South Africa’s land expropriation debate continues to roil everyone from farmers to foreign investors and financial institutions. What has the government done to address land reform?
It’s a five-hour drive from Johannesburg to Smithfield in the Free State province of South Africa. As we arrive, the sun is shining its warm golden hue over 1,200 hectares of Eddie Prinsloo’s land. As we drive on the long dirt road towards the farm house, the smell of manure hangs thickly in the air. On the right is a beautiful view of the mountains towards Lesotho. It is quiet and peaceful here but debates about white-owned farms are getting louder and louder.
The issue of land in South Africa is big. Many black South Africans were pushed off commercial farms and even denied opportunities to own land during white colonial rule. In a democratic South Africa, it has caused heated debates around dinner tables, in political party headquarters, and parliament and even had United States President, Donald Trump, tweeting. It has also given birth to opposition political parties like Julius Malema’s Economic Freedom Fighters (EFF) and Andile Mngxitama’s Black First Land First (BLF).
Most black South Africans say they want land. The African National Congress (ANC) government agrees. It wants to change the Constitution to make it possible to take land from white farmers and give it back to black South Africans. It is calling it expropriation of land without compensation.
“The ANC will, through a parliamentary process, finalize a proposed amendment to the Constitution that outlines more clearly the conditions under which expropriation of land without compensation can be effected. The intention of this proposal is to promote redress, advance economic development, increase agricultural production and food security,” said South Africa’s President, Cyril Ramaphosa after the ruling party’s two-day National Executive Committee (NEC) Lekgotla in South Africa’s capital, Tshwane.
This news sent shivers down the spines of farmers, banks and some investors. The government is however adamant expropriation without compensation should happen to give opportunities to the blacks who had land unjustly taken from them.
Prinsloo, a white man who started sheep farming in 1974 when he inherited the farm from his father, says he is one of the few farmers already trying to empower blacks. We meet him in his thatched office. Awards and photographs of sheep hang on the wall.
Two years ago, he asked the government to buy one of his four farms on condition it will give it to his nine workers.
“In 1994, I wanted to give my people a farm because they sell a lot especially to the Lesotho people. That is their part of the business… In 2016, I offered the 1,500-hectare farm to the government on condition that my workers will be the new owners and they get title deeds,” says Prinsloo.
The process took two years. It worked. Currently, the farmworkers have 49% shareholding in the farm, while Prinsloo retains 51%.
“I will help them by training them on the business side of farming and letting them use my equipment for their sheep. Black farmers are good farmers, they do all the work but they don’t know about accounting and other stuff but these things can be taught. I want them to know every aspect of this business so that they are able to run their own farms,” says Prinsloo.
According to Prinsloo, who is fourth generation South African, the longest-serving workers will get more shares to the farm compared to newcomers.
“The government was very supportive. It just took too long and I almost sold the farm to another farmer who wanted to do this with my employees.”
Asked about his views on Ramaphosa’s plan for expropriation of land without compensation, Prinsloo does not appear worried.
“It has never scared me. I believe that before the elections, [the ANC] makes a lot of scary announcements but I have never been scared. I think it will just go on as we farm now. I don’t think it’s fair to expropriate land without compensation. Seventy five percent of all black people want to become a part of agriculture but only one percent wants to farm,” he says.
Prinsloo says his fear is that when people get things without paying for them, they would not value or look after them.
“The government must now give the black people who want farms a low interest rate so they can be able to buy land. In the old days, there was Agri bank. It helped poor farmers who couldn’t get a loan from the land bank. The government must bring it back.”
Prinsloo however says he is against farmers who have land here but are living overseas leaving the land unattended.
“Those farms should be taken and given to black people, like my staff members, who deserve it.”
Palesa Phantsi is one of Prinsloo’s workers set to benefit from this deal with the government. She has worked as a maid for Prinsloo since January 2012.
“I am so happy that I am getting land. I never thought this would ever happen in my life. Now, I will grow and be able to do many things I couldn’t do before,” says Phantsi.
Lebogang Phomane is another employee set to benefit from this initiative. He walks us around the sheep kraal showing us what his day-to-day work with sheep entails. He has worked for Prinsloo for 30 years and knows most of the work except the administrative side.
“I am so happy because a lot of farmers don’t do this kind of thing. When he started talking about it two years ago, I didn’t believe him. Now he is helping us create our own legacy. I stopped going to school in grade nine so this is going to be life-changing,” says Phomane.
Prinsloo says he will train these soon-to-be land owners on the business side of sheep farming and even help them with equipment and a place to sell their sheep or wool.
This initiative has won him a lot of support but also criticism. One of those against his actions is BLF, a South African political party founded in 2015.
“This is a scheme by whites to hide the fact that the likes of Prinsloo gets paid for stolen land. There is no prescription for historical land theft – and the white Prinsloo still benefited by selling the stolen land. This is a clear indication of the impunity with which whites continue to act – they will never return land without receiving payment,” says Free State Chairperson Luyolo Busakwe.
Millions of people lost land during colonisation in South Africa.
According to Professor Ruth Hall, from the University of the Western Cape’s Institute for Poverty, Land and Agrarian Studies, between 1984 and end 1993, 1,832,000 blacks were displaced from commercial farms and 737,000 were evicted from farms.
The numbers get worse. From 1994 to the end of 2004, 2,351,000 people were displaced from farms and 942,000 were evicted. After attaining democracy, the government started a land reform initiative to give land to those who had lost it. Some of the displaced were placed in other farms but 3,716,000 were permanently displaced and 1,586,000 permanently evicted.
In the Free State, where Prinsloo lives, there hasn’t been a lot of land redistribution. It is number three from the bottom on the list of land distribution numbers across South Africa’s nine provinces. Only about 400,000 hectares of land have been redistributed here. For some of those who received land, it ushered in years of court proceedings, pain, fear and poverty.
In QwaQwa, a part of the Free State province, 560 kilometers from Prinsloo in Smithfield, is Mmabatho Mphuthi. She is in the autumn of her life but spends her days moving from court to court trying to fight for her farm.
We meet her as the sun sinks behind the rugged mountains. Mphuthi says she fears dying without ever being able to make good money from her farm.
She was given land by the government in 1994 under the land reform program.
“The ANC said if you have 15 members, they would give you land. I organized people who were willing to join me and in total we are 17. We went to government and they gave us a big farm which was divided among us to work as small holder farmers,” recalls Mputhi.
Mputhi, and the other small holder farmers, moved into the farm on December 16, 1997. They were given title deeds to the land and were trained by the department of agriculture on how to farm and sell. They also learned how to supply milk to big dairies around the province.
“I was so happy because finally, after so many years of struggle under the white rule, we had our land back and could earn a living,” she says.
Trouble came when a white farmer moved into their property.
“One day in the year 2000, I was busy with my own work and saw trucks come in. A white man was moving into the other end of our farm. He said the department of rural development had given him a lease on the property. I don’t know how that happened because I had the title deeds to the farm and we are the rightful owners.”
Mphuthi says she tried and failed to get help from all departments in the area.
“At first, I was told that he was coming to help us while we were being educated on how to farm but that never happened. Instead, he came in and terrorized us. He closed us off from the areas around the farm that we needed… Everything we farm gets destroyed by the rain because we don’t have access to the equipped area of the farm,” she says, as tears roll down her wrinkled face.
“How can you lease someone a farm that belongs to someone else? That is wrong. I am the one getting bills for services and taxes but I can’t farm or use the land because someone else has taken it over,” she says.
Mphuthi says her efforts to seek help have been futile.
“I have paid agents thousands of rands over the years to get help and get a lawyer for this to be fixed but each time, the case gets postponed. When I go to the police, they tell me to go to the public protector but no one responds. He even got a protection order that prevents me from going to that part of the farm yet I have the title deeds of the land in my hand and it seems there is nothing I can do about it.”
Mismanagement, like this, of the redistribution processes is one of the big apprehensions.
“Over the years, the government has failed to effectively redistribute land to blacks and now they want to change the Constitution yet they have failed to use the Constitution they already have. First, government must clean out corruption and then understand what land it owns, what land has already been redistributed and iron out any ongoing cases on redistributed land before trying to change the Constitution,” says Mphuthi.
That is exactly what the government has been trying to do.
According to Professor Hall, South Africa has 122 million hectares of land and 86 million hectares of that is private commercial agricultural land. That is 67% of the land in the country held by white South Africans.
Another problem is, since 1994, the government has only redistributed 9.7% of commercial farmland to blacks under the land reform program.
“For many South Africans, this pace is too slow. There is frustration because not much land reform has happened. Land reform can and should be made to work. There is a huge demand for small holdings by black emerging farmers. To meet the demand for land, will mean the need to acquire land held by private owners,” says Hall.
It is true. During the ruling party’s public hearings on the matter, many blacks indicated they wanted land. The government says it now wants to make sure this happens faster and more effectively than it has in the past.
“We want to now work on providing greater clarity on how expropriation without compensation can be effected. The proposal (to amend the Constitution) is informed by the views of our people that have been expressed in the public hearings that have been taking place,” said President Ramaphosa in Parliament.
Currently, Section 25 of the South African Constitution allows for expropriation without compensation but says there should be an equitable balance between public interest and those affected. Ramaphosa says he has appointed an inter-ministerial committee on land reform led by the deputy president to work on clarifying how expropriation will take place and under what circumstances.
“The acceleration of land redistribution is necessary not only to redress a grave historical injustice but also to bring more producers into the agricultural sector and to make more land available for cultivation,” says Ramaphosa.
Hall is however of the opinion that the problem is not the Constitution but the failure to use the Constitution as expropriation is already allowed by the Constitution.
“This can be justified in many cases, for example, when state expropriates land, when it wants to build roads or other public infrastructure. Expropriation isn’t new. What is new is the idea that the state will take property without paying compensation. This is not likely to happen in the majority of cases. We may only see it in cases where the state can justify why there is no compensation,” says Hall.
According to Hall, the kinds of cases that would require expropriation without compensation for example would be an abandoned city building, land left unoccupied and unoccupied land where informal settlements have grown in that property.
“There are a small number of landowners who have absolutely not been using their land, who may lose out in the process of land expropriation without compensation. My view is that they are very few in number and I have no doubt they will contest each case in court,” she says.
There is also a question of motive on behalf of the ANC.
Dumisani Nyembe, an ordinary South African who wants land to farm crops, says he thinks the ruling party is only doing this now because of the upcoming 2019 elections.
“I wonder why the ANC hasn’t been doing this for the past two decades. They can see that EFF is gaining a lot of traction because they are the most vocal about the land issue and all of a sudden they are promising us land expropriation without compensation. Whatever they are trying to do is EFF policy and not ANC policy. I don’t trust them a bit and I wouldn’t be surprised if this amendment of the Constitution isn’t passed come elections,” he says.
According to Hall, another problem is money.
“The land reform process is being hampered by corruption and mismanagement. If we sort out those problems, there will be funds to provide basic support to the new farmers being given access to farmland. The land reform budget has always been a very small part of the total fiscus. Right now, the land reform budget is at 0.4% of the total budget. If money is spent well and appropriately, funding would be available,” she says.
Ramaphosa however reiterates in most conversations about land expropriation that the intention of the proposed amendment is to strengthen the property rights of all South Africans and to provide certainty to those who own land, to those who need land to those who are considering investing in the country.
The ANC will need a two-thirds majority in parliament to be able to amend the Constitution.
“I don’t think this will be hard to get because if they join forces with the EFF, this amendment can be passed. The EFF can’t be seen going against this because it has been their main message since foundation,” says Nyembe.
Hall, however, insists that even when passed, expropriation without compensation is most likely not going to be the norm but likely applied selectively on a case-by-case basis and the courts will review every case.
Even if that is the case, another big fear with this amendment is the potential loss of Foreign Direct Investment (FDI) into the country.
According to David Nathanson, a global equity specialist at Bellwood Capital, investors are concerned.
“South African investors are really over-invested in South Africa and they are worried about many things in the country such as our debt situation, how we are very close to junk rating and the talk of expropriation without compensation. They are concerned about property rights where they are invested,” he says.
Although Nathanson says he doesn’t think investors think their houses will be confiscated in the short-term, they are worried because the country is dependent on foreign investment and when the government talks about land expropriation without compensation, it will make it more difficult to get foreign investment which will make it even more difficult to fix South Africa’s problems.
“We could see the weakening of the rand in the long-term and South Africa could find itself in a situation where it is unable to meet its obligations and we could have a crisis like a Brazil or Argentina,” he says.
South Africa is already in technical recession following two consecutive quarters of negative growth.
“The government doesn’t have a lot of flexibility to be spending money on anything other than the necessities. Things like the National Health Insurance (NHI) and other noble policies that the government is trying to implement; the question is where will the money come from? If they expropriate land, they will need to assist the farmers and maybe give some sort of guarantees to banks…We don’t know the depths of what kind of money could be required to do that but the government probably won’t afford it. We are struggling to manage our public wage bill, so it would be difficult,” says Nathanson.
Ian Matthews, Head of Business Development at Bravura, an independent investment banking firm specializing in corporate finance and structured solutions, has similar views to Nathanson. He says an uncertain regulatory landscape cannot hope to instil confidence in foreign investors. The main concern, he says, has been whether foreign investment assets could be expropriated without compensation.
According to Matthews, in this climate, there is every possibility that direct foreign investment could contract significantly.
Prior to 2018, South African Reserve Bank (SARB) statistics had shown that FDI into South Africa declined from R76 billion in 2008 to just R17.6 billion in 2017 and a UN report, Global Investment Trends Monitor indicates that in 2015, FDI into South Africa fell by 74% to $1.5 billion.
According to Matthews, banks are the biggest source of credit for farmers at 61% and about R148 billion outstanding in loans for agricultural land and R1.6 trillion in property.
“Initially playing down the risk of expropriation of property without compensation, South Africa’s banks have since proposed a fund to help accelerate land transformation. Although no amount has been suggested for the fund, the proposal signifies the banks’ intention of seeking practical solutions to protect the billions of rands in assets that are tied up in farm loans,” he says.
South African banks are worried.
Taking the same view as Hall, according to Nedbank Group, one of South Africa’s commercial banks, the government has not used its existing powers to expropriate land for land reform purposes effectively, nor has it used the provisions in the Constitution that allow compensation to be below market value in particular circumstances.
“Changing [the Constitution] would send a very strange and damaging signal to our people and potential investors. It is our view that the acquisition of land and the current Constitutional provisions have not been a key obstacle to land reform so far and that an amendment to Section 25 of the Constitution would offer little in the way of sustainable solutions in the future,” says the bank in its written submission at the Public Hearings on the review of Section 25 of the Constitution.
It says the key challenges are lack of effective implementation of current powers, lack of capacity, lack of resource allocation and lack of proper and structured support for new land owners.
“As a commercial bank, we are a key role player in funding the economy and any material impact to property prices would adversely affect confidence in the banking system and could trigger a classic banking crisis with significant negative knock-on effects on the economy,” said Nedbank CEO Mike Brown, speaking to the Constitutional Review Committee, which is investigating proposed changes to the Constitution.
Cas Coovadia, Managing Director of the Banking Association of South Africa, says there are better ways of expropriating land for blacks.
“To expropriate land with compensation without ensuring that we have the funds to support those who get the land in the way that fulfils the commitment of the president that it will not threaten food security and agricultural production is going to be a challenge,” he says.
Coovadia says the banks made it clear that the critical thing for the country right now is to get investments and create growth.
“We have been engaging government through the department of land and rural development for the past five years. We have presented projects and initiatives, we think, through a public-private partnership between the banking sector, agricultural sector, and government, can ensure people get land in a sustainable way and get commercial farmers involved to offer support,” he says.
The trick is, according to Coovadia, releasing land owned by the state first and giving it to the people.
“This is a problem that needs to be dealt with but it should be handled carefully… We don’t even know how much land is owned by who and where. We need a land audit to understand these issues. We don’t have enough issues or data on land to understand how exactly to deal with it. We need to stop pretending that having an amendment of Section 25 is going to fix our land reform issues,” he says.
On the other hand, the EFF has welcomed the government’s plans to expropriate land.
“The ANC president Cyril Ramaphosa has finally capitulated and submitted to the basic logic of amending Section 25 of South Africa’s Constitution to allow for expropriation of land without compensation,” said spokesperson Mbuyiseni Ndlozi in a statement after Ramaphosa’s announcement.
“The resolute submissions of the people on the ground and in all the public hearings exposed the ANC to the fact that an absolute majority of black people agree with the EFF’s steadfast and consistent position that the Constitution should be amended to allow for expropriation of land without compensation. This illustrates that when given an opportunity, the people of South Africa are always ready to provide resolute guidance on key economic and redress questions,” he says.
Until the motion is brought to a vote in parliament, the land expropriation debate lives on.
Risks of amending the Constitution, according to Nedbank
Any changes to the Constitution, however well-intentioned, would send a negative signal to potential investors and be seen as a risk to future property rights. Should this happen, according to Nedbank at the Public Hearings on the review of Section 25 of the Constitution:
• Fixed investment spending and job creation would suffer
• Borrowing costs could rise at a time that the country – and government – could ill-afford
• Growth would remain below potential
In the unlikely event of a poorly-implemented land reform program, carried out exclusively or largely through Expropriation Without Compensation, the effects would be more structural and significant:
• Property prices would plummet along with other asset prices
• There would be large-scale defaults, with little or no collateral for the banks to offset losses
• Government may have to step in to protect depositors’ funds in the event of a banking crisis
• Borrowing costs generally would soar
• The economy would be severely depressed and unemployment would rise even further
• Food security would be impaired and food prices would increase
Going Once, Going Twice! The Evolution Of Auctions
Online auctions are gaining popularity, but the traditionalists are still sold on the idea of live auctions that guarantee a good show, with emotions and bids running high.
In an industrialized area approximately 30 minutes from Sandton, the commercial hub of Johannesburg, is a shining fleet of trucks, parked and ready to be sold to the highest bidder.
The sun reflects off the windshields in the direction of the registered bidders as they sit under red outdoor umbrellas at the entrance of the property.
Some opt for refreshments, while others make small talk with their competition.
A man uses this time to make phone calls to a mechanic, who discourages him from making a regrettable bid on a “non-runner”.
He runs towards the towering fleet of trucks, where he joins the eager buyers as they take a final peek before the auction begins.
We are at Aucor Auctioneers’ popular commercial auction, at their head office in Midrand.
After spending four hours traveling to Johannesburg from Nelspruit (in South Africa’s Mpumalanga Province), for the auction, Charles Malibe gets into a heated bidding war that lasts no longer than a minute but is packed with plenty of fervent action.
It is noon and an overjoyed Malibe has just won a R465,000 ($32,401) bid on a second-hand truck.
“I attended my first auction three years ago. Sometimes you get it wrong and sometimes you get the right stuff at the right price. It is good to be exposed to new things. I went to Durban once, but I did not get anything there. It was not a waste. It is not only about getting things, it gives you exposure,” he says.
As Malibe heads back to Nelspruit, the auctioneer remains chanting until the last vehicle is sold, with the crowd getting smaller with each purchase.
Wasim Babamia, Aucor Auctioneers’ multimedia consultant, manages the national marketing for the 51-year-old auctioneering company.
Digitalization has disrupted traditional norms of advertising, and has made the industry more accessible for both buyers and sellers.
“Selling any asset boils down to supply and demand. The advantage of buying in an auction is cutting out the middleman, saving that money and getting something of real top value,” he says.
Marketing the call to action remains a vital component for the business.
“Social media has to be on point when we market a particular auction,” Babamia says.
Instagram, Twitter and LinkedIn are some of the biggest platforms, apart from the traditional pamphlets and website advertising strategies.
According to Babamia, online bidding has pulled in more numbers over the past four years.
He sees a rapid transformation in the auctions landscape in the foreseeable future.
According to a South African Institute of Auctioneers (SAIA) report, Gauteng is the highest province of interest with over 6,000 potential buyers (for all kinds of auctions including residential properties, retail vehicles, jewelry and collectables) on its website, while the Northern Cape is the lowest with just over 1,000 buyers.
The traditional means of auctioning have had to make way for digital platforms that have been steadily increasing over the last decade.
SAIA records close to 100,000 visitors to online auctions in 2010; the first half of 2019 is already at 400,000 visitors.
Last year’s record 600,000 visitors reflect that the online market could be just as lucrative as the live auctions.
As the state of the South African economy remains uncertain, Babamia suggests that auctioneering will always provide a cheaper option to consumers.
An industry that has been in existence for more than 2,000 years continues to grow despite its many iterations over the years.
Ancient Greek records on auctions dating as far back as 500BC show women were auctioned off to become wives.
Auctions were popular for family estates and the selling of war plunder in Rome.
As a result of the great depression in the 1900s, the United States opened auction schools to generate income as businesses and individuals needed to liquidate assets to withstand the economic crisis.
In recent times, market trends have changed dramatically to adapt to socioeconomic norms.
A shift to online auctioneering has been a great development and contributor to the fluid industry.
Orbis Research reports that the global online auction market is expected to grow during the period 2018-2022 with a 7.2% compound annual growth rate.
“Another major trend witnessed in the online auction is the immense impact of artificial intelligence (AI). AI’s main role in an online auction is to perform different tasks such as processing internal operations, customer-service inquiries, delivery and product packaging. In the last years, AI has instigated a gradual shift, from conventional auction to online auction,” the report states.
The increase in sales of art-based goods through online auctions is a key market driver.
Traditional live auctions, however, are still a preferred option for bargain-hunters, despite the global steer towards digitalization.
This is according to fine art specialist Luke Crossley who manages Stephan Welz & Co. in the affluent northern suburb of Johannesburg, Houghton Estate.
Moving to simpler models will improve the industry by providing a greater competitive edge, he says.
“There is a growing interest and understanding of auctions across a broad section of people where, maybe, a couple of decades ago it was seen as just for the very rich people doing very rich things.
“People are realizing that it is a great way of finding weird and beautiful objects, artwork and furniture at quite reasonable prices,” he says.
The increase of auction houses in South Africa offers a variety to buyers and sellers, with SAIA having 80,546 members registered by April 2019. As a result, the art and design market is at an advantage.
“The South African art market on auction is always evolving and broadening. The importance to history and art history is being realized and there is a growing interest and demand for these. It is encouraging a lot of the younger artists working with galleries to look at the history and heritage of artistic practice in this country,” Crossley says.
“With growing appreciation for South African and African art overseas, a couple of international houses based in England regularly do sales of more historical work. The audience overseas means a lot for the artists, the country and the future.”
Selling or buying art on auction engages the audience as well as the creator.
“The gallery, thus, becomes the primary market where young artists can build their careers; whereas auctions and private individuals with a passion for art can sell work they own, re-invest in other artists, or buy.
‘South Africans Love Martyrs’
The first 100 days of any presidency are often harshly scrutinized as they set the tone for what citizens expect. South Africa’s Cyril Ramaphosa is under the magnifying glass as all await his next tactical move.
At the end of May, South Africa’s sixth democratically-elected president, Cyril Ramaphosa, took an oath of office at Loftus Versfeld Stadium in Pretoria. In his speech, he touched on many issues that resonate with South Africans, including corruption, poverty, equality and youth unemployment.
These burning matters prelude what is to be expected from him in his first 100 days in office.
Ramaphosa’s period at the helm of power (before the elections) has been typified by repeated calls for a ‘New Dawn’. It seems the man who made it to the 2019 Time magazine list of 100 Most Influential in the world has a laundry list of issues to attend to if he is to set the tone for the rest of his presidency.
The challenge that has deeply affected how South Africans and investors view the country is that of corruption.
“Let us forge a compact for an efficient, capable and ethical state, a state that is free of corruption, for companies that generate social value and propel human development… We must be a society that values excellence, rewards effort and rejects mediocrity,” Ramaphosa said at his inauguration on May 25.
In the first 100 days, analysts say he needs to demonstrate he is a proactive leader; one who takes decisive action to address the plight of those who live in a society as unequal as South Africa. The gaping chasm between the richest and poorest has widened since the end of apartheid 25 years ago. This information is not lost on citizens whose lived experiences and disenchantment were in evidence during the elections.
A specialist in social economic development and political commentator, Kim Heller, is of the view that Ramaphosa has some way to go to address the resolutions of his party, the African National Congress (ANC).
“There are critical social maladies that need to be treated with the urgency they deserve… One of the key things people are looking for is a decisive man and decisive leadership,” she says.
Political analyst, Prince Mashele, ventures: “He is yet to act on resolutions because he is navigating complex political infighting in the ANC, which is why he can’t move boldly and faster…”
Economic transformation has been seen to also imply redistribution of the means of production, which currently has been reiterated in the call for land redistribution without compensation. This is among the duties citizens and investors will keep a close eye on as it is a contentious matter.
Leading up to the elections, Ramaphosa said to apprehensive farmers, “the land reform process is something we should never fear. It is going to be done in terms of the constitution”.
Heller says that, “the question of land is unresolved, despite very solid ANC resolutions from branches, and despite extensive consultation”.
The president will to have to choose whether he wants to be investor-friendly or whether he wants the interests of his own political party to find expression in policy.
“The investors have become the supreme branch of the ANC. So Ramaphosa certainly, is spending a lot of time on their concerns rather than ordinary people…,” Heller says.
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Mashele echoes: “He has been a market-friendly president. He has railed against his comrades calling for the nationalization of the [South African] Reserve Bank”.
Another matter influencing investment into the country is red tape that inhibits instead of encouraging business. South Africa dropped from 34 out of 181 countries on the World Bank’s Ease of Doing Business ranking in 2009 to 82 out of 192 countries last year, leaving the country trailing its African peers, including Mauritius (20), Rwanda (29) and Kenya (61).
In his address to the nation, Ramaphosa continued with the mantra thuma mina (which means ‘send me’) and committed to continue to build South Africa. In his rebuilding, he will have to take a closer look at the factors that infringe on those looking to conduct business while straddling the line in ensuring that (natural) resources are not further depleted while failing to trickle down to those who need it the most.
Heller is of the view that the expectations created by the president serve as a double-edged sword: “Some quarters have built him up to be the Messiah we have all been waiting for. He may have embraced that but it’s actually going to damage him. Because there is no individual who can save this country without looking at doing serious things in terms of economic restructuring… Until we address structural issues in this country, shifting the economy to favor ordinary people, not markets, we actually aren’t very benevolent.”
Also affecting business has been the view that South Africa is amongst the most corrupt on the continent and viewed as one of the murder capitals of the world. The Zondo Commission has illustrated the stark reality of the malfeasance the president will have to address to change these perceptions and in so doing, hold high-profile individuals accountable.
In line with building an equal society, the president made mention of the prevalence of violence against women at his inauguration.
“Let us end the dominion that men claim over women, the denial of opportunity, the abuse and the violence, the neglect, and the disregard of each person’s equal rights. Let us build a truly non-racial society, one that belongs to all South Africans, and in which all South Africans belong. Let us build a society that protects and values those who are vulnerable and who for too long have been rendered marginal,” Ramaphosa said.
Leading up to the resolution of the president’s first 100 days in office, the public is watching with bated breath.
“I pity him. He’s made big promises on housing and unemployment. Those are not going to magically change overnight. The problem with South Africa is that we love martyrs and here we have a president that we have martyred and who is actually going to fall on that. To replace one man with another, is not going to replace problematic policies, poor implementation and poor conceptualization of economic solutions. So I think in the next 100 days, I don’t expect to see anything unless the fundamentals are changed,” Heller says.
No doubt, it is going to take a concerted effort from all institutions, including those that have been revealed to be compromised. The first 100 days will certainly determine the rest of the president’s term in office.
Lifting The Heavy Veil On Wedding Costs
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.
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.
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.
“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.
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.
“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.
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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