When Ruth Obih completed her legal studies she could see law and nothing else.
“I wanted to be a lawyer so badly, I was bent on it! That was my passion,” she recalls with a smile.
It didn’t work out that way for Obih. After practicing for a year, her first legal firm decided not to retain her. It was a blow to her dreams, to say the least. Few knew then, including her, that this set back was to put her on the path to a fortune.
Obih forgot law and made a 180 degree turn into fashion. She enrolled at the London College of Fashion and returned to Nigeria with her newly acquired skills.
“People always admired what I wore. So, when you tell me you like what I’m wearing, I’d tell you I sell it,” she says.
Fashion whiled away the time, but Obih yearned for more.
“I get bored really easily and always set new tasks for myself. On achieving them, I move on to my next task,” she says.
So it was back to London, where Obih enrolled for her Qualified Lawyers Transfer Test (QLTT) in the hope of practicing law again. While studying, she interned at a property law firm and became intrigued by the business of real estate. With no formal training in property, thoughts of using her legal skills in the real estate business flooded through her mind.
In 2006, Obih started 3Invest Limited UK, in London—a company focused on providing legal advice and property for those wanting to invest in real estate. A good response in London, led to thoughts of how this kind of service would fare in Nigeria.
Obih moved back to Nigeria later that year. She registered 3Invest Homes in Lagos and began hunting for properties to market with her legal advice.
In January 2007, Obih made her first big sale—a property worth millions of naira. She moved money from her thriving fashion label—Ruru Tunics—to secure the deal.
“I never went to the banks to ask for a loan. I almost have a phobia for that,” says Obih.
Sale after sale, 3Invest grew in leaps and bounds, as did Obih’s ambition.
“Yet again, it was time for me to do something different, I had toyed with the idea of starting a real estate advocacy platform using radio,” she says.
It took a number of approaches to radio stations and months of uncertainty. In the end, Obih’s proposal was accepted leading to the launch of Nigeria’s first real estate radio show, in March 2011, called Real Estate on Air.
“This show, is geared at empowering the Nigerian populace and helping them make better informed decisions when investing in real estate, the program is a one-stop shop, for real estate in Nigeria,” says Obih.
She also runs a real estate blog, driving traffic to the radio show.
With a fashion brand; a growing real estate business and a radio show under her belt, Obih is not done yet.
As a business woman, Obih describes herself as shrewd and dynamic.

Law, Fashion, Property, Radio, Success

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Technology is changing the entertainment industry so quickly that it’s difficult to predict where the next media fortunes will be made. There is no shortage of entrepreneurs in this field, one of whom is Emma Kaye. Kaye is a leader in African animation and filmmaking. Her credentials are undisputed—she’s the co-founder of Triggerfish Animation Studios, producers of the award-winning Sesame Street and founder of the Sithengi Cinema Festival in Cape Town. But her focus has shifted from producing content for television and film to finding new ways to distribute entertainment content.
The late Steve Jobs epitomized this type of entrepreneur. The introduction of the iPhone was the game changer: Apple sold 128 million handsets earning the company an estimated $76.6 billion. The smartphone fueled the surge in mobile application use, changing the pricing and the distribution of entertainment forever. In 2008, a year after the iPhone’s launch, 18 billion apps were downloaded from the iTunes store earning the company $4.3 billion. Soon after competitors Larry Page and Sergey Brin—the founders of Google, created the Android platform increasing the amount of app content available to cellphone subscribers.
Kaye watched the evolution of mobile devices, then abandoned the old media platforms she’d relied on and immersed herself in new media; first as the CEO of Breakdesign and then as the founder of Gate 7 New Media, a mobile media, entertainment and content company. Under her stewardship, Breakdesign became one of Nokia and Adobe’s top seven global Flash Lite developers.
She was frustrated that there was a lot of generic content to download which had little relevance for Africa. She wondered whether people were downloading this content only because it was available or whether they were demanding it. So she co-founded Mobfest—Africa’s first user-generated mobile content platform. The first channel, Novel Idea, is a text-based mobile entertainment channel featuring serialized fiction—a first in Africa.
But it didn’t ease her frustration—soon, she had started a new mobile app called bozza.mobi.
“I have worked in the mobile industry for a considerable amount of time and during that time, there was a big gap in the market for content that was relevant for an African community. At the same time, there were barriers to media platforms for people who could produce relevant content. Although there was no shortage of content, there were barriers to producing and distributing that content on a mobile platform,” says Kaye.
She decided to conduct a proof of concept in Khayelitsha in Cape Town and Alexandra in Johannesburg, South Africa. She worked with individuals who could produce content but found access to traditional media prohibitive. The feasibility study was launched on MXit using seven minute mobile spec video content. Within three days, there were 40,000 downloads. Three months later, this number had risen to 170,000.
After the successful proof of concept, Kaye secured investments to build a customized mobile application. Aimed at feature phones, with plans to upscale to smartphones, the application features music, videos and poetry from across the continent.
Move over Nigella! Bozza.mobi recently launched Africa’s cooking channel. Users of bozza.mobi have been glued to the popular episode on ‘how to cook a sheep’s head’ in South African townships. In this particular episode, an industrial blowtorch is used to burn the sheep’s hair, turning it into easily removable ash, which is scraped off with a stone or pot scraper. The head is then thrown into a big water tank to wash off the remaining ash. Then it is cut in half, cooked and served to the restaurant’s customers.
For Kaye, bozza.mobi is about access to self-expression. With over 300 artists, filmmakers and poets on its growing database and with new channels being released daily, bozza.mobi offers these individuals and groups a mobile platform through which to distribute their music, films and poetry. Check out the show about a Congolese woman who used a rundown caravan as her hair salon. She uses bozza.mobi to teach hairdressing. By offering tutorials, small businesses can earn revenue—50% of their channel earnings—while users get free access to content.
The provision of free local content has advantages for handset manufactures too. When Nokia was looking to sell their 3250 series in Europe, they asked Kaye for help.
“We worked with Nokia on creating relevant content for a particular demographic in Europe. We created the interface and content relevant for the skateboarding community. It contained video, news tips and travel guides. Because the content was relevant, the Nokia 3250 series phones sold out,” says Kaye.
Handset manufacturers are now embracing local application development as part of their growth strategies. Ericsson ConsumerLab recently found that the emerging app culture in high-growth markets is driving the uptake of mobile devices. The study showed consumers are not buying smartphones for their superior hardware such as the touch screen, memory capacity, attractive design and resolution size, rather, they want app functionality and faster internet access.
For this reason, Samsung is partnering with app developers such as bozza.mobi, which is working on a new version of their application to be released in six months’ time. Samsung is teaching bozza.mobi developers how to develop apps for different platforms. The improved version of bozza.mobi will be rolled out in Nigeria and Kenya. In Nigeria, Kaye has partnered with IT company, Iroko Partners, founded by Jason Chukwuma Njoku. The firm distributes Nollywood movies online—its services have been well received by the diaspora in the States, England, Canada, Germany and Australia.
Due to the fact that apps are becoming an integral part of cellphone users’ daily lives, Kaye says the new version will also serve as a commercial tool to facilitate informal trading in African communities.

On The Up And App

“I was born into business,” says coal mogul and media magnate Quinton van der Burgh.
“I knew I wanted to be a businessman from a young age. An entrepreneur is born, you know inside yourself what the passions are and where you want to drive yourself in the future.”
His eyes light up as he talks of working for his father’s supermarkets. Through this job, the Simba Chips Company gave him a pile of Ghostbusters stickers for which children clamoured. So, always the entrepreneur and scholar of the science of scarcity, he priced the stickers according to market forces—high prices for scarce stickers, lower prices for common ones. He bought one of his teachers lunch and she allowed him 10 minutes during lunch break in which to do his deals.
“I was on a sales mission. I told him [his classmate] that if he didn’t come to school with the money the next day he’d be in trouble.”
This landed him in the principal’s office and was one of the reasons why he was kicked out of school.
Van der Burgh felt that school was a waste of time and spoke to his family about entering the business world. He moved to England on a holiday visa and began trading shares under a friend’s name, for commission. After two years, he managed to get his business visa. London is where he learnt difficult lessons. He lived with 14 other guys and learnt how to wash his clothes and cook.
“A few people took me for my money, so I was down and out a few times,” he says
When he lost investors’ money, he pleaded with his boss to give him one month to make it back. He made an excuse about having a problem with his bank account to borrow £50 ($78) from a friend.
“I learnt my lessons on how to be cleverer about my next transactions and from there I grew and grew on my own,” he says.
Van der Burgh learnt the hard way.
“I’ve gone bankrupt a few times, not so much in my later years but in my early years when I was naïve to the fact of how business works. It’s tough when you think you know it all but you don’t, that lesson is the best lesson you can learn and take it into your next business development.”
That’s how he made his first million by the age of 21.
“I always wanted to have a Ferrari by 26. By 32—when I could afford one—I realized that I didn’t need one, but it was my goal and I couldn’t go against what I believed in,” he says.
From Ferraris to bowling alleys, he knows what he wants.
“Growing up I was a Richie Rich fan and I thought that it was a fantastic idea to put a bowling alley into the house. It was a bad idea when it came down to building the house. It worked out to be 10 times the price but worthwhile when you have friends over and it’s a fantastic game when you have a competitive nature&#8230;.”
“I’m an average bowler, I’ll get there one day,” he says.
Another one of his ambitions is to be the richest man in Africa by 2022.
When he returned from London he bought equity in the family-owned investment holdings company, Burgh Group Holdings, of which he is chief executive officer. He works in close partnership with his father, Stan, and his brothers, Stanley and Wayne. Burgh Group Holdings has a portfolio of several companies including mines; a plant hire company; an earth moving equipment company; several hotels and commercial properties, as well as a production company.
Experience has taught him to have fingers in many pies.
“I diversified into a variety of different businesses where I tried to spread my risk because I never wanted to be in that position again, where I had nothing. It’s a terrible feeling, to go from something to nothing and have to build that up again. That was my best lesson,” he says.
His next big idea was being a television and film executive producer.
“I’m passionate about the creative aspects of media. Had I studied I would have liked to have learnt about the media game, filmography and how to become a director or a good producer,” says van der Burgh.
“But you need to understand the industry and everything I have learnt to date has been the hard way, from other people and having to understand the industry, the market and how things are done. I attach myself to experienced people, that’s how I learn very quickly,” he says.
He stays away from what he calls ‘passion projects’—films for South African viewers—because the majority of such movies die. He believes that the South African film industry needs to emulate Hollywood.
“I just change a few things around, cast aspects, the story line and where it’s going and then we can make 90% of our money back and we can double our profits in international markets&#8230;
If you just produce for this country you’re going to be breaking even, if not make a loss, and that just doesn’t appeal to me. I’m passionate about what I do but it has to make business sense,” he says.
With Sharp Shooter—a documentary about photography—behind him, his most recent venture into the entertainment industry is Clifton Shores. He funded and starred in the unscripted reality series, shot in Cape Town; under the direction of Hisham Abed, who directed The Hills and Laguna Beach. The series follows four American women—alongside South African cast members—who come to Cape Town to work for Quintessential Events, Van der Burgh’s events and marketing company. It aired in South Africa in late August. He has two movies, a thriller and a romantic comedy, in the pipeline.
One day, he wants to produce films in the filmmaking hub of Los Angeles in the States. For now, he lives between Cape Town, Johannesburg and Witbank, where he can keep an eye on Eskom power station Duvha—to which he supplies coal—through his back window.
His mining interests lie in Eyethu Coal, Iyanga Coal, I.M.E.C, Zingaro and Twin Cities Trading. Between 60 and 70% of his mines’ coal is sold to Eskom—South Africa’s energy provider, for which they also wash coal.
Van der Burgh is always looking for innovative business ideas.
“I thought to myself ‘half our profits are going out the back door to contractors for transport’. I knew we needed a turnkey solution and a new and sustainable strategy so we started doing it ourselves.”
“Our multi-billion [rand] family mining development has great partnerships; which trust and like us for being hard workers. We work according to the trust of the handshake. I’d rather cost the money than make money, ruin a relationship and have a bad name. We have not one bad name, I say that with confidence,” he says.
He is not interested in easy business.
“I don’t want to sit in my office and just collect a check. I want to master business and create new innovations,” says van der Burgh
With the launch of swimwear range, Wet Peach, in South Africa, van der Burgh says that he’s looking into launching a fashion channel. He’s also dabbling in the music industry.
The entrepreneur describes himself as being down to earth.
“I don’t enjoy people with money, they are full of themselves&#8230; although I am a prankster and like to have fun,” says van der Burgh.

The Born Businessman

Emilia de Sousa is small, but tough. She’s had to be. Founding “Old Fashioned” Fish And Chips, South Africa’s biggest fish &amp; chips franchise, has been a struggle every step of the way. It has been a long and painful road from a tiny corner shop in the east of Johannesburg to 350 stores in South Africa and millions of rands.
It all began when the South American-born de Sousa started helping her uncle in his corner shop as a teenager. De Sousa was from a family of immigrants who came to South Africa from Curaçao Island, on the coast of Venezuela.
The little fish and chips shop taught de Sousa the basics: discipline and hard work. She worked behind the till, mixed the batter, peeled the potatoes, fried the fish and fed her dreams.
“You know when I had this shop, every single day people used to ask me ‘Why don’t you franchise? Can I buy this one?’ and I had this thing in my mind, [that one day] I will franchise because there were so many people [asking for it]”.
She began franchising the business in 2005, after opening her first store 10 years earlier; shortly after the release of Nelson Mandela, when many people were packing up and leaving, fearing new leadership under a new government, de Sousa embraced the change and even attended Madiba’s first birthday in freedom, following his release from Robben Island.
“…When Nelson Mandela came out [of prison] I actually met [him]. I met him at Sacred Heart College… Now I think I should have taken a photo,” she laughs.
At the time when many were skeptical about the incoming government and scared for their safety, she stuck to her adopted country.
“I was never frightened. I have got this thing that ‘when it’s your time, it’s your time. It doesn’t matter where you are’. And this is such a beautiful country we’ve got, I’ve travelled a lot and this country is still the most beautiful country to me,” says de Sousa.
It is a beautiful country, but it was also harsh on young de Sousa. To complicate matters she was a mother at 16.
“As a single mom for 27 years, I [have] also started my life tough. I had to bring up three kids on my own. I never got a cent from maintenance or anything like that. I’m the type of person [who says] ‘Don’t just sit down and cry about it. Do something’.
“I’ll never forget I went to court for maintenance and the [female] prosecutor turned around and told me, ‘You must pay your husband maintenance, he says he is not working’. I turned around and said ‘What a lie… Cheers my friend. Never see me again’. The tears were running down my face I couldn’t believe what she had said to me,” says de Sousa.
Following her divorce, the young mother had begun selling second-hand clothes to make ends meet and it worked out well. Soon she was back to the original plan, opening up her own fish and chips shop like she had once done with her uncle, selling quality food at low prices.
“I don’t believe in ripping people off, if you look around [in a mall], say they are selling their handbags for three or 2,000 [but] nobody is in the shop. But if they had cheaper bags, that are still good [quality], there would be more people in the shop… It’s the same with food, but some people just want to make money.”
One of her problems in the early days was making money.
“I did have very hard times [starting] the business and I used to work hard [trying] to put money together… I remember I went and borrowed money and these people charged me about five times more and I paid them back… I paid them all that money,” says de Sousa.
As the money problems were solved, grim, violent, reality visited her business. A gang of robbers sneaked into her shop and attacked her.
“When I got to work the door was closed, they were waiting inside for me because I had the money. There were three of them, the first one pulled out the gun, the second one ran with the money and the third one stabbed me in the back and just missed my heart,” says De Sousa.
De Sousa almost bled to death, but somehow survived. Through it all, she vowed that there was no time for tears.
When it comes to business, she claims she has the magic touch. A food lover, she says she has never failed in any business that she has started.
Her son Nicholas, Operations and Marketing Director, agrees.
“She might not have our degrees and all that but she can do everything that we do and she does it much better than we do. And I’ve met the likes of the Gordon Ramseys and Richard Bransons, but still, when I look at men like that, and I look at my mom I swear they’ve got nothing on her,” he says.
The next step is to make her business a world-wide brand. Surely, a woman who survived poverty, cheated death, negotiated loan sharks and loneliness would be odds on favorite to do anything.

No Time For Tears When You’re  Fishing For Dreams

Flamboyant, young, handsome, sociable and most of all: successful, beyond most people’s dreams. With his Panama hat on, sipping a drink at his rental house’s swimming pool only four steps from Luanda’s beach, Thomson-Payan looks like an actor in a gangster movie: too smooth to be true. But he’s the real deal.
Thomson-Payan owns Electrix Group which makes more than five times Thomson-Payan’s initial $200,000 investment each month. The annual turnover at Electrixtel, the telecommunications arm, is $15 million. .
“In five years, we’ve had well over 1,000% growth or between 100 and 200% growth per year.”
Electrix created its construction company, Topson SA, two years ago. Its services company, ESS, counts Schlumberger, ConocoPhillips, Trafigura and FMC among its major clients.
Thomson-Payan’s granduncle was former Colombian president Alfonso Lopez, while his father was a diplomat and a successful international entrepreneur. With a background like that, you could say he was born for success. But that’s not the whole story.
“I first came to Angola in 2007 after my friend, who lived there, told me to check it out. I was sick of working in a corporate American office. When I arrived, I was stupefied. There was so much to do.”
Thomson-Payan went to Babson College, the top entrepreneurial school in the States.
“I always knew that I wanted to be an entrepreneur. When I was 10, my dad told me to work for my own car. By the age of 15, I’d saved enough money by doing odd jobs. That’s when it started.”
When he was 19, Thomson-Payan moved to Shanghai and lived there for a-year-and-a-half.
“I studied Mandarin nine hours a day. Then I started an outsourcing company called China Source. We still have a three-person office there.”
China Source’s bigger clients spread the word. Suddenly, things moved forward fast.
“One day I received an email from a guy named Marcelo Claure. I had no idea who he was. It turns out this 35-year-old guy owns $7.5-billion company Brightstar—the largest mobile phone distributor in the world.”
Thomson-Payan met Claure in New York.
“He asked: ‘So where do you see yourself in five or 10 years?’ I bit my tongue and said: ‘Running my own company or running yours!’ I was 20 or 21 at the time. He gave me an offer I couldn’t refuse—to become his right-hand. I worked with him as a senior business development manager, and we grew from 35 countries to 54. We worked crazy, crazy hours. Sometimes from 7am to 4am. But it was an amazing experience and education… amazing.”
In his second year at Brightstar, Thomson-Payan started studying law at Florida International University in the evenings. Meanwhile, he was itching to start something new.
“Africa was the only part of the world that Brightstar hadn’t conquered. This continent is a difficult market to break; you have to be very hands-on here. After my visit to Angola, I raised some capital among Swiss and American investors, friends of friends. We then started Electrix.”
Electrix now has between 100 and 120 employees, 95% of them Angolan; 25 stores in Luanda, Malange and Lubango; and store-within-a-store contracts with supermarket chain Nosso Super and gas station chain Pumangol. Cellphone brands distributed by Electrix include Samsung, LG, Nokia, Motorola, Alcatel, Apple and HTC.
“In the retail industry, we’re the fastest growing mobile phone distributer and the only one with our own brand.”
Electrix sells airtime, internet, cable and satellite TV, digital cameras and computers and it’s launching a gaming division. The company buys large chunks of airtime at discount prices from Angola’s biggest cellphone players, Unitel and Movicel.
“The beautiful thing about Angola is that there’s no landline infrastructure. Mobile phones are not a luxury, literally everybody needs one,” says Thomson-Payan.
Smartphones aren’t hot in Angola. Eighty percent of Electrix’s phones are sold for under $50.
“The large majority of this country lives under the poverty line. You’ve got to fit into that market. This is one of the reasons we’ve partnered with a company and brought in our own brand, BLU, with a price range of between $12 to $250 for smart Android phones.”
Electrix understands the Angolan market. BLU has a 30-day battery.
“Imagine that, in a country with major electricity problems!”
In July, Electrix implemented electronic recharge systems that look like credit card machines.
“We sell a few $100,000 per week’s worth of Unitel and Movicel recharge cards to Pumangol and our other retail clients. But they are high-risk, because you’re basically moving cash. These machines will allow us to distribute airtime instantly without risk and minimal operations. Credit cards haven’t hit the Angolan market strongly yet.”
Competition is the drive behind these revolutionary ideas.
“Five years ago in Angola, in a business where Brightstar makes a two percent margin, we were doing 80%. Crazy! But margins have gone down a lot; competition has grown. When I started, to differentiate Electrix, I literally filled my big truck with phones and drove off to the provinces, where margins are a lot higher.”
“When the market matured, margins went down and no one wanted to drop their prices anymore. My competitors started giving clients credit. So I told my biggest clients: ‘Look. You guys have the cellphone stores. What are your main costs?’ The answer was always inventory, which for an average cellphone store can go up to $35,000 or $50,000. So I’d say: ‘I’ll put in the inventory and we’ll go 50-50 on the store and become partners.’ That meant I gave them credit, but now I owned 50% of the retail business. So I was making my margin in the wholesale, plus 50% of the retail margin and could control my debtors. As a result, we’re now the largest retailers in the Angolan cellphone industry.”
Unlike many foreigners operating in Angola, Thomson-Payan has never had an Angolan business partner.
“I suffered for two years because I didn’t have anyone to lean on, but now I don’t need to lean on anybody because all my contacts are my own.”
Thomson-Payan says the toughest aspect of doing business in Angola is the bureaucracy.
“Many people will say corruption. But there are two ways to get things done here: corruption and relationships. The second option is actually better. Let’s say you want to get your stuff out of the port quickly, so you pay someone 500 bucks. But as soon as someone else comes and pays him 550, he’s not going to give you any more love.”
“I know a guy at the port, he’s a good friend of mine. I called him from Europe because I knew he was getting married and then I brought his wife’s wedding dress over. That guy will remember that for the rest of his life—it’s a true relationship. He’ll always be there for me and I’m really there for him. I try to build genuine relationships that in the long run are so much more valuable for both of us.”
Thomson-Payan was in the right place at the right time.
“After 15 years of independence war and 27 years of civil war, Angolans need absolutely everything. They’ve got the money to pay for it, but no one here to provide it. If you’re here and can offer first-world service, the sky is the limit. Angola is a perfect storm for business.”
Electrix opened a new office in Johannesburg, South Africa in July. The company is scheduled to start operations in Mozambique in the next three months.

A Good Call

The first ever World Cup on African soil brought the whole continent together. Africa was finally able to showcase its beauty to the rest of the world. The passion, vibe and pure energy were beyond all imagination. People took to the streets, sang through the cold winter nights and the world was introduced to the vuvuzela. Who could ever forget it?
The international football governing body, Fédération Internationale de Football Association (FIFA), once said: “Brazil is football”. So it’s hard to think that the country synonymous with the beauty of football could be struggling to put on such a huge event in the sporting world. Is it true? Are the Brazilians more concerned with lifting the cup for the sixth time than putting together a spectacular event?
Brazil is the only team to have qualified for all the World Cups and has won it: in 1958, 1962, 1970, 1994 and 2002. The country last hosted the World Cup in 1950 and is currently ranked 13th by FIFA, Spain and Germany are ranked first and second respectively.
The excitement of a World Cup at the home of legends has been tainted by allegations of corruption and reports that construction was far behind schedule and over budget.
When news of Delta Constructora’s withdrawal from the Maracanã stadium, in Rio de Janeiro, redevelopment and its investigation for corruption and bribery by the federal police came out, it threw a $3.7 million investment into doubt. This money was meant to contribute to the Maracanã Rio 2014 construction consortium, which included Odebrecht Infraestrutura and Andrade Gutierrez. With only two companies left in the consortium, the question was whether there were going to be enough funds to complete the project. At the time, the construction company also had numerous Rio transport infrastructure contracts.
Maracanã was built for the 1950 World Cup final. It holds the record for the largest attendance at a World Cup final, at 199,854 supporters. By April, work on the stadium was about 40% complete and open for public tours. It is the venue for the 2014 World Cup final and is supposed to be completed by February 2013, in time for the Confederations Cup.
PricewaterhouseCoopers partner, Mauricio Girardello wrote: “When building a facility for one event, you need to balance the demands of a limited use with other uses that will make the facility more financially viable over the long term.”
This is something South Africa knows all too well. The country is faced with the problem of unused stadiums that it spent close to $1 billion to build. The 94,000 capacity Soccer City, in Johannesburg, is being used for concerts, games and tours but others, like Moses Mabhida Stadium in Durban, are sitting empty and costing millions to maintain each year—due to the fact that there are no provincial teams large enough to take the leases over from the provincial governments and the inability of the stadiums to cater to the large rugby teams and their supporter’s needs. The other legacy left by the 2010 World Cup was the dire state of the South African hospitality industry. In 2011, the average occupancy rate dropped to around 48% and many hotels had to shut their doors. The millions of visitors were gone and had taken their money with them.
Danny Jordaan knows what it’s like to stage a World Cup. Jordaan was part of the formation of the South African Football Association (SAFA) in 1991. His World Cup involvement spans almost 15 years and his experience with the 2010 World Cup, held in South Africa, earned him the position of special advisor for the 2014 World Cup; a member of the 2014 World Cup and Confederations Cup’s organizing committee; a member FIFA’s Transparency and Compliance Committee and part of the FIFA technical evaluation team for the 2018 and 2022 World Cups.
“The infrastructure of Brazil needs huge investment and so their infrastructure program has greater demands on Brazil than in South Africa,” he says.
Access roads, parking lots, subways, trams, monorails and shopping malls are just some of the infrastructure projects Brazil will need to focus on, aside from stadiums. Construction of the $500,000 North/Center (Manaus) Monorail has been awarded to a consortium consisting of three companies.
Brazil’s planned infrastructure budget is around $11.2 billion and it is expecting $102 billion to be contributed to its GDP by the end of the two tournaments. Three point two billion dollars is allocated for airports.
In February, Airports Company South Africa (ACSA) and a Brazilian partner secured 51% of a 20-year concession to expand, operate and maintain the Guarulhos Airport in São Paulo. The airport is said to be one of the worst in the world. Brazil has decided on the privatization route for its airports in the hope to meet the demands that will be placed on them by the millions of expected visitors.
The two countries, Brazil and South Africa, have been sharing information and expertise since the 2010 World Cup, when a Brazilian soccer delegation came to visit. Like Brazil, South Africa received a lot of bad press, with people citing high crime rates; poor preparation and calls to move the tournament to Australia.
Jordaan feels that this criticism rears its head when the host country is in the developing world.
With this shared experience, how much cooperation is there likely to be? There are two sides to this coin. Some would say that the key to hosting a great World Cup would be to use the experience and expertise of those who have come before. But on the other hand, you can argue that Brazil would want to keep all business and money within the country by giving Brazilian companies the opportunity of large-scale projects.
Jordaan says this is where joint ventures come in. He says that as much as the government will not give a 100% tender to a foreign company, having a Brazilian company on board will certainly help—like in the case of ACSA.
“Brazilians are passionate about football. So I think that once they get the bricks and mortar sorted out the people will turn it into a wonderful celebration and that is what we are looking for”, he adds.
One of the issues facing the organizers was the passionate but poor Brazilian fans. In Brazil, students and pensioners are allowed a 50% discount on tickets. As an institution trying to make a profit, this may not be what FIFA had in mind. As a compromise, the organization has agreed to set aside 300,000 tickets for these supporters.
It really has been one thing after another for the Brazilians. The sports minster, Orlando Silva, resigned last October under accusations of corruption. The Brazilian Football Association’s president has also resigned. At some point the Brazilian President, Dilma Rousseff, was not speaking to the Brazilian Confederation of Soccer’s president, Ricardo Teixeira. At the same time the minister of sports, Aldo Rebelo, was not speaking to FIFA’s general secretary, Jérôme Valcke.
In 2000, FIFA introduced the continental rotation policy, which began with the 2010 World Cup in Africa; South America was next in line.
There is a major difference between the South African and Brazilian World Cups, beyond geographics. Unlike Brazil, South Africa went through two competitive bids, the first was lost to Germany for the 2006 World Cup and the second was secured against five African countries with a 500 page bid book. South Africa had to show that it had the capacity to host the tournament and provide 17 government guarantees. Brazil was up against Columbia in the 2014 bid, but the South American Federation unanimously decided to back Brazil as the option for 2014.
This seems to have caused problems. One of the more thorny matters was the sale of alcohol at matches. Anheuser-Busch InBev NV (ABI) is the largest brewer in the world and one of its brands, Budweiser is a major sponsor of the tournament. The problem was that Brazil’s Soccer Fan Statute—Article 13: prohibits alcohol at Brazilian soccer games. After heated words and years, the World Cup Bill—to lift the ban on alcohol—was passed by the lower house of Parliament in March, the Senate in May and received the final approval and signature of the president in June. The Senate changed the Bill so that it applies only to the Confederations and World Cups.
Some members of Senate were holding out because they felt that their law on alcohol was in line with the FIFA 2004 Safety Guidelines—Article 19: ban on the sale of alcohol and that the ban has helped reduce violence at games.
Jordaan’s tips for a world class World Cup are simple. First, you need the necessary legal framework and then you get the infrastructure going. These seem to be lessons the Brazilians would have done best to learn much earlier in the game. All new reports from both sides seem to be positive that Brazil is back on track, or at least trying.
You’ll get a different story if you ask the millions who live in Brazil’s slums—the favelas.
One of the harshest measures in the preparation for the soccer tournaments, as well as the Olympic Games in 2016, is the forced removal of favela residents. Some have been around for over a century and have now been declared Imminent Domain—meaning that the government has the power to remove the residents and use the space for public use. The proposed 2016 Olympic Park is an extravagant project destined on a favela site.
In a video produced by non-profit organizations, Phesca Brazil and WITNESS, a devastated grandmother tells of how she was born in Morro da Providência, in 1941, and her mother before that. Three generations of her family currently live in the favela. Some residents talk about how they’ve only been given a month’s notice.
Other favelas are enjoying some improvements to the power, water and sewage. There have also been reports of armed police raids with tear gas, rubber bullets and tanks to clean up crime.
All this aside, the eyes of the world will be on Brazil. The only question is whether they will feel the pressure to step up their game and put on a fantastic show or merely the pressure to lift the cup.
“The people [Brazilians] will not react as South Africans. What South Africans did was embrace other teams and the event hype and passion continued and South Africa celebrated in the streets even though their own team was long out of the tournament”, says Jordaan.
“If they [Brazil] don’t [win on home soil] I think it will be a difficult moment”.

The Land of Pelé  Tackles The Tough Times

Political risk continues to remain elevated in Zimbabwe. The introduction of a government of national unity (GNU) saw a decrease in violence and human rights abuses but little else. Differences between Zimbabwe African National Union (ZANU-PF) and the two factions of the Movement for Democratic Change (MDC) are glaring and threaten the future of the government.
A key source of political risk arises from the upcoming election. Southern African Development Community (SADC) member states have reaffirmed their position that no election can take place until all conditions of the 2008 Global Political Agreement (GPA) are fulfilled.
A key condition of the GPA is the formulation of a new constitution. A draft constitution has now been completed and submitted to the GNU for comment and suggestions for amendment. The two factions of MDC have supported the draft constitution and are ready to put it to a referendum.
President Robert Mugabe, who has ruled Zimbabwe for 32 years, is adamant there should be an election this year, but reality is that it may not be before 2013. It is likely the next election will be close. ZANU-PF will be reluctant to relinquish power to the MDC, which it accuses of being sponsored by the West. The voters themselves are eager for change following years of economic stagnation.
The European Union (EU) said it was considering easing decade-long sanctions if the country implements a new constitution; a move that could encourage a free and fair poll.
Politics will undoubtedly trump any economic policy considerations. As such, Zimbabwe is unlikely to see any significant economic reforms to revive the economy of what was once Africa’s bread basket. The indigenization drive will take center stage economically especially as the election draws closer. The indigenization legislation aims to ensure that 51% of foreign-owned companies are owned by indigenous, black Zimbabweans.
The indigenization program, which is in full swing is led by indigenization minister, Saviour Kasukuwere, who is seen as a die-hard ZANU-PF loyalist. One of the thorny issues for the program is the fate of the lucrative mining industry. The government is locked in a dispute with the country’s largest foreign investor, South Africa’s Impala Platinum (Implats). The miner has complied with the law by divesting the required share of the company to indigenous, black Zimbabweans. The government is to get 31% of Implats. The miner has requested that the government pay market prices for the stake. The cash-strapped government has refused to pay. The dispute still rumbles on.
From the resources sector the zealous Kasukuwere has turned his attention to the financial sector. The target is the four foreign-owned banks. Indicative of a rift within ZANU-PF, Zimbabwe Reserve Bank governor, Gideon Gono, has warned of the implications of indigenizing the banking sector, the backbone of any modern economy. The minister of finance, Tendai Biti, also added his voice of concern to such a move. ZANU-PF is likely to disregard these voices of reason and power ahead with the indigenization campaign until the elections. Indigenization is likely to be a vote winner for ZANU-PF. Therefore, investors will remain wary of the country’s investment climate.
Zimbabwe’s political environment will weigh heavily on an already injured economy. The minister of finance in July downwardly revised growth for 2012 from 9.4% to 5.6%. The revision is on the back of a poor harvest, inadequate donor funding and incoherent policies. Zimbabwe grew 9.3% in 2011.
Political uncertainty will surely remain in place until elections are held. Until then, the economic policy will remain incoherent, which will in turn be detrimental to the economy. Zimbabwe’s economy will only show signs of sustained recovery with a democratically elected government.

A Free Vote Could Be The Best Medicine

Adam Molai is a tobacco entrepreneur. The Zimbabwean born-and-bred entrepreneur is the co-owner and executive chairman of Savanna Tobacco who has enjoyed a life that has rarely been dull. He studied in Canada and Britain; he did his articles in accounting, owned and operated garages, a stationery and copy shop, as well as a chicken farm. It was a friend who introduced this non-smoker to the tobacco industry.
As the land reform program of President Robert Mugabe forced out large-scale white commercial farmers, in favor of black workers, Molai realized that it would be a gamble going into business with his white friend when he founded the Zimbabwe Tobacco Growing Company. Now he is the director along with his wife. In 2002, he acquired a tobacco threshing plant with some partners. It did not make sense to Molai and his partners that the plant was being grown in Zimbabwe, shipped overseas and the finished product imported into the country. He decided to do something about it.
Savanna Tobacco launched its first brand of cigarettes in 2004. Two years later, it had brought in high-speed manufacturing equipment and won both bronze and silver at an international brand competition. By 2008/2009, the company had grabbed the largest share of the Zimbabwean market and was importing new and specialized equipment. This was at a time when Zimbabwe could not import paper from Germany to print its money.
<div id="attachment_1107" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1107" class="size-large wp-image-1107" src="/wp-content/uploads/2017/04/Cigarette-Packer1st-of-its-kind-in-Africa-1024x678.jpg" alt="" width="474" height="314" />Cigarette Packer,1st of its kind in Africa</div>
“We felt proud to be heads and shoulders with the big multi-nationals,” boasts Molai.
The company introduced the contract system to the country as a way to help boost the tobacco industry. It worked like this: there is an agreement between the contractor and the grower; the contractor supplies the grower with all the inputs and the grower grows, reaps, cures and delivers the crop. The grower receives preferential interest rates and the contractor is guaranteed a crop. This system got around the problem of finding finance to buy tobacco inputs in US dollars. Although the contract system is still operational, alongside the auctions, Savanna pulled out when they felt the financial system was capable of providing finance. This year a commercial bank in Zimbabwe—MBCA Bank Limited—made available $65 million worth of lines of credit to support the industry.
Zimbabwe is the largest producer of tobacco in Africa. It exports to China, South Africa, Belgium, the United Kingdom, Indonesia and Germany and imports some tobacco from Malawi and South Africa.
China is the biggest producer of cigarettes and has the largest tobacco company in the world. It started using the Zimbabwean leaf in the 1980s and in 2005 Tian Ze Tobacco Company was established in Zimbabwe. Chinese companies came in and financed small-scale farmers under the contract system. Their presence has since increased the price of tobacco per kilogram. This year, the average price increased to $3.67.
Molai feels that China has played its role in the growth of the industry but that the relationship with China needs to be symbiotic and not perpetuate the mere exportation of raw tobacco and jobs.
“China protects their market more than anything else. We’re running with people that are already at the half-way line&#8230; You’ll never win, you have no chance,” he says.
Around 100 countries produce tobacco; the major producers are China, India, Brazil, the United States, Turkey, Zimbabwe, Zambia and Malawi.
Zimbabwe has some domestic issues that were raised at the National Tobacco Workshop held last year. These included the poor conditions of amenities and accommodation at the auction floors, constant power cuts, deforestation, the limited credit and poor infrastructure.
The industry however does not have to worry about tight regulation in the marketing of cigarettes. The global legislation on tobacco has decreased global consumption over the years. The World Health Organization’s Framework Convention on Tobacco Control—which is “the international health treaty that guides national efforts to counter the tobacco epidemic…”—now has 168 signatories. Zimbabwe is not one of them.
“I make no apologies for it,” says Molai, “we are strong marketers.”

The Golden Leaf

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If you haven’t been to Lusaka for a while, prepare for a shock. The last time I was there in 1999, the Cairo Road was grubby and rundown; there were cars on the road that should have been pensioned off in the 1970s and everywhere there were the signs and scent of pungent decay.
The Lusaka of 2012 couldn’t be more different. Shining new shopping malls are springing up on once barren land; gleaming new office parks are everywhere. Investment and trade are brisk and the roads packed with brand new cars. Indian and Chinese investors have helped breathe life back into the once moribund copper industry and it is tipped to achieve record production this year. Resurgent agriculture means Zambia is enjoying surpluses and exporting everything from maize to yoghurt.
Zambia, free from exchange controls, is reaping the rewards of more than 20 years of working towards becoming one of the most liberal economies on the continent. The country has set up the Zambia Development Agency to find ways to ease business. This year, it looked at 517 of the plethora of licences business needs to operate in Zambia and abolished 170 of them. Many of these licences can take months to acquire and have seen off many a frustrated investor.
All appears lovely in the garden, but there are clouds overhead. Uncertainty is a word used often these days by bankers and business types in Lusaka these days. The new government, formed by the ruling Patriotic Front (PF), led by President Michael Sata, is under pressure to ease the suffering of the poor. More than half the country lives below the poverty line. One of the bitter lessons of the Arab Spring was that governments cannot risk allowing the young to be restless and unemployed for too long. Zambia, with a population of 13.6 million, has 10.2 million people under the age of 35, with a mere five million jobs to go round.
Economists, government officials and bankers alike accept that Zambia’s growing economy, which has sustained a healthy 6 to 7% GDP growth for 10 years, has hardly made a dent in the country’s poverty. This cold fact is forcing the government to budget and regulate in the cause of the poor, which is creating disquiet among those in business.
One of the most recent and talked about regulations is the increase of the minimum wage, from around $75-a-month to around $110. This has caused consternation among cost conscious employers, who warn there could be job losses and a reluctance to hire.
This was one of the many issues at the “Growing Zambia” debate, held in a Lusaka hotel, as part of business channel CNBC Africa’s launch of its live TV crossings from the country.
“Let me ask you how many of you in this room can live on a $100-a-month?&#8230; You have to give an individual a reasonable wage to live on,” says Zambia’s pugnacious minister of commerce, trade and industry, Robert Sichinga, to the well-heeled audience at the televised debate.
The panel also debated the other new regulation causing waves, the so called SI 33. This statutory instrument bans the quotation of prices of goods and services in foreign currency.
Sichinga says the measure was to revive the kwacha, follow a plunge in its value. At the time of the world financial crisis in 2008, the kwacha was 3,300 to the US dollar, according to Sichinga, and has not recovered, standing at around 5,500 to the dollar.
“If you deal in foreign currency you are increasing demand for the dollar, which is decreasing the value of your currency,” he says.
David Kombe, the CEO of D&amp;C Saatchi &amp; Saatchi, said otherwise it was like building a house with kwacha and being allowed to rent it out in dollars.
“Today sales are made and tomorrow the revenue is sent out of the country,” he says.
Economist Trevor Simumba disagreed with the policy to defend the currency saying that it was akin to some of the protectionist policies of the 1970s and could hurt investment.
“My prayer is for the government not to regulate the private sector too much. If you squeeze it, you squeeze the life out of it,” says Simumba.
Despite these concerns, Sichinga believes Zambia can beat last year’s foreign investment of $5.4 billion. He says he travelled to Australia, Dubai, Doha, Turkey, India and the United States this year in search of more, but warned these trips could take a year to five years to bear fruit.
“We will use policy to entice business,” says Sichinga. Simumba countered that government policy should concentrate on growth as well as redistribution of wealth.
Growth is the name of the game on the streets of the new Lusaka. Where once was wasteland, now loom giant shopping malls, doing brisk business, with packed car parks. The familiar South African franchise names are all there, but inside there are Zambian produced goods from jewelry to food. Even the state has jumped on to the bandwagon. A spanking new shopping mall, in the heart of the city, opened in November. It cost $200 million and was named the Levy Shopping Centre, after the late Zambian President Levy Mwanawasa. The government’s pension scheme partnered with Liberty Properties in putting up the money.
In many ways, Mark O’Donnell is the father of the shopping mall in Zambia. He is a born-and-bred Zambian, the son of an entrepreneur, who emigrated from Britain in 1948, in search of a new life. More than half a century later, O’Donnell is chairman of Union Gold, a family company that owns three brands in Zambia: Protea Hotels; Spar and MICA Tools.
O’Donnell has also had a hand in marshaling millions of dollars in investment in the building of three shopping malls. The new SI 33 regulation, calling for all domestic transactions to be carried out in kwacha, concerns him.
“The resources are not available in the country. If I want to build a new hotel it is going to cost $10 to $20 million and that kind of investment is not available in kwacha… I think there is a lot of emotion around wanting to support the currency,” he says.
“I think there is a bit of inconsistency and different views from different ministers. What we in business are saying is: could there be no capital controls and no exchange controls in an economy where foreign investors can repatriate their profits?… I think the economy faces, many, many challenges.”
The next morning it was the wide blue sky of a winter’s morning in the capital as warm as a welcoming kitchen. Why can’t all winters be like this? I breezed into the Finance Ministry past friendly waves. One of Zambia’s most valuable national assets is its relaxed informality—I swear, I have felt less welcome in the reception of a tin pot South African company, than in making my way to the office of the top decision maker in Zambian economic policy, Alexander Chikwanda, the finance minister of Zambia.
Chikwanda was born in Kasama, in northern Zambia, the son of an ex-soldier, turned district magistrate. He was a young turk in the United National Independence Party around independence in 1964 and left the country for Sweden, where he qualified as an economist in 1968. To say he is a veteran politician is almost an understatement. Chikwanda has climbed the political ladder from the job of district governor to junior minister and into high office in the cabinet. In the 27-year rule of Kenneth Kaunda, Chikwanda was minister for everything from agriculture and health to local government, finance and planning.
Nine months ago, Chikwanda took over the job of finance minister, when Michael Sata’s PF party won the elections, steering economic policy and batting away criticism from uneasy business types.
Chikwanda’s first budget was hailed by the masses for being pro-poor, putting a bit of money back into the lean pockets of struggling Zambians. At the same time economists, like Simumba, worried that the budget didn’t address growth. The next budget will be in October.
“The PF policy of pro-poor budgets will continue,” he says.
Chikwanda believes business and government should join hands to grow the Zambian economy. He dismisses concern over the new SI 33 regulations, which he drew up.
“Every country has its legal tender. How can you spend anything but rand in South Africa? How can you pay other than in dollars in the United States? This is not a new policy, it is something that is carried on all over the world… Funds are available in kwacha for investment, in fact a lot of money is on offer… Those guys who talk about this are not right at all, they are protecting narrow interests,” he says.
Chikwanda accepted one of the criticisms by business of Zambia’s plodding bureaucracy.
“The bureaucracy has a history and leaves much to be desired. It moves at a snail’s pace and not as fast as we would like,” he says.
Another criticism is that Zambians are not seeing enough value for their tax dollar.
Chikwanda hopes to address this, in his fiscal legacy, by restructuring the country’s budget in favor of spending more on education, Zambia’s pounded roads and parlous rails. He says that 70% of the country’s 27.5 trillion kwacha budget (around $5.6 billion) is allocated to recurrent expenditure, while a mere 30% is earmarked for capital expenditure; Chikwanda hopes to change this to a 50-50 split by the end of his time at the helm of the country’s economy.
“It will not be done overnight,” he says.
Few could argue with the need
for change and the time it is likely to take.

A Fight For The  Business Soul Of Zambia

The elephants feeding off the nearby shrub looked remarkably placid as we strolled along the boardwalk that was high enough from the ground for them to pass underneath. But shortly after they kicked up a shindig, trumpeting and rumbling, whether from love and joy or from anger, I could not say.
Sitting, feet up, afterwards on the veranda of my Pafuri Camp tented chalet, I watched a hippo wallow lazily in a still pool of the Luvuvhu River down below. Staring back blankly with heavy-browed eyes, it—every now and then—snorted contentedly. Behind it on a sandbank lay a crocodile, mouth agape, as if dead.
<div id="attachment_1099" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1099" class="size-large wp-image-1099" src="/wp-content/uploads/2017/04/Enos-Mngomezulu-Wilderness-Safaris-head-guide-at-its-Pafuri-Camp-1024x683.jpg" alt="" width="474" height="316" />Enos Mngomezulu, Wilderness Safaris&#8217; head guide at its Pafuri Camp</div>
Waterbuck moved about the reeds and a couple of baboons approached the river for a drink. Then, the peace was shattered briefly by a fish eagle and a purple heron getting into an almighty scrap on the opposite bank.
This is daily life at Pafuri Camp to the north of South Africa. The 24,000-hectare spread of land, within which the Wilderness Safaris tourist facility falls, is a national treasure, which could have been lost had the Makuleke community not decided to keep it as a protected area. That decision has proved as wonderful as the Pafuri.
It was a prescient choice, benefiting Kruger National Park in particular and nature in general by extending the roaming area of the park’s animals and by keeping under formal protection a landscape of extraordinary scenic beauty and biodiversity.
Wedged between the Luvuvhu and Limpopo Rivers at the Kruger’s northern extreme, Pafuri is made up of a rich mixture of wetlands, floodplains, savannah, Mopane veld, riverine and fever-tree forests, rugged hills and dramatic gorges.
Its climate, location and geology combine to make it the southern-most extreme of several tree species, causing it in turn to be a favored destination for botanists; not least baobab lovers who come to admire the exquisite species spread around the veld and by the roadside. Among its exceptionally rich birdlife, there are several species that are found nowhere else in South Africa, making it a favored destination for bird lovers as well.
The Makuleke decision to keep it as a reserve, served a further purpose. It introduced the concept of community-held contract parks that has been applied since in various parts of South Africa; ensuring the formal protection of valuable parts of the natural environment that might have been lost otherwise, as well as giving back dispossessed people a living.
The arrangement did not come easily. It was steeped in the hurt and bitterness of the apartheid era, which, for the Makuleke people, went back to a day in 1969 when government trucks arrived at their village, set among the brooding forests and woodlands of the Pafuri. Livingston Maluleke, a leading member of the community, told me of that painful day. Staring across the Luvuvhu from where we were sitting on the veranda of the Wilderness Safaris lodge, he recalled how villagers were bundled onto the trucks with only what they could carry and transported to a strange new place about 25 km outside Kruger National Park’s Punda Maria gate.
“It was terrible. Our old people, to this day, shiver when they talk about that experience,” he says.
The government’s thinking behind the forced removal was to add land to the Kruger as well as to allow security forces to better counter the anti-apartheid insurgents who were making use of the lush vegetation for moving back and forth between South Africa, Mozambique and then Rhodesia. The borders meet at the confluence of the Limpopo and Luvuvhu rivers. The spot is known as Crooks’ Corner for the way outlaws used it in olden times to skip from one country to another to evade arrest.
The landmark decision to keep the area as a reserve was negotiated with South African National Parks (SANParks), after the community had won back the land in 1998, under newly democratic South Africa’s land-restitution process. It was not an easy choice, Maluleke told me. Some of the old people wanted to move back there. But eventually the deal was negotiated whereby SANParks would continue to run the conservation aspect and the community would benefit in the form of jobs and an income from the concession given a decade ago to Wilderness Safaris. There is another lodge named The Outpost and a guide-training school that operates under similar concessions.
<div id="attachment_1098" style="width: 484px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-1098" class="size-large wp-image-1098" src="/wp-content/uploads/2017/04/Masingita-Hatlane-deputy-chairperson-of-the-Maluleke-Communal-Property-Association-683x1024.jpg" alt="" width="474" height="711" />Masingita Hatlane, deputy chairperson of the Maluleke Communal Property Association</div>
The concession holders have been contributing to conservation projects as well.
Wilderness Safaris, for instance, has helped with the reintroduction of game to the area, most notably the translocation of white rhino, giraffe and wildebeest from the heavily populated southern region of the Kruger Park. It says its anti-poaching operations have involved 20 game scouts from the community.
The money from the concessions has been going into a trust run by the Makuleke Communal Property Association (CPA). The estimated R3 million ($369,000) that has been generated so far has been going into projects like street lighting for two of the Makuleke’s three adjoining villages; crèches for two others; a community hall for another and improvements to schools. Each of the villages decides how it wants its portion of the income to be used.
In 2007, notable conservation recognition came with the declaration of Pafuri’s string of wetlands situated mainly along its Limpopo River boundary as a Ramsar site of international importance. In 2010, followed the United Nations Development Program’s Equator Prize that recognizes the efforts of local communities to reduce poverty through the conservation and sustainable use of biodiversity. Last year followed SANParks’ Kudu Award for community contribution to conservation.
Now there are changes in store that could affect the way the contract park is run. Under the arrangement concluded back in the late 1990s, SANParks ran the conservation aspect in terms of much the same rules as applied to the rest of Kruger. Administrative decisions have been taken by a joint management board (JMB) that includes representatives of SANParks, the Makuleke CPA and officials from government’s environmental, tourism and security departments. A few years ago, the concession holders were also allowed to sit in on meetings as a way of streamlining JMB decisions.
According to Masingita Hatlane, deputy chairperson of the CPA, the system has been under substantial review by an independent company. The central idea to have emerged—from what is called the Conservation Development Framework it produced—is that the JMB should be restructured and that the administration of Pafuri should pass to a park manager. How exactly it will work, is not clear though.
“We felt we should co-ordinate the conservation and the commercial side and be better able to implement JMB decisions. But there are many aspects that still need to be sorted out,” smiled Hatlane, a school teacher who is known as Mavis; as we sat at the Makuleke village’s community center, where guests are sometimes treated to traditional dancing, drumming and such cultural events.
A key question is whether the park manager should come from the ranks of the Makuleke, from SANParks or the concession holders, or whether it should be an independent person from outside. Another question is where the manager’s office should be—inside Pafuri, where a lack of communication facilities would be a problem, or in Makuleke village, which is almost a two-hour drive from the park. The most likely site therefore is Kruger’s Punda Maria Gate, which best addresses the various problems.
But then still remains the big question: Who foots the park manager’s salary and his staff and office bill?
Though not spelled out in so many words, the implication of the proposal is that, rather than being run as an appendix to Kruger, the Pafuri should be treated as a park in its own right, with the Makuleke through their CPA taking a more direct hand in its administration. Part of the reasoning is that whereas the community lacked the experience to do so from the outset, it is now in a better position to take charge.
The importance of the Pafuri’s retention as a reserve is underpinned by another factor. Situated where it is, it is the kingpin of the Great Limpopo Transfrontier Park between Kruger National Park, Mozambique’s Limpopo National Park and Zimbabwe’s Gonarezhou National Park that make up the scheme.
There was even talk of constructing a bridge inside the park over the Limpopo River to provide a direct tourist connection between the two southern reserves with the Zimbabwean park. Apparently, the wetlands inside the park dictate that the bridge should be outside the park boundary. But as the imaginative transfrontier scheme is firmed up, so Pafuri’s part in it and the Makulekes’ decision to keep it as a reserve should keep standing out more prominently for the landmark development it represents in the conservation history of South Africa and increasingly also of the broader region.

Paradise At The Crossroads

Chid Liberty is not your typical businessman, particularly not the kind you would expect to find in Liberia, a nation where big business has always been dominated by a cast of outsiders: middle-aged Lebanese men renting out overpriced apartments and selling American imports in slick grocery stores catering to high-maintenance humanitarian workers, Indians trading in electronics, rice and pharmaceuticals, and multinational companies exploring and exploiting the sea and land for oil and minerals. Nor is Liberty your usual “been to” young Liberian who has returned with a degree from a US university to take up a high-level position within a government ministry. Liberty, born in Liberia and raised in Milwaukee, Wisconsin, after his family was forced into exile in the 1980s during the military rule of the then president, Samuel Kanyon Doe, came back to his homeland with a grand ambition: to sow the seeds of an industrial revolution in a nation whose economy has been dependent on natural resource concessions and foreign imports throughout its history.
<img loading="lazy" decoding="async" class="alignleft wp-image-1095 size-medium" src="/wp-content/uploads/2017/04/20120710_ChidLiberty_010-200x300.jpg" alt="" width="200" height="300" />
In 2009, Liberty and his business partner and best friend from Milwaukee, Adam Butlein, set up Liberty &amp; Justice, the umbrella company that founded the Liberian Women’s Sewing Project (LWSP), the first certified fair trade factory in Africa and the first garment factory in Liberia.
“One of the core reasons we started our company is because we thought that what every developed economy has done so well is started really large industries that employ masses of people with low skills and education,” Liberty says.
Liberty and his partner focused on developing a project for women, as numerous development studies they read pointed to the important role that women’s employment can play in poverty alleviation within communities. In contrast to NGOs that train women to make handicrafts and tie-dye, Liberty combined a commitment to social justice with a shrewd business sense and approached large buyers from the United States.
But starting up a business in a non-existent industry in Liberia wasn’t easy. When Liberty began searching for funding for the project, he was often met with a harsh response.
“You talk to your first two or three people and you say, ‘Hey I am trying to put a couple of hundred thousand dollars or a couple of million dollars to build a factory in Liberia’, and they say, ‘Are you crazy?’ which is a response I got quite often,” says Liberty, a dapper man who punctuates his sentences with expletives.
Liberty and his partner started the business with a paltry amount of personal savings and raised an initial round of $600,000 partially from friends and family, but mostly from angel investors. The business that started with 30 women making T-shirts in a factory in Sinkor, Monrovia now employs 250 women, 100 in Liberia and the rest in a recently-constructed factory in Tema, Ghana. With customers like Godiva chocolate, the US-based apparel companies Haggar and prAna, and the Japanese company Itochu Corporation, Liberty says he expects the business to generate $40 million in revenue over the next year. He says he will need around 2,500 workers to fulfill his current demand and is looking at the possibility of expanding to other countries in West Africa.
Vamoma house is an odd retro geometrical cream and white building off Monrovia’s main thoroughfare, Tubman Boulevard. Like many of Monrovia’s large structures it was a battlefront during the war and was left looted, pierced with bullet holes and used as a mass gravesite. The presence of the factory on the first floor is testament to the progress Liberia has made since the end of the civil war in 2003.
Inside, women are busily cutting red cloth and stitching together a batch of T-shirts for an order. Along the two production lines, the women sit dressed in yellow aprons and black hairnets beneath fluorescent lamps and look intently at the pieces of red cloth they run rhythmically through the machines. A short, middle-aged Filipino woman named Loderena Rojas, who has spent the past 30 years working in the garment manufacturing industry in her homeland, stands at the front quietly watching over the workers. Liberty’s factory looks like one you’d expect to find anywhere in the world, only smaller. They will be moving into larger premises—an old Volkswagen distribution showroom—in the bustling downtown commercial district of Waterside in the coming months.
The women earn $100 a month, a modest wage, but well above the average annual income per capita that rests at $400 a year, in a country with an unemployment level at almost 80%. But the workers also receive $30 a month for transportation and a bag of rice, along with healthcare and an annual savings matching program that rewards them dollar for dollar with what they manage to save in their bank accounts. The women of LWSP hold a 49% stake in the factory, which is all part of Liberty’s business approach. For Liberty, worker ownership plays an important role in creating a productive workforce, particularly in the Liberian context, where it’s mostly outsiders and the elite who have benefited from successful businesses.
“Worker ownership and partnership with the Liberians, having them own a piece of company really changes the conversation. There is a ‘boss man culture’ here because it has been a chief-based society—you won’t get rid of that—but in terms of getting workers to take responsibility, if people feel that they are a partner in the company, it changes the paradigm. We have gotten timeliness and productivity out of workers that are unheard of, and we haven’t gotten it out of fear, which is the tactic they use in Asia.”
Fifty-two-year-old Leona Monger, a petite woman wearing fine gold-rimmed spectacles and a red headscarf who lives in a slum known as Vai Town, is head of the workers’ union and has held her position at the factory since it was established. While Monger says there is room for improvement in the pay, she says her wage has allowed her to keep her three children in school and set up a small provisions store.
“I see a future, not only for me, but for the younger ones who have just started. There are a lot of incentives that will enable us workers to improve our lives,” Monger says.
Unlike economies of developing countries throughout Asia that have been buoyed by investment in the manufacturing sector, Africa is still viewed by many foreign investors as a continent whose only value exists in natural resources. A survey released by Ernst &amp; Young earlier this year focusing on Africa’s perceived “attractiveness” to investors found that despite the fact that foreign direct investment grew by 27% between 2010 and 2011, there “remain lingering negative perceptions about the continent”, namely that Africa is unstable, corrupt and a risky region for investors, but these perceptions were held mostly by those who are yet to do business on the continent. For Liberty, the lack of investment in the manufacturing sector is due to misconceptions about the capabilities of African workers.
“I think the number one thing keeping the multinationals away from labor intensive industries in Africa is a complete mistrust of African human resources and African human capital,” Liberty says, adding this perception is often underpinned by racist stereotyping. “People say African workers’ hands are too big, they are too lazy, or they don’t respect time. I don’t think that can be true—if you can walk six hours to fetch water in the heat, laziness isn’t the issue.”
Under the leadership of President Ellen Johnson Sirleaf, who was re-elected for a second term in November, the government claims to have attracted $19 billion worth of investment, mainly in the form of oil, mineral and agricultural concessions. But Sirleaf and many in the government and the business community say more needs to be done to ensure sustainable and equitable economic growth that will create jobs for Liberians.
“No country is going to get growth if you don’t have it [the economy] driven by exports or some kind of manufacturing,” says Monie Captan, president of the Liberia Chamber of Commerce. “We have to identify specific sectors, plan properly, and invest in these sectors. It is not going to happen by saying it.”
For Liberty, Liberia must move beyond its economic concessions for the sake of its future security and survival.
“There are also issues of political instability. As long as you are not employing people and are only giving jobs to a few lucky well-paid people, others will feel like they are getting nothing,” he says.
The International Monetary Fund (IMF) in a recent policy paper expressed concerns about youth unemployment. The death toll of Liberia’s civil war made it one of the youngest nations in the world with 70% of the population below the age of 30. The IMF says that with 50,000 youths joining the labor force every year, the 90,000 jobs that the National Investment Commission estimates will be created from concession agreements over the next 10 years will do little to address the problem.
Liberia also faces major infrastructural challenges that make investment in manufacturing a challenge, among them poor road conditions and expensive and limited access to electricity—a consequence of the destruction of the Mount Coffee Hydropower Plant, for which the government only recently received funding from international donors to restore.
While Liberty acknowledges his factory is a small step towards Liberia’s industrial revolution, he is optimistic the nation can change the fabric of its economy through carefully developed government policy, investment in infrastructure and more open-minded foreign and domestic investment.
“I am positive that it will happen and at the end of the day the economics need to make sense. Currently, it doesn’t make sense, from a purely capitalist perspective… but we have labor at competitive rates, and with the infrastructure we should be able to compete with countries like Bangladesh and Cambodia and we should be able to get there in five to seven years if we are aggressive,” says Liberty.

A Thread Of Hope…  And Liberty

At the Careers in Africa Summit in London this May, the queues alongside recruiting stands wound around the Hilton Canary Wharf within minutes of opening, as 1,500 pre-selected, high-quality African candidates gathered for a matchmaking event with global companies looking to source African talent from the Diaspora.
Over the road, the Wharf itself was unusually busy for a Saturday afternoon, as global banks desperately worked through their scenario planning after the carnage on European markets. Once, the UK financial services industry in Canary Wharf and the Square Mile would have hoovered up many of these candidates. The city has been a magnet for global talent for decades, picking up not only the best from British universities, but those in Asia and Africa as well.
Now, that seems to be changing as resurgent African markets attract global businesses desperate to find new sources of growth, and as entrepreneurial members of the Diaspora look to return to capitalize on opportunities back home.
“The general atmosphere [in Africa] is much more optimistic,” says Wynand Smit who left a risk management job in a UK bank to return to South Africa to work for Rand Merchant Bank earlier this year.
“This is in stark contrast to the gloomy atmosphere in the UK where the focus, in my experience, was much more on the uncertain EU situation and potential future impacts,” he says.
The opportunities on the continent, as well as family considerations, led him to return after a successful few years in London and the Netherlands. However, for others the conditions in developed markets are a compelling reason to head back home. London’s slide—and the slowdowns across the rest of Europe and the United States—has come at a time when African economies have proved their resilience in the face of global economic turmoil.
The UK banking boom in the early part of the new millennium saw the sector expand from just over 5% of the country’s GDPin 2000 to more than 10% in 2009, when the country’s recession began in earnest. A royal flush of new, strict regulations, economic downturns in almost all developed markets and the existential threat to the Eurozone, which makes up the UK’s largest trading bloc, drove many institutions to the wall. The bloodletting that followed has been brutal.
According to figures compiled by Bloomberg, there were 58,000 job cuts in London’s financial services industry in 2011 alone. 2012 has seen that pace maintained, with bank after bank responding to the continuing pressure from regulators to build capital by cutting costs and headcount. Trading firms have seen losses mount as stock indices continue to be battered by the ongoing turmoil in the Eurozone; and corporate finance houses have seen their client base retrench in fear of a second recession. The Royal Bank of Scotland alone has slashed 30,000 jobs since its nationalization in 2008, and more cuts are still to come as the slim hopes of an economic recovery in the near-term fade away.
Hugo Lambrecht, who manages the African finance and banking practice at CA Global Headhunters, says that he has seen both the number and the profile of candidates change over the past few years of recruiting. Whereas before, the company’s focus was on finding expatriates for roles on the continent, the last two years have seen an upsurge in returnees—of the 280 people his team have placed in that period, around half are returnees. With a lack of experts in transaction banking, corporate finance specialists, investment professionals and chartered accountants, it is a good time to be in the executive search space in Africa, Lambrecht says.
It is not just finance that is benefitting. The compelling demographics of the continent continue to underpin growth in the fast-moving consumer goods and the financial services sectors across most economies. One major constraint for these businesses, historically, has been their ability to source executive talent with the financial and management skills required to operate in global companies, and the understanding of the complexities of relatively unstructured African markets.
The economic downturn in the West, combined with a growing understanding amongst multinationals and businesspeople that African markets are now a far cry from their mid-90s gloom, has created what Richard Putley, managing director of Executives in Africa, calls “a perfect storm”.
Putley’s company specializes in sourcing executive talent for international companies operating in Africa, particularly the retail sector, where knowledge of local market conditions is of paramount importance. What most companies are looking for, he says, is somebody that you would call ‘business bilingual’.
“This is a person who has the ability to work for an international company to ensure that the global policies and procedures that are in place for an emerged market are translated into a language that can be understood and delivered on a local level.”
These are individuals like Olu Kolawole. After spending the bulk of his career in the US, Kolawole had risen to become director of construction at Pathmark Stores, a supermarket chain. But just over a year ago he decided to abandon the relative sanity of the West Coast to head back to his native Nigeria and the chaos of Lagos. He admits that he was driven in part by a “nationalist instinct” and a feeling that “it was time to give back”, but equally the strong and visible opportunities in his home country were an attraction.
“You also see the challenges of being back in Nigeria—challenges in terms of constant utilities, challenges in terms of security, both of life and property. But then you decide that at some point, with the growing uncertainties in the economy and job security in the US, you start to really consider the opportunities in Africa,” he told FORBES AFRICA.
“When the opportunity came to come back, I really sat down and thought about it, but you know, you look at my career path over the last 10 years, which was rapid in the States, and you see that you’ve kind of peaked.”
With mergers and acquisitions trimming workforces in the US retail sector and growth in the industry slumping from 7-10% pre-crisis to just 2-3% in recent years, the chance to reboot his career with a move to a fast-moving market was too much to turn down.
“You realize a lot of these global brands see the African continent as the next frontier and you want to take a pioneer role. You know the lay of the land, you know what modern retail is supposed to be like,” he says.
Kolawole is now chief operating officer of CoolWorld Electrical Retail Stores, a subsidiary of international consumer goods giant PZ Cussons. It has not been all plain sailing. Business processes can be frustratingly slow or nonexistent and corruption “is at a level that you’ve never understood before”. The city has its inconveniences including interrupted power and security concerns. But even so, Kolawole has no regrets—yet. His role allows him to make changes to the way things are done and bring in his own best practices, and his remuneration package allows for a good quality of life, despite Lagos’ reputation for exorbitant prices.
“You have to negotiate your terms properly before you take the plunge. Nigeria is an expensive place but there are companies here willing to pay top dollar for talent. When you are negotiating a salary, you have to really negotiate properly and make sure you have everything taken care of. If you miss your utility payments or something, and you miscalculate, it really affects your overall income,” he says.
After three months, he brought his family over, including his two children, aged 10 and 12.
“It’s probably been tougher on the kids because they’ve lived their whole lives in the States. They still ask me when we’re going to go back,” he says.
The answer is: no time soon.
For some returnees, however, the motive is altogether more altruistic. OB Sisay spent 15 years in London working as an analyst in political risk consultancies and investment funds until September last year when he left his job and began the process of moving back to Sierra Leone.
Currently flitting back and forth between the UK and the country of his birth, Sisay is setting up a number of small enterprises, including a farm and a transport business and taking over his family’s holdings. Salaried jobs are hard to come by but once he has established a domestic cash flow he and his wife will up sticks and head to Freetown. Most of his family fled the country during Sierra Leone’s civil war but after years of stability and a new government that has put development top of its agenda, they are beginning to come home.
“We have a country to develop. You can’t all sit in the UK, earn huge wages and come on holiday for three weeks. The country has a huge shortage of human capital and so a few of us kind of think that the pocket has to take second place to the country. One of my cousins has quit his post as a gynaecologist at Aberdeen Royal Infirmary and he’s back here, he’s got a clinic. Another one is back here to work for the procurement department. The attitude is that we want to develop our country.”
The move is proving incredibly rewarding.
“Every morning before I get out to do my running, I’ve made a difference to one to three people’s lives, whether that’s someone who has come to me with a problem with their children’s education, somebody comes in sick, they’re in hospital and they need money. It’s not that much money, but I feel as if I’m making a difference. Whereas in the UK I get up, put my suit on, make big speeches, get congratulated, get paid very well and come back home. Meanwhile, Africa is still where it is. Somebody needs to fix it,” he says.
There is commercial opportunity, he acknowledges, as Sierra Leone builds from scratch during its post-war reconstruction and as international money finds its way into the country. But being a part of that development is far more compelling and exciting.
“Everything means a lot more. The elections mean a lot more; policymakers’ decisions mean a lot more. I don’t want to come back here in 10 years with kids who barely speak the local language, who only claim they’re Sierra Leonean because their parents are and I find myself a stranger in my own country,” says Sisay.

From London To Africa  In The Brain Gain Game

“I may have left Nigeria, but Nigeria has not left my heart,” says Beatrice Hamza Bassey, a Nigerian partner at the New York offices of prestigious law firm Hughes Hubbard. She is a product of a country many have fled to seek greener pastures in the great Nigerian brain drain.
Nigerians are fanatical about tertiary education. At home and abroad, they pursue exceptional professional qualifications; however, only a handful, willingly invest their expertise in the country as many a Nigerian are caught in the zeitgeist of ‘finding the golden fleece’. The gross underfunding of educational institutions has left the quality of education questionable as many migrate to develop expertise abroad.
Expatriate skills are highly sought after to make up for the lack of skill in the country. For many, the causes of the brain drain, is a double-edged sword. Those who were privileged to be educated in the West easily secure employment in Nigeria, which prompts young Nigerians to follow in their footsteps. At the same time, there is a high rate of unemployment among local graduates.
This shows a dire need to establish more educational institutions to accommodate the country’s expanding population while simultaneously providing the same standards as Western institutions.
Bassey, who also sits on the board of the Nigerian High Education Foundation, says: “Nigeria produced people like me. The education I had there prepared me to compete on the global stage. This means that we once had an excellent structure which we must find a way to return to. I’m very passionate about issues concerning education in Nigeria and the plan is to help raise more funds to push this course forward.”
She is a product of the famous Queens College, Lagos, University of Maiduguri and Nigerian law school. Bassey believes that in spite of the good, corruption still has the country in its firm grip.
“I was noticed because I worked hard. With hard work, the sky is your limit here. In Nigeria, hard work is not just enough.”
At the Pan African University, home to the prestigious Lagos Business School, FORBES AFRICA meets graduate students who are passionate about entrepreneurship.
Graduate student, Chivuzo Offiah, is positive about the future.
“We have the resources, the human capital and immense potential, this is why there are so many expatriates doing business here. Yes, a lot of professionals have left the country but there are still a lot of equally smart people here who can turn this situation around.
“Nigeria needs to give these people a chance. Executing the right policies at government level will make all the difference. Nigeria is a market for any economy. We need a critical mass of Nigerians who will clamor for change. You don’t wait to be empowered, you grab empowerment with your hands,” he says.
Offiah’s view is echoed by Godson Ikiebey, a PhD student in government policies.
“The government is inept, corrupt and incompetent but I still believe in the future of this country. I believe in remaining here to be the change we are clamoring for,” he says.
Jeremiah Iyamabo, a PhD student in marketing communications, is from a different school of thought.
“Based on the status quo and my goals, I do not intend to remain in Nigeria as the structure is not enabling. I tie the issue of the brain drain to the collapse of our collective value system, which has led to the breakdown of infrastructure. Why would I be faithful to a system that doesn’t have an enabling infrastructure for our development? There is a great disconnect between the educational institutions and what the industry needs. It is the responsibility of the government to bridge that gap and put the right structures in place.
Tope Falade, another master’s student, is also concerned about the future.
“I blame the citizenry of this country for not being bold enough to demand accountability from those we put in power.”
Previous attempts to reverse the brain drain, by attracting talent that had left the country, proved futile. For Nigeria, the impact of the brain drain is too costly and cannot be ignored any further.
In recent years, the Nigerian government—under the leadership of President Olusegun Obasanjo—addressed the issue of turning the brain drain into a brain gain through the formation of two new organizations. Nigerians in the Diaspora Organization (NIDO) and the Nigerian National Volunteer Service (NNVS) were created to harness the skills and talents of the Nigerian diaspora.
Bassey said: “On the brain gain, I won’t hesitate to find ways to lend my expertise to my country where required and I will embrace the opportunity to bring my skills back home in due course.”
From the halls of Nigeria’s finest institutions, to the corner offices of prestigious firms across the globe, all voices lean towards one truth—the future of Nigeria’s work force, dangles on a precarious precipice.
“We will be doing ourselves a great dis-service as Nigerians, if we don’t find a way to return to the previous level of excellence on all facets,” says Bassey.

Should I Stay  Or Should I Go?

A year ago—eight years after retired nurse, Jamela Mogodi, started farming—the only satisfaction she was getting from all the effort she was putting into her 28-hectare farm was growing her own food. Every now and again, there was a little entrepreneurial excitement as she sold her tiny surplus at the nearby market for pocket change.
To take her green beans, butternuts, green peppers, dry beans and tomatoes beyond her remote Julesburg town was a wish the 70-year-old thought would perhaps come, for someone else in her family, long after she was dead. She had never imagined that on a fine August morning in 2012, she would be the toast of one of the world’s biggest retailers.
And there she was, before a few dozen journalists who had traveled 427 kilometers from Johannesburg, to her Limpopo growing fields. Walmart, the retail giant from the States, had bussed-in the scribes to witness what it called the first harvest of a multi-million dollar farming-assistance flagship project, called the Ezemvelo Direct Farm Program.
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Established last year through an initial investment of R15 million ($1.8 million), it is Walmart’s idea of fending off or disproving its critics who have vowed to oppose the company’s entry into the lucrative South African market. By the way, two of Africa’s richest 25 people—billionaire Christo Wiese and multi-millionaire Raymond Ackerman—made most of their money from supermarket chains and discount stores. Their South African retail empires Shoprite and Pick ‘n Pay—rank one and two respectively in terms of size, while Walmart’s partner, Massmart—the parent company of Game, Dion Wired, Makro and Builders Warehouse—is the third largest.
Despite the fact that it is a done deal and already growing vegetables in Limpopo, the Congress of South African Trade Unions (Cosatu) has vowed to oppose Walmart’s Massmart takeover, until the bitter end. In submissions to the country’s Competition Commission, Parliament and the courts, the union federation cites a litany of allegations: a so-called anti-union attitude; a ruthless approach to keeping down wages; a poor health and safety record; gender, racial and other forms of discrimination; job losses; and the alleged bullying of farmers, manufacturers and suppliers.
Walmart was of course quick to counter the accusations, announcing a five-year world vision and global commitment to selling $1 billion in food sourced from 1 million small to medium farmers like that of Mogodi of Limpopo. The merger has since been approved.
In South Africa alone, through Ezemvelo—which means from the earth—the company has said it intends to spend R15 million ($1.8 million) over the next three years and to assist between 30 and 50 smallholder farmers with finance, pack-house refurbishment, skills development as well as sourcing fresh produce directly from small farms and cooperatives run by women and previously disadvantaged black people. Benefits to farmers include: the transfer of knowledge and skills on sustainable growing techniques; reduction of waste, environmental impact and input costs; as well as growing their income. You could argue that this is the kind of thing that governments normally do.
The most senior Walmart official during the tour of Limpopo was Donald Frieson, who goes by the title of chief integration officer. He says he’s been in South Africa for more than a year overseeing “the integration process”—which he says entails aligning Massmart’s merchandizing, sourcing and back office systems with those of the new parent company.
It’s all been working quite nicely, he says.
“The foundational phase is done and the focus is now on the pulling phase.”
Apparently this entails bringing on board some of the best practices found in countries similar to South Africa.
What about the unions?
“We don’t find that to be a barrier, we have no issues at all,” he says.
Frieson says the talk is largely due to misconceptions.
“When you are big there’s plenty of room for speculation. You may not be founded in that community, but you can be part of that community. We think globally, but act locally. Once we are in the market, people begin to understand the value we bring. The business case is there. We make economies and societies better.”
As for the big fight with Walmart, that Pick ‘n Pay founder Ackerman promised in the July issue of FORBES AFRICA, all Frieson is prepared to say is: “We think competition helps the customer. Everyone wins. The marketplace wins. Competition makes you better.”
Whatever the attitudes of other retailers and of organized labor, if that of senior politicians is anything to go by, African National Congress ministers seem prepared to kiss Walmart and spit at their union allies.
Insisting on saying something at the end of the one-day tour—there were no unionists around—agriculture, forestry and fisheries minister Tina Joemat-Pettersson declared that “the marriage is working”, and called the journalists witnesses in church.
She and her Cabinet colleagues, among them the ministers of finance and of trade and industry, are awaiting the outcome of a study to be conducted by, among others, Nobel laureate and former World Bank chief economist Professor Joseph Stiglitz. This follows a March judgement of the Competition Appeal Court, that such a study be commissioned but only to “determine the most appropriate means together with the mechanism by which local South African suppliers may be empowered to respond to the challenges posed by Walmart’s arrival.
Very little, it would seem, is now going to stand in the way. The Cabinet ministers’ last statement on the matter read in part: “The ministers believe that Professor Stiglitz will add depth and global know-how to the work of the panel and can assist the parties to identify an appropriate and constructive remedy to the potential negative public interest effects identified by the Competition Appeal Court.”
This means that Mogodi will realize her wish sooner, rather than later—she wants to run her farm independently within a year, but not before she raises enough money to fence it to keep animals and trespassers at bay and throw away those broom bushes that presently define the boundaries.

Walmart Tries To Be  Down To Earth

It all started with an article in Forbes 14 years ago. Steven Kark was paging through the magazine when he was struck by an epiphany. The article was about three businessmen in the United States who were raking it in through the automated teller machine (ATM) industry. Couldn’t he be a millionaire too?
Kark was 25 at the time, fresh out of university, had just married and found a new job. It made more sense to stick to this steady job but the article lit an entrepreneurial flame in him that refused to go out. He wanted to know more about the industry and bring it home to South Africa.
It wasn’t a spontaneous decision, he mulled over the idea for about a year, before he took the risk. He quit his job, booked his ticket and was off to the States. He spent almost a year there, absorbing all he could about the payment services industry, meeting manufacturers and securing contracts. Kark then bought a cargo container loaded with 23 machines and headed for South Africa. When he arrived, contract in hand, he had no clue how he would pay for the cargo, or even who he would sell to.
“In South Africa banks were wholly responsible at the time for putting in ATM machines. If convenience stores like ‘Seven Eleven’ or ‘Kwik shop’ or a ‘BP Express’ wanted an ATM [they] were totally reliant on [the] bank to put in an ATM,” says Kark.
False promises from investors forced Kark to turn to family and friends. But that wasn’t the only curve ball coming his way. Their first deal with a bank went south.
The bank in question was Saambou. The year was 2002, which saw a dramatic collapse of the bank.
Growing distrust about one of the bank’s directors led to a bank run, as rumors of the bank going under spread, it soon closed down, failing to meet the demand. It was liquidated and bought by one of South Africa’s biggest banks, First National Bank (FNB).
“That was our Black Friday actually. We had all these machines, we were really flying. All those machines were under Saambou [and] it went south. In the end we [made] a deal with Absa, they were quite ready to step into Saambou’s shoes… and today they are fantastic partners of ours,” says Kark.
Today he is the co-founder of Transaction Capital, listed in June, valued at R4.7 billion ($576 million). Transaction Capital wholly owns Kark’s three sub companies, installing ATM machines and dealing with electronic payments. Although the business is diversified, Kark treads carefully.
“We work in close collaboration with the banks today, which are expanding their footprint. If you’re going to push north outside of South Africa, you need to do it in absolute collaboration with a like-minded bank,” says Kark.
Paycorp—previously called ATM Solutions—is the subsidiary that is taking Kark north. It has more than 4,500 independent machines in South Africa and 200 in Namibia and installs at least one-a-day in shops from Cape Town to Windhoek. The fruit of 12 years of business, which has been anything but smooth.
“It was all hands on deck, I used to install the ATMs; I used to sell [them and] cash them myself. But our first time in Durban [I remember] we couldn’t offer a ‘Cash-In-Transit’ vehicle… We helped one retailer load his machine. We would go there every single morning, his wife would come out with cash hidden under her clothes and he would leave us in the back room and we would sit and load up the machine. It was unbelievable stuff, it was fascinating,” says Kark.
This industry is not for the faint-hearted. It is plagued with fraud, robberies and the infamous ATM bombings.
According to the South African Police Service Crime Report 2010/2011, there was a 61.5% increase in ATM bombings from the 2009/2010 to the 2010/2011 financial year. This after a 10.2% decrease from 2007/2008 to 2008/2009 as well 36.2% decrease from 2008/2009 to 2009/2010 financial year.
“It happens to us but certainly a lot less frequently than it ever has been. If it’s not bombings it’s something else, it’s a continuous battle where criminals will think of new and innovative ways to get their hands on your money… You need to try as best as you can to stay a step ahead,” says Kark.
One of the legacies of the ATM is that more people are using them, from cities to villages. It appears to be good for business.
“Where things are a bit geographically removed, you would find that there is a phenomenon of capital flight. If they work in town X and they live in town Y and Y doesn’t have an ATM, they would spend all their money at X. So if you put a machine where people live [they] have the ability to spend. It makes sense for everybody, there’s business for us, the community benefits, the retailer benefits and our partner banks get additional reach into those areas,” says Kark.
In fact, half of the ATMs installed in South Africa are in the villages. Little do people know, they sprang from an idea formed while paging through Forbes magazine.
Kark has framed that article, so he should, it helped make him a fortune.

Tag: September 2012

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