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A lot of work ahead



Recently, there has been incessant talk about the National Development Plan (NDP) and how it, as our government so eloquently states, will mitigate the triple challenges that South Africa faces: poverty, unemployment and inequality.

Developmental theory tells us that ‘developmental states’ aim to attain industrialization through active participation in the formulation and implementation of industrial policy, while simultaneously implementing policy to redistribute income to minimize the unequal distribution of income resulting from industrialization.

One of the greatest dangers South Africa faces with industrialization is that the tendering processes in the public sector is corrupt. We cannot have a situation where the benefactors of the industrialization will be those with close ties to government and the ruling party. This would be disastrous for the country and will increase social tensions, while widening the income gap. A good education and healthcare system, which is often entirely subsidized by the government, are key characteristics of a developmental state. The equalization of income is also an important factor, with countries, such as South Korea, being considered among the most equal as well as enjoying the highest living standard in the world.

Bureaucratic competence is essential in ensuring that state institutions facilitate the swift and efficient implementation of the NDP. The state will have to bolster its departments with captains of industry and experts to improve its human capital base. In addition, they ought to be able to attract the brightest young minds and look for creative ways to lure them to the public service as opposed to merely giving them higher salaries. How will the National Planning Committee (NPC) fare compared to successful central planning economic bodies of countries such as Malaysia and South Korea? It remains to be seen. In these aforementioned governments, the state had a more interventionist stance in the economy, coupled with establishing a cohesive relationship with the private sector based on common national policy goals.

A competent bureaucracy is an essential, but not sufficient, condition for a developmental state to thrive. Equally important is the political capacity that will ensure that the state is both accountable and transparent. Unfortunately this is an area that the South African government needs to improve.

Although South Africa should draw inspiration and lessons from the developmental states of the Asian Tiger economies, it should note that the blueprint from these nations is not a one-size-fits-all solution. South Africa’s developmental state will require differing arrangements because no single economy is like another. South Africa is a resource-rich nation, whereas South Korea and Malaysia are more technologically-centric and industrialized economies. Our government should focus on formulating our own unique developmental state blueprint that will help tackle and alleviate our pressing challenges within our distinct African context.

The lack of cohesion between the ruling political party, the African National Congress (ANC), and its communist tripartite alliance is also a cause for concern. Very often the two have stark differing ideologies on pertinent issues such as monetary policy. The South African Communist Party (SACP) previously lobbied for a populist stance of growing the economy by removing the inflation target of 3% to 6% and lowering interest rates to stimulate demand for credit. This will result in inflationary pressures in the long-run and will lead to an eventual economic collapse. The communists often fail to understand that in as much as South Africa has pressing unemployment issues, the loss of employment for those who are already employed will permeate levels of poverty throughout our social structures and place an even greater burden on our social welfare system.

The NDP presents the ruling party with the opportunity to make amends for the lag in creation of jobs and reducing poverty. Perhaps the NDP is exactly what the ANC needs in order to salvage some of the lost faith that has resulted in the emergence of opposition parties such as the Economic Freedom Fighters (EFF) as well as the resurgence of the Democratic Alliance (DA) in last year’s elections.

There is no easy solution to attain economic growth. Placing a nation’s economy on a growth trajectory requires patience and, perhaps more importantly, resilience to astute economic policies.


Cryptocurrency for Africans




George Gordon is on a quest to revolutionize the financial system. The director of Africa Master Blockchain Company talks digital currencies, blind risks and board games.

What is this new African cryptocurrency you are offering?

Where the majority of current digital currencies are based on speculative models, AfriUnion Coin (AUC) and the AfriNational Tokens (ANT)are designed for a transactional purpose allowing international payments, remittances, foreign direct investment as well as day-to-day transactions at local retail stores and other outlets. While the option for speculative trade is available with AUC, the focus is not around that.

Each African country will have a specially-designed ANT which will allow users to pay for goods and services and bills easily through completely digital means without requiring any bank account. AUC and ANT will be fully interchangeable to one another and there will be no fees for the user.

It’s the natural next step for digital finance from mobile banking which most Africans are accustomed to. The ability to freely have the power to send and receive money locally and internationally will allow the freedom of choice and spending power many Africans don’t have currently.

What is your own investment philosophy?

I am a gambler! I believe in taking risks and putting things on the line. That being said, blind risk or whimsical guesses don’t get you very far. Always acquire enough information to understand to a reasonable level what the thing you are planning on investing is or how it works and then trust your instinct and gut feel.

What advice would you give entrepreneurs wanting to invest in blockchain?

First, do some research in terms of what the blockchain technology is being applied for or created in terms of its application to an industry or project. Thereafter, check the white paper for the design of the platform as well as its functionality and applicability to what it is trying to achieve. If it aligns with your personal investment rules, then go for it,however, remember that blockchain is continuously evolving and thus you need to explore outside the usual and standard.

First cash-less, now card-less. What is the future of online banking?

If we are looking into what is currently science fiction, I would say the future is digital contact lenses that will be able to connect you to all your social media accounts, internet, news as well as make payments by just looking at QR codes or specialized barcodes to approve and accept payments.

Now, realistically we are not far off from such innovation and technology, but for the time being, I think the next step is scanning of QR codes at retailers and having the transaction automated from your wallet to the retailers digitally.

What is your most prized investment and why?

My mind. I believe that the work I have put into developing my mind, and continue to do so every day, is the number one investment that I have ever done. It allows me to look at things in a unique perspective as well as provides me with the tools to push boundaries and create new opportunities.

Money, success, fame? Which is most important to you?

I would have to say success… because it is most likely going to bring the other two as well, right? But success in the form of starting something and letting it grow and succeed and knowing that something new exists because of your efforts.

What do you spend your money on mostly?

Board games. I love board games and believe it’s a fantastic way to expand your mind as well as have fun with friends.

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Investment Guide

King Price CEO On Why He Invested On Insurance



King Price Insurance’s CEO Gideon Galloway, who built an insurance company in South Africa worth over $226 million in six years, talks investments, industry trends and how self-driving cars will change the entire car insurance landscape.


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Offering The American Dream



Gar Lippincott and Daniel Ryan of Atlantic American Partners were in South Africa recently looking for high-net-worth individuals wanting to invest in the US.

It’s a warm spring day in September, and Gar Lippincott and Daniel Ryan have just arrived in South Africa. It is Lippincott’s first time in the country, and he is jet-lagged.

A little over two months ago, he was booked to fly here from the United States (US) but was turned back at immigration.

“At Atlanta airport, the lady looked at Daniel’s visa and let him through and she looked at my visa and she said ‘I am afraid you can’t get on the plane because you have to have a blank page on your passport’. I said ‘I have three blank pages’ and she said ‘no, it’s supposed to be the one that says visa on it’. She said it’s the rules in South Africa so I had to sadly go back home… now when I was coming, I was told that’s not an issue anymore so I am happy they have made traveling into the country easier,” says Lippincott.

With a brand-new passport, he’s here with Ryan looking for people who want to invest in the US in exchange for a green card.

Lippincott, the Managing Partner of Atlantic American Partners, says he has always been keen on South Africa for its growth opportunities and prospects.

“From what I understand, the things that are causing short-term decline in the economy in South Africa are set up to provide long-term growth and hopefully people will understand this,” he says. Ryan, the company’s Managing Director of Emerging Markets – Africa, agrees: “I lived in Malawi for 12 years and South Africa is still considered the shining one throughout the continent. Even with all the problems, everyone still wants to come here because of the opportunities.”

According to an AfrAsia Bank report, South Africa comes second to Mauritius in boasting the highest number of high-net-worth individuals.

These are the kind of people Ryan and Lippincott target through their work at Atlantic American Partners. The company has real estate investors and professional private equity fund managers that manage money for banks, insurance companies, and pension funds. In addition, they help people get US green cards and ultimately US citizenship through the US government’s EB-5 Immigrant Investor Visa Program.

“Basically we look for people who want to move to the United States and we help them do so legally by investing and the nice thing is, with our program, they are also able to get a nice return on investment,” he says.

According to Lippincott, for a $500,000 investment that creates 10 jobs for American workers, you could get a green card in about two years and be a US citizen in about six or seven years. “Twenty seven countries have an investor visa program but with most of them, it’s essentially a fee you pay, or you need to be actively engaged in the day-to-day operation of a business. For example, you invest $1.5 million in Australia, but you need to hire employees and generate a certain amount of revenue. One of the biggest advantages with our program is you actually invest the $500,000 into a fund. We act as a trustee of that money and within five to seven years, they get that money back with a bit of return on investment and you are a permanent citizen in the US.”

Atlantic American Partners invests the money in real estate developments like hotels, apartments and student accommodation.

“What’s nice about the program is it doesn’t only cover the investor; it covers the spouse and children under 21. Our biggest family was a Hungarian family with seven children so they got nine green cards for $500,000,” says Lippincott.

The company says it has had positive response in South Africa. “Two months ago, we were here and we had scheduled six presentations for 100 people and we ended up speaking to 450 people. Most were business people, people worried about the economy, people worried about the political future of South Africa and people concerned about the education future of their children,” says Ryan.

According to Lippincott, despite the news of the clampdown on immigration, the US economy is booming and will perish without immigration. In the era of Donald Trump and his anti-immigrant views, that’s heartening news indeed.

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