A powerful team of private lawyers will fight the mining companies in court. With an attorney backed by four advocates, it is clear that the Department of Mineral Resources (DMR) plans to fight tooth and nail to keep its Mining Charter III intact. It promises a quick fix for the black majority calling, in tough economic times, for a larger slice of one of the richest cakes in Africa. The mining industry of South Africa contributed 7.1% of the country’s GDP in 2015, employing more than 450,000 people and paying more than $1 billion in royalties and taxes.
For a start, Mining Charter III calls for an increase in the black ownership of mines from 26% to 30% at all times. In court, the Chamber of Mines, which represents 90% of the country’s mining companies, will argue for “once empowered, always empowered” policy in that once a mining house has borne the cost of transferring ownership, into black hands, it is deemed to have done its job. This would make most companies compliant overnight.
What has become clear, since it was gazetted on June 15, is that even though it was more than four years in the making, many agree this was a hastily and poorly written document, full of holes, compiled without consultation with the industry. A source in mining says even the savvy, powerful, legally trained, regional managers of the DMR weren’t even consulted. All of this is likely to weaken the DMR’s case in court. Martin Madlala, the spokesman for the DMR, was unavailable for comment.
<a href="http://www.forbesafrica.com/investment-guide/2017/07/19/smugglers-take-sheen-ugandas-bright-gold-refinery/" target="_blank" rel="noopener noreferrer">Smugglers Take Sheen From Uganda&#8217;s Bright Gold Refinery</a>
“I think just the whole approach is terrible and the content is flawed. If you look at what it says about prospecting rights of 50% black ownership, plus one share; when you are prospecting you must take drill samples of the ore body. One hole will cost you R200,000; for an emerging black miner, where does he get the millions to do that with?” says Frans Baleni, the former head of the National Union of Mineworkers and current central committee member of the South African Communist Party.
The head of the New York Stock Exchange-listed DRDGold, which produces more than 140,000 ounces of gold from mine dumps around Johannesburg, feels that the 70% black ownership requirement for procurement could infringe the General Agreement on Tariffs and Trade (GATT) rules.
“Very little in this document is right, it is a shambles… I don&#8217;t think it can be executed,&#8221; says Niel Pretorius, the CEO of DRDGold.
<blockquote>&#8220;We will not be applying for mining licences in this country anymore because of the new mining rules. We do have mining licences to last us for 10 to 15 years, but there won&#8217;t be any more applications for now,&#8221; says Pretorius.</blockquote>
Defeat in court would mean a rewrite, watering down the new mining codes. It’ll be a setback for the government. Either way, after years of attempting to be a team player, capital in mining is likely to become a lot more defensive, allocated in the interests of shareholders and little else.

‘It’s A Shambles’

In Brussels, the airy, elegant, European capital built by King Leopold on riches from the minerals and rubber of the Democratic Republic of Congo, there was a glimmer of hope for Africa.
At the EU-Africa Business Forum, the European Union (EU) threw its weight behind a new push for investment, along with private companies in Europe, into the emerging economies of Africa. It could mean jobs and a new generation of entrepreneurs. The plan is to concentrate the money on dynamic small and medium enterprises, by easing private investment into the continent.
The EU plans to leverage investments in Africa to the tune of €44 billion ($49 billion) – the equivalent to the market cap of Barclays Bank – before the end of 2020; it also plans to reduce risk for foreign investors by putting up €1.5 billion ($1.7 billion) in guarantees to secure their money if it goes awry.
The EU is worried about the estimated 50,000 Africans who risk their lives, every year, crossing the Mediterranean because there is nothing at home.
<a href="http://www.forbesafrica.com/life/2016/10/01/lonely-planet-child-refugee/" target="_blank" rel="noopener noreferrer">A Lonely Planet For The Child Refugee</a>
“Hope is what we are offering,” says Roberto Ridolfi, a former EU ambassador in Malawi, Uganda and Namibia, now the Director for Sustainable Growth and Development at the European Commission. He wrote the new investment policy and hopes it will navigate through the European Parliament by the end of July.
“Hope? We Africans have to work for this hope,” declared the Vice President of Côte d’Ivoire Daniel Kablan Duncan, sagely, when I asked him about it a few hours later.
Not all Africans in Brussels were happy. The Deputy Chairman of the African Union, Thomas Kwesi Quartey from Ghana, complained that the continent had not been consulted.
<blockquote>“It’s like someone coming in and planning alterations to your house without asking you,” he says.</blockquote>
How long it will take and how many jobs the plan will create is likely to be another question. When dealing with the governments of Africa the latter, in the shape of thousands of jobs, is likely to demanded by State House sooner rather than later. There was a lot of talk about so-called “sustainable jobs” in Brussels – with unemployment plaguing many African countries along with a rising number of discontent youth, the leadership of Africa wants vast numbers before  sustainability.
The problem is many of the high-tech companies interested in plugging the gaping infrastructure gaps in Africa employ few people. Take a foreign investor in Africa, 46-year-old Philip Gahn, based in San Diego, California, who runs an IT network in a number of countries, including Kenya, Uganda and Botswana.
Gahn, of Asian origin, is a maverick entrepreneur with a remarkable life. He was adopted by Ohio farmers and went to the Massachusetts Institute of Technology at the age of 14.
“It didn’t bother me about being young, there was a 10-year-old girl there doing her master’s!” he chuckles in Brussels.
By the age of 17, Gahn had graduated as an aeronautical engineer, but never went near a plane.
“They weren’t building airliners in the 80s.”
So he began in IT and became an entrepreneur that led to his current investment of $5.5 million into RippleNami, an information gathering network in Africa, with 12 million users, that draws on satellite technology. His system can tell you how many cows and chickens there are in Kenya; he gives farmers the price of cabbages so they can pick the most lucrative market. In Uganda, his system tells fisherman the price of fish so they can make the most valuable catch of the day on Lake Victoria.
<blockquote>“We are into big data, being the brains of the government,” he says.</blockquote>
How many people does he employ in his African network? Two, yes, enough to fit into the front seats of a car.
“We use artificial intelligence,” says Gahn.
Job creation is likely to be just one of the sticking points of this brave new future of investing in African entrepreneurs. The EU says 72% of foreign investment, according to 2012 figures, is concentrated in the continent’s 10 resource rich nations with a mere 6% going to what it calls fragile countries. It wants to help these fragile countries. How many countries will own up to being that?
I recall at the World Economic Forum in Durban in May, President Robert Mugabe being asked  about Zimbabwe.
<a href="http://www.forbesafrica.com/focus/2017/06/01/the-pain-of-mugabe/" target="_blank" rel="noopener noreferrer">The Pain Of Mugabe</a>
“I don’t think you can call us a fragile country. You can call the United States a fragile country.”
One of the many political mine fields the EU will have to navigate with this brave investment plan. It will take brave men and women to see it through.

Billions In Investment But No Jobs

You may not believe it, but this is my first article I have ever published, with my own fair hands, on a website &#8211; not just any website, but ForbesAfrica.com, the publication I have ate and slept for more than six years.
I feel exhilarated, excited and on top of the world. What a way to take our precious content on the important business and entrepreneur story to every corner of the continent? The possibilities stretch out in my mind like an endless blue horizon. How many more lives will we be able to touch, for the good, with our incisive and measured journalism? How many more entrepreneurs could these words inspire to take the plunge? I feel as giddy as I did on my first day in the job 36 years ago.
It also makes me think about how communications for journalists have changed so rapidly in the two decades I have spent reporting from Africa. I arrived to the chatter of the telex machine – for those if you under 50, that was a huge metal box that would type out incoming news onto paper that we had to rip off and read. On top of this, very few people had expensive satellite television; all we had was the faint crackle of shortwave radio. When we journeyed to the bush, on stories, even day-old newspapers were scarce – it was so bad, we used to miss the deaths and funerals of prominent figures, only to find out months later that they had passed on.
In those dim days, even using a fax to file stories was seen as man landing on the moon.
But now the technology is on the march and so is our journalism. I work hard every day of my career to carry it forward through the pens and ambition of our crack young team of African journalists at FORBES AFRICA. What an enticing and appetizing prospect.
In the days of telex, crackly radios and dodgy fax machines, we still managed to send out many great stories that went down in African history. Just think how faster and further FORBES AFRICA can send those stories now.

IMG_4665

There’s A First Time For Everything And It Blows My Mind

As another multi-billion-dollar English Premier League season ends, an African-based FIFA World Cup winner has called on clubs to band together to curb vast fees paid to player agents.
The English press is up in arms about the £41 million ($52.5 million) paid to Mino Raiola, the agent who negotiated Paul Pogba’s switch from Juventus to Manchester United.
<a href="https://www.forbes.com/athletes/#676c9a8755ae" target="_blank" rel="noopener noreferrer">World&#8217;s Highest Paid Athletes</a>
Enough is enough, says Terry Paine, a World Cup winner with England 1966, who has lived in Johannesburg since 1984, when he came to manage Bedfordview Country Club in the then Transvaal League.
<a href="http://www.forbesafrica.com/sport/2017/04/01/well-follow-beast-hull-back/" target="_blank" rel="noopener noreferrer">We&#8217;ll Follow Wanyama To Hull And Back</a>
“All the clubs have to get together and say ‘right – are we going to cap this?’ Don’t pay more than £20 million in a deal… the line has to be drawn. They must come to an agreement and stick to it. Put it into the contract how much you pay the agent,” says Paine.
<blockquote>“But you know it will be difficult. The agents will say if you don’t want to do a deal then Real Madrid will.”</blockquote>
Fifty six years ago, Paine – who played a club record 813 games for Southampton – was one of the hundreds of players across England who threatened to strike to end the £20-a-week maximum wage for footballers. He is the Southampton club President and shuttles between Johannesburg and England in the football season.

World Cup winner wants outrageous transfer fees to end

WEF Africa 2017 was a story of foreign investors, growth and grey business suits. It also held the tale of two finance ministers. Rarely have the economic politics of the host nation loomed so large over one conference.
The reshuffling of steady-as-she-goes Finance Minister Pravin Gordhan for young, untested, Malusi Gigaba prompted a downgrade to junk status for South Africa and reverberated throughout the conference in Durban.
“I am young, I have energy for days,” says the younger of the two as he strides confidently down the walkway. Forty-five-year-old Gigaba almost shines when you look at him, like has been varnished. He has his skinny suits made for him – for about $1,600 a pop – by Johannesburg designer Linda Makhanya and wears snazzy glasses. He may have a long way to go to become the greatest finance minister South Africa ever had, but is certainly the most snappily dressed from day one.
Gigaba, fresh from an investment roadshow to New York, Washington and Boston, faces another long haul to drag South Africa clear of damaging junk status and economic decay that will drive capital away from the country.
“He is a bright guy, give him a chance,” says Maria Ramos, the CEO of Barclays Africa.
The man himself bridles at the suggestion that he is too inexperienced for the job. He says, with 13 years under his belt, he is one of the most experienced in cabinet who served in the economic cluster when public enterprises minister.
“I think as soon as he can be on top of the numbers and speak the language of the numbers he will be able to work with a very good team at Treasury,” says Lesetja Kganyago, the Governor of the South African Reserve Bank.
It is Gigaba’s difficult job to stave off another downgrade by the ratings agencies, which could come in a matter of weeks, restore confidence, promote investment and create what he calls inclusive growth – fashionable buzz words in cabinet right now – at a time when any kind of growth would be welcome.
“You need to change the patterns or structures of ownership, of the South African economy, so that black people don’t become only employees and get limited to being a middle class, but you create asset owners,” he says.
<div id="attachment_31403" style="width: 1034px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-31403" class="wp-image-31403 size-large" src="http://www.forbesafrica.com/app/uploads/2017/06/GettyImages-661435026-1024x684.jpg" alt="" width="1024" height="684" srcset="https://cms.forbesafrica.com/wp-content/uploads/2017/06/GettyImages-661435026.jpg 1024w, https://cms.forbesafrica.com/wp-content/uploads/2017/06/GettyImages-661435026-300x200.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2017/06/GettyImages-661435026-600x401.jpg 600w, https://cms.forbesafrica.com/wp-content/uploads/2017/06/GettyImages-661435026-768x513.jpg 768w" sizes="(max-width: 1024px) 100vw, 1024px" />Former Finance Minister, Pravin Gordhan</div>
Nationalization – a word that sends foreign investors running for the hills – is off the table for now.
“You don’t nationalize shrinking economic sectors in a shrinking economy. We are not talking about that. The ANC itself, as the ruling party, has been clear on that; South Africa is a mixed economy.”
With corruption allegations swirling around government, the new minister’s public position on it could be seen as comforting.
“If we allow corruption to become rampant it actually creates a trust deficit between the public representatives as well as the public. And it makes it difficult for us when we have to take tough decisions to earn loyalty and support from the public. And so I am committed in doing everything that we have to do and can to fight corruption and ensure that we are running a clean country.”
Also at WEF Africa was the more soberly dressed Gordhan who looked a little down and had every right to be. He had worked tirelessly for 14 months to put the economy back on to an even keel before being dragged back from an investment roadshow in London to be reshuffled ruthlessly; he found out he had been fired in the newspapers.
“What has happened has happened we can’t mourn over those things. There could have been a more dignified way in which some of those ways could have been done and it was not just me, many  colleagues were part of this process as well and if we begin to lose our sense of dignity and decorum that is not a very good sign,” he says.
It did not rob him of all hope.
“We have had assurances that the policy framework that the government has adopted will remain in place. The world of course is still an uncertain place and whilst there were still green shoots in our economy and globally there is an element of uncertainty that come in either of geo-politics on the one hand or domestic politics and economics on the other hand as well. I am not apprehensive, I am hopeful but hope must be based on some real actions that are taken,” says Gordhan.
“We have to all focus our attention on our best to get the country going, not in the interest of a few individuals, but in the interest of the 50 million people we are here to serve.”
Gordhan had a rough ride as finance minister after climbing back into the saddle in December 2015 following a clumsy reshuffle that saw three finance ministers in four days. He spent most of his second stint in the shadow of the sack or trumped up charges in court.
Even outside cabinet he was under unfriendly fire. Hotheads from the ANC youth league heckled him at a memorial service – yes, I said memorial service – for party stalwart Ahmed Kathrada in Durban. Catcalls from youths for a man who spent the best part of a year in solitary confinement for their freedom to do so.
“I think if you lack a sense of history, if the younger people are not educated about the past and don’t wish to be educated. Thirdly if you practice the politics of renting a crowd you will end up with that sort of denigratory behavior and you have to just forgive them for their ignorance,” says Gordhan before giving a warning.
“Many of us have said that if you carry on at the current rate then the ANC will lose the 2019 elections and we don’t want that to happen.”
A dignified political epitaph for a man likely to end nearly half a century of fighting the good fight by quitting politics. He says he will discuss this with his family and surely they’ve had enough by now.
As for Gigaba; people can often become what the times demand. Many expect him to do what he is told, but maybe the unexpected power bestowed upon him could see him make landmark decisions for the good of the economy with insight as sharp as his tailored suits. If only.

SAFRICA-ECONOMY-WEF

A Tale  Of Two Ministers

Remember Piet Kemp? It’s been more than three years since FORBES AFRICA featured him in its pages in October 2013. Kemp left South Africa for the Soviet republic of Georgia in search of greener pastures, he says he has found happiness and toil thousands of miles away from home. The 72-year- old Kemp claims to now be a Georgian citizen and vows to never come back to his homeland. He was one of 10 South African famers who left on the promise of free land.
<blockquote>I am really glad to be out of South Africa; it’s a dangerous place.</blockquote>
And the whole country belongs to colonialism,” says Kemp. He now has 30 laborers, who neither speak English nor Afrikaans, but Kemp says he is slowly learning the Georgian language. “Speaking the language was very difficult. My wife has been helping me learn it and I don’t need a translator anymore.” Kemp says spare parts are one of the big problems. “Sometimes when the tractor is broken, it takes a long time to get the tools to fix it. We have to import our tools and machines.” Before the age of 80, Kemp plans to retire.

Author: Chris Bishop

FORBES AFRICA SOCIAL MEDIA

‘It’s A Shambles’

Billions In Investment But No Jobs

There’s A First Time For Everything And It Blows My Mind

World Cup winner wants outrageous transfer fees to end

A Tale Of Two Ministers

Greener Pastures For African Farmer