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.
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.
Roadmap For African Startups
Francois Bonnici, Head of the Schwab Foundation for Social Entrepreneurship, explains how African impact entrepreneurs will continue to rise.
Does impact investment favor expats over African entrepreneurs? If so, how can it be fixed?
There is a growing recognition all over the world that investment is not a fully objective process, and is biased by the homogeneity of investors, networks and distant locations.
A Village Capital Report cited that 90% of investment in digital financial services and financial inclusion in East Africa in 2015-2016 went to a small group of expatriate-founded businesses, with 80% of disclosed funds emanating from foreign investors.
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In a similar trend recognized in the US over the last decade, reports that only 3% of startup capital went to minority and women entrepreneurs has triggered the rise of new funds focused on gender and minority-lensed investing.
There has been an explosion of African startups all over the continent, and investors are missing out by looking for the same business models that work in Silicon Valley being run by people who can speak and act like them.
In South Africa, empowerment funds and alternative debt fund structures are dedicated to investing in African businesses, but local capital in other African countries may not also be labelled or considered impact investing, but they do still invest in job creation and provision of vital services.
There is still, however, a several billion-dollar financing gap of risk capital in particular, which local capital needs to play a significant part in filling. And of course, African impact entrepreneurs will continue to rise and engage investors convincingly of the growing and unique opportunities on the continent.
What are the most exciting areas for impact investing and social entrepreneurship today?
After several decades of emergence, the most exciting areas are the explosion of new products, vehicles and structures along with the mainstreaming of impact investment into traditional entities like banks, asset managers and pension funds who are using the impact lens and, more importantly, starting to measure the impact.
At the same time, we’re seeing an emergence of partnership models, policies and an ecosystem of support for the work of social entrepreneurs, who’ve been operating with insufficient capital and blockages in regulation for decades.
The 2019 OECD report on Social Impact Investment mapped the presence of 590 social impact investment policies in 45 countries over the last decade, but also raises the concern of the risk of ‘impact washing’ without clear definitions, data and impact measurement practices.
In Africa, we are also seeing National Advisory Boards for Impact Investing emerge in South Africa and social economy policies white papers being developed; all good news for social entrepreneurs.
What role does technology play in enabling impact investing and social entrepreneurship?
The role of technologies from the mobile phone to cloud services, blockchain, and artificial intelligence is vast in their application to enhancing social impact, improving the efficiency, transparency and trust as we leapfrog old infrastructures and create digital systems that people in underserved communities can now access and control.
From Sproxil (addressing pirated medicines and goods), to Zipline (drones delivering life-saving donor blood to remote areas of Rwanda) to Silulo Ulutho Technologies (digitally empowering women and youth), exciting new ways of addressing inclusion, education and health are possible, and applications are being used in many other areas such as land rights, financial literacy etc.
While we have seen a great mobile penetration, much of Africa still suffers from high data costs, and insufficient investment in education and capacity to lead in areas of the fourth industrial revolution, with the risk that these technologies could negatively impact communities and further drive inequality.
Businesses At The Heart Of A Greener Future
With every day that passes by it becomes more apparent that the Earth is deteriorating and time is running out to save it. Scientists have estimated that we have less than a decade to save the planet before it is irreversibly damaged, mainly due to climate change.
Businesses claim the largest percentage of global emissions (at approximately 70% since 1988, according to The Guardian) which is an alarming statistic, especially in a time when the planet’s well-being is being compromised.
Many large business corporations are hastily coming on board with operating sustainably by transforming their practices and placing business ethics at the forefront of their priorities.
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Last week, a round table discussion was held at the Fairlawns Boutique Hotel, Sandton hosted by Environmental Resources Management (ERM) – the world’s largest sustainability consulting firm. Their aim was to discuss how imperative it is for African businesses to get on board with sustainability.
“We have been talking about how to be sustainable for a long time but now it is time for us to do sustainability,” says Thapelo Letete, Technical Director of ERM.
An engaging and thought-provoking panel discussion ensued with representatives from ERM and mining companies, Anglo American and Gold Fields. They emphasized the importance of sustainability being recognized by investors, especially in mining and oil companies that rely solely on Earth’s natural resources.
Civil society has a colossal role to play in ensuring the sustainability of businesses. Due to the law of supply and demand in production, consumers are being urged to be mindful of their buying habits and to make sustainable decisions. These are as simple as minimizing the utilization of plastic straws by replacing them with metal or paper straws and reusable shopping bags and by recycling selected items.
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“Research suggests that socially and environmentally responsible practices have the potential to garner more positive consumer perceptions of (businesses), as well as increases in profitability,” according to an entry in Sage Journals published in May.
The advancement of science, artificial intelligence and the rapid growth of the technological industry make it an undeniable fact that the Fourth Industrial Revolution is underway. Many businesses across the globe seem to be well prepared for this change. However, businesses in Africa seem to be vulnerable.
“It is difficult to say that all businesses in Africa are prepared for it. It is not a country specific thing but it does vary across corporations. There will be businesses that are well prepared and businesses that are not so well prepared,” says Keryn James, CEO of ERM.
A large part of sustainability also relies on empowerment and equality. Sub-Saharan Africa has the highest number of female-owned businesses who contribute a large amount of money towards their respective countries’ GDPs. However, most of these businesses struggle with the issue of scaling.
“Women sometimes underestimate their ability and they don’t necessarily have the confidence that they should have about the value that their businesses present. Women often take less risks than men,” says James.
“The issue of scaling is one that we see globally. One of the issues are access to funding to support in the investment and growth of their businesses.”
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Going forward, the availability of mentorship programmes and skills development opportunities for women, especially black women in business should be encouraged.
According to a study done by the UN Women’s organization, an average of 3 out of 7 women score higher in performance when they are placed in senior managerial positions. Additionally, if more women work, the more countries can exponentially maximise their economic growth.
Women will be empowered when given the correct skills and opportunities to be able to run their own businesses independently which would ultimately lead to the scaling of female-owned businesses in Africa and sustainable development.
The Nedbank Capital Sustainable Business Awards aim to recognize the efforts of businesses that operate sustainably and to encourage other corporations who intend to adopt more sustainable strategies into their practices. Initiatives such as these prove that business value also depends on how sustainable they are.
It is clear that the prioritization of sustainability and accountability in businesses is the only way forward in the midst of this global crisis. With a combination of will and the rigorous work that African businesses have put into sustainability initiatives and strategies, it is easier to be optimistic about our planet’s wellbeing.
Ex-Google Staffer Says After Split With Chief Legal Officer David Drummond: ‘Hell Does Not Begin To Capture My Life’
Former Google employee Jennifer Blakely has written a scathing blog post with allegations about how her affair with chief legal officer David Drummond unfolded.
A former member of Google’s legal team who says she had a child with the company’s chief legal officer, David Drummond, has written a scathing blog post about the way that their relationship unfolded within the search engine giant, including that he issued “terrifying threats” to take custody of their child after initially refusing to pay child support.
In a Medium post, Jennifer Blakely says that she was inspired to detail her experience after an explosive New York Times story last fall put a spotlight on how the company shielded top executives from harassment claims and sparked massive employee protests.
“Looking back, I see how standards that I was willing to indulge early on became institutionalized behavior as Google’s world prominence grew and its executives grew more powerful,” Blakely writes.
“Women that I worked with at Google who have spoken to me since the New York Times article have told me how offended they were by the blatant womanizing and philandering that became common practice among some (but certainly not all) executives, starting at the very top.”
While her relationship with the married Drummond was included in the Times story and first reported byThe Information in November 2017, this is the first time Blakely has written about the experience herself.
Drummond is one of several current and former Google executives who has reportedly had relationships with employees or extramarital affairs, including Eric Schmidt, Sergey Brin, and Andy Rubin.
READ MORE | Calling Out Sexual Harassment
Blakely alleges that after their relationship ended, Drummond had another relationship with a subordinate, which is against Google’s workplace policy. He is still employed by Google and made more than $47 million last year.
Blakely says that she started working in Google’s legal department under Drummond in 2001 and that after he told her that he was estranged from his wife, they began a relationship in 2004. She says the two had a child together in 2007 and that Google’s human resources department then told her that one of them had to leave the department.
She moved to sales, an area where she had no experience, and subsequently struggled with her work. Blakely alleges that after she ultimately left the company at Drummond’s urging in 2008, but that while they were living together in Palo Alto, he broke off their relationship via text message.
“‘Hell’ does not begin to capture my life since that day,” she writes. “I’ve spent the last 11 years taking on one of the most powerful, ruthless lawyers in the world. From that fateful night forward, David did things exclusively on his terms.”
She alleges that Drummond initially refused to see their son or pay child support, and then fought against her in a custody battle. While she says they ultimately reached a settlement and he began paying child support, she writes that “months or years” would go by when he wouldn’t see their son. In 2014, Drummond allegedly showed her an article about Eric Schmidt’s reported history of extramarital affairs during an argument, implying that the executive’s position granted him impunity.
“His ‘personal life’ (which apparently didn’t include his son) was off limits and since I was no longer his ‘personal life’ it was time for me to shut up, fall in line and stop bothering him with the nuisances or demands of raising a child,” Blakely writes.
Blakely’s story is the latest in a string of public posts from former Google employees highlighting issues with the company’s culture and policies (or their lack of enforcement).
One of the women who helped organize last fall’s protests, Claire Stapelton, recently wrote about her experience with retaliation, another employee detailed the disappointing way the company’s human resources department dealt with her harassment reports, and former senior engineer Liz Fong-Jones posted about “grave concerns” with the company’s decision making in general.
The outspokenness of Google employees exemplifies — and has helped spur — a broader activism in the tech sector that has seen workers speaking out against their employer’s internal policies and business decisions.
Blakely’s post also taps into the larger #MeToo movement which has drawn attention to sexual harassment and abuse in the workplace across industries.
“Until truth is willing to speak to power and is heard, there’s not going to be the sea change necessary to bring equality to the workplace,” she writes.
Neither Google nor Drummond immediately responded to a request for comment.
This story is developing.
-Jillian D’Onfro; Forbes
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