Johannesburg entrepreneur Chris Pienaar was hungry for profits and it was bread which fed this hunger. He set up Straight to Your Door bread deliveries in Alexandra—one of Johannesburg’s oldest townships, which is affectionately referred to as ‘Alex’—more than two years ago. He started out with just R20 ($2.40) to buy stock and made a R2 ($0.24) profit on his first sale. In July, those numbers grew to around R23,000 ($2,756).
“In Alex people can wait up to 40 minutes in supermarket queues just to buy fresh bread every day. That’s when I realized bringing bread to people’s doors would be something Alex residents would be happy to pay for,” he says.
But closing this gap and turning it into a business opportunity only became a reality when Pienaar joined forces with the Awethu Project, an entrepreneurs’ incubation program based at Constitution Hill.
Awethu, meaning ‘ours’ in Nguni languages, was launched by Yusuf Randera-Rees, a Harvard and Oxford graduate, who cut his teeth working for a Swiss bank and returned to South Africa in 2009. His objective was to merge his Harvard training and insights with the entrepreneurial potential of South Africa’s townships. He wasn’t out to establish a charity but a business model that would see entrepreneurs and Awethu’s partners make mutual profits. Entrepreneurs have to give half of their new profits to Awethu.
“At Harvard and Oxford I saw an almost proven record of success but it wasn’t necessarily because the students were all exceptional,” says Randera-Rees.
What was exceptional, Randera-Rees noted, was that his peers had access to quality education, mentors, infrastructure and the halo effect of being associated with the world’s most respected business schools.
“I was angry that so much entrepreneurial potential in South Africa was being wasted just because people didn’t have access to opportunities.”
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By 2010, Randera-Rees had secured corporate sponsorship, funding from treasury’s job fund, staff members and a heavyweight list of patrons and advisory board members. He could pilot the project, which he and university friend Ryan Parker had first conceived as Oxford students when they entered the university’s 21st Century Challenge. The winning social-entrepreneurship projects had to be sustainable, show financial returns and produce social and environmental benefits. The pair’s business incubation idea got top 10 spot in the competition.
Pienaar joined the first Awethu workshop held in Alexandra and the match was obvious from the start.
“Chris was great at every problem solving exercise we gave to the entrepreneurs. And when he did undergo the testing process we had devised he scored in the top percentages of anyone in the world,” says Randera-Rees.
Pienaar, who was a less-than-successful beer seller when he joined the workshop, recognized Awethu’s fresh take on hackneyed buzz phrases of job creation and poverty alleviation.
“This was about getting practical business training, partnering with Awethu to use their networks and then having the guts and initiative to make it happen,” he says.
It is about steady growth and making real profits that also factor in Awethu’s cut. It’s not a get-rich-quick scheme. That is why Awethu’s key to success is to select the right entrepreneurs with which to partner.
Over the next 18 months they aim to have 1,000 thriving entrepreneurs. It all begins with the workshops, which aim to reach around 13,000 entrepreneurs who will be provided with a free two hour business course. Applicants don’t need a minimum level of education, business experience or capital. Like Pienaar, they don’t even need an investable idea. They only need to come from an underprivileged background and prove, after the workshop and testing process, that they have what it takes to become entrepreneurs. From the 13,000 a core group of 1,000 will be identified to partner with Awethu’s mentors to start on the incubation process.
Pienaar has become a mentor and trainer himself. He says his success disproves that township youth are doomed to fail. Straight To Your Door works because he understands his market and his customers’ needs. It makes money because the ideas are polished by mentors; have the confidence of acquired business skills and the thumbs up from those who are part of powerful business networks. Pienaar has not stopped doing the grunt work and he is constantly adapting the responsiveness of his business strategies.
“I know me and I know Alexandra. The bread deliveries work because we’re doing them in the afternoon when people are at home, not rushing around and trying to find change to pay. We can also do deliveries quickly because the homes are close together and this means you save time, you keep your customers happy and so you can sell more bread and make more profit,” he says.
Today, Pienaar has six employees and is looking to partner with other entrepreneurs who want to sell door to door. He’s been able to piggyback on Awethu to seal significant deals with large established brands that now recognize his successful track record.
“My granny is so proud of me. She sold fatcakes for a living but we lived from hand-to-mouth, now I’m a person who gets respect and people come to for business advice,” says Pienaar.
Randera-Rees is also proud. Pienaar is exactly the kind of success story Awethu needs to reach their target of 1,000 ace entrepreneurs and to prove the strange but beautiful alchemy that can happen when Harvard and ‘Alex’ meet.

Breaking Bread With Destiny

Take a minute to think back to your college days. A number of lectures a day; frequent trips to the library; many hours spent studying; countless exams and a bit of a social life here and there. Now, throw creating a web browser into that mix. Impossible, you say? Well, not according to 21-year-old Raindolf Owusu who has done just that by successfully launching a web browser specifically customized for Africa’s growing internet users.
Owusu, a very agreeable computer science student at Methodist University College in Accra, Ghana is talk of the town. As I walk through the halls of his fine institution with him on an overcast morning, his peers acknowledge him with a little hail and respectful handshake, while his cellphone rings intermittently. That is business calling because when classes are over, it’s back to being a software developer and CEO.
“I believe software can solve many problems in Africa. Our problems on the continent are different and existing software from abroad are not built to suit the African setting. Propriety operating systems are being entrenched into our society and we spend so much money paying for licenses on this software. I decided to build a company that will address this problem and develop homegrown software,” says Owusu.
This decision led to the birth of Oasis WebSoft, a software development start-up, from which Owusu’s Anansi Browser and operating system emerged. Anansi operating system is an openSUSE 12.1 clone OS, that was developed on Linux kernel. This makes it a unique experience for Unix desktop users. It is a general purpose, free operating system. It is virus free too, which eliminates the need to buy anti-virus software and it comes pre-installed with LibreOffice. The beauty of Anansi is that it runs on every type of computer architecture and can be run live on a DVD or CD-ROM, which means you can use Anansi OS and your default OS like using Windows on
your Mac.
“I’m an advocate for free and open-source software,” says Owusu.
The Anansi Operating system, attracted 3,000 downloads within the first two weeks of its launch in July. The numbers have since increased to 6,000 downloads and counting. For Owusu, who describes his programming skills as self-taught, funding for his project did not come easily. A lot of funds were injected into securing an unlimited server to host the OS for downloads. After being granted the Guido Sohne fellowship—named after a late, award-winning software developer—by the Free Software and Open Source Foundation for Africa, more angel investors have since flooded in.
On what makes this a pioneering innovation, Owusu explains, “There are so many Linux distributions including Ubuntu, Fedora and Finnix, currently Anansi has a Gnome 3 desktop environment and we have embedded all the basic system wares and software that will enhance software connectivity.”
He hopes that his plans to run the next updated version of Anansi in local languages and the customization of features, to adapt to a variety of African countries, will bring more revenue in the near future.
Owusu’s Oasis WebSoft might be one of the most promising start-ups in Ghana presently, but his interest in his academics has not been swayed in
the least.
“I am very dedicated to my studies. There is still a lot to learn. It’s all a matter of time management. If it means getting less sleep, I’ll continue to balance my studies and work. I don’t want to become a college drop-out. That is not a notion that should ever be held by any African student. Education is very important.
He currently has a team of five, which he hopes to expand with time.
“Raindolf is very hard working and driven. He is one of the best guys I have ever worked with and I’m very proud to be a part of Oasis WebSoft. I believe we have something special on our hands and we will take the name of Ghana and Africa very far with this,” says Jeffery Aboagye-Asare, one of Owusu’s team members.
“My market is Africa. I believe in Africa. It’s quite astonishing that we are currently getting downloads from overseas but I am not worried about competing on a global stage. I want to make sure that anything I build—my mobile, software and web applications—are built solely for Africa,” says Owusu,  the fourth of six children.
Drawing inspiration from names like Larry Page, Sergey Brin and Mark Zuckerberg— the CEO’s and founders of Google and Facebook, respectively—Owusu has got his finger on the cursor and Africa is waiting on his next
click.

MARK ZUCKERBERG IN THE MAKING

If ever there was a country that could be described as Africa for beginners, Namibia would be a strong contender: a young, but stable, democracy and an open economy in a country blessed with good mineral and natural resources; a robust financial system, good infrastructure and an independent judiciary.
In spite of the relatively small size of the economy, with a Gross Domestic Product of around $12.6 billion, Namibia has been something of a niche destination, especially for mining companies, since achieving independence in 1990. While only the eighth largest producer of diamonds, its production is 90% gem quality and a mainstay of the economy.
The country is also a popular tourism destination and has marketed itself as an up-market holiday for European clients, much like neighboring Botswana. Its fishing industry is considered a world-class resource and is the source of much of Spain’s European whitefish exports.
Over the past two decades, Namibia has recorded respectable economic growth, averaging at 5 to 6% per annum, but it has been slipping of late. According to the latest available figures for the National Accounts for 2011, growth has dropped from 6.6% in 2010 to 4.8% in 2011, largely as result of a slump in the mining sector. Inflation has remained relatively stable, although it is expected to increase from 2011’s 5% to 6.5% this year.
Historically, the mining sector—followed by agriculture, fisheries and tourism—has been the engine of the Namibian economy, with mining’s contribution peaking at 15.9% of GDP in 2008. This was largely due to an unprecedented boom in uranium exploration in 2004-2010, which saw two new uranium mines opening in addition to the 36-year-old RioTinto-owned Rössing Uranium mine.
However, the economic fall-out from the 2008 international financial crises landed in Namibia shortly afterwards as investment flows froze and mining’s share of GDP contracted by a record 45%, as the impact of the February 2011 Fukushima incident pushed uranium prices down to levels where several uranium mining projects had to be shelved. The largest of these, the Chinese-owned Swakop Uranium project, is however still on track to commence production in 2015.
This trend has been offset to some extent by growing interest in the potential for finding off-shore oil and gas deposits along the 1,200 kilometer long Atlantic coastline, which is held to be analogous to the Brazilian geology, that has in recent years yielded impressive oil fields. The Kudu gas field, a modest deposit of 5.7 Tcf, was discovered along the southern coast line in the 1970s, but because of low international prices for this commodity, was never developed due to cost considerations.
A looming, region-wide electricity shortage has however added new impetus to investment in this field, and several oil majors, including Shell and BP, have recently joined forces with Namibian investors to resume the search for the precious commodity. The government announced that it was to push ahead with the development of the Kudu gas field, in order to construct a gas-fired power station that it hopes will renew momentum in the development of other mining projects, as well as take advantage of a regional electricity shortage by selling excess power to neighboring South Africa.
A recovery in zinc and tin prices in the third quarter has seen renewed interest in exploration for these commodities, while continued global insecurity has also seen the revival of several gold-mining projects. There has also been renewed interest from Indian and Chinese investors in hitherto undeveloped iron ore deposits. A planned extension of the local railway network into Botswana to allow it to exploit and export newly discovered coal deposits, via Namibia’s Lüderitz and Walvis Bay harbors, is widely expected to help the mining sector regain its prime position in the local economy.
Namibia, however, is not without its own problems, the most obvious of which is a persistently high unemployment rate, exceeding 51% in 2011, as well as a growing corruption problem in areas of government procurement and related services.
This has brought additional pressures to bear on the ruling South West Africa Peoples Organization (SWAPO), which has been in power since 1990 and is struggling to deal with an internal transition in leadership.
To address the most pressing problem of unemployment, the government has embarked on an expansionary budget over the past three years under the so-called Targeted Intervention Program for Employment and Economic Growth (TIPEEG), a $1.5 billion stimulus program, that the government hopes would create an additional 104,000 new jobs per annum over the next five years.
Results so far have been disappointing in respect of employment creation, largely as a result of government’s insistence on making Black Economic Empowerment (BEE) the key criteria for accessing funding under this program.
This has also impacted on Namibia’s competitiveness: the most recent rankings released by the World Economic Forum’s Global Competitiveness Report showed the country has slipped nine positions to 92nd of 144 countries surveyed.
More worryingly, Namibia slipped 57 points in terms of rankings for the macro-economic environment due to the current high levels of debt—27% of GDP. Ranking of its infrastructure has also slipped by 26 points, which is of major concern to the mining industry.
Some of the concerns are being addressed: harbor facilities are currently being expanded to improve handling of bulk commodities like ore and the expansionary budgetary period is to cease by 2013-14.
As they say, ‘Watch this space’.

Mine Faith

Nana Akufo-Addo, the presidential candidate for Ghana’s main opposition New Patriotic Party (NPP), takes to the lectern in a theater packed with university students wearing the party colors of red, white and blue. Dressed in a white shirt, wearing his familiar round glasses, that accentuate his equally round face, the British-educated lawyer, turned politician, outlines his vision to transform Ghana, a nation dependent on the export of raw materials, into a thriving industrial economy.
“We have to make a deliberate, conscious effort to modernize our economy, industrialize our economy and make it a value-adding economy,” he says at the University of Ghana, in the capital, Accra.
“There are many countries in the world, [which] had similar backgrounds [to] ours that undertook this transformation, and succeeded, especially the nations of Asia—Japan, Korea, Thailand. If the Asians can do it, can we not do it here in Ghana, in Africa?”
“We are capable of doing it!” the students roar.
Ghana’s December polls are expected to be the most closely contested in West Africa, with the ruling National Democratic Congress and opposition NPP shaping their policy platforms around industrialization and social welfare. This ideal of a modern industrial African society has existed since independence, when Kwame Nkrumah, the nation’s visionary first socialist leader, followed the then popular model of import-substitution industrialization and set up a slew of state enterprises and manufacturing companies that eventually collapsed and weighed the country down with debt.
Decades later, Ghana boasts a fast growing economy that is diversifying. Close to 50% of GDP is generated by the services sector, according to Ghana Services Statistics. But despite this growth and economic shift, 60% of Ghanaians are employed in agriculture. Since 1996, manufacturing has plummeted from 26% of the economy to a mere 3% today. Ghana’s economy may be booming on paper but like many African countries, it is stuck in a pattern of exporting raw commodities and importing manufactured goods.
Socialist sentiments underscore the ruling National Democratic Congress (NDC) party’s political rhetoric, yet both major political parties view the private sector as a driving force behind economic growth. The NDC believes the state should play a stronger role in development. By contrast, the more capitalist NPP—led by President John Dramani Mahama, the former vice president who replaced the late President John Atta Mills—argues for social goods and protection against market forces.
“You must find a way of regulating the market so that it doesn’t create a class of society that loses out because everything is left to market forces,” said Mahama, in a recent interview with The Africa Report.
Both parties are committed to education and health, with free senior high school being the centerpiece of the NPP’s campaign.
From the perspective of the Ghanaian business community, the differences are subtle.
“The manifestoes are similar—they are speaking the same language with just a little color,” says Prosper Adabla, a businessman and vice president of the Ghana Chamber of Commerce.
“We have a mixture of socialism and capitalism and that is making us move well… The businessman is free, basically, to do what he wants.”
The creation of industries that process Ghana’s raw commodities, are policy platforms for both parties, with a particular emphasis on agricultural modernization. The NDC’s manifesto promises an agricultural industry strengthened by subsidies. Both parties argue that entrepreneurship is also key to economic growth and jobs.
But leaders in the business community say that while progress has been made in the way of policy, the government needs to do more to boost local business and protect it from the influx of imports from China and elsewhere.
“The government needs to do more to protect local industry through building local capacity, helping provide better access to finance and funding arrangements and improving technology,” says Seth Twum-Akwaboah, the executive director of the Association of Ghana Industries.
While positive policy developments have been made, among them the launch of an industrial policy last year, Twum-Akwaboah says that there must be more focus on implementation. Electricity offers a significant challenge for industry with erratic supplies and the recent closure of the West African Gas Pipeline, reportedly due to technical faults.
The presidential elections are expected to be close, but independent pollsters say that it is too early to determine who will claim victory in December. The NDC government will have to work hard to prove it can drive the economy forward. Ghana’s economic growth rate, which soared to great heights last year, has fallen to 7.1%, short of the projected growth rate of 9.4%, according to the Ghana Statistical Services. This along with the sharp depreciation of the Ghanaian cedi against the greenback by 17% in the first half of the year, a failed multi-billion dollar government housing project deal, and millions of Ghanaian cedis paid out in judgment debts for abrogated government contracts, pose hurdles for the NDC government.
Both parties face rising youth unemployment, poverty, underdevelopment in the northern regions, and accusations of corruption and financial mismanagement. Ghana ranked 69 out of 182 in Transparency International’s Corruption Perception Index in 2011, down seven places the previous year.
Vitus Azeem who heads the Ghana Integrity Initiative (GII), the Ghana chapter of Transparency International, says both parties have the political will to tackle government corruption.
“One of the issues is the lack of commitment of the people in power to take action against those who are alleged to be responsible for corrupt acts, especially when it involves people who are involved with and tied to the party.”
Florence Dennis, executive secretary of Ghana Anti-Corruption Coalition, of which GII is a party, echoes this sentiment, adding that while legislation is in place, allegations of corruption too often become politicized.
“For the past years our concern is that a lot of these corruption issues are politically handled and it doesn’t allow a fair sort of support from the public in terms of dealing with it.”
Ghana is among the few African countries that economists say will likely achieve the Millennium Development Goals. But the economic disparities between the arid north and tropical south pose a major challenge for Ghana, according to development economist Jeffrey Sachs. This development divide is starkly illustrated in the slums of Accra, hidden away by the city’s construction boom, where thousands of northerners flock in search of work.
In Old Fadama, Accra’s largest slum, men and women toil: dragging clumps of metal scraps and waste on rickety wooden trolleys, carrying loads on their heads, sending money back home to their families in the north, saving so they can start their own small businesses.
Inusah Sayibu, a 36-year-old tailor and father of three, has lived in Old Fadama for more than 10 years. With the small money he saved from cleaning out wood shavings from a sawmill, he gathered enough money to pay a master to train him to be a tailor. Sayibu earns ¢100 ($50) a month, well below the national average of $1,400 per annum, according to World Bank figures.
“If I could go back home, I would, but there are no companies, no jobs,” says Sayibu.
When I ask him who he will vote for, he says President Mahama and flicks his right thumb up. Mahama is from the northern region and many in Old Fadama expect that as a son of their soil, he will develop the north.
Nkrumah’s vision of a modern industrialized society has been a vision for Ghana throughout its political history, but some argue that the government ought to be more skeptical about this ideal.
“None of these two parties have questioned the idea [of] industrialization and whether it is the right form of development for an African country, particularly given the problems associated with industrialization in the advanced industrialized world now,” says Michael Whyte Kpessa from the Institute of African Studies at the University of Ghana.
“The question is, should we be industrializing now? Or should we be looking at alternative forms of development that are more sustainable, that are more germane to our particular socio-cultural circumstances.”
For the Ghana Chamber of Commerce agricultural industrialization is the way forward. “We are an agrarian economy. It is going to be difficult for us to industrialize because of the competition,” says Adabla.
Adabla adds that it will take a number of years to achieve this vision.
While Ghana may be touted as the ‘rising black star’ by some, there is still a long way to go.

If Asia Can Do It, So Can We

The story goes that in 1867 a 15-year-old Afrikaans boy picked up a ‘mooi klippie’ (nice stone) on the banks of the Orange River in the Hopetown district. Sir Roderick Murchison, Keeper of the Royal Museum of Geology in London, said the diamond had been planted. It was impossible, he said, for diamonds to be found where it was, but soon massive diamond deposits were discovered in Kimberley and the Hopetown district and the diamond rush began.
Syndicates and partnerships were set up, the De Beers Group being the largest. They were in favor of the Diamond Trade Act of 1882, which made it a punishable offence for anyone, but a licensed buyer, to possess rough diamonds. A diamond cutting industry, they believed, would pave the way for stolen diamonds to be processed.
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However, in 1919, the then-prime minister Louis Botha, put forward a plan to start a diamond polishing industry. A Cutting Act was passed, but it was another five years before an industry was established in Kimberley. Dutch experts were imported to train local workers and diamond polishing began in earnest.
But the trade went through a series of recessions and did not prosper. Eventually most of the industry moved to Johannesburg. In 1930, a Diamond Workers’ Union had been set up, but the trade suffered in the Great Depression and really only recovered during the Second World War.
The master cutters formed a Diamond Dealers Club, which remained stable and productive contributing to the fiscus and being respected around the world. In 1947, they were admitted to the World Federation of Diamond Bourses in Antwerp, Belgium, but the changing political situation in South Africa had its effect on the trade.
In 1976, the master cutters wanted to introduce a chain system—a way of polishing the rough stones in a production line—a faster method of producing a finished diamond. But the polishers objected to this because it lowered their skill. They went on strike. After six weeks, the chain system was brought in anyway.
Ernest Blom, then 25, was the youngest vice-president of the Diamond Workers’ Union. Initially, the fewer than 1,000 diamond polishers were exclusively white. After the strike, women and previously disadvantaged individuals were admitted as polishers and the tradition of a five-year apprenticeship was abandoned.
The Harry Oppenheimer Diamond Training School opened with Blom as its first chairman. The idea was to train unemployed youths. The South African Diamond Bourse sponsored the school, but the new diamond cutters were no longer artisans in the accepted sense of the word. By 1990, the trade reached a peak with 3,500 workers and 18 sightholders—those factories entitled to buy rough diamonds directly from De Beers.
By July, the number of sight holders had fallen to 10—none of them South African. The number of diamond polishers had dwindled to less than 600.
Blom says the European banking crisis and recession have affected the trade. The local industry has suffered with the declining labor force, the competitiveness of Indian and Chinese buyers and too much red tape.
“Our production costs are too high, much higher than Indian or Chinese costs. The open system of buying rough directly from the diggers has gone, having been replaced by the tender system which most people accept,” says Blom.
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A Johannesburg factory owner said: “De Beers did not look after the local industry, nor does the government. Many workers are being brought in from India. They work seven days a week, virtually 24/7, non-stop, are housed in crowded conditions and bussed to the factories. Furthermore, they are paid in India, so they pay no tax here”.
“Uncut diamonds, which now have to be bought through the State Trader, are too expensive because our labor costs are too high. It’s more profitable to send rough diamonds overseas for processing, despite the taxes and interminable red tape.”
Another factory owner said the government wanted diamond polishers trained locally.
“We are just not able to buy polishable goods at workable prices [to train them on],” he said. “What’s more, there are qualified workers who are unemployed, walking the streets, trying to get jobs, so how can we take on learners?
“In any case, the industry is moving to Botswana and Zimbabwe. At this rate, there is no future in this country for a polishing industry. There isn’t one wholly South African-owned sightholder. There is a 500-bench factory in Polokwane and they cannot get a sight.
“The only hope is to give rough to South African-based manufacturers at a favorable price. South Africa was once regarded internationally as being at the forefront of diamond polishing—now it’s a joke.”
Blom was sanguine, however.
“The government is due to hold a summit later in the year. Hopefully, they will upskill labor and cut out the unnecessary red tape. If they get that right, we still have a bright future.”
A Diamond In The Rough
Kgele Ellen Mahuma finds herself in the heart of the African diamond industry and still can’t believe how she got there. It’s been a long way since her childhood years, when she first recalls watching a dishwashing liquid commercial on television: the dishes sparkled like diamonds. Mahuma also remembers the advertisements for diamonds and how she longed to touch them. Her childhood dream became a reality in 1984, now she has her own diamond cutting, polishing and trading company.
Mahuma is multi-talented: a true diamond in the rough. She established K. E. Mahuma Diamonds—with its modest office in the South African Diamond center, in central Johannesburg—in 2008. In the next two years, she hopes to have an employee or two.
“I don’t want to rush things, it must grow first. The money I could pay that person, could have bought a stone. I can do everything on my own,” she says.
This diamond entrepreneur has repaid the loan used to establish her company. She visits her clients from China to India and from Dubai to Belgium.
It’s a lucrative industry.
“If I have a polished stone, there are always buyers,” she says.
It can be a risky one too.
“It’s a dangerous industry. My neighbors don’t even know what I do. They try to investigate. They ask my children, ‘Why is your mom going to China? ’I tell them, ‘I work for a white man and I am happy with my job.’”
There is a lot of worry around the buying of stones. She bets against around 100 other people; the person who offers the highest price, ‘wins’ the parcel.
“Whenever I ‘win’ a parcel, I worry that I may have overpaid and miscalculated because I have to consider the color and clarity of the stone or stones; as well as my labor; the payment for the certificate from the lab and then, of course, the profit I will make,” she says.
She started working for Reichman Diamond Cutters in 1984, at the age of 23. It took a year of training to learn the basics of the trade and another five for her to feel competent.
Her mother—who used to work at the bioscope (cinema) in Carlton Center—was scared when Mahuma first started working there.
“She used to say, ‘don’t lose any of the diamonds. Don’t tell anyone that you work there. Don’t let anyone convince you to steal one’,” she recalls.
It wasn’t easy for a Zulu-speaking woman. The male to female ratio was two to one. She was the only black woman at Reichman Diamonds; there was one other black man working alongside her. Her mentors were Afrikaans-speaking, colored males.
“They couldn’t speak my language. I was forced to learn and speak Afrikaans. I used my dictionary at home and if I couldn’t understand something at work, I had to ask someone to explain it. Now I’m competent in both,” she says.
She has trained seven other black diamond cutters on a part-time basis; two men and five women, three of them are foreigners: one from Côte d’Ivoire and two Ghanaians. While she doesn’t charge them the going rate of R30,000 ($3,550) for a six month training course, her trainees can recognize a sure-sell stone and sell the diamonds bought in their home countries to her.
In a month, she polishes around six stones amounting to around 14 to 16 carats.
While she believes the South African diamond industry is growing, times can be as rough as the diamonds.
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More carat, Less Stick

Adam Kahane is worried. The world-renowned facilitator, who helped shape ANC planning at the dawn of South Africa’s transition to democracy, has warned that the state lacks capacity to solve complex problems; that the citizenry is responding with protest and that the government, in return, reacts with brutal repression.
Kahane—a pivotal figure during the Mont Fleur scenarios in 1991 and 1992, that helped to shape South Africa’s democratic and economic thinking—was a central figure four years ago when the Dinokeng Scenario team came together to take stock of where South Africa was and to consider possible futures for the country.
In 2008, along with the Dinokeng team, he warned about a walking apart-scenario for the future of South Africa in which the state becomes weaker and ineffective, and that the disengaged citizenry loses patience and erupts into violence. The state then responds brutally.
Kahane said in an interview with FORBES AFRICA the walking apart-scenario is an apt description of Marikana  where scores of miners were shot dead at a mine owned by multi-national, Lonmin.
It is not a question of the state being weak morally, but its capacity has weakened to deal adequately with the challenges of society, he says.
“Some pockets of the state [are] strong, but on balance, its capacity is not strong enough to deal with the
problems effectively.
“All the scenarios that we discussed at Dinokeng coexist currently in South Africa, but what happened at Marikana, with social groups not getting what they think they deserve and protests erupting, and the state responding violently, makes this a catastrophic walking apart.
“All the mechanisms of solving disputes, between workers and trade unions, between citizens, the police and the state failed. It was a failure of mechanisms for working out disputes.
“Marikana shows that our capacity to work out difficult complex conflicts is degrading. In fact, it was a catastrophic degradation,” says Kahane.
He also warned that South Africans will have to rediscover their extraordinary capacity to work things through, instead of superficially papering things over.
Some observers have called Kahane a critical and pivotal figure in helping to shape South Africa’s economic thinking in the two years prior to the 1994 elections.
Clem Sunter, South Africa’s foremost corporate scenario practitioner, might have had Kahane in mind in January 2010, when he said that Africa had navigated its own transition to democracy and the global recession, “So take a bow, all you who were involved in the Mont Fleur initiative. You may have changed our history at a critical juncture in the fortunes of the world.”
But Kahane denies that his role was ‘pivotal’. He argues a meaningful role is a more apt description and salutes the impact of Trevor Manuel and Tito Mboweni on the ANC think tank during the Mont Fleur scenario discussions.
The Mont Fleur scenarios team questioned how South Africa’s transition will proceed and whether the country would succeed in taking off.
One of the dark prophecies that the country wanted to avoid, was Icarus, in which a constitutionally unconstrained black government comes to power on a wave of popular support and embarks on a huge and unsustainable public spending program, which crashes
the economy.
Manuel and Mboweni presented the Icarus scenario to the ANC’s leadership team. Icarus was a direct attack on the party’s orthodoxy.
Mont Fleur helped to shift the economic thinking and action of the ANC to avert an economic disaster.
“The post-1994 government had been more conservative and fiscally disciplined in its economic policies than what they were expected to be. Mont Fleur had a broad impact on the specific question to what constitutes a sustainable economic policy,” says Kahane.
“Trevor Manuel and Tito Mboweni had created the scenario and understood inside out what it meant. So I would not take personal credit [for shaping the ANC’s economic thinking], but Mont Fleur [had] made a useful contribution,” he says.
Asked whether the vibrant and vigorous debate about the nationalization of the mines presented a possible return in the ANC engine-room to socialist thinking, Kahane said one must understand the global debate about the matter.
“Not only in South Africa, but globally, the faith in markets and in the current form of capitalism that we had in the late 1980s and the 1990s has been eroded substantially. The SA government is trying to figure out what is the best way to get the social and economic results we want. In 1992, during the Mont Fleur scenarios, [the faith in capitalism] was much more credible that it is now.
“Globally there is a reopening of the question on sustainable economic models. In South Africa there are specific challenges about the extremely poor and about economic inequality which has worsened in a certain way since 1994.”
Kahane said the economic debates in South Africa are not entirely a parochial matter, but are vigorously debated elsewhere.
When Kahane and the Dinokeng-team debated possible options for the future, the most positive one was ‘Walking Together’. This tells the story of a state that becomes increasingly collaborative, listens to its citizens and leaders from different sectors and engages with critical voices.
When asked how South Africa can produce the Walk Together option, Kahane said changes by government won’t necessarily fulfill the ‘Walk Together’ scenario.
“The citizenry must increasingly stand up and say: this is what we need, think and what we want. The government might then readily or grudgingly respond to these voices.
“I think it is important that ‘Walk Together’ is driven by the citizens, and not by the state. The state will always generally have a tendency of saying, ‘We will take care of this, why don’t you keep quiet and let us do the job’. It is an error to wait for the state. The citizenry must push the country and state into walk together,” he says.
Although the drive by the citizens should not be a violent one, it is not necessarily a calm phenomenon. People will shout and push and shove, there might even be a cacophony of voices that must be tolerated in order to move to a ‘Walk Together’ scenario.
The mechanisms, cultures or institutions that allow conflicts to be addressed, even noisily, is sadly absent, he notes.
Kahane not only nudged South Africa towards a peaceful resolution, or helped post-dictatorship Guatemala move beyond the longest civil war in the history of the Americas. He and Reos Partners, of whom he is a director, have also been involved, intimately, in Zimbabwe with scenario planning and have released a document called The Great Zimbabwe Scenarios Project. They are also involved in Southern and Northern Sudan, in Europe, America and Australia.
A man equipped with such enormous insights and the author of the recently published book Transformative Scenario Planning: Working together to change the future, Kahane could offer some advice on how to arrest the current malaise in South African society, the hardening of the stance between government and some sections of society.
And Kahane says the possible answer lies in the excavation, the rediscovery of the capacity for dialogue and for collaborative action in South Africa.
“I have learned my craft in South Africa. South Africans have an extraordinary capacity to work things through. This existing capacity must be un-buried,” he says.
“We are always in a seesaw between walking together and walking apart. We are in a phase now where trust is low, polarization is high. It is about protecting myself and my people. It leads to walking apart.”
“Perhaps combinations were made that [were] superficial. Perhaps real economic, cultural or political differences were papered over. I said in a previous book of mine that love without power that papers over differences, is sentimental
and endemic.”
Kahane said the current situation might require a deeper capacity for engagement in which society and the state deal with difficult unresolved issues.
“A superficial coming together is inadequate. Difficult work is needed. We need to look at conflicts squarely and not pretend they are not there. We might be more wounded than we think we are, for untreated wounds are dangerous,” says Kahane.

Whither The Free Market

It has been another wounding month for Africa’s biggest mining industry that it is likely to take years to recover from, despite efforts by unions and mine owners to heal the rift.
Tens of thousands of mine workers spent the month marching and protesting in wildcat strikes, across South Africa, for more pay. There were so many, it was difficult to keep track.
<div id="attachment_1349" style="width: 210px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1349" class="size-medium wp-image-1349" src="/wp-content/uploads/2017/04/AV_00024554-200x300.jpg" alt="" width="200" height="300" />CARLETONVILLE, SOUTH AFRICA ñ SEPTEMBER 11: Disgruntled mine workers gather to be addressed by expelled ANC Youth League President Julius Malema at Gold Fields Mine on September 11, 2012 in Carletonville, South Africa. The South African Defence Force has been put on high alert following Malemaís visits to various mines in the country. (Photo by Gallo Images / Sowetan / Antonio Muchave)</div>
Fifteen thousand workers were on strike at Gold Fields, stopping production at KDC Mine, in Carletonville 79km west of Johannesburg; hundreds of workers downed tools at ferrochrome miner Samancor; thousands went on strike at AngloGold Ashanti’s operations, 80% of Anglo Platinum’s workforce stayed away and at Aquarius Platinum a mob of 200 illegal strikers forced their way into the mine and threw petrol bombs.
On October 8, the head of Aquarius, the ebullient Stuart Murray, became the third platinum CEO to resign this year.
At least three people died in October in South Africa’s mines and 20 were injured. Police, soldiers and union leaders struggled to keep control amid the tension of nearly three months of wildcat stoppages that would have been unthinkable five years ago when the mines were booming.
Economists talked of the danger of drifting into recession as the losses piled up. By the second week of October, Gold Fields had lost at least 35,000oz of gold from its KDC Mine, while Angloplats, the world’s largest platinum producer, had lost 67,000oz and revenue estimated at R1.1 billion ($125.8 million).
Mines have been closing shafts, cutting costs and firing staff as the losses have grown. Twelve thousand workers lost their jobs at AngloPlats on October 8; at Gold One—where a strike began on October 1—1,435 of 1,900 employees were fired at its Ezulwini Operation and at Bokoni Mine, in Limpopo, 2,000 workers lost their jobs.
More shafts are likely to close in the next few months, at the cost of even more jobs, according to mining analyst at Cadiz Corporate Solutions, Peter Major.
“In August, when the platinum price was down to 1,400 [dollars], half of the mines in South Africa were losing money. The price may have gone up, but now they have to cope with an unstable workforce. The price is only good if your mine is working and I can see more mining companies closing shafts to try to survive,” says Major.
“I was in a telephone conference with Indian investors this week and they were saying they are avoiding all of the mining and resources stocks here. They only wanted to talk about finance and industrial stocks. It was the worse phone call we have had for years.”
Christo Fourie, the CEO of PCC, South Africa&#8217;s biggest quantity surveyors and consultants to mining capital projects, agrees that there is likely to be long-term uncertainty in the industry.
&#8220;A lot of people are concerned right now. We have had a lot of projects put on hold or cancelled,&#8221; he says.
While the mining industry fretted over its future, the custodians of its once robust wage negotiations tried to put the wildcat strike genie back into the bottle.
Unions and mining companies met at the Chamber of Mines in Johannesburg to agree upon new pay scales for the gold mining industry. They include: doing away with Category 3, as an entry level and adjusting all newcomers’ pay up to Category 4; an allowance for rock drill operators; a new category for locomotive, loader, winch and water jet operators and adjustments to pay to preserve the integrity of the current job grading framework.
&#8220;It is critical that all the parties show leadership in restoring stability to the mining industry and bringing an end to the unprotected industrial action that is besetting the industry,” says Elize Strydom, the chief negotiator for the Chamber of Mines.
<div id="attachment_1346" style="width: 310px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1346" class="size-medium wp-image-1346" src="/wp-content/uploads/2017/04/ED_0016111-300x199.jpg" alt="" width="300" height="199" />CARLETONVILLE, SOUTH AFRICA ñ SEPTEMBER 13: Gold miners gather at Gold Fields KDC West Mine under the watch of police members on September 13, 2012 in Carletonville, South Africa. Miners have embarked on an illegal strike to air their labour grievances and their unhappiness with the leadership of the National Union of Mineworkers. (Photo by Gallo Images / Dino Lloyd)</div>
The long-term aim is to bring platinum, which has always settled its own pay deals, into the collective bargaining talks in which unions, representing 300,000 gold and coal workers, strike a pay deal every two years with the mining companies through the Chamber of Mines. It is a process that promises certainty and parity for the workers and a chance to plan for costs for the next two years.  Wages make up 50% of mining costs.
The next wage talks are set for June, but talks will have to begin sooner rather than later if they are to bring platinum into the fold. Even then, there are few certainties to comfort the mine owners in the face of an open revolt against low pay.
“Wage talks are not going to do much good, these disputes are all about politics,” says one official from the National Union of Mineworkers.
There are wild whispers doing the rounds that this is an orchestrated grassroots campaign to bring the mines of South Africa to their knees to usher in nationalization, a radical course of action that has all but been abandoned by the government.  Concrete evidence of this is unclear; what is clear is that it is likely to be a bleak Christmas in Africa’s largest mining industry.

It’s Going To Be A Bleak Christmas

“Is there anything that you haven’t done, that you’d still love to do?” I asked Zwelakhe Sisulu towards the end of the interview.
After a deep sigh, he pointedly and regrettably replied, in his trademark baritone voice, “The reason I got into journalism was because of my love for writing. Then I was diverted. I never did what was my first love. I hope that one day I’ll get a farm in some remote area, age gracefully and write.”
Well, it was not to be.
Just over a month later, death would put paid to that wish along with the hope of the journalist who was interviewing him.
On Thursday October 4, I was chairing a public discussion in East London, in South Africa’s Eastern Cape when, the Managing Editor of FORBES AFRICA, Chris Bishop, sent me a text message saying that Zwelakhe Sisulu had died.
It was barely a week after we had published, as part of our October issue, a nine-page focus on the increasingly volatile mining industry in South Africa. Five of the nine pages focused on the chaos in the platinum sector, while the other four were dedicated to manganese mining, looking at whether new players like Kudumane Manganese, of which Sisulu was chairman, were doing anything different to avert the crisis that the platinum sector was experiencing.
Sisulu’s encounters, and views, were the thread that held together the manganese article. Chris and I had subsequently spoken about going back to Sisulu, with the hope of possibly getting him to grace the cover of one of our future issues. The leftovers from my interview would form a good basis from which we could build a really strong lead story about the rise and rise of a journalist-turned-entrepreneur, who had so excitedly told me, “There’s nothing as exciting as being an African in Africa today”.
I knew that it would be one of the easiest stories I would ever be able to tell, for Sisulu himself was the master story teller. Like a good journalist, he had the amazing ability to tell so much, so well, in so few words. When, for example, I asked who had inspired him the most in his life, he gave a simple yet sophisticated reply, “It’s difficult to say, but the man I admired greatly was Oliver Tambo. He’s somebody who stood head and shoulders above everybody else. Joe Matthews looked through you like a prosecutor. Madiba tapped you with a jab. Oliver Tambo hugged you.”
I immediately got the picture, or rather, the message.
Like his hero Tambo—the man who held together South Africa’s ruling African National Congress (ANC) for decades in exile, while other leaders like Mandela were in prison—Sisulu appeared soft, yet his intellect was so sharp, his organizational skills impeccable and his determination steely.
Never the one to shy away from new challenges, in July 1978, a mere three years after kicking off his journalism career as a cadet reporter and merely 28 years old, Sisulu was elected president of the newly founded Media Workers’ Association of South Africa; the same year he was appointed news editor of the Sunday Post.
Two years later, he would lead the longest and biggest strike by media workers in the country, ending in successful wage negotiations, albeit the authorities would retaliate by forcing the proprietors of the newspaper he worked for, The Post, to close down.
As if that was not enough, Sisulu—alongside fellow journalists who had led the strike—would be banned for three years, placed under house arrest and would not be allowed to work as a journalist, attend public meetings or even go to townships other than the one in which he lived.
Following the lapse of his banning orders in 1983, Sisulu would get a Nieman Fellowship, a mid-career journalism award entitling him to a year’s study at Harvard University. And it was during this time, sitting among the audience listening to a speech by his hero, that he would not only rekindle his childhood memories of how warm Tambo was, but find other good reasons for admiring him.
“Oliver Tambo stood up and spoke. There isn’t a speech in the world that has made more of an impression on me than that one. The thing about that man was the way he would marshal his facts and use them as galloping horses. He was quite unequalled. I had always thought of the struggle in emotional terms. But when Tambo spoke I understood, for the first time, that there was actually a rational contestation, that it wasn’t just Amandla! Amandla!” recalled Sisulu.
On his return to South Africa in 1985, Sisulu was appointed editor of The New Nation, a new weekly publication sponsored by the Southern African Catholics Bishops’ Conference, one that, in more ways than the publications he had previously worked for, would become a bigger thorn on the side of apartheid’s apologists. Needless to say that more bannings, gagging orders and imprisonment would follow.
When Mandela was released from prison in 1990, Sisulu became his press and private secretary, traveling the world with the revered statesman.
“No one would see Madiba if I didn’t want them to see him. The question rose to me very fundamentally when I was working for Madiba, do I want to be a gatekeeper all of my life?”
Following the historic 1994 democratic elections, after which Mandela was elected South Africa’s first black president, Sisulu was deployed by the ANC-led government to the South African Broadcasting Corporation (SABC), the national public broadcaster, as its first black Group CEO, a position he would hold until 1997.
After leaving the SABC he would become a businessman, with stakes in a string of companies that straddle mining, energy, telecommunication and the media.
As more messages came through to my cellphone on that fateful day, from, among others, board members of a community television station that I chair and which Sisulu’s broadcasting outfit generously supports through funding, equipment and training, and as tributes continued to appear on social media sites from fellow journalists—who either worked with him or who were inspired by his activism as  a journalist—my mind raced back to our encounter a
month earlier.
From the bits he had told me about the years he had spent outside the limelight focusing on building his business empire, I could not help but be in awe of the kind of model entrepreneur he had become, in a continent so desperately in need of them. He told me the story of how he was working with government of São Tomé and some Chinese business people. The terms were that the São Toméan government wouldn’t pay a dime, but after 18 years would own
the station.
Brutally frank, as he was kind, provocative even, he sneered at ongoing suggestions for the nationalization of mines in South Africa. Not surprising for a mining magnate, I pointed out to him during our interview, but he insisted his reasons were more practical than ideological. He cited as examples telecommunications utility Telkom as well as the SABC.
“The major challenge facing this country is the management of public assets. Until and unless we perfect management of public assets, we must not even talk of nationalization.”
Not far from the auditorium, from where I had just received the news of his premature death, was the state of the art minerals polishing factory Sisulu had urged me to visit. Based at the East London Industrial Development Zone, the factory was very special to him, he told me. He was passionate about the project because it was, in part, his way of giving back to the Eastern Cape, the largely impoverished province that gave birth to both his parents, struggle stalwarts Walter and Albertina Sisulu, as well as other outstanding South African liberation heroes like Steve Biko, Mandela and Tambo.

It Was Exciting To Be  An African In Africa

Johanna Mukoki  grew up in Apartheid South Africa in the 1970s. Her family struggled to make ends meet—her father was a bus driver and her mother a teacher. To help out with their finances Mukoki spent her weekends selling ice cream, boiled eggs and raw meat on the busy streets of Soweto, Johannesburg. It was on these streets that she honed her entrepreneurial skills. It didn’t matter to her that she occasionally had to walk to school barefoot, when the kids would make fun of her, because it all added fuel to the fire, burning inside her, with the desire to prosper in life.
At home, although money was tight, inspiration was plenty. She was motivated by the books her father encouraged her to read, such as How to Win Friends and Influence People by Dale Carnegie and The 7 Habits of Highly Effective People by Stephen Convey. From a young age she learnt that the key to success was not just about having a gift but that it required hard work and determination.
“I told my mom that I was going to work very hard to make sure that we never had to struggle again.”
In high school, Mukoki traded in selling for a successful modeling career. Her protective father accompanied her to every TV shoot and beauty pageant and his support kept her going. With the money she made from modeling Mukoki was able to support her family for an entire month. She recalls a song her mother always sang that went, “The little things you do for me they so
please me.”
The promising entrepreneur completed her B.Com degree at Rhodes University, where she became the first black student to tutor accounting. Life was going well for Mukoki until she hit another crossroads.
In her final year of completing her articles at KPMG, formally known as Aiken &amp; Carter, she was approached by many firms, which wanted to hire her. In those days qualified, black, female accountants were in short supply. Each offer made was better than the previous and Mukoki came to a sudden realization.
“If these people really think that there is value in me then I need to work for me, I need to invest in me.”
Uncertain of which direction she would take, all she knew was that she didn’t want to become a grey auditor for the rest of her life. When Mukoki was introduced to Tibor Zsadanyi and Robert Wilke, her partners in the company, it was a match made in heaven. They all had the same dream and vision for the company. Travel With Flair (TWF) started with three members of staff and one green-striped couch; they have since grown into a leading travel management company on the continent with a staff of 550 people. It has branches in Pretoria, Johannesburg, Cape Town and KwaZulu-Natal. If you visit their Pretoria offices you will find the original green-striped couch at the front reception.
“It’s a good way to remind one of where one came from. Those humbling experiences take you back and help you find your equilibrium,” she says.
For the past three years, TWF has won the ‘Africa’s Leading Business Travel Agency’ Award at the World Travel Awards. The company is worth an estimated R1.8 billion ($205.7 million) and credits much of its success to their ability to be pioneers in the industry. It was the first travel agency in the country to have SMS confirmation, e-confirmation and email boarding passes to passengers.
“Travel is dynamic and forever changing and if we are going to stay at the top we have to move with it.”
The road to creating one of the top travel companies in South Africa did not come without difficulties. Mukoki faced many problems.
“The first three years were a challenge. I would end up going without a salary because we had to pay employees’ salaries first.”
Being a black woman made acquiring finance from the bank difficult and there was also the challenge of finding regular clients. Their breakthrough came after they landed their first account with the University of Venda and business snowballed from there. Mukoki pushed on through the hard times because she believes that anything worth having needs to be worked for.
Mukoki’s hard work has garnered much recognition. Throughout her career she has won many awards including being named South Africa’s most influential women in business and government for the Tourism Sector by CEO Magazine and Top Woman of the Year in Business 2009/2010 at the Impumelelo Awards. She is also the first African to be appointed on the Global Tourism Board of the Association of Corporate Travel Executives (ACTE), which represents Africa and the Middle East; she is also the youngest person on
the board.
When it comes to managing her team Mukoki tries to lead by example.
“I treat everyone from the cleaners to the senior managers with the same amount of respect. When you do that, people serve with a joyful heart.”
After 16 years of being in the business Mukoki can say that she has achieved what she defines as success.
“Success is something that you are doing daily that makes you [jump out of] bed in the morning and still pays your bills.”
Some of the best fashion advice she received came from author and talk show host, Felicia Mabuza-Suttle.
“Dress for the title you want and not for the job that you are in,”
says Mabuza.
To all aspiring entrepreneurs, Mukoki offers the same advice her father gave to her.
“He always used to say, ‘People are attracted to those that glow.’ That is why I always aim to represent the best version of myself.”

One  Who Glows

William Duk had every reason to be pleased with himself as he strolled along the lovely, long pristine beach at St Lucia in South Africa’s KwaZulu-Natal province. He had celebrated the spectacular turnaround of his once-doomed business, by hiring a hotel, inviting 110 guests and marrying his bride, Briggie, in wild and convivial weekend in Umzumbe on the
south coast.
“We had a record sales month in April and I thought, ‘Great, I can I get married and have a honeymoon in peace,” says Duk.
“It was a nightmare. The honeymoon, wasn’t really a honeymoon.”
As the scores of guests clinked glasses in a final farewell at the hotel in Umzumbe, on the south coast of KwaZulu-Natal, little did Duk know that tens of thousands of transport workers in ports and depots across South Africa were going on strike for more pay. For thousands of business people like Duk, who rely on imported materials, this was going to prove a cut to the jugular.
It had been a short career as an entrepreneur for Duk, who had graduated in accounting from the University of Cape Town in 1999. He left to cut his teeth in the one of the world’s liveliest financial markets.
“I went to London for two years to work with South Africans, Kiwis and Australians in banking at Lloyds and the Royal Bank of Scotland (RBS). We were all on contract and partying every night, you had to have a South African passport to get into Fulham and Putney in those days. On bank holidays we would spend five hours in traffic just to get to the M25,” he says.
“At the end of the two-year holiday visa I was marched out of RBS—they had a change of human resources and they said I had worked longer than my time. On these holiday visas you are only meant to work 50% of your time in your chosen profession. So, I got a part-time contract in a small technology services company. I was meant to leave the country after that, but my new employers convinced me to stay for another six months and then another six months and then I rolled out four- and-a-half years later. That time was pivotal; the London business was going into Europe, employing 200 people, and I was financial director. I was opening offices in Madrid and Paris for voice and data services like PABX and call centers.”
Duk flew home to Cape Town in 2006, with a pocket full of pounds, determined to invest in his future. He had always wanted to be an entrepreneur, like his father and grandfather, this was his chance and in many ways it bore out the Chinese proverb: Be careful what you wish for.
It all began with an investment in property. Duk went to Atlantis, a small town a short drive from Cape Town, to buy a factory from the Plantation Shutter Company, which made wooden louvered shutters for windows out of rare imported hardwood. The company was going into liquidation.
“I bought the building and spent the next few weeks looking for a tenant. I got a phone call from the silent partner, who I bought the building from, he said he was coming to Cape Town and wanted to meet. I looked through the financial information he showed me and thought this shouldn’t have happened. Working in a European company, you know how much working capital can be stretched. It was down to mismanagement, more than fundamental problems with the business,” says Duk.
“I bought in for a rand and took over the debts and liabilities. I didn’t have any cash—that was all tied up in property—I used the cash I had paid into the business for the building to finance a rescue plan. This was February 27, 2006: the doors of the business had been closed; 40 people hadn’t been paid for three months; suppliers were in the courts trying to get their money; there were 49 clients who had paid 50% of their deposit and expected their shutters to be installed before last Christmas. The business was a million rand in debt. It was as bad as it can get.”
It got worse from day one, as Duk tried to salvage what he could amid angry customers. He needed every ounce of his affable nature.
“My first job was phoning my clients and saying, ‘Hi, I am William from the Plantation Shutter company’ and they were saying, ‘Have you got our lawyers letters?’ I calmed them down and said, ‘Let me explain.’”
Duk was encouraged by the fact that 39 clients still wanted shutters, even though they had already waited for five months. It took nearly six months to placate the angry 39 and fulfil their orders. It took 18 months to turn around the business and by April it was selling a 1,000 sets of shutters-a-month and turning more than R40 million-a-year ($4.6 million). It was a dramatic turnaround that helped Duk win the Sanlam Business Partners Entrepreneur of the Year Award for 2012.
So Duk could be forgiven for feeling replete as he walked on the beach in St Lucia, on his honeymoon, on a sunny May afternoon. This warm feeling evaporated in a heartbeat as the strike by tens of thousands of dock and transport workers, in support of a 15% pay rise, hit home.
“I got an SMS saying we have got a problem with our timber supply,” says Duk.
In many ways, timber was the Achilles’ heel of the business. The shutters have to be made from durable Obeche hardwood, that will not warp, from the forests of Ghana. It has to be shipped from Accra to Cape Town and then transported by truck to Atlantis. In 2010, this supply line proved highly vulnerable in the face of a strike that was to cost South African business an estimated R7 billion ($803 million).
The upshot was that the factory in Atlantis ran out of wood and angry customers once again lurked in the wings. So, Duk was on the phone, on the beach, day in day out, in a frantic bid to keep the wheels of his business turning.
“So, it was all about buying time and putting a plan in place. If we were a smaller company we could have gone down the road to buy, but we were no longer a small company. We were consuming 320,000 kilograms of timber a year. I spent the entire day phoning timber merchants and suddenly the price had gone up 25%. I ended up negotiating with a few of these, but we couldn’t get enough, soon enough. We are a 21-day turn around operation. I ended up trying to juggle production and speaking to my clients around the country. I spent the entire day on the phone trying to put a plan in place. The worst moment of that day was realizing that everything we had worked for to restore credibility, in an industry not well known for its reliability, was at risk. We couldn’t afford to make excuses. For us it was going out and getting whatever timber we could at the best prices, paying 20% more than usual,” says Duk.
To make matters worse the supply of wood that Duk needed so badly was so near, yet so far. As the strike wore on, three 40-foot containers of hardwood from Ghana bobbed in Cape Town harbor, with no one to unload it. An email from the clearing agent said it all.
“Wait, hope and pray…. Here’s hoping the comedy of errors turns into that romantic comedy with a happy ending,” says the email.
The strike ended on May 27, 2010 but that wasn’t the end of the troubles for Duk and his timber. There was a scramble to see which of the tied-up freighters was to be unloaded first on the docks of Cape Town, as frustrated customers gathered on land. Duk says the problem was that the clearing agent didn’t have the captains’s cellphone number, so there were more delays as he had to wait for information through the shipping line.
“It went from bad to worse, the strike broke on the 27th and then we had to wait another two or three days for our containers to arrive on land,” says Duk.
“After two-and-a-half weeks of uncertainty. It was absolute relief. The ball was now in our court so we could put a plan in place….”
Duk took his wife to their favorite restaurant that night, a little older and wiser than they had been when they married just a few weeks before, after the strike that could have pulled down the shutters on his business.

Wait, Hope And Pray: How A Strike Can Ruin Your Honeymoon

“It has been decided that you have to resign with immediate effect.”
Those words stunned Jannie Mouton. They were uttered by the senior partner of the broking firm Senekal, Mouton and Kitshoff (SMK), of which he was the founder. He was dismissed by the very firm he had started in 1982, which bore his name.
The next day, at a special meeting of the board of directors, he had to submit his official resignation. There was no farewell party, just an abrupt note of dismissal by the new chief, Louis Geldenhuys.
<img loading="lazy" decoding="async" class="alignleft size-medium wp-image-1334" src="/wp-content/uploads/2017/04/Shot-01-CF208186-225x300.jpg" alt="" width="225" height="300" />
“Right, you may go.”
Suddenly, he was unemployed, dejected, lacked confidence and was floundering in emotional turbulence. Mouton was dazed, confused… and angry. As he said in his autobiography, “Resentment was winning the first round”. Some predicted he would opt for a civil lawsuit, for unfair dismissal but a friend, Donald Masson, talked him out of it.
“It was wise counsel. A negative person has never established or started anything positive,” says Mouton.
Fifteen years after that fateful day, in August 1995, Mouton co-authored a book, And then they fired me. The book was not an attempt at retribution by a defeated and embittered businessman, whose evening star had fallen, it was a glorious celebration by a business tycoon who had been dubbed ‘The Boere Buffett’ by Moneyweb, a South African investment news website.
In the 15 years since he was fired, Mouton built one of Africa’s most successful and formidable business empires.
Today, PSG Group, of which Mouton is non-executive chairman, has interests in several companies with an overall market capitalization of around R75 billion ($8.6 billion).
The term “Boere Buffett” is a massive compliment, says Mouton.
“He is one of the two or three wealthiest men in the world and when he passes away, he will leave his entire will to charity, a gesture that underlines what a special individual he is,” he says of Buffett.
Buffett, is the primary shareholder, chairman and chief executive of Berkshire Hathaway and is consistently ranked by FORBES as among the top three richest people in the world.
“Every investor with a long timeframe wants to call himself the Warren Buffett of someplace. Of course, many of Buffett’s well-documented principles have universal application, so it’s understandable [that he is referred to as the ‘Warren Buffett of Africa’] but [it is] still silly. Jannie Mouton is the Jannie Mouton of Africa. That should be enough,” says Paul Theron, a financial analyst.
The PSG Group—over which Mouton has presided for 14 of the past 16 years—showed a total return on equity of a healthy 57%. While he is still non-executive chairman, his son, Piet, succeeded him in July 2010 as executive chairman
The PSG Group outperformed Shoprite, Remgro, Rand Aksepbank, Bidvest, Imperial and even Buffett’s Berkshire Hathaway, which managed 23% in 40 years.
So, how did Mouton complete the transformation from disgraced and deposed founder of SMK to Boere Buffett? First, came a SWOT analysis of his strengths, weaknesses opportunities and threats. His friends and his wife reminded him of his obstinacy and temper, weaknesses he had to tackle head-on.
Mouton came up with his greatest threat.
“At the age of 50, I was not ready for retirement yet… I had to persuade myself that I was doing something useful, that I was devising plans and ferretting out opportunities. I knew I had to fight against the threat of stagnation.”
Mouton read Think and Grow Rich by Napoleon Hill, the manuscript that changed his life and inspired him to start the PSG Group. Buffett proved to be a literary companion with his memoirs in The Snowball: Warren Buffett and the Business of Life.
“To me, strategic planning is the alpha and the omega,” Mouton says.
“In the book The Art of War the principles of the Oriental military strategist Sun Tzu are outlined. Strategy is the great world of the organization. According to the book, strategic thinking determines the survival or extinction in situations of life or death.”
His plan of action to direct his dreams were to be in control of a listed company; to focus on the financial services sector; to procure capital for a strong capital base and to think more and do less.
Before the PSG Group was formed, he gained control of the embattled PAG Group.
“I don’t think I’ve ever done a better deal than PAG, the small listed financial services company, the predecessor of the PSG Group, that fell into my lap like a dream,” he says.
“If its R7 million ($804,200) did not become R107 million ($12.2 million), a foundation for this powerful company would never have existed.”
In February 1996, Mouton, Johan van der Westhuizen, Ian Müller and Jaap du Toit started PSG. Du Toit derived the name Professional Securities Group (PSG) from the PAG name.
“We started small and slowly achieved success. Success gives one self-confidence and that’s quite contagious in the market,” he says.
Good timing contributed to PSG’s next round of success. In 1997/98, they sold all of PSG’s business to Servgro, a listed cash shell, for R863 million ($99 million). They were paid with R327 million ($37.5 million) in cash and with an issue of 200.7 million Servgro shares, which gave PSG a stake of 61.9% in Servgro. It remains one of the best deals they have done, says Mouton.
Simultaneously, they issued ten million shares at R9 ($1.03) per share to Siphumele Investments for an 11.5% stake in PSG.
“The timing of both deals was incredible and increased PSG’s net asset value per share from 147 cents in 1997 to 617 cents in 1998. Over the same period our market capitalization increased from R249 million ($28.6 million) to R1.172 billion ($134.6 million),” says Mouton.
Mouton, since listing PSG, has set up significant deals that have secured vast wealth for shareholders.
Leon de Wit, former executive chairman of Channel, described Mouton as, “Inherently a trader, a shrewd one at that, as he hardly ever does a bad deal”.
“Jannie is also known to have good ‘exit discipline’—knowing when to get out of an asset, or to turn down an investment opportunity,” says Theron.
Another success story has been inspired: agribusiness investment company Zeder, which many insiders expected to fade into oblivion. Zeder’s investment philosophy is unlocking value from companies with shares that trade at a sizeable discount to
intrinsic value.
Zeder, as Finweek suggested, initially offered its own scrip as settlement, with the tagline, “If we make money, you make money” to counter any notions of opportunism.
Capitec Bank is another story in a long line of PSG’s successes. The PSG Specialized Lending was established in 1998/1999 as a precursor to Capitec. Capitec Bank obtained a banking license in 2001/2002.
Gerrit Thomas (GT) Ferreira—chairman of RMB Holdings Limited, which is in competition with Capitec—lived on the same floor of the Simonsberg hostel, as Mouton, at Stellenbosch University in the Eastern Cape Province. Now they share offices in the same building.
“Jannie refers to me and us [at Rand Merchant Bank] as ‘friends and family’ of PSG.… I own quite a few shares in PSG which I have had for a long time because I have backed Mr. Mouton from the beginning,” says Ferreira.
Mouton’s opening up of banking to the poor, through Capitec, has won him many friends. The idea came through another book. He read the Nobel Prize winner Muhammad Yunus’s Banking to the Poor as well as a report by Huysamer Stals on microloans to the poor. Mouton says their arguments convinced him that the poverty in South Africa could only be relieved by making capital available to people without collateral.
Capitec, with its micro-financing soul, was honored 10 years later as one of 27 outstanding brand names of tomorrow, in 50 countries, by 3,000 analysts of the Swiss-based financial services group Credit Suisse.
Mouton’s ability as a strategic thinker is almost legendary. When some companies, with white-controlled board rooms, fulminated against the future of Black Economic Empowerment (BEE), he and the PSG Group sought new opportunities and investment through their partnership with Thembeka.
“Thembeka is a Black Economic Empowerment group that is an unqualified success. We, the PSG Group, have a 49 percent share in Thembeka and the black business people have a 51 percent share,” he says.
Mouton has been an outspoken, vocal advocate for the principles of BEE.
“Through BEE you help to level the playing field in South Africa instead of being politically incorrect due to sheer obstinacy.”
Mouton prides himself in the success of Thembeka and in his role of seeking BEE partners.
He is also very passionate about Curro, an affordable, bilingual private school group, and PSG’s role in it.
In 2009, the PSG Group acquired a 50% stake in Curro Holdings by means of a R50 million ($5.7 million) injection.
It was decided in 2010 that PSG, through its subsidiary Paladin Capital, would acquire a further stake of 26%.
“In 2011, I had 5,500 children in 12 schools. The current objective is 40 schools with 50,000 SA learners by 2020,” he writes in his book.
In his investment philosophy, Buffett understood that there is a difference between the value of a share and its price.
“Prices might fluctuate and if you trade during a bad time on the stock exchange, prices would be low and it won’t reflect the true value of an item,” says Mouton.
Understanding the culture of a stock market is important. If everyone is optimistic and even people, who don’t work with the stock exchange every day start chatting about it, it is time to sell. And if nobody is interested in the stock exchange any more, it’s time to buy.
“The classic ‘big’ win for him was many years ago when he saw a thinly traded ‘A’ class of shares in media giant Naspers…he bought that class of stock cheaply and sold it back to Naspers for a fortune,” says Anthony Clark an analyst at Vunani Securities.
Buffett’s famous quote is, “We simply attempt to be fearful when others are greedy, and to be greedy only when others are fearful.”
Mouton warns that one should understand a company in which one invests.
“If you cannot tell someone else what the company is doing, don’t invest there. I’ve never made money from mining shares, especially gold, because I don’t understand it,” he says.
How do small businessmen take their empires to the next level?
“One must always think and dream. I have read somewhere about a great entrepreneur who said he worked by day in my company and dreamt at night about my company.”
His wife and trusted companion, Deidré, gave him a book by Malcolm Gladwell called Outliers: The Story of Success. He reckons that if anyone dedicated 10,000 hours to something, they are bound to make a success of it.
Mouton also recalled a dinner hosted by William H. Gates, father of the Microsoft founder Bill Gates, for some hand-picked business people. Gates senior asked those present to write down a single word that they deemed of the utmost importance in the business world.
Coincidentally, two of the guests chose the same word. The guests were Bill Gates and Warren Buffett. And the word was ‘Focus’.
Asked by FORBES AFRICA, if South Africa and the rest of Africa need more people like Buffett, Mouton says, “For sure. Too many people are only interested in doing smart transactions, or in being part of the tender process. They don’t add value.”
“Capitec Bank creates jobs, they have 6,000 people working for them. You want to have Buffetts, or Whitey Bassons who employ hundreds of thousands of people, who create jobs.”
South Africa, says Mouton, is pre-eminently a country that presents its people with golden opportunities. PSG was born in the new dispensation after 1994.
“In an ancient culture like Europe, everything has already been done. There is no opportunity to start a Capitec in Europe. It has been done and dusted. But in South Africa with its [millions] of ‘unbanked’ people, a Capitec is possible.”
“For people who always complain about everything purportedly being so bad, I want to ask, ‘Why they don’t pack up their things and emigrate?’ The joy is in seeing opportunities, rather than troubling yourself about t
he problems.”
“We have political stability, the economy didn’t go to ruin during the recession and the doors to international trade have never been more wide open. We even have membership of BRICS now,” he says.
Africa as an investment destination is definitely improving. Growth in Africa will be faster than the rest of the world in 2012, but then the growth comes from an extremely low base.
“Africa has enormous growth and investment opportunities in terms of agriculture.
“We have made investments in Zambian agriculture. It’s unbelievable how much better the agricultural conditions there are, compared to South Africa. There is a bigger downpour because it is closer to the equator. It is also hotter, and you can do double cropping. In South Africa you can sow wheat and utilize that for six months, but you leave the ground barren and unutilized for the next six months.
“But in Zambia you can sow wheat for six months, and then use the same ground for soya for the next six months, so you double your income per hectare through double cropping. The World Bank encourages investments to Africa, and food producers are protected by them being allowed an insurance policy in case their assets are confiscated by a ruthless government,” says Mouton.
There are an increasing number of investors from Europe and the rest of the world investing in Africa in agriculture and other sectors.
“There are still some problems with things like transport, crime and a less ordered banking system. But there are improvements in the African climate for global investments. For us, it is easier to invest in Southern African neighboring states like Botswana and Zambia, as it is easier to manage it closer to home.”
Mouton doesn’t subscribe to the work ethic of a business executive that works 12 hours per day. It’s what he does when he is in the office that is important.
Somebody told him the other day that he had 240 emails waiting for him when he came back to the office.
“My question is, ‘What about delegating? You must trust subordinates. Employ competent people and trust them implicitly,” he says.
“I do believe that a company should have a dream of where it is heading, a desire directing one and which one can implement in practice. As George Bernard Shaw said, ‘Some men see things as they are and ask why? Others dream things that never were, and ask why not?’”
Mouton encourages his colleagues at the PSG Group to think and find solutions. He adds that positive people can start new businesses. Pessimists cannot create something out of nothing.
“If you say something can’t work, you have to come up with a better alternative or shut up. I don’t take ‘No’ for an answer anymore,” says Mouton.
Recently, the National Planning Commission announced its vision for 2030, which, amongst others, envisioned that South Africa should create 11 million additional job opportunities during the next 18 years, and reduce joblessness to a mere 6%.
“Entrepreneurs who take the risk of starting businesses and developing them, create value, job opportunities and eventually wealth. Get rid of the red tape and administrative burden in order to make life easier for these entrepreneurs.”
Probed about what South Africans can do to realize that dream, Mouton said, “Entrepreneurs like Capitec create 200 new jobs every month.”
Mouton said if the state doesn’t encourage entrepreneurship, South Africa is in trouble. The state on its own can never create jobs, because its only source of revenue is tax-paying workers and businesses. Without its tax base, it cannot even borrow money.
“Therefore their tax payers are the asset it should best take care of. In South Africa, we are in the position already where 14.3 million people received some form of grant in 2010, while only five million people pay taxes,” said Mouton.
A society is most in need of successful companies doing business within the bounds of proper corporate governance and performing well.
“Let’s take PSG as an example and assume there are 40 companies over whom we exert an influence. These companies have 38,000 employers. They pay tax on their salaries and they pay VAT on what they buy. The PSG Group and all the companies in which it has a material interest, pay R2.5 billion ($287.6 million) in taxes annually—an amount with which one can build 83,000 basic houses.
“If six people live in a house, 500,000 can find shelter in this way,” writes Mouton in his book.
“Before the state can collect and distribute taxes, there should be opportunities. Rules, laws and regulation that interfere with the distribution of wealth, discourage the creation of wealth.
“As the South African economist Mike Schüssler pointed out in South Africa’s Sake 24, there are only 301,000 individuals who pay a salary to more than four people. These people should be treasured,” he says.
“The current labor laws interfere with the market mechanisms. With the insistence on minimum wages, half of the country will remain unemployed,” says Mouton.
He added that the annual competitiveness report by the World Economic Forum showed that South Africa had fallen back to 54th.
“Our labor is not internationally competitive any longer. I have heard it is cheaper to manufacture furniture in Germany than in South Africa. The costs are higher over there, but the productivity is also so much higher. It is shocking,” he says.
“How could we ever compete with a country like China if we keep on striking for higher wages without better productivity?” he asks.
How, indeed.

Tag: November 2012

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