Thursday, 3 August 2017

Who better than an auditor to analyse South Africa 2017?

Few are more ideally placed than Nonkululeko Gobodo, South Africa’s first black woman to qualify as a chartered accountant and a luminary among her peers.

Gobodo has made it her business to analyse leadership through a consultancy she established last year after stepping down as chairperson of top-tier auditing firm Sizwe Ntsaluba Gobodo.

The corporate sector has been hugely receptive to Nkululeko Leadership Consulting, she said. Not so the government departments to whom they have offered their services.

As is to be expected, Gobodo is methodical in her assessment of the current political malaise. She posits a question that throws the crisis into sharp relief:
How is it possible that all our governance structures seem to have failed?

She lists them all: Parliament, Chapter 9 institutions, the judiciary, the criminal justice system. And that’s just on the part of government. What about the corporate governance structures, such as the Companies Act, old and new, not to mention the freshly minted King IV rules on corporate
governance?

“In spite of all of those governance structures, it’s like we don’t have frameworks. How is it possible that at least these checks and balances that we’ve put in place are just failing, dismally failing?” Gobodo told TMTV in a recent interview.

The seasoned businesswoman seems genuinely puzzled as she raises these questions in her modest boardroom in Parktown, Johannesburg, where the purple wallpaper is echoed up in the multi-coloured suit she is wearing, a quilt of bright hues.

The figure she cuts could hardly be more South African. All her neatly put together look needs is a vuvuzela or a makarapa. Gems the size of five cent coins dangle from her ears (they could be diamonds but my untrained eye can’t tell) and her knees are covered in a blanket emblazoned with the colours of the South African flag.

“We are not naïve. We know there’s no perfect governance structure,” she adds. “I suppose we always forget the human factor, from the corporate side.”

Gobodo, who earned her stripes at KPMG and also worked as a university lecturer after graduating, does not come across as a pessimist. But it seems the Mthatha native seems has been somewhat disillusioned.

“We knew about what was going on with corruption but I don’t think we understood the depth of it and how widespread it is and how it has infiltrated every fibre in the country,” she said.

The conversation takes place weeks after the ANC held its national policy conference. Despite all the commissions and discussion documents issued during that week-long talk shop, Gobodo did not see any evidence that the ruling party is serious about tackling corruption.

“The ANC has allowed this (corruption) and the disappointing thing for me is how they have just handled this crisis in the ANC,” she said.

“Besides just the corruption, since Polokwane (where Jacob Zuma was elected in 2007) the ANC has gone into crisis … For 10 years … the crisis has become so deep that they seem to be paralysed to me, which I just find shocking.”

Gobobo’s perspective is quite unique, given that Sizwe Ntsaluba Gobodo has been one of the government’s most favoured auditing firms over the past three decades.

Their client rostrum includes the likes of Eskom, Transnet and Denel, the very state-owned entities that have been at the centre of state capture allegations.

Gobodo therefore has greater access to those in power than many in corporate South Africa. Has she ever tried talking sense into those at Luthuli House or the Union Buildings?

Gobodo laughs at the question but reveals that she did raise her concerns after the Constitutional Court found last year that President Zuma had breached the constitution by failing to account for millions spent on his Nkandla estate.

She won’t say exactly who in the ruling party gave her an audience. We prod a bit further: Just give us a sense of how high up the indifference goes? “The indifference is high up, it is high up,” she responds pensively.

Not only is it high up, by all appearances it’s also widespread. And getting rid of Jacob Zuma may not be the magical panacea that South Africans are so desperate for.

“It’s about how do we fix the ANC, such that it provides the kind of leadership that the country needs to move forward to this destiny that we all know is possible,” Gobodo offers.

“So, that’s what they need to fix. Removing Zuma is neither here nor there for me. It’s about how do we emerge in December with a leadership in the ANC that we can have confidence in.”

At times she bangs the table to underline important points.

“Looking at them now, I have no confidence that in December we will come out with a positive (solution)… All these things that have been exposed and this path of self-destruction that I’m talking about should have been a wake-up call.”

The award-winning businesswoman said she has given up on doing business with government.

“We’ve been knocking on doors but no one is interested … We’ve been submitting proposals. We have received no work from government. At some point, we decided not to put any more effort into it,” she said.

“For us, we also want to work with organisations who are committed to transformation … If you are not committed to transforming yourself, we are also not interested.”

One of the great tragedies of the ANC’s effete leadership has been the demise of state-owned enterprises. The supposed engines of economic growth have become “slaughterhouses” for black talent, Gobodo believes.

“For us as black people, they (state enterprises) are a vehicle for talent development and the development of leaders, but that is where talent is destroyed and corrupted, and leaders are destroyed. They are just not fulfilling their purpose,” she said wistfully.

What advice would she, as a leadership guru, give to Deputy President Cyril Ramaphosa and Nkosazana Dlamini-Zuma, the main contenders to succeed Zuma as party president in December? For that matter, what counsel would she offer the ANC?

“My advice is that we are human beings, we all make mistakes. And I think the ANC should acknowledge that huge mistakes have been made.”

Wednesday, 26 July 2017

Limitless label - Mvula nominated for KZN Young Achievers Awards


 Less than a year after pursuing his business dream, Siyabonga Mvula has been recognised for his entrepreneurial efforts.
Mvula has just been nominated in the business category of the KZN Young Achievers Awards.

Mvula, a qualified accountant, left his cushy government job last year to launch his own wine label.

He has since enjoyed great success by selling his products online.

The awards ceremony will be held on August 5.










Political uncertainty leads to drop in M&A deals in Africa this quarter

Baker McKenzie’s latest quarterly Cross-border M&A Index shows that there were 17 inbound M&A deals in Africa in the second quarter (Q2) of 2017. The 17 inbound deals reflect a 48% drop from 33 deals in Q2 2016. On a quarter-by-quarter basis, inbound deal volume also dropped - by 45% - from 31 deals in Q1 2017.

The total deal value for inbound deals amounted to USD 780 million, decreasing by 83% year-on-year and 88% on a quarter-by-quarter basis. The second quarter of 2016 saw USD 4.54 billion worth of deals. In the first quarter of 2017 USD 6.38 billion worth of inbound deals were concluded in Africa.

Morne van der Merwe, Managing Partner of Baker McKenzie in Johannesburg explains, “Foreign Direct Investment (FDI) in South Africa has decreased and this will continue until the local investment climate stabilises. Due to the credit ratings downgrades, the cost of raising capital for acquisitions has become more expensive, making deals more difficult. In addition, the Rand has been one of the most volatile currencies in 2017 and this volatility has suppressed deal appetite.

"These factors, combined with recent political instability and uncertainty, have resulted in a perception in the market of increased risks of doing business in South Africa. Global players are finding more attractive investment destinations elsewhere.

 "Further, almost half the continent’s M&A activity flows through South Africa, so recent South African developments have had a negative knock-on effect in Africa. Political uncertainty in other jurisdictions on the continent, such as the current election in Kenya, has also made investors wary of African deal making in the short term, although we expect this to change once stability returns to the region.”

The top target industry by volume and value in Africa was mining, which accounted for 23% of total deal count and USD 312 million or 40% of total value.



In terms of outlook for the mining sector in South Africa, van der Merwe says there is widespread agreement that the Mining Charter in its present form will severely impact the mining sector in South Africa. In addition, the recent proposal, published in the South African Government Gazette for comment, regarding a possible moratorium on mining and prospecting rights and the granting of applications in terms of section 11 of the Mineral and Petroleum Resources Development Act is cause for concern. If these measure come into effect, they will have a detrimental impact on transactions in the South African mining space.

Looking at the technology sector, the M&A Index showed no inbound technology deals in Africa in second quarter of 2017. This is in comparison to the global results, which noted a high volume of technology deals in the first half of 2017. Globally, besides H1 2016, the number of cross-border technology deals was higher in H1 2017 than in any post-crisis half-year period.

Van der Merwe explains, "Africa has several technology hubs, including one in Cape Town, South Africa and the development of technology in the banking and finance sector, for mass usage on the continent, is well advanced. A positive explanation for there being no inbound deals in this sector in Q2 2017, is that this is not due to lack of IT development in Africa, to the contrary, but because IT companies are structuring their operations in a way that allows them to enter into partnerships offshore and bring their operations into Africa through licencing arrangements.”




The Index shows that South Africa was the top target country for inbound deals by volume and value, accounting for 29% of total deal count and USD 422 million or 54% of total value in Africa. The top investing country by volume was Australia with three deals or 18% of total count. China deals had the highest overall value at USD 324 million or 42% of total.

“It is surprising that Australia was the highest inbound investor country by deal volume as one would expect it to be China or India. Australia is a resource-based economy, with the knowledge, know-how and asset base to attach to opportunities in Africa, so it does make sense that they would be investing heavily in African businesses,” notes van der Merwe.

Asia Pacific and the European Union were tied as top investing regions by volume, each accounting for 35% of total deal count. By value, Asia Pacific outpaced the rest with USD 487 million or 62% of total.

Cross border outbound deals painted a more positive picture. There were 15 cross border outbound deals in Africa for the second quarter of 2017, a decrease of 12% on a year-on-year basis, but an increase of 67% from the previous quarter. The second quarter of 2016 saw 17 outbound deals, while the first quarter of 2017 saw nine outbound deals. The total deal value, USD 1.52 billion, fell by 28% from USD 2.1 billion in Q2 2016, but more than doubled on a quarter by quarter basis from USD 665 million in Q1 2017.

Technology tied with Business Services was a top target industry for Africa’s outbound deals by volume with a total of three deals for the quarter (20% of total). In terms of deal value, the Financial Services sector led slightly with USD 535 million or 35% of total deals. Technology deals came in close second, accounting for USD 510 million or 33% of total outbound deals from Africa.

“An increase in development in African telecoms industries, as well as the opportunities presented by a rapidly developing financial services sector, remain key drivers of outbound investment activity in Africa. The growing financial services sector has also seen domestic banks make significant investments in technology, including in offshore companies. As discussed, the increase in outbound deals in the technology sector also points to African technology companies looking to base their local operations offshore,” he notes.

The Index also shows that South Africa outperformed other African bidders by volume and value for outbound deals, with eight deals (53% of total) amounting to USD 821 million (54% of total).  Top target regions for outbound deals were EU and Asia Pacific by volume, each with 40% share of total. The top target country from Africa by volume was India, with three deals accounting for 20% of total deal count.

The Global report  PDF

SA emerging fashion designers head to London

Fifteen of South Africa’s established and emerging fashion designers are showing off their fashion at Pure London, the United Kingdom’s most anticipated fashion trade show event this week.

The KwaZulu-Natal Fashion Council (KZNFC) has successfully facilitated the travel, accommodation and ground travel of 15 South African fashion designers and emerging fashion exporters to participate in Pure London at Olypmia in Kensington, London from July 23-25, 2017.

On Friday, the KZNFC gave the designers a send-off in Durban. In attendance were its board members, including Mrs Sizakele Moloko, Mrs Lindiwe Khuzwayo, Ms Lethabo Maseko, and the council’s current chairperson Zola Shabangu.

Pure London, which commenced yesterday is set to finish on Tuesday, July 25, 2017. It is the UK's most dynamic fashion and footwear gathering, where over 700 brands are expected to exhibit their work.

Highlighting the industry’s established and emerged designers, Pure London is at the forefront of capturing the surge of current street trends in the fashion industry. The event aims to celebrate the work of international designers worldwide.




The mandate of the KZNFC is to support and uplift the design and fashion sector of KwaZulu-Natal to ensure that the number of designers that receive support from the Council grows each year. Strategic programmes are delivered for junior, emerging and established designers with a focus on previously disadvantaged individuals.

Xolani Zulu, acting managing director of the KZNFC, said the Pure London trade show was important for any business as it was in a commercial location and invaluable for designers who were making inroads. “It is invaluable for any designers’ research into fashion trends,” he said.

Zulu believed that empowering designers was at the heart of the Council’s operational strategy.

From the 15 designers, Zama Mathe, Mike Narainsamy, Thembeka Vilakazi, Sandile Mngadi and Shaun Dugen attended the send-off on Fridayand gave the media a glimpse of some of the clothing they have on offer for the trade show.

“The platforms created by the KZN Fashion Council will always prioritize designers and their creative work. We have also started working on the next instalment of the Africa Fashion Exchange, to be hosted in Africa Month, May 2018,” Zulu said.

The KZNFC partnered with the South African Footwear and Leather Export Council on their international trade show missions in order to open up more designers to international opportunities and expand the amount of trade shows per year.

Zulu added that the KZNFC that would track the progress of the designers after they have returned to ensure that they improve where necessary and dedicate consistency where the Council has done right.

Shabangu said: “The KZN Fashion Council’s mandate is to develop export ready, globally competitive designers from all the 11 municipal districts of the province. We also serve as a vehicle for the national foot-print of development. We have now been tasked with facilitating communication with designers from Cape Town to Johanessburg and Pretoria.”

Maseko, also Project Manager for Clothing and Textile at the KwaZulu-Natal Department of Economic Development, Tourism and Environmental Affairs (KZN EDTEA) encouraged the designers to use the opportunities given to them grow their brands and “most importantly, to fly the South African flag high”.

“Do your best to market yourselves, establish contacts and make sure that you are able to sustain them. Wear your garments, show that you are proud of your own creations.

Sandile ‘Duke’ Mngadi, one of the designers, said he was planning to use the opportunity to break in the international market and establish networks with international boutiques to distribute his creations.

 Another designer, Thembeka Vilakazi, said: “this opportunity is about learning for me. This is my second time attending the trade show and I want to use this experience to improve on my past experience.”

Khuzwayo also a veteran fashion designer told the designers not to lose focus on the reason of why they were sponsored for the trip.

She said: “Remember this is a privileged opportunity. Be grateful. There’s a lot of work that needs to be done when you get to London. Be informed. Be attentive and respect yourselves. Strive to be in the right frame of mind, always.”

Businessman turns dumping site into thriving chesa nyama

Moshe Lesutu is living proof that one man’s garbage is another man’s treasure. The 41-year-old entrepreneur turned a dumping site in Garankuwa outside Pretoria into a thriving business.

What was one the neighbourhood refuse heap is now home to a butchery and a chesa nyama called LSU Pub & Grill. The eatery attracts all types — from celebrities and businessmen to kasi folk. It’s also become a popular spot for year-end functions and other events.

Like many entrepreneurs, Lesutu saw an opportunity where others saw an eyesore. But it wasn’t easy.
His biggest challenge was finding capital. But the key to success has been surrounding himself with the right people.

“For example, the guy who is managing the butchery we started together in 2010, when the place was still a car wash … so a person like that can never let you down, because he understand the challenges and what we have been through … he understand and respects your vision.”

Being supportive towards staff has also contributed to the success of the business.

“I always say to my staff, they can be anything they want to be in life. I always believe in giving young people opportunities. Like, if you tell me you can cook or you are a chef, I will say to you, ‘Here’s a kitchen, prove yourself … let me see what you can do.”

Lesutu has managed to keep the doors of LSU open for seven years, despite a tough economic climate. He believes a lot of that has to do with the location.

“I love my kasi … my place is accessible from different areas. There is a market for good food, I think it’s going to work, I can actually visualise it.”

In the end, it boils down to keeping people happy.

“Open the gate, make people feel very special and important. Respect people and treat people equally. Make your place look good. Prices need to be reasonable for people to afford, we are in the kasi. Make your products accessible to people,” he said.

His advice to aspiring entrepreneurs is to persevere.

“Things just don’t happen overnight … there are challenges everywhere, face them, learn from your mistakes. (It takes) hard work, dedication and passion.”

-Content by Gershwin Wanneburg, TMTV Media, 076 832 3141