beginning, it is unfortunately not lucrative because you have to look into getting the equipment that is up to standard, however, it took me about seven years where I could get to a point that I could make a business out of it,” West says.

International award-winning photographer Daniel West with his clients. Picture: Supplied

His annual turnover before expenses is R800,000 ($55,502) and he has about 25 clients a year.

He believes that the industry is regarded as valuable in South Africa and it is growing because people are becoming more enlightened about the photography industry. And social media has become an important motivator driving this industry.

“It is vital to have a good photographer for your wedding, because you as a bride are not quite educated of what is out there and what is not [in terms of photography].”

A good photographer needs to have foresight.

“The quality and charisma of your photographer is really one of the most important things you pay for because if something were to go wrong on your wedding, like rain, what does your photographer do? Do they stand back or make a plan?” he says.

Other luxe services associated with weddings include limos and chauffeur services, and florists, live music bands and gourmet caterers flown from around the world. The more money you are willing to throw, the more sparkling the champagne, crystal and caviar on the beach

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Why Science Matters So Much In The Era Of Fake News And Fallacies

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Democracy and social progress die without science and fact-based knowledge. Science and facts are the foundational basis for rational and logical disputation and the possibility of reaching some truths.

Fake news, on the other hand, is a calculated assault on democratic freedoms.

The power of the notion of fake news and of its practitioners is demonstrated by how we have all quickly come to accept that there is a category of news called fake news. By doing so, we are running the real risk of being complicit in its legitimisation. My point is: if it’s fake then it’s not news. There is news, and then there is fake stuff, dodgy facts, distortions and lies.

So what’s the connection between science, knowledge and facts?

What makes good science

Science is one important means of producing knowledge and getting to what approximates the truth. Good science results from rigorous processes. Part of the rigour in science and knowledge creation is the peer review process, which is a means of ensuring not only the correctness of facts, but also transparency.

Science must generally also meet the test of replicability. These days data used in scientific experiments often also has to be preserved so it can be assessed or analysed if results are disputed. Ethical norms also govern scientific experiments to prevent harm.

Science is not the absolute truth. Scientific findings are the beginning, not the end, of the quest for truth. Empirical data used in science that can be verified forms a sound basis for robust discussion, debate and decision-making. Science brings a degree of rationality that creates a higher probability that the best interest of society or the public interest will be taken into account in, for example, decision-making.

Science, then, is the habit of exercising the mind to help think through especially difficult and complex phenomena.

This makes science important in the exercise of democracy. This isn’t possible without facts and information that enable – or aid – voters to make an informed choice in elections, for example, or help the making of sound policies that best promote the public interest. Science also enables discerning members of the public to make sense of their worlds and the world.

So-called fake news

Fake news, on other hand, is a set of at worst, manufactured or concocted facts that are a perversion of reality. It is the direct antithesis of science.

But fake news isn’t new. It’s as old as news itself and has a variety of aims, including propaganda and spin doctoring. It can be argued that the growth of spin doctoring in the 1990s is the precursor to the exponential growth of fakery. It has also been enabled by the decline of content that enriches public discourse in the context of commercialisation and concentration of media since the 1980s.

These developments led to a decline in the influence of public interest media or media that strikes the balance between commercial enterprise and the public good. And this has led to the reduction in the kind of news and media content that focuses on science.

Science journalism and investigative journalism, in particular, have seriously declined. This has meant that the ability to shine a light on the dark areas of lack of knowledge, superstition, and myths has seriously been diminished.

Specialist reporting is now confined to the content-rich ghettos of those who are highly educated or interested.

Another reason for the growth of fake news and its increasing influence is the loss of confidence in public institutions, including media institutions and the profession of journalism. Fakery has risen to fill the vacuum, driven by individuals and political organisations who position themselves as messiahs with instant solutions to multiple social crises. In their discourse knowledge institutions, science, facts, evidence, experts and reason or rationality are thrown out of the window as the sophistry of the elite.

The role of social media

Digital technologies and social media have made it much easier to produce and disseminate fake news. It is a paradox: unprecedented scientific advances and technologies are enabling us to transcend traditional constraints of distribution and literally place information at people’s fingertips. Yet these same technologies seem to facilitate more fake news and information that doesn’t necessarily advance the public good.

In addition, social media largely exists outside the professional norms of fact checking and the use of evidence to support assertions, arguments and positions taken in relation to social phenomena.

Fact checking and peer review are more important than ever because of the reality that false information now flows freely. This can be extremely harmful, particularly in public health campaigns.

The attraction of fake news is its apparent simplicity. It has a ring of truth around its claims, even when these are outlandish, and its ability to seem to resonate with what people think are their life-worlds or everyday life. Its ability to reinforce stereotypes, including prejudices, makes a bad situation even worse.

Science, facts and knowledge will save humanity

Science journalism and investigative journalism which seek to pursue the truth rather than just the reporting of events, are critically important in this age of fake news and fallacies.

It is not an exaggeration to say that the sustainability of the idea of humanity and the environment in the broadest sense of the word depends on science – or the respect for facts, evidence and experts.

Science that allows the public to have a nuanced understanding of life is important to building inclusive, open societies that enable public participation in decision making and progressive social agendas. Science disseminated in ways that are understood by the public and resonate with their life-worlds is important for building trust in reformed institutions and creating new forms of social cohesion in diverse societies.

Tawana Kupe; Vice-Chancellor and Principal of the University, University of Pretoria

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Entrepreneurship Funds In Africa: Distinguishing The Good From The Bad

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Entrepreneurs have a pivotal role to play in Africa’s unemployment crisis. Today over a third of the continent’s young workforce (those aged 15-35) are unemployed. Another third are in vulnerable employment. By 2035, Africa will contribute more people to the workforce each year than the rest of the world combined. By 2050 it will be home to 1.25 billion people working aged.

To absorb these new entrants, Africa needs to create over 18 million new jobs each year. Governments need to put in place policies that drive economic growth and competitiveness. These in turn, will enable the growth of small and medium-sized enterprises (SMEs). This is important because they currently play a significant role in low-income countries, representing nearly 80% of jobs. They are also responsible for 90% of new ones created each year.

The challenge for countries is how to support the growth of SMEs. Various African governments have experimented with ways to help address the US$140 billion funding gap for startups and SMEs. For example, one approach has been to set up entrepreneurship funds.

Based on my experience of watching their performance over the past 18 years, I would issue some words of caution. Some entrepreneurship support models work better than others. And how they are set up – particularly the governance structures put in place to manage them – is key to their success, or failure.

Funding gap

Access to financing is consistently listed as the biggest obstacle to business for SME’s in African countries. They often face double digit interest rates from local banks. And venture capital penetration is still extremely low. Top end 2018 estimates put it at about $725 million for the whole continent.

To tackle the problem, African countries continue to start new entrepreneurship funds. In July 2017 Ghana launched the National Entrepreneurship and Innovation Plan. The aim is to provide integrated national support for start-ups and small businesses.

Almost a year later, Rwanda secured a $30 million loan from the African Development Bank for the establishment of the Rwandan Innovation Fund. This will focus on investments in tech-enabled SMEs.

As new funds are started, African countries must look to the successes and failures of both global and regional funds to replicate best practices and avoid common pitfalls. African governments should explore replicating models similar to Small Enterprise Assistance Funds and the USAID backed enterprise funds. Both include robust investment selection criteria for funds.

In doing so, African government-backed entrepreneurship funds would operate as fund-of-funds – where a fund invests in another private equity or venture fund rather than directly in businesses themselves – as do many development finance institutions globally such as the UK’s CDC or FMO of the Netherlands.

The what and the how

The fund of funds structure creates an arm’s length relationship between the government agency that houses the entrepreneurship fund and the businesses that eventually receive investment. In between, sits a professional fund manager that earns the majority of its income from making good investments, growing companies and exiting them after a period of five to seven years. In this way, there are natural disincentives for corruption and market-based selection criteria for the entrepreneurs who receive investment.

How the fund managers are selected also matters. To ensure true investment independence from the government, fund managers and board members must be chosen in a transparent and competitive process. And once selected, representatives of the government entrepreneurship fund agency can sit on the investment committee for oversight purposes but should respect the fund managers’ independent decision-making.

There are examples of funds being set up without the necessary independent, accountable fund managers. One is the YouWin program in Nigeria. Created in 2016, it was set up to help youth entrepreneurs grow businesses. But senior civil servants handed out awards to friends and relatives.

Government supported fund managers through the FoF model can also catalyse additional investment. By operating in markets and sectors often ignored by traditional private equity funds, Small Enterprise Assistance Funds and enterprise funds have mobilized additional capital for investment-starved companies. African government-backed entrepreneurship funds could do the same by participating in blended finance deals with development finance institutions, social-impact investment funds, local banks and other market players to back growing firms.

Measuring success

While not actively managing the funds’ portfolio investments, governments have a key role to play in guiding the funds priorities. Priorities may vary by country and given Africa’s growing rates of unemployment, funds should prioritise job creation by evaluating investment on key performance indicators. These would include the number of jobs created per dollar invested, indirect jobs created per dollar invested, and average salary of job. In addition to job creation, governments can direct funds to focus on specific sectors either in need of increased capital or high-growth areas in local economies.

Beyond establishing investment criteria, government-backed funds should prioritise rigorous measurement of investment results and long-term data tracking to inform future investment decisions. The UK British Bank regional growth fund found the cost per job created varied considerably by project from £4,000 to over £200,000. It concluded that a better allocation of funds could have led to thousands more jobs created for the same resources.

Data driven investments can not only lead to a better results, but further curtail issues around potential mismanagement of funds.

Tackling Africa’s job creation challenge requires innovative thinking and initiatives that support private sector-led growth. Looking to the model of Small Enterprise Assistance Funds and enterprise funds, African governments can spur local ecosystems and drive new private capital to regions today seen as unfriendly or too risky to outside investors.

Properly structured investments today could yield much larger dividends tomorrow.

-Aubrey Hruby; Senior Fellow, Africa Center, Georgetown University

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