“When sailing a boat or driving a bus, I don’t want to be in the passenger seat, I want to drive.” These are the words of former MXit CEO, Alan Knott-Craig Junior, who stepped down on October 19. He and the shareholders knew where they wanted to take MXit, but didn’t agree on how to get there.
In 2013, instead of sitting in the boardroom, Knott-Craig won’t be driving a bus but a motorhome, contemplating his future. He bought MXit in October 2011 through his company, World of Avatar, and announced his resignation in October 2012; in the same breath MXit announced a R100 million ($11.4 million) investment.
The word is that Knott-Craig clashed with shareholders and FirstRand heavyweights Paul Harris and GT Ferreira.
Knott-Craig sold the shares in World of Avatar, which bought MXit from its founder Herman Heunis; who in turn sold all his MXit shares to World of Avatar and is now on sabbatical photographing wildlife in Botswana.
Knott-Craig will also be taking time out to reflect on his decisions and traveling.
“They bought me out, it was quite emotional. In retrospect it was a long time coming,” he says.
Duncan McLeod, tech columnist, founder and editor of TechCentral says it appears the disagreement was largely between Knott-Craig and Paul Harris. He also said that Knott-Craig’s management style, which included not taking minutes; allowing staff to wear baggy pants and having an unstructured approach, was appreciated by his employees, especially at iBurst.
“It depends on who takes over MXit. They’re facing fierce competition [from] BBM and WhatsApp as the market moves to smartphones,” says Mcleod.
Knott-Craig believes his former business will prosper.
“It’s got a lot of money invested in it. It makes a lot of money. It’s got a lot of employees; a lot of users and that’s the ecosystem. It’s not going anywhere anytime soon; it’s on the right track. My [former] co-shareholders are not fools, they wouldn’t be investing in this thing unless they thought we had a chance. So it’s quite exciting,” says Knott-Craig.
For now, Knott-Craig is off on holiday for six months; he’ll travel the States with his wife and two children in a Winnebago mobile home. He will have plenty of time to consider his future on the open road. When he gets back he wants to study South African history, maybe he would do well to study South African boardroom politics as well.

Knott Mixing It Anymore

It’s a sunny day in the judicial capital of South Africa, Mangaung—formerly known as Bloemfontein—but inside the country’s highest court of appeal, the temperature is rising. Media conglomerate Media24, with one of its specialist journalists, Jan de Lange, are first respondents to a case against one of the biggest mining companies in the world, BHP Billiton.
The London Stock Exchange-listed company is appealing a decision by the Gauteng High Court, which declared that they should divulge the details of their contract with Eskom. The contract might reveal that BHP Billiton is actually paying very little for electricity and that the public is subsidizing their consumption.
It is big money. In his application to the High Court, de Lange mentioned, among other things: “It appears that the contracts are responsible for at least part of Eskom’s R3.2 billion ($368 million) operating loss for the year ended March 31, 2009 and the whole of its projected loss on embedded derivates of R9.5 billion ($1.1 billion) going forward.”.
It all started in 1995 after de Lange joined Media24 as a specialist reporter in the business division, Sake24.
“It was the first story I went out to when we made the trip to Eshowe for the opening of a power station; it was here that they announced that Hillside and Gencor were to become Eskom’s biggest private client. When it came to the question and answer section of the presentation, we wanted to know how much Gencor was paying for electricity. We were not given an answer. I then started following this issue closely because you could feel that something was not right,” de Lange says.
Gencor was, at the time, one of South Africa’s biggest mining companies. Under its control it had, amongst others, Impala Platinum, Goldfields and Billiton. The company was unbundled and Billiton changed its focus to non-precious metals under the leadership of former Gencor head, Brian Gilbertson.
“At that time Gencor was one of South Africa’s major companies. We were looking for growth opportunities and we identified this aluminum opportunity arising from the country’s surplus electricity at the time,” Gilbertson says from London, where he runs a resources company.
“In order for us to invest $1 billion in South Africa and over $1.5 billion into Mozambique we needed to be confident about the power supply. As part of our risk mitigation, we wanted to know that if the price of aluminum collapsed we [wouldn’t] lose all our money invested in the project and so we did something new in South Africa, which was to link the power price from Eskom to the price of aluminum in the market.”
“This meant that if the aluminum price went down, the cost of our power would go down; if the aluminum price went up, the price would go up. In this way our project would be more viable. Even President Mandela was backing the deal because we were using it to showcase to the world that South Africa would be able to build projects of this size and nature.”
In those days Eskom had a surplus of cheap electricity but this was soon to change when economic and population growth surpassed anticipated figures. BHP Billiton was purportedly doing well as a result of the cheaper tariffs they were charged.
De Lange’s investigations revealed that while the general public was hit hard by tariff increases subsequent to blackouts, BHP Billiton might have been gaining benefit through lower electricity prices.
In 2009, he went to court to try to obtain the details of the contract between Eskom and BHP Billiton.
In August last year, de Lange finally won a ruling in the Gauteng High Court in Johannesburg, which obliged Eskom to release the contract details. Eskom was willing to abide by the ruling. BHP Billiton was not and appealed.
“We have contracts with our customers and those contracts are confidential. The reason Eskom originally contested Jan de Lange’s case was that the contracts were confidential. When we lost the case we agreed to the courts findings,” says Eskom spokesperson, Hilary Joffe.
Eskom has since gone to the National Energy Regulator of South Africa (Nersa) to seek a renegotiation of the electricity supply contract for the Hillside and Bayside smelters after the Mozal Smelter (in Mozambique) deal was successfully renegotiated along with Scorpion Zinc in Namibia.
In the Mangaung courtroom, the two opposing advocates are exploring legal issues and the technical loopholes of each other’s cases.
Advocate Frank Snyckers, on behalf of BHP Billiton, states that his client is unwilling to reveal the details of the case.
“Aluminum pricing information is crucial to keep away from competitors,” he says.
It was revealed that BHP Billiton employs around 1,600 people between the two smelters. Each smelter uses at least 500MW of electricity per year. A large city like Mangaung only uses 400MW. BHP Billiton also uses around 6% of the country’s total electricity consumption.
After four hours of legal sparring, Justice Mthiyane reserved judgment for a later date.
Managing director of EE Publishers, Chris Yelland, was one of only five people in the court’s public gallery today and he is a worried man.
“An Appeal Court is looking at obscure technical issues of a legal nature, which are being used to try and overturn a judgment of the High Court. For me, as a non-lawyer, I find this frustrating. Issues of the rights of South African public are being ignored. It is conceivable that Media24 will lose their case and if so, I hope they will take it to the Constitutional Court,” he says.
I ask de Lange if he will indeed continue fighting if he loses this round. “Of course,” he says, with a smile.

On the Threshold Of The Truth

Attention is not something 46-year-old Sisa Ngebulana seeks but at nearly two meters tall, it is hard to miss him. He also happens to own the aptly named Billion Group, which is worth R3.6 billion ($413 million).
The Johannesburg-headquartered company, located in the Montecasino entertainment complex, is busy with developments, in South Africa alone, worth more than R7 billion ($848 million).
Ngebulana, who was born in Mthatha in the Eastern Cape, also chairs the biggest black-managed property fund in the country—the Rebosis Property Fund. His success is drawing attention but this wasn’t always the case, in a long journey where much has changed.
<div id="attachment_1446" style="width: 310px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1446" class="size-medium wp-image-1446" src="/wp-content/uploads/2017/04/Mdantsane04-300x239.jpg" alt="" width="300" height="239" />Mdantsane City Mall, East London, Eastern Cape</div>
“If you take Mdantsane Mall for example it was a piece of veld [field] where women would be raped when they crossed at night. Today, it is a mall that employs thousands of people and which employed 3,000 at its height during construction. The mall also contributes R140 million ($16 million) to the local fiscus,” says Ngebulana.
The R500 million ($57 million) Mdantsane Mall, which was constructed in 2008, was the second biggest mall in the Eastern Cape at the time. It represented the first time the public became aware of the property mogul, even though it was not his first business.
Ngebulana started out as an estate agent while studying towards an LLB degree at the University of Natal. After completing his studies he became a candidate attorney at De Villiers Attorney’s—now Werskmans Attorneys—in Cape Town. In 1996, he moved to Johannesburg to open Blue Truck Rentals.
“That business didn’t go so well. I put all my eggs
in one basket and when one of the bottling companies,
I was contracted to, went down I had to close down.”
He dusted off his law degree and got a nine-to-five job at Eskom, South Africa’s energy supplier, as legal counsel. He moved up the ranks rapidly, but could not repay the bank the money owed for the failed truck business, and gave business another go. This time, he got involved in coal mining.
“With the R10,000-a-month ($1,100) salary; with a take home of just over R5,000 ($573) after deductions I could not have been able to pay the R1 million-a-month ($115,000) I owed the bank. I only qualified for a R230,000 ($26,000) mortgage bond that would have taken 30 years for me to pay back,” he says.
Needless to say, the worse happened—the coal business failed.
After experiencing an 11 month dry-spell, without a job or any prospects, he made a deal with a generous landowner. He subdivided one of the landowner’s plots in upmarket Hyde Park, Johannesburg and sold houses off plan, making a small profit. The bank then gave him an overdraft and he built another cluster of 20 homes.
From the profit, he was able to acquire commercial buildings such as the Bank of Lisbon building in Pretoria. He was now playing with the big boys but problems arose when he decided to go into retail.
“The nice thing about shopping malls is that it’s a science. You have to do your market research, you have to convince retailers. It is hard work and not everyone can do it,” he says.
He encountered challenges even before he started building his flagship R1.5 billion ($172 million) Hemingways shopping mall, in East London. There was a bidding war to build the first regional mall in the Eastern Cape. Some of the biggest names in South African property development—Investec, Growthpoint and Atterbury—wanted a piece of the pie. Everyone agreed that there could only be one winner: the Billion Group.
“Retail, besides track record and delivery, is about location, location, location. I managed to convince the retailers that my location was the best. It is simple as that,” says Ngebulana.
Some argued political interference and many others looked to ensure that he failed even before he started building. Ngebulana becomes animated as he talks about one of his detractors.
“The MD of Grinaker at the time swore he could close us down. He said he had a bigger wallet and was going to discourage subcontractors from doing business with us,” he says.
The Grinaker MD had enough reason to be angry. After his company reneged on the deal to build Hemingways—Grinaker deny that they submitted a tender to build the mall but would not confirm or deny the comments attributed to their former MD—Ngebulana poached some of their senior staff to start Billion Construction. True to the MD’s alleged words, suppliers and subcontractors refused to do business with Billion. So Billion bought material from Europe, opened a concrete manufacturing plant in Mthatha and made its own steel beams on site. The Platinum Group, which owns luxury brands like Aca Joe and Jenni Button, was not ready to open some of its stores in East London so Billion Retail was created.
“The mall was opened not a day too early, not a day too late,” he says.
What of the accusation that Ngebulana is a beneficiary of the ruling African National Congress?
“People speculate too much. I have never had a relationship with the African National Congress. I have never been a member of the ANC. Sometimes I don’t blame these people. Maybe that is what they are seeing of black people in this country; that they only do things because of connections.
“When I won over the retailers in East London, where were politics? When I formed my own contractor, because I was being stifled by competitors, where were politics? There is a war out there. It doesn’t suit certain circles in business to see a black entrepreneur getting to where I am because it motivates others, and tomorrow there will be more black entrepreneurs and the notion of Black Economic Empowerment (BEE) will go out the window” Ngebulana says.
Hombisa Bubu, a former executive at the Billion Group says, “When you work for him every minute must be productive. He is a hands-on kind of guy, very focused and knows what he wants”.
Interestingly, Bubu adds that when he met Ngebulana, in the early 2000s, he already owned a helicopter and a ten-seater airplane.
Billion Group’s outgoing chief financial officer, Thabo Lebelo, says Ngebulana is the most financially literate lawyer he knows and predicts big things to come.
“He is going to be Africa’s own Donald Trump,” he says.
The divorced father of two credits his grandfather for inspiring him to be the man he is today.
“He forced me to make bricks, to go behind the counter at his shop and to study law when I thought I would do better things with my life.”
The Billion Group is in the process of building the R1.75 billion ($201 million) Bay West City Mall in Port Elizabeth and the R1.3 billion ($146 million) Forest Hill City Mall in Pretoria, set to be opened in 2014.
Ngebulana is making in-roads into other countries. There are currently two malls being leased to retailers in Angola—one on the waterfront in Luanda, will cost $150 million; the other, on the mainland, will cost $100 million. The group also plans to build six shopping centers in Nigeria, collectively costing $300 million, and is busy with plans for malls in Uganda, Mozambique and Tanzania. Once complete, these projects will be worth R38 billion ($4.4 billion).
“The future is certainly Africa. The continent is ready for opportunities. There is a lack of formalized retail in the continent. We will be bringing that to the market and that will lead to things like furniture and fashion becoming cheaper,” he says.
Ngebulana is a businessman par excellence but what really drives him? Surely, he has enough money to relax?
“I am not into a game of money but a game of passion. I take risks, I have God on my side and I want to leave a legacy,” he says.

Bricks, Mortar, Passion

Nothing signifies the unbridled optimism in this East African nation more than the well-known Swahili phrase Kenya hakuna matata: there are no troubles in Kenya, which is bandied around in tourism circles; printed on T-shirts and repeated in blockbuster movies like Out of Africa and The Constant Gardener. But its economy has known more trouble than relief.
When inflation reached 100%, in 1993, President Daniel Moi printed money to fund his re-election campaign for the country’s first multi-party elections.
<img loading="lazy" decoding="async" class="alignleft size-medium wp-image-1440" src="/wp-content/uploads/2017/04/dreamstime_m_6306839-245x300.jpg" alt="" width="245" height="300" />
Before President Mwai Kibaki was elected in late 2002, Kenya’s economy was in bad shape. Its growth averaged 1.1% for two consecutive years and shrank to minus 0.2% in 2000. Key sectors were stagnant; agriculture and tourism recorded marginal growth of 0.7% and 0.8% respectively.
To resuscitate the economy, government formulated the Economic Recovery for Wealth and Employment Creation Strategy in 2003, which hinged growth on the overhaul of infrastructure as well as political and economic reforms that would unshackle the economy. The most notable result was the investment of billions of dollars on infrastructure—from roads and railways to electricity. Since 2004 growth has averaged 5% and peaked at 7% in 2007.
Kenya’s economy is dominated by agriculture; the sector employs more than 70% of the population and accounts for 24% of the GDP. More than a third of Kenya’s agricultural produce is exported, which accounts for around 60% of the country’s exports. This, despite the fact that its arable land is a paltry 15%, the rest is either too dry or infertile
Irrigation systems could double this percentage. The country’s cash crops—tea, coffee and horticulture—have led to an increase in earnings due to high commodity prices.
Last year, the country exported 48% of its goods to African countries, mostly in the East African Community (EAC) trading bloc, which is not severely affected by the Eurozone debt crisis. During the last decade, however, Kenya’s imports have surpassed its exports. Despite a surge due to high global crop prices, earnings from its top four exports have been insufficient to pay for oil imports.
The services sector follows closely behind, with tourism leading the pack. Tourism earnings rose by 32.8% in 2011, bringing more than $1 billion to the country. Other sectors like wholesale and retail, transport, communications and education are following suit.
Kenya is a hub for the ICT sector with the largest fiber optic network in the region. M-Pesa—the mobile money transfer service operated by Vodafone’s subsidiary Safaricom—transfers $27 million a day and has more than 25 million mobile subscribers.
By the end of the year, the economy is expected to have grown between 3.5 and 4.5%, according to government projections; while World Bank estimates stand at  5%. Inflation, driven by high oil prices and inadequate rainfall which lead to high food prices, has fallen from 14% last year to around 5% this year.
The 2008 post-election violence saw more than 1,000 fatalities and led to a decline in economic growth from 7% in 2007 to 1.5% in 2008. Kenya’s new constitution, enacted in 2010, is expected to herald good governance and reforms. Yet the economy still faces structural challenges. According to the World Bank, its economy has become even more vulnerable as the country’s current account deficit could reach 15% of GDP this year. This is among the worst external balances in the world and poses a significant risk to Kenya’s economic stability. A sharp rise in oil prices could trigger severe inflation and economic downturn. Its debt levels of 45% are in decline from 65% at the turn of the century and are below the global benchmark of 60%.
Like many other African countries, Kenya  faces an energy shortage, which allows for investment from the private sector. The peak power demand, estimated at 1,191MW, is projected to grow at 7% annually over the next decade. To meet this  demand, the generating capacity will have to be raised from 1,534 MW to 2,263 MW by 2018.
State-owned Kenya Electricity Generating Company (KenGen) is set on providing geothermal power in the future. Investors are establishing wind farms in Northern Kenya as part of the Lake Turkana Wind Power Project. The government is looking to partner with the private sector to generate coal power, after deposits were discovered in the eastern region. Hydro and thermal power accounts for 80% of the country’s total generation, making its energy price susceptible to high oil prices and power rationing when rains fail.
On the social and political end, half of the population is younger than 35 and unemployment is at around 40% of the country’s 42 million. Experts says that job creation, especially among the youth, is necessary for long-term stability. Two of the leading candidates in the upcoming March elections—Uhuru Kenyatta and William Ruto—face crimes against humanity charges at the International Criminal Court at The Hague over their role in the 2008 post-election violence.
Vision 2030—which aims to make Kenya a medium income country by 2030—is hinged on economic growth of 10% per annum through governance reforms and a focus on infrastructure, energy and science. By that time, the population is expected to reach 60 million.
The recent discovery of commercially viable oil will welcome new investments and save the country on its huge monthly oil bill. Tullow, a London-based oil and gas company, discovered 143 meters of net pay oil deposits in northern Kenya. More than 23 companies have exploration licenses.
Mining—which contributes 1% to the economy and is confined to the extraction of soda ash—may receive a boost after Tiomin Resources, of Canada, was allowed to mine titanium deposits along Kenya’s southern coastline.
Infrastructure, needed to foster more trade, is also set to improve. The $23 billion Lamu Port-South Sudan-Ethiopia Transport Corridor (LAPPSET) project is being touted as one of the biggest in Africa. It will entail the construction of a port, standard gauge railway, pipeline and highways connecting Kenya, South Sudan and Ethiopia. Throw in a resort city at Isiolo, in Northern Kenya, and they are betting it will be a winner.
As the World Bank aptly put it in 2010, if Kenya is an airplane, it’s flying on one engine. If the second is turned on, the  economy will ascend at supersonic speed, like a fighter jet.

‘Flying On One Engine’

At the age of 20, Rob Stokes was sitting in his room at university, thinking of how he was going make pocket money. Then it came to him—why not follow in Mark Shuttleworth’s footsteps and start a business? Thirteen years later that company, called Quirk, has a $10 million turnover and an unusual name.
“I was literally lying on the couch, thinking I need to start a business… I looked over at my cat and her name was Quirk and I thought ‘That’s an unusual word, it’s short and I’ll probably get the domain name’ and off I went. So Quirk is actually named after my cat. I’d like to have something more fancy to tell you but that’s the reality,” says Stokes.
Stokes is an easy going roller. His backpack contains nectarines, apples and pumpkin seeds along with documents and magazines. He says it has nothing to do with being a health enthusiast; he just likes to eat on-the-go. A decade ago, when Quirk was still in its infancy, Stokes was so broke that all he had to eat were carrots.
“I once had nothing but carrots for two weeks, true story. I actually went yellow around my mouth, and I’m already orange so it was really weird… But hell if you’ve got no money, what choice do you have?”
For the first five to six years, he was so broke his parents paid his rent. The fact that his friends were earning fat salaries in the corporate world frustrated Stokes, at times, but his entrepreneurial spirit kept Quirk alive. He was inspired by a lecture given by South African entrepreneur and millionaire Mark Shuttleworth, who was also the country’s first space tourist.
“…I didn’t get to meet him but he was massively inspiring… And I remember watching that lecture and I thought, ‘I can do that. I can be that guy’. I’m definitely not as smart as him, I definitely know that, but I’m entrepreneurial.
“I’d [also] been reading about a guy called Michael Dell, from Dell Computers. He started in his dorm room, he cut the door in half so he could sell computers over the counter, and I just thought, ‘That’s an awesome story’. So I was kind of inspired by those guys,” says Stokes.
Stokes is described as inspiring by one of South Africa’s respected journalists and ICT commentators, Arthur Goldstuck.
“Initially [Quirk] struck me as just another SEO, then I saw the book he wrote and realised he’d become one of the thought leaders in the online marketing environment and not just an SEO,” says Goldstuck.
The term Search Engine Optimization (SEO) refers to the process that companies, such as Quirk, use to get a company’s name read more often by those searching on search engines such as Google and YouTube. The aim is to increase a website’s popularity by gaining more hits.
Quirk has branches in Johannesburg, Cape Town and London and employs 200 but in the early days things were different.
“I remember the first client who came to our offices; he was just blown away because it was the filthiest office in the world. Our ‘boardroom’ was about five chairs, none of which were the same, around a beer crate, with a tray on it… I think he appreciated that we were doing our best, so he gave us a piece of business…”
“There are many times when, if we hadn’t landed a piece of business within a week or two, we would have gone bankrupt,” says Stokes.
Stokes is also the chairman of the Silicon Cape Initiative, a private sector community movement founded by two South African hi-tech entrepreneurs, Vinny Lingham and Justin Stanford. The initiative wants a community of entrepreneurs, the best tech talent and foreign investment.
The Western Cape Province has produced some of the country’s brightest tech entrepreneurs including Stokes; Lingham—who lives in Silicon Valley in California; Herman Heunis—founder of MXit and Ludwick Marishane, who was recently named one of the 12 brightest young minds in the world in 2011, by Google.
Stokes thinks that more could be done.
“My biggest frustrations at Silicon Cape is actually how few university students start businesses… it creates an opportunity cost to become an entrepreneur because a [graduate] leaves UCT and suddenly Old Mutual pay him R40,000 ($5,000) a month. So now becoming an entrepreneur is not only about risking what you have, it’s about risking what you could have.”
It irritates Stokes that the tech business is not yielding more. An unreliable internet connection and bureaucracy are just a couple of problems that Stokes sees in the way.
“Internet connectivity [is a] huge issue. I mean, business would be much bigger and more successful now, on a global level, if there was better internet. So the more customers there are online, the more [our] kind of marketing is going to be of value.”
As for bureaucracy, when he registered his business in South Africa he filled his form out with a blue pen. The form stated black pen only, so what would’ve have taken him three months, took six.
“When I first registered the Quirk cc, it took me six months. When I first registered the limited company in London it took me 24 hours… Is it worth holding back a small business for three months because they used the wrong color of pen?”
What is his tip for upcoming tech entrepreneurs?
“Hitting the road and selling the stuff, that the best thing you can do when you’re young. Don’t wait.”
The thirty three-year-old’s next dream is not to be a space astronaut; in the next ten years he wants to open a cricket academy in the Transkei in the Eastern Cape.
“I want to be remembered for my cricket school, it’s going to be the greatest cricket school in the world”.
It seems like a quirky plan

Name The Business After Your Cat And Paws For Success

The road to Mangaung, South Africa’s judicial capital, is an uncertain one. Beleaguered, incumbent president, Jacob Zuma (70), is up against his strangely ambivalent deputy, Kgalema Motlanthe (63). Nowadays, no one is even talking about Tokyo Sexwale, a tycoon known to have ambitions to the post but who has just never been able to muster enough support.
Although nominations only opened on October 1, that did not stop warring factions from firing the first salvos, digging up dirt and leaking (mis)information to newspapers about one another. And there is evidence that even though members can now openly talk about, and even circulate list slates and permutations of their preferred candidates, somewhere in some dark alleys and smoke-filled rooms, connivers on either side are continuing to plan the downfall of their opponents, by all and any means necessary.
Not surprisingly, the stakes are high. With an overwhelming parliamentary majority in charge in eight of the country’s nine provinces, as well as the great majority of municipalities, the ANC is mighty. The fight over resources and the dispensation of patronage is therefore a real one. And plots are abound.
In the past year both presidential hopefuls Motlanthe and Sexwale have been subjects of investigations for their alleged involvement, directly or indirectly, in a scandalous UN Oil-for-Food program that involved Saddam Hussein’s regime.
The ANC Youth League, the first group to make it clear that they didn’t want Zuma re-elected, is among those crying foul, alleging that state resources are being used to silence the president’s critics. The league points to the disciplinary expulsion of its president, Julius Malema. The youngsters contend that Malema did nothing wrong and was in fact articulating resolutions of the league when he was kicked out. Malema’s comrades don’t believe that it is sheer coincidence that following his expulsion, the Hawks, South Africa’s elite crime-busting unit, has charged Malema for money laundering; the Public Protector is now investigating him; while the South African Revenue Services believes he may have a case to answer with regard to his tax liabilities. The league’s acting president, Ronald Lamola, says it’s “a political issue” they are going to raise at the conference.
The incumbent is not having any peace either. In October, following a complaint lodged by the official opposition, the Democratic Alliance (DA), South Africa’s Constitutional Court found that Zuma had acted “irrationally” by appointing one “dishonest” Menzi Simelane as the chief of the National Prosecuting Authority.
While Zuma was pondering that, new “looting” allegations emerged detailing how, on top of his rural village, which was upgraded to become “a mini New York” amidst a sea of poverty, around R248 million ($28.2 million) was being spent on a host of other improvements to the president’s private homestead in the area. The president has denied this, insisting his family is spending its own money to do the upgrades, and that the government is only taking responsibility for security, and even then at the insistence of state security officials. The minister of public works, whose department has the responsibility of looking after the residential and security needs of ministers and senior state officials, has however steadfastly refused to divulge the details of both the actual money spent and the extent of the work done on the president’s home.
In an unprecedented move in November, the DA, with the support of eight other opposition parties, tabled a motion in Parliament in which they declared their intention to impeach Zuma. Knowing that it has the overwhelming majority that would prevent such a move, the ANC called it a “frivolous and narrow publicity-seeking gimmick” that will never see the light of day.
The people who have the best chance of deposing Zuma—if they want to—are the 4,500 voting delegates who will be gathering in Mangaung for the party’s elective conference. Drawn from the ANC’s branches, affiliate leagues and members of the national executive committee, they are the ones who will have the job of electing not only the party’s president, but also its deputy president, the secretary general, the deputy secretary general, the treasurer general, the chairperson, as well as 82 members of the powerful national executive committee.
The voting delegates’ task has not been made any easier, though. In a rather outlandish practice, certainly for a party that makes no secret of its desire to lead the continent and the world, neither of the two candidates has to go through any form of interview for the job. The candidates are not required to present to the party faithful any vision of where they intend to steer the party, the country and the continent. In fact, they should not canvass at all. To openly campaign, the unwritten rule goes, is “un-ANC” and therefore frowned upon.
So Zuma’s campaign has been left to pronouncements made by leaders of his home province KwaZulu-Natal who, with 974 delegates to the conference (see sidebar), will have the biggest representation. Following the opening of nominations, the women’s and veterans’ leagues, as well as the majority of provincial executive committees have nominated him—although it must be pointed out that the branches may vote differently to the pronouncements of provincial leaders.
The pro-Zuma group is so confident that they are resisting any compromise permutations that are being bandied about by certain brokers, under the guise of avoiding blood on the floor. The Zuma slate, by the time of going to print, had him staying on as president, Motlanthe as his deputy, chairperson Baleka Mbete and incumbent secretary-general Gwede Mantashe also staying put. Deputy Secretary General Thandi Modise and Treasurer General Mathews Phosa are no longer wanted.
Motlanthe is being accommodated only if he doesn’t challenge Zuma, something he is yet to indicate whether he will do. But he hasn’t said he’s not interested either. At last month’s launch of his political biography, where many expected him to give the clearest indication, he was as vague as he has ever been. While at the beginning of his speech he had his supporters’ hope, talking about “agents of change” and calling for an end to “the notion that so it was, and so shall it be”, he still left everyone hanging when he somewhat abruptly ended his short speech by saying when he dies, eventually, he would like his tombstone to have the words: “Others made suggestions and he implemented”.
Afterwards journalists asked each other about the meaning of what he had just said. No one had an answer. As for the race, it’s still very much on—for better or worse.

The Rocky Road To Power

The last time I saw Alf Kumalo, it was a fitting place to meet one of the true greats of journalism. He was working, a camera slung around his neck, as always, on one of the biggest stories on the planet that day. We were at Milpark Hospital in Johannesburg, in early 2011, where hundreds of journalists from around the world descended after Nelson Mandela had been admitted in poor health.
Kumalo, the man who had been photographing his friend, Mandela, for more than half a century, was his gentlemanly self. He stopped his car, smiled and shook my hand with a warm greeting. He didn’t quite look himself that day but as he drove off, I mused that the man epitomized everything I respected in journalism: hard work; professionalism; integrity; a sense of fun; guts and grit; in short, qualities of man lauded across Africa, for more than half a century, for capturing the history of the struggles of his continent.
In this trade, riddled by braggarts and self-promoters, where even a spin doctor can command columns in newspapers—Kumalo was a man who wore his eminence lightly. He also wore the finest, smartest, clothes. Now, most photographers wear jeans and scruffy jackets; Kumalo dressed to the letter with a handkerchief nestled in the top pocket of a sharp jacket.
Kumalo appeared in the first edition of FORBES AFRICA in October 2011 when we interviewed him about his role, where he played himself, in the The Bang Bang Club, a film about the rough world of journalists covering South Africa’s political troubles.
“The Bang Bang started in the 1990s, but we’d been banging on for years,” laughed Kumalo.
It had been a long journey for Kumalo from his birth, more than 82 years ago, in Alexandra Township, just down the road from the FORBES AFRICA offices in Sandton. He went to college in Evaton, in the Vaal just outside Johannesburg. His eye for a picture saw him work for a number of publications, including South Africa’s Drum magazine and The Star, photographing every step on the road to freedom for millions of Africans. It was a fascinating journey that would see him befriend boxing giant Muhammad Ali—Kumalo was a successful amateur boxer himself—along with everyone from Moroka, Mbeki and Mandela.
I got to know Kumalo in 2009, when I interviewed him for the CNBC Africa documentary Liliesleaf—The Untold Story. It was a trilogy I produced on the underground movement in the 1960s, which hid out at Liliesleaf farm in Rivonia. Their capture, in a raid on the farm, led to the world-famous Rivonia trial, in which Mandela was sentenced to life.
Kumalo was at the raid and trial. He was lucky enough to have won a car in a photographic competition, so he was able to drive to cover the raid. In the car he packed a blue overall so he could disguise himself as a worker and avoid manhandling by the police. Here, he used his famous techniques to shoot, without anyone knowing, which included balancing a camera on his head and clowning around while the shutter clicked away. This hard work and guile brought Kumalo some of the most stunning pictures of his generation. He told me that he took a picture inside the court at Mandela’s Rivonia trial in Pretoria—an action that would have meant prison back in the day—and hid it away when his editor disapproved.
“I think I still have the negative somewhere, I will have to look it out,” he said to me, but took the secret of the missing Rivonia photograph to his grave.
As a fellow journalist, from the days before cut-and-paste hearsay, I always appreciated how much Kumalo had been an eyewitness to history; that he had felt, as well as recorded, the momentous stories of Africa. I shall never forget the pain in his face when he told me of how he saw police tossing casually the bodies of dead schoolchildren in piles during the Soweto uprising in 1976.
Kumalo suffered for his craft. He was beaten up and arrested more times than he could remember. Once the South African police cracked his skull with a rifle butt and then charged him with fighting police and resisting arrest.  The case dragged on for nine months, before charges were dropped on condition that Kumalo stopped shooting pictures. It was like telling the Limpopo River not to flow.
“I shot pictures all the more; I was angry and defiant,” said Kumalo.
Through it all, Kumalo never lost his sense of fun and love for the job. I recall the twinkle in the eye, when he told of driving to Francistown, in Botswana, to cover the escape of two South African underground activists from Liliesleaf: Arthur Goldreich and Harold Wolpe. The two had broken out of police cells in Johannesburg and fled to Swaziland, hidden in a car boot, before flying to Botswana dressed as priests. Kumalo recalled the hectic night drive, with a journalist, along the dirt road to Francistown where they were more afraid of lions than speed traps. Kumalo risked the lions as he jumped out of the car to retrieve the game road kill for the pot, his colleague was afraid to follow.
“He was in the driver’s seat taking a pee through the door saying, ‘I am not taking the risk, I am not mad like you!’” chuckled Kumalo with a laugh that could light up a room.
It was a more somber occasion, laced with tears, at City Hall in Johannesburg when those who knew Kumalo gathered, on a warm October afternoon, to remember his life. Winnie Mandela was there, as was legendary photographer Peter Magubane, who stood shoulder-to-shoulder with Kumalo in shooting many of the stories of the day.
“Bra Alf never hurt anyone’s feelings. I never heard him make a derogatory comment about a colleague,” says poet activist, Don Mattera.
Veteran journalist Hopewell Radebe recalled how the gentle man, with a camera, always had time for rookie reporters.
“On a job, he used to call you aside and say, ‘This is how you behave and when things get tough you do this…’ Alf proved the lens of a camera can be as powerful as an AK-47 in freeing the people from the yoke of oppression,” he says.
There were tears from the many young photographers trained by the great man, who lamented how he struggled to raise money for his college in Soweto. Kumalo could have been forgiven for thinking that he was denied the monetary reward of an illustrious career. He complained to me that people often stole the images he had fought hard to capture.
All of the photographers in the room lent their cameras for the photographic equivalent of a 21-gun salute. As the shutters clicked away everyone paused for a moment to contemplate a world of journalism that is much poorer for the loss of Alf Kumalo; the kindly king of the lens.

Farewell, The Kindly King Of The Lens

You say your prayers when your kingdom comes crashing down but do you survive to tell the tale?
This is the story of 46-year-old Nigel Chanakira, one of the first black Africans to own and run a bank in Zimbabwe. He was only in his 20s in 1994 when he opened Kingdom Bank and Kingdom Financial Holdings. He beat the odds of an uncertain political and financial environment to make it happen. But the company has been as much his success story as it has been his worst nightmare.
Chanakira says:  “I had worked in white organizations. I worked in an Anglo [American] subsidiary and I was the second black investment analyst in Zimbabwe. That is where I cut my teeth and learnt about financial markets.”
Chanakira was also among the first group of black children to go to former whites-only schools in the early 1980s.
“That was an experience of its own. I was very vocal about racism. I showed them that you can co-exist as black and white,” he says.
Working for finance house Bard after school, he learnt to trade government bonds. He also came up against racist drivel like the notion that blacks could not be investment analysts.
“It was still a time when professionally things were quite racial. I proved them wrong because I became one of the finest investment analysts in the industry,” says Chanakira with a mock British accent.
But what drove him into setting up his bank was his passion for economics. He jokes that TV programs about the lifestyles of the rich and famous, showed that the biggest bling belonged to lawyers and bankers. This also sparked his interest.
Having already made a mark in the heart of the financial district in Zimbabwe, the 26-year-old knew he could take the next leap. He started by making the bold offer to buy and lead Bard. That was rejected. He then sought a licence to start a bank. And just like that Kingdom Bank was born.
“The idea of Kingdom as the name for the bank was born out of Matthew 6 verse 33: “Seek ye first the kingdom of God and his righteousness and all these things shall be added unto you,” quotes Chanakira, who is cut from Pentecostal cloth and peppers his speak with biblical quotes.
Kingdom became the second bank to be listed on the local bourse. USAid sponsored him on a visit to the States. The aim of the visit was to expose him to how global financial markets work and to give him insights into how the New York Stock Exchange (NYSE) operates. The ultimate dream for Chanakira was to have Kingdom listed in the Big Apple one day.
By 2007, Kingdom Financial Holdings merged with Meikles Hotel, led by John Moxon, to form the powerful conglomerate, Kingdom Meikles Africa (KMAL). Meikles had been toying around with the idea of getting into a banking deal and looked to Kingdom Bank. The merger was the culmination of lengthy negotiations. It happened because Meikles wanted an empowerment partner and a bank to be part of his diversified company that included Tanganda Tea Company, Cotton Printer, TM supermarkets and stores as well as KFHL subsidiaries. Chanakira sold 25% of his shares worth, a record of, $260 million.
Chanakira’s merge deal was big news. It got the bourse all shook up and raised the prospects of a listing on the NYSE. The deal was a triumph for Chanakira in a turbulent Zimbabwe market that had seen several local banks collapse under the burden of debts, insider trading, bad loans and corporate malfeasance. At the time, analysts called the KMAL deal ‘a marriage made in heaven.
“The share price went ballistic, it hit the roof,” says Chanakira.
But the happy days would be short-lived. In one year, relations between investors soured after a furor over money invested into the Cape Grace hotel in South Africa. Chanakira was questioned about how the money had been transferred out of Zimbabwe without his knowledge and investors demanded that the money be returned.
Soon the marriage became acrimonious and the fallout, public and nasty. The demerger between Kingdom Financial Holdings and Meikles Africa followed. Shareholders agreed to demerge KFHL from Meikles on the condition that Chanakira pay Meikles around $23 million by 2010, to regain control of KFHL.
The fallout had all the ingredients of a soap opera. Chanakira admits that the manner in which his worst day played out was full of drama that only Hollywood could have improved.
Chanakira remembers it well. It was September 2010 and he had just landed at O.R. Tambo airport in Johannesburg en route to China for the World Economic Forum meeting. His reputation intact, he had been invited to be part of a global team of young, African entrepreneurs who would debate current world business trends.
As he was checking in and clearing customs, it didn’t occur to him that his KMAL partner, Moxon, wanted him out. Chanakira says it was exactly like a typical African coup d’état. The takeover was swift and stealthy, as they executed the plan while the leader was away on official business.
“I went to the airport with a ticket to China, but I ended up flying back to Harare. Just imagine, you are about to fly out to the World Economic Forum, as a young global leader, then you receive a report of a circular, informing you you’ve been fired. John Moxon, chairman of Meikles Africa, issued a letter firing me and instructing me to leave the company. I was fired via circular sent to the market,” says Chanakira.
It was the ultimate humiliation. He was hurt, irritated and drained of energy.
In that instant, it mattered little to Chanakira that he had won numerous management awards in Zimbabwe and had been named among the greatest entrepreneurs on the continent. All the hurdles he had to overcome to form Kingdom bank and to cement the deal with Meikles, seemed in vain.
“I had sold my house to start that bank and went back to stay at my father’s house,” he says.
He adds: “We built Kingdom and expanded to Malawi, South Africa and Botswana.”
But there was no time for self-pity. Once he touched down at the airport, he began to initiate a plan to reclaim his business. His plan was to rope in political empowerment groups that would fight in his corner. When ZANU-PF party officials, loyal to President Robert Mugabe, got wind of the KMAL debacle they were hopping mad. They were not about to let one of their ‘success’ stories, which was part of the government’s indigenous empowerment strategy, be gobbled up and spat out by white business.
Even though Chanakira instituted legal proceedings, it was politics that prevailed as Chanakira called in political favors. Zimbabwean media has continued to take a dim view of Chanakira’s use of politics to handle his business affairs. Moxon eventually fled to South Africa after been specified by government for allegedly “externalizing” foreign currency.
“The demerger was a very complex transaction; it had undertones and overtones of complicated business dealings, political interference, race, even greed. The political overtones were dominant,” says Dumisani Muleya, editor of The Zimbabwe Independent.
“Chanakira had his connections behind him, pro-black economic empowerment business people, your Philip Chiyangwa, Themba Mliswa, the affirmative action proponents. Moxon marshaled some political support. He also had very strong political connections. You have to see who he was working with. He was working with Farai Rwodzi, who is well connected politically. Rwodzi had the backing of the late Retired General Solomon Mujuru. That’s the nature of business in Zimbabwe,” says Muleya.
For Chanakira, it’s been about clawing back from financial disaster to rebuild his reputation.
“I have developed friendships out of the crisis. It was very difficult. When I was still at Meikles, I had hair then—it went gray in those two years,” he says, with a chuckle.
Doing business in Zimbabwe remains an unpredictable environment where policy inconsistencies agitate both domestic and foreign investors.
He says of Zimbabwe’s indigenization program: “I think indigenization, as an empowerment tool, is a great concept. Empowerment is needed, let nobody lie to us. I can’t start a bank in the US. You can’t start a TV station [or] media. There are certain industries that are guarded in the US.”
But he adds: “The policy is too strong for the season and if you bludgeon people, if you bulldoze them, it doesn’t work.”
The program driven by indigenization minister, Saviour Kasukuwere, is a real threat. Plans are for foreign banks to give up half their stake to Zimbabweans under the controversial Indigenization and Economic Empowerment Act. Already Standard Chartered, Barclays and Stanbic are in the firing line and stand to have their licences revoked.
Zimbabwe’s central bank has warned of turmoil in the financial sector, should some of these proposed government drives take place. Central bank governor, Gideon Gono, says: “There is no law that provides for arbitrariness on the part of anyone and or expropriation of banking assets in Zimbabwe yesterday, today or tomorrow.”
However, the invitation stands for Zimbabweans to come forward to start banks. Chanakira would agree, even with the rollercoaster ride he’s had. You can’t keep him from business and you can’t keep him from giving thanks in the prayer room he has in his home.
“I grew up in a very strong business family. I had a rich business culture.”
He warns about due diligence and about choosing business partners carefully.
“Kingdom is a legacy, how do you sell it for a bowl of soup, I just can’t do [that],” he says.
Chanakira lives in a posh Harare suburb today. He points to the stairs in his mansion.
“I have a prayer room upstairs; I went there to pray every day. It was three difficult years. It took nearly three years for the fight and to survive after the demerger. That was God’s intervention.”
Chanakira is still passionate about listing Kingdom on the NYSE and says it’s still a possibility.
“Absolutely, it will happen! It’s a journey. I guess we probably need another five years to get there. Africa is too rich to be poor and I want to be one of the world changers,” he says.
Kingdom Bank now has new investor on board, namely Africa Asia Bank.
Only a few months ago, Kingdom Bank was dogged by reports that they had to send clients home without cash, allegedly because the bank simply didn’t have money. Chanakira said, at the time that it was just a small hiccup and they were not having cash flow problems.
Chanakira says there’s no stopping him and that he still has a lot of his story to tell.
“I am not only going to write a book, but I’m going to make a movie. Dallas will have nothing on my story,” he says.

Tag: December 2012

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