AMSA vs the Steel Downstream … and the Trump factor

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The whole world, including role players in South Africa, is up in arms about President Donald Trumps’ introduction of 25 percent import duties on steel.

According to Trevor Kincaid, for Reuters, this step can, among others:

  • unravel the global trading system;
  • raise prices on basic goods;
  • make American businesses less competitive; and
  • drive a wedge between the US and its European allies.

Economists agree that these duties, while protecting US steel companies, will lead to increased costs for US consumers and to more jobs lost than saved.  ‘There are many, many more US manufacturing workers who would be adversely affected by tariffs than workers who would benefit from them’, according to Justin Fox, writing for Bloomberg.

In respect of the prevailing 22 percent duties in South Africa, aimed at keeping AMSA operating, all these factors find application – obviously within a different context and unique outcomes. The point is this: duties are detrimental, whether implemented in South Africa, in the USA or elsewhere.

The risk to South Africa of losing US market share is real and cannot be replaced with other export markets – as a result of already lower price competition in those markets. Equally, more cost effective competitive mills will now shift their focus to find replacement markets, which would include South Africa and Africa, beckoning the question: would AMSA need even more protection? What makes the South African situation far worse is that AMSA is a monopoly with vastly higher production costs than the world average.

One difference between South Africa and the US is this: while the worlds’ protest might cause Trump to consider exemptions (in fact already has), the plight of the South African downstream has gone unnoticed by the global steel industry, and locally deliberately disregarded by the dti, ITAC and AMSA.

Ludicrously, all this more affordable, high-quality steel, now needs to find markets, but will be prevented from entering South Africa – as a result of the duties protecting AMSA. The Downstream desperately needs this steel to stimulate growth in the South African Steel Industry, which will contribute towards stemming the tide of persistent job losses.

ITAC should not procrastinate in removing the 22 percent duties currently in place. This is a golden opportunity which should not be missed.

It remains our expectation that, in the not too distant future, AMSA will be forced to partially close down – as a result of global and local economic realities. This is long overdue due to AMSA’s antiquated technology and high production cost.

When will common sense eventually prevail?

Kind regards

Gerhard Papenfus

State of the Nation Address – 2018

State of the Nation Address – 2018

A PERSPECTIVE ON THE
STATE OF THE NATION ADDRESS

Click here to express your views.

I cannot recall a State of the Nation address that grasped my attention so much as President Ramaphosa’s maiden SONA address on 16 February 2018. Without underestimating the challenges lying ahead of us in any way, I felt exhilarated, eager to get to work and to play my part to make South Africa a better place for all who live in it.

Firstly, as a South African, then as an employer and employer representative, but also from the perspective of a particular race group with a unique history (in the South African context), President Ramaphosa’s speech presented me with many challenges, but also filled me with a sense of responsibility and renewed hope.

From my perspective, here are the statements which stood out:

The President recounted President Mandela’s wisdom, his unfailing humility, his abiding compassion and his essential integrity and challenged all South Africans to devote their every action, every effort and every utterance to the realisation of his vision of a democratic, just and equitable society. He called on us to reinforce our commitment to ethical behaviour and ethical leadership.

He envisaged a country where its peoples’ prospects are determined by their own initiative and hard work, and not by the colour of their skin, place of birth, gender, language or income of their parents.

He called on us to reaffirm our belief that South Africa belongs to all who live in it. He reminded us that there are 57-million of us, each with different histories, languages, cultures, experiences, views and interests; that although we are a diverse people, we are one nation; a nation at one, bound together by a common destiny.

He reminded us of the necessity of unity and harmony among all the people of this great land; that although we differ on fundamental issues, we are at one.

He called on our commitment to work together to find jobs for our youth; to build factories, roads, houses and clinics; to prepare our children for a world of change and progress; to build cities and towns where families may be safe, productive and content.

He gave recognition to the fact that there is still a lot that divides us and specifically refers to our highly unequal society, in which poverty and prosperity are still defined by race and gender. He called on all of us to take up the responsibility to build a new nation, to confront the injustices of the past and the inequalities of the present. He called on us to do so even under difficult conditions.

The President pointed out that South Africa, in recent years, experienced a reverse of the gains we had achieved previously: poverty levels have risen, unemployment has gone up and inequality has persisted and he recognised that, for several years, our economy has not grown at the pace needed to create enough jobs or lift our people out of poverty.

He challenged South Africans to seize this moment of hope and renewal to work together to ensure that we make a meaningful difference in the lives of all of us.

The President confirmed that, in 2018, job creation, especially for the youth, will be at the centre of our national agenda, pointing to the following measures to address the unemployment agenda:

• the convening of a Jobs Summit within the next few months to align the efforts of every sector and every stakeholder behind the imperative of job creation; the Job Summit is expected to generate practical solutions and initiatives that will be implemented immediately;

• the addressing of the decline of our manufacturing capacity over many years, which has deeply affected employment and exports;

• endeavours to re-industrialise on a scale and at a pace that draws millions of job seekers into the economy, as well as to promote greater investment in key manufacturing sectors through the strategic use of incentives and other measures; and

• the emphasizing of special economic zones to attract strategic foreign and domestic direct investment and build targeted industrial capabilities and establish new industrial hubs.

Working in partnership with business, organised labour and community representatives, the President pointed to opportunities for young people to be exposed to the world of work through internships, apprenticeships, mentorship and entrepreneurship.

As far as the Mining Sector is concerned, the President expressed the need to resolve the current impasse and agree on a Charter that both accelerates transformation and grows this vital sector of our economy.

The President affirmed that growth of the South African economy will be sustained by small business, as is the case in many countries. He pointed to our shared responsibility to grow this vital sector of the economy and committed Government to work with its social partners to build a small business support ecosystem that assists, nourishes and promotes entrepreneurs. He committed himself to reduce the regulatory barriers (red tape) for small business.

The President again pointed to the importance of a healthy Agricultural Sector. He confirmed the need for land expropriation (without compensation), but emphasised increased agricultural production and improved food security. From the President’s speech it is clear that huge challenges are facing this sector, but he committed Government to a process of consultation to determine the modalities of the implementation thereof.

The President promised that, in 2018, the tide will be turned on corruption.

While the President applauded many government officials who serve with diligence and commitment, he acknowledged the challenges that South Africans face when they interact with the state, admitting that in too many cases, they often get poor service or no service at all. He determined that everyone in the public service should undertake their responsibilities with efficiency, diligence, integrity and a new discipline – to do things correctly, to do them completely and to do them timeously.

To all South Africans, business in general and employers in particular, it needs to be emphasized that this is not the time to sit back in scepticism, waiting to see if all of this is going to materialise. Now is the time to put our collective shoulder to the wheel, to grasp this opportunity – a second chance – afforded to us; to make sacrifices where it is required, but also to differ and debate where that is required; to give it our everything to secure a better future for all South Africans.

Kind regards

“A rising tide lifts all the boats”
A slogan of the New England Council, borrowed by John F Kennedy.

UN Environment supports women on energy entrepreneurship in East Africa

Over 25 Women working as energy entrepreneurs are expected to participate in this training. Other women entrepreneurs from Europe including Italy will also participate in this training to boost south-south cooperation and share best practices.

The objective of this training is to enhance access to energy in rural communities, local enterprises and job creation. This will positively impact on health and education services, women empowerment, environmental protection and climate change mitigation.

The workshop will be held at the Kenya Power and Lighting Company (KPLC) facilities in Nairobi and will use the 20 – 40kW micro-grid for hands-on training. It will support managers and engineers to plan, design, build and operate grid connected as well as hybrid mini-grids.

The workshop will be held within the framework of the implementation of the innovative environmental solutions, as recommended by the African Ministerial Conference on the Environment (AMCEN). The Conference has called on countries in the region to strengthen the technical and business skills of African women entrepreneurs in the energy sector.

The workshop will be led by the Micro-Grid Academy (MGA). The academy is an Eastern-African capacity building platform that aims to enhance access to energy and green jobs market through technical and entrepreneurial training programmes. The platform focuses on decentralized renewable energy solutions.

UN Environment will convene a one-day meeting on 10 April 2018 to share best practices on renewable energy development among trainees, instructors and representatives of partners of Microgrid Academy.

Nominations for 200 Young South Africans 2018

Each year the Mail & Guardian profiles interesting young people who have stood out from the pack and who show us what to look forward to in the country’s future. These under-35s are talented and have shown themselves to be leaders. They are the ones to watch.

Do you know (or are you) an exceptional under-35? Complete the form below.

Entries close on April 30.

You can see the 2017 M&G 200 Young South Africans here.

SAVCA Launches Industry Awards

The Southern African Venture Capital and Private Equity Association (SAVCA), as part of the organisation’s 20th anniversary celebration, has announced the launch of the inaugural SAVCA Industry Awards. These annual sector accolades will recognise portfolio companies that have thrived from private equity and venture capital investment in the region.

All investee companies (headquartered in Southern Africa) currently benefitting from these types of investments, or that have had investors exit within the last 12 months, are eligible for consideration by the judging panel. Judges will comprise business leaders and captains of industry, with the awards being supported and sponsored by Investec Corporate and Institutional Banking.

“With an increased government focus on small business as a contributor to overall GDP and employment growth, these awards will serve to highlight the achievements of portfolio companies as they relate to innovation; environmental and social impacts; profit and investor returns; job creation and reputation,” says Tanya van Lill, SAVCA CEO.
Categories include:

  • Small Companies – seed/early stage growth investments with an enterprise value of under R50m and revenue of under R200m.
  • Medium-sized Companies – expansion stage investments with an enterprise value of R50m to R1bn and revenue of R200m to R2bn.
  • Large Companies – with an enterprise value of more than R1bn and revenue of above R2bn per annum.
  • Chairman’s Award – recognising exemplary work within the sector, awarded at the judges’ discretion.

“We are delighted to be associated with the very first SAVCA Industry Awards as lead sponsor,” says Lourens van Rensburg, Head of Investec Corporate and Institutional Banking.

“We are especially proud to be part of an event that recognises the exceptional performance of portfolio companies in the sector, as well as their contribution to society and Southern Africa as a whole.”

Adds van Lill, “We are looking for businesses that stand out amongst their peers; demonstrating skilled execution of particular projects as well as evidence of bold and authentic leadership. The positive impact that private equity/venture capital has had on the business also needs to be reflected – this includes mentorship, strategic advice, governance and new market access.”

Private equity and venture capital investors can nominate investee companies or these businesses can nominate themselves by submitting an entry form via the SAVCA Awards website. Judges will select a shortlist of finalists across the outlined categories who will be assessed and interviewed. These findings will be presented to the judging panel, with the process culminating in winners being announced at a gala dinner and awards ceremony at Monte Casino in November 2018.

Nominations for the awards close on the 15th April 2018.

Russian Investors are warming to South Africa

There is considerable and growing interest among Russian companies in investing in South Africa, according to a study based on surveys and cited by a South African government agency responsible for managing the country’s global reputation.

Increasing numbers of Russian businesspeople consider starting business in South Africa and there is a decline among those who rule out making the country part of their business geography, the Brand South Africa agency said in a statement, citing a study by Paris-headquartered global market research firm Ipsos.

The study involved two surveys, one in 2016 and one in 2017, among Russian business executives authorised to make investment decisions.

While in the 2016 survey 68 per cent of respondents said they considered doing business in South Africa, the proportion was 76 per cent in the 2017 poll.

Ten per cent of those questioned in the 2017 survey were currently doing business in South Africa while none in the 2016 poll had any current business presence there.

The 2017 survey also suggested there had been a numerical decline among Russian entrepreneurs who ruled out any chance of launching business in South Africa – 8 per cent expressed this attitude in 2017 survey compared with 20 per cent in the 2016 poll.

The study suggests that cheap labour and a favourable climate are seen by Russian businesspeople as the greatest attractions of South Africa, and that politics are the main obstacle to Russian investment in that country.

Brand South Africa said in its statement that, overall, 78 per cent of respondents had spoken positively about South Africa, that 82 per cent had expressed respect for the country, and that 44 per cent were willing to recommend South Africa as a country to invest in.

In seeking more foreign capital, South Africa has set up a one stop shop service for investors – InvestSA, a division of the Department of Trade and Industry. InvestSA handles all the regulation, registration and licensing for investors.

UKZN alumnus runner-up in global techno entrepreneurship contest

Global Start-up Weekend Women (GSWW) South Africa winner, UKZN alumnus Ms Farnaaz Shaikjee was the runner-up at the global finals of the competition held in Paris.

Shaikjee holds an Honours degree in Accounting and was an academic trainee at UKZN’s School of Accounting, Economics and Finance. She presented her Beauty Butler app at the finals.

Celebrating entrepreneurship in women, the global event involved women from more than 20 countries showcasing their diverse, inclusive and daring technology ideas.

Addressing the finalists, French Secretary of State in Charge of Digital Affairs Mr Mounir Mahjoubi emphasised the importance of start-ups to any economy, especially in times of recession as entrepreneurs help build up an economy by providing jobs and decreasing poverty.

Mahjoubi also pointed out that initiatives like the GSWW contributed to making the world a better place as it gave aspiring entrepreneurs the courage to pursue their ideas.

After winning the South African edition held at UKZN’s Graduate School of Business and Leadership, Shaikjee said the experience of an ‘ordinary girl from Durban’ becoming a runner up in Paris was like a dream, especially as she had to compete with individuals from first world countries such as the United States, Australia and France.

Shaikjee said travelling to Paris and being part of the GSWW was an experience she would never forget. ‘I’ve been abroad before, but nothing compares to Paris. It is truly a magical city one can easily fall in love with. Parisian life seems to be all about good food and high fashion. The French are really friendly and even though my French was limited, they tried their best to communicate.

‘The finals in Paris were challenging as we had to pitch our business idea in four minutes compared with five minutes in the South African competition. It was really nerve wracking as I had no home ground advantage. Most of the judges did not speak English as their first language, I had a global audience and I was competing against representatives from over 20 countries,’ she said.

Looking to the future Shaikjee wants to get her Beauty Butler app up and running in order to create a platform that will maximise the convenience of consumers seeking beauty services.

Regional and Local Economic Development (RLED) academic Professor Shahida Cassim, who organised the GSWW Durban contest, believes the initiative was a success as it achieved its goal of nurturing the entrepreneurial spirit and contributing to a start-up culture, particularly for women in the region.

Algeria won the contest with their business idea Safe Sahara – a digital app designed to detect and locate camels by placing a GPS tracker on the animal, which would link to a web mapping service such as Google Maps.

MC III takes stake in Groupe COFINA

Mediterrania Capital Partners has acquired a minority stake in Groupe COFINA, a meso-finance institution in West and Central Africa, through its third fund MC III.

Along with technical assistance, Mediterrania Capital Partners’ funding will enable Groupe COFINA to raise up to €50m in capital and debt over the next three years.

With the support of Mediterrania Capital Partners, COFINA plans to increase its ability to finance its clients and accelerate its regional growth, with four new operations scheduled for launch in West and Central Africa by 2021.

Albert Alsina, Founder and CEO of Mediterrania Capital Partners, said: “We are proud to contribute to the success story of Groupe COFINA. This African group has managed to establish itself in a key business sector and lead the market in five African countries. We expect that the new expansion phase will both increase COFINA’s profitability and position itself as a model for all the other players in the sector.”

In joining the COFINA financing round, Mediterrania Capital Partners guarantees the group’s consolidation as well as increasing the amount of financing available for entrepreneurs.

With more than 1,000 employees and managing 90,000 clients across its six subsidiaries, COFINA has positioned itself as the “missing middle”, particularly for entrepreneurs and SMEs who have difficulty in obtaining medium- or long-term financing (more than 70% of all businesses in Africa, according to the African Development Bank).

Many existing financial institutions have neither sufficient knowledge nor suitable systems for evaluating and monitoring the projects of SMEs, and they compensate for this by demanding highly costly guarantees.

Meso-finance assists entrepreneurs or SMEs whose financing needs have outgrown microfinance institutions but whose entrepreneurial structure is still considered insufficiently formal for traditional commercial banks.

Only 6.4% of all SMEs in Sub-Saharan Africa say they have had access to financing, compared with 27% in South-East Asia.

Jean-Luc Konan, Founder and CEO of Groupe COFINA, said: “Following our initial expansion phase, the signing of this partnership with Mediterrania Capital Partners marks a new stage in COFINA’s growth within its still-promising market. In Africa, lending to the private sector represents less than 20% of GDP, compared with 30% in South Asia and 40% in Latin America. In spite of their immense potential, the markets in which we operate are very poorly served by traditional banks despite their very many entrepreneurs.”

Liberia’s Leelai Kpukuyou To Receive ‘African Female Business Leadership Excellence Award’ 2018

As an actor in Liberia’s post-war economic recovery, Leelai is one of Liberia’s and West Africa’s rising prominent entrepreneurs with key focus on international trade and development.

Leelai has keen sense and ground knowledge on the day-to-day business environment of Liberia in all sectors. Due to her consistent work and tireless innovation rooted in trust, she has developed credible links with diverse business actors in the MRU (Mano River Union), ECOWAS (Economic Community of West African States) and other parts of Africa.

Leelai is a strong advocate for youth and women empowerment through entrepreneurship with clear focus on private sector development, developing suitable environment, strategy for international investors in Liberia and encouraging the international increase in trade and commerce in Liberia

She is the Secretary-General (SG) of the Liberian Business Association (LIBA), from 2011 to present, the CEO of Mini Mall Enterprise, Inc. and Board Chair of Sanoyea Realty Incorporated, a sister company to Mini Mall Enterprise, Inc.

Mini Mall Enterprise Inc and Sanoyea Realty Inc. are Liberian owned companies with a 21st century model of doing sustainable, people centred, trusted innovation solutions in Real estate, Petroleum Supply, Retail stores, General merchandise as well as business consultation. Currently she is looking to adding to her business portfolio, Technology and Tourism.

As CEO of Mini Mall Enterprise Inc., Leelai initiated a commission-based distribution model, where more than forty women and youths who are mainly high school dropouts, teen-aged mothers, ex-child soldiers from the Liberian civil war were supplied various goods on credit to sell and pay the cost of the goods while retaining the profit.  Today, more than 75% of these disadvantaged Liberians are now self-employed and some have diversified into commercial transport (motorbike), shop owners, cross border traders, etc.

At the Liberian Business Association (LIBA), Leelai is also responsible for Youth and Women Empowerment through Entrepreneurship. She visits various universities and business training institutions of higher learning to share with business students her experiences and encourage the spirit of wealth creation by starting their own business rather than seeking jobs that are already scarce.

eading to Liberia’s 2017 general and Presidential elections, Leelai served as Guest Speaker on Election and Peace for the Girls Peace Summit at the U.S. Embassy in Liberia. The forum was intended to awaken the consciousness of young women from across Liberia on election and peace.

Leelai served as one of the Mentors for the Goldman Sachs sponsored CHF 10,000 Women Certificate Program for Women Entrepreneurship (CPWE) in Liberia from 2010 – 2014.

As an Advocate, Leelai was instrumental in negotiations with the Central Bank of Liberia which resulted to US$5 million stimulus package provided to Liberian owned-businesses. This facility provided easy access to finance through selected commercial banks to hundreds of Liberian-owned businesses covering low interest rate and longer term repayment period (2013-2018).

Leelai has been in the forefront of constructive engagements with the Liberian Government to create the enabling environment for Liberian-owned businesses to thrive and make significant impact in Liberia’s economic development. One of the notable outcomes of these engagements is:

A MoU signed between the Ministry of Commerce and Industry and the Liberian Business Association to collaborate in capacity building programs for Liberian-owned SMEs, implementation of the Small Business Empowerment Law of 2014, which allows for 25% of procurement by the Government of Liberia Ministries, Agencies and Commissions, to be awarded to Liberian-owned businesses.

During the 2017 electioneering process in Liberia, Leelai undertook a series of campaigns at several Liberian-owned business premises and some local markets in Monrovia to engage with Liberian business women on the need to demonstrate peaceful posture during and after the elections.

Through her strong passion for development of the domestic private sector, Leelai has worked with several stakeholders, locally and internationally.

Led Liberia private sector delegation to London along with the Government of Liberia delegation, to participate in a UK-Liberia Partnership dialog – focusing on investing in infrastructure, energy and agriculture in Liberia.

Represents LIBA at the UNDP and UNMIL round-table with Stakeholders in Liberia,

One of the main actors to formulate legislation to regulate food and establish an effective standard authority to govern consumer products,

Led LIBA delegation to participate in Improved Business and Investment Climate in Africa Conference. Sponsored by European Union and implemented by the World Bank in Lagos, Nigeria,

Served as co-panelist at the UNMIL Entrepreneur Fair intended to transition UNMIL employees into the private sector,

Participated in discussion on Trade Facilitation Agreement of the WTO that led to Liberia’s accession to the WTO in 2016 and IMF annual meeting in Washington, DC,

Participated in ILO conference in Geneva, Switzerland and the United Nations High Level Panel, on post 2015 Millennium Development Goal Meeting in 2013 in Monrovia, Liberia.

In 2014, Leelai was humbled to have accommodated in one of her properties some of the first ECOWAS Multinational Medical Doctors who helped in the fight against the deadly Ebola Virus in Liberia.