The revival of Nigeria’s economy has gained momentum under the guidance of President Buhari’s ERGP programme; its ambitious targets yield results that seem to indicate that they will soon be superseded.
In spite of difficult times, Nigeria has been rated as the top 10 most improved economies in 2016/2017.
“Nigeria is a very resilient country in terms of economy,” states Mr. Venkatapathy Venkataraman Group MD at NIPCO.
<a href="https://www.forbesafrica.com/wp-content/uploads/2018/04/PENRESA-FINAL.pdf">DOWNLOAD FULL REPORT HERE</a>
<img loading="lazy" decoding="async" class="alignnone size-medium wp-image-35858" src="https://www.forbesafrica.com/wp-content/uploads/2018/04/MAKING-NIGERIA-224x300.jpg" alt="" width="224" height="300" srcset="https://cms.forbesafrica.com/wp-content/uploads/2018/04/MAKING-NIGERIA-224x300.jpg 224w, https://cms.forbesafrica.com/wp-content/uploads/2018/04/MAKING-NIGERIA-300x402.jpg 300w, https://cms.forbesafrica.com/wp-content/uploads/2018/04/MAKING-NIGERIA.jpg 446w" sizes="auto, (max-width: 224px) 100vw, 224px" />
This has been a result of the ERPG programme and its emphasis on industrialisation and diversification policies which boost capital inflows and encourages ease of doing business.
In November 2017 Godwin Emefiele Governor of the Central Bank of Nigeria CBN’s presented Nigeria’s economic outlook for 2018, predicting that national forex reserves will hit US$ 40bn in 2018. In introducing I&amp;E forex the improvement in the ease of doing business is guaranteed.
“The Central Bank of Nigeria (CBN) played an extensive role in ensuring relative price stability and in managing the dearth of foreign exchange,” declares Mr Obeahon Ohiwerei, Managing Director at Keystone Bank.
<a href="http://www.forbesafrica.com/focus/2018/01/19/nigeria-needs-new-national-carrier/" target="_blank" rel="noopener noreferrer">READ: Why Nigeria needs a new national carrier</a>
“If the tight monetary policy continues, and the Central Bank continues to manage the liquidity that makes FX, the economy may grow more than the 1.8% projected,” claims Mr Abubakar Jimoh, CEO at Coronation Merchant Bank.
Although energy sales in Nigeria account for up to 80 percent of all government revenue and more than 90 percent of the country’s exports, Agriculture and ICT sectors have flourished, providing steady growth, employment and investment opportunities.
The ERGP’s shift towards becoming import dependent has been particularly successful in Agriculture. Proforce MD, Mr Ade Ogundeyin declares, “the government is serious and committed about made-in-Nigeria goods. They are saying that if it can be produced in Nigeria you don&#8217;t import it.”
The government&#8217;s intention to use telecoms and ICT for economic development and financial inclusion is auspicious for the industry. Executive Vice Chairman of the Nigerian Communications Commission, Mr Umar Danbatta states that “telecoms contribution to GDP is now close to 10% and has been contributing 1.4 trillion naira to the economy.”
Minister of Power, Works and Housing Hon. Fashola confirms the commitment to IT, “We&#8217;re installing more broadband and connectivity across the country,” which in turn enhances a definite entrepreneurial spirit at play amongst the people.
The government has made it extremely clear that it will be pouring funding into infrastructure. Minister of Power, Works and Housing Hon. Fashola declares, “the investment in infrastructure is driving the value chain of the economic diversification.”
The government’s plans to modernise and restructure the country’s public transport system has proved a great opportunity for investors and the economy.
<a href="http://www.forbesafrica.com/investment-guide/2017/05/01/nigeria-needs-industrialization-now/" target="_blank" rel="noopener noreferrer">READ: Nigeria Needs Industrialization now</a>
Nigeria remains a highly appealing destination for investors. Mr Tunde Fowler, Chairman at FIRS elaborates, “Nigeria is an investor’s heaven with so much potential; from industry to agriculture to telecommunications. There&#8217;s so much room for expansion and the ease of doing business ensures that anyone who has a business, or who intends to start a business, will not have to face any bureaucracy, roadblocks or hindrance.
Nigeria’s government is determined to provide profound and long-term change in economic prosperity and stability; there remains little doubt that it is Nigeria’s destiny to uphold the title of largest economy in Africa for a long time yet.

LAGOS-cv2

FOCUS ON NIGERIA: Making Nigeria

It was a career defining moment that will live with lawyer Derek Light for the rest of his life: listening as Judge Gerald Bloem in the Grahamstown High Court, in South Africa’s Eastern Cape province, ruled that fracking in the Karoo region was unlawful. It was the punch Light had been waiting years to throw and it sent a battered and bruised government back to the drawing board.
&#8220;[The feeling] was overwhelming. You are viewed as a bunch of country people just making a noise. So when you go in a court, on an aspect that is nationally important and it&#8217;s got complex legal issues, and the court finds for you, you&#8217;re vindicated,&#8221; says Light.
This January marked the ninth anniversary when this quiet, unassuming, small-town lawyer and a handful of farmers challenged multi-million-dollar oil corporations and the South African government to stop hydraulic fracturing in their backyards.
&#8220;I always say to people I&#8217;m not a banner-waving green extremist, I&#8217;m a lawyer. What we want is a lawful process and our rights not to be unlawfully hinged… [we] are not just a bunch of country idiots behaving in an unreasonable fashion,&#8221; says Light.
<div id="attachment_35438" style="width: 510px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-35438" class=" wp-image-35438" src="https://www.forbesafrica.com/wp-content/uploads/2018/02/Derek-Light_JC-300x200.jpg" alt="Derek Light Fracking" width="500" height="333" />Derek Light (Photo by Jay Caboz)</div>
For Light, it has meant years slogging through snail-paced proceedings and stockpiling mountains of paperwork from his offices in Graaff-Reinet, situated in the heart of the Karoo.
&#8220;When they change a law in parliament in line with what you called for, then you start getting ticks on the box and saying the last eight years have been worth it,&#8221; he says.
This was all because of three areas of concern the farmers had with the fracking regulations.
&#8220;The obvious issue farmers had was with the potential impact of the environment that shale gas development, that hydraulic fracturing, might have. The second was that the legislation was inadequate to cater for such a development, so we were concerned there was a lack of legislation and regulation. Then thirdly, and this is interconnected, we were concerned that there was a lack of knowledge on the process, a lack of knowledge on the receiving environment and therefore an inability to determine the potential impact,&#8221; says Light.
<a href="http://www.forbesafrica.com/focus/2016/07/01/fracking-future-fades/" target="_blank" rel="noopener">READ MORE: The Fracking Future Fades</a>
Light and the 400 Karoo landowners won their court case on October 17 because government failed to follow its own law. The Department of Mineral Resources (DMR) went beyond their authority and published fracking regulations relating to environmental and water usage matters, when it did not have the power to do so, the court found.
&#8220;It will mean the ministers of mineral resources, environmental affairs and water affairs will have to go back and do their job properly,&#8221; says Light.
It also means another vital lifeline for anti-fracking farmer Doug Stern, who has been farming sheep near Graaff-Reinet for the past 45 years, and was the first to lay the case against government.
&#8220;Derek doesn&#8217;t get the accolades he deserves. That man has virtually singlehandedly handled this anti-fracking campaign in my view. He&#8217;s been backed by strong businessmen, but he&#8217;s been able to gather a very strong team to supply him with information that he can use very effectively. Thanks to him largely we&#8217;ve been able to keep these cowboys at bay and protect the environment,&#8221; says Stern.
&#8220;We found so many loopholes in the regulations that government put forward that we felt we had to fight it. It was a significant victory that sends government back to the drawing board and forces them to relook at their regulations. In that time we are buying time and hoping that research into renewable energy will advance at a rapid rate.&#8221;
<div id="attachment_35439" style="width: 310px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-35439" class=" wp-image-35439" src="https://www.forbesafrica.com/wp-content/uploads/2018/02/Doug-Stern-200x300.jpg" alt="Doug Stern farmer fracking" width="300" height="450" />Doug Stern (Photo by Jay Caboz)</div>
Stern, who is also the president of Agri Eastern Cape, a private association representing more than 3,000 farm owners in the province, was one of the initial farmers to stand up against fracking in 2009.
&#8220;Who knows what damage would be done if we had allowed them to do exploratory drilling? If you look at the statistics, at the animal stock numbers of South Africa, a third of those are found in this province. We are an agriculture province through and through. If we start allowing industries like mining to impact on our environment we stand to lose a lot of our animal producing country, which will then impact again on our food security.&#8221;
Stern is one of the few farmers in the area to have seen the impact of fracking firsthand. He went to Pennsylvania, United States, as a guest of anti-fracking groups.
&#8220;My experiences in America were horrifying and I knew we couldn&#8217;t allow this to happen in this country. We had to make sure that they weren&#8217;t granted any exploratory lisenses.&#8221;
This is not the first time Light has stepped into the ring. In 2011, he and the farmers raised concerns and convinced government to place a moratorium on fracking in the Karoo. This led to government setting up a multi-disciplinary task team to investigate the potential impacts and benefits of hydraulic fracturing.
The report identified significant gaps in research before regulations of exploration of shale gas could proceed. Light and the farmers then called for a full Strategic Environmental Assessment (SEA) before any further exploration could begin. Farmers claimed there were too many unknowns around the impact of fracking on Karoo&#8217;s highly sensitive aquifer system from which boreholes are part of their primary water resource.
Nevertheless, government, in August 2012, chose to lift the moratorium and allow exploration of shale gas, but that they would not allow hydraulic fracturing to take place unless it was properly regulated.
&#8220;Government was concerned that if it did not allow the process to proceed, it could be a lost opportunity,&#8221; says Light.
&#8220;The sad part of the policy decision was that they took a decision notwithstanding the fact that they were uninformed, which we joined issue with. We welcomed the fact that they wanted to revisit the legislation, but we joined issue with the decision that they continued to proceed under circumstances under where they couldn&#8217;t take an informed decision.&#8221;
It would take government another three years, until June 2015, to submit the next round of regulations. By this time, an important amendment was made to South African law in June 2013, under the Mineral and Petroleum Resources Development Act No. 28 of 2002 (MPRDA) and in line with the National Environmental Management Act of 2008. This amendment allowed Light and the farmers to win their case with the DMR, which they say overstepped its authority.
&#8220;Unfortunately it was an attempt by the minister to publish regulations that were all encompassing, it dealt with exploration and production and all other potential impacts to do with fracking,&#8221; says Light.
To make matters worse, when the DMR published its regulations, it did so without an SEA from the Department of Environmental Affairs. This joint operation produced a 165-page document detailing the uncertainties of fracking and took two years to complete.
&#8220;A team of 200 specialists authored work, peer reviewed by 19 international specialists… In each chapter, the scientists made a list of scientific unknowns which the science militated against proper decision making,&#8221; says Light.
<a href="http://www.forbesafrica.com/focus/2014/10/01/want-fracking-future/" target="_blank" rel="noopener">READ MORE: I Want A Fracking Future</a>
Light says one of the recommendations of this report was that at least 52% of the areas in question could not be fracked because of their sensitivity and more importantly that no water was be used in the Karoo because it was a limited resource.
&#8220;Also, what was said to be a massive economic benefit bringing 400,000 jobs to the country, the report said otherwise. It said fewer than 3,000 jobs would be created and of that only 900 locally,&#8221; says Light.
In the meantime, the government, through the Department of Science and Technology, also commissioned a report to determine South Africa&#8217;s technical readiness to support a shale gas industry. This was published in 2016 in partnership with the Academy of Science of South Africa and concluded, “much needs to be done to put in place a clear legislative environment and a rigorous regulatory and monitoring structure which will ensure that operators, in using their exploration and production lisences, apply best-practice technologies that are fully compliant with the rules and regulations governing the industry.”
&#8220;The good news is that there is research being done. It is clear that the initial reserves, which were stated by the oil companies and their advisors, and therefore government, have been overstated. Therefore the cost of producing shale gas, particularly in the context of the Karoo geology, is not viable,&#8221; says Light.
<div id="attachment_35441" style="width: 510px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-35441" class=" wp-image-35441" src="https://www.forbesafrica.com/wp-content/uploads/2018/02/Karoo_JC-20-e1519808833674-300x200.jpg" alt="Karoo fracking" width="500" height="333" />The Karoo (Photo by Jay Caboz)</div>
While the fight for the Karoo is well underway, the fight for national regulation is just about to begin. It is ironic that while research, millions of dollars and time have been spent to protect the Karoo from fracking, it may proceed in any case on a national level.
This is because while there is a moratorium over the Karoo, this does not apply to the rest of the country. Beyond these borders, farmers now face similar cases where applications have been lodged by oil and gas companies for petroleum and gas exploration in the KwaZulu-Natal, Free State, Gauteng and North West provinces.
Although the applications do not specify fracking, Light is concerned with the rising number of applications.
&#8220;Which is what we predicted would happen. If there was shale gas in this country, and if they did allow shale gas development on well-field situations on large reserves, it would cover probably 60% of this land’s surface,&#8221; says Light.
Sungu Sungu Gas, in 2015, placed bids to explore in KwaZulu-Natal and Free State in an area 565,000ha and was halted in 2016 in the Pietermaritzburg High Court on the grounds it did not consult land owners adequately. In July 2017, it withdrew its exploration application completely.
In May 2017, the Pietermaritzburg High Court ordered Rhino Oil and Gas Exploration South Africa to stop all exploration in an 8,000km2 area after it was found that the Petroleum Agency of South Africa (PASA) had flouted the procedure process. This is just a small part of their applications, which stretch across five provinces and 78,876km2.
&#8220;What the general public and government must realize is that agriculture is the cornerstone of their food security program and we can&#8217;t jeopardize that in any way whatsoever… Even the politicians have to eat. Everybody has to eat,&#8221; says Stern.
<a href="http://www.forbesafrica.com/cover-story/2015/09/01/power-people-people/" target="_blank" rel="noopener">READ MORE: Power For The People By The People</a>
Meanwhile, back in the Karoo, Mosebenzi Zwane, the former minister of DMR, told Reuters they are studying the court order.
&#8220;We remain committed [to shale gas exploration]. We will study the outcome of the court and decide where we go,&#8221; says Zwane. &#8220;We are talking about first fracking licenses being granted in 2019 if all goes well.&#8221;
The rematch could begin later this year, as the DMR was granted leave to appeal at the Supreme Court of Appeal and have filed notice to appeal.
If unsuccessful, the government could face the arduous task of drafting new regulations in line with the High Court ruling, again.
&#8220;What we have fought for since 2009 is to achieve a better legislative framework with better regulation. That process is not complete and we will continue to ensure that if shale gas development ever occurs, then it occurs lawfully and it occurs with proper regulation in force,&#8221; says Light.
&#8220;You need stamina. It&#8217;s a long process,&#8221; he says with a smile.
One thing that living in the Karoo has taught Light is how to box smart and wait for the right moment to deliver a stunning right hook.
<div id="attachment_35440" style="width: 510px" class="wp-caption aligncenter"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-35440" class=" wp-image-35440" src="https://www.forbesafrica.com/wp-content/uploads/2018/02/Karoo_JC-4-e1519808674871-300x200.jpg" alt="Karoo fracking" width="500" height="333" />The Karoo (Photo by Jay Caboz)</div>
<h1 style="text-align: center;">A Fracking Fight Since 2009</h1>
It started in 2009, when Econometrix, South Africa’s largest independent macroeconomic consulting firm, believed there was 485 trillion cubic feet of natural gas. The government and energy companies took this as gospel to support their case to open up the Karoo for fracking.
They pegged the Karoo as the $100-billion answer to Africa&#8217;s energy crisis, saying there would be enough gas to make it the world&#8217;s fifth largest resource – enough to fuel the country’s economy for up to 30 years and create thousands of jobs.
No one really knows how much shale gas there actually is. Researchers have only begun to explore its potential and exploration can take up to five years to conclude.

No Fracking Way

We are at Barclays Africa’s steel-and-glass offices in Africa’s richest square mile, Sandton, talking about a world far, far away – in rural Africa.
A world where Zimbabwe-born Sazini Mojapelo, Group Head of Corporate Citizenship at Barclays, raised by a single mother, first started, in the remote communities of her home country where subsistence farming, women-headed households and rural to urban migration were the norm.
Her work with an NGO led her to a Master’s degree in Development Studies from the University of Cape Town and subsequently, a job with the government.
“It became quite important for me to get into policy and understanding the way public-private partnership works, how policy frameworks are developed and governments function,” says Mojapelo.
She soon founded Hand in Hand, and grew the organization beyond South Africa to countries including Swaziland, Lesotho and Zimbabwe helping women grow their small businesses and supporting them with micro-financing.
A corporate career was on the cards.
“For me, it was important to have experience from government, civil society and the private sector. I wanted to get into all three areas of private-public partnership; the tri-sector conversation. To make a sustainable and meaningful contribution in the areas we operate in, it does not take one player alone.”
For Mojapelo, it had to involve the communities as well – the voices of the people.
“When I worked in government I did really feel the responsibility of caring for the people and their livelihoods. The sense of purpose is very strong, but the inefficiencies that come within that space are very crippling, where things don’t move forward, and the political element does not help as well,” says Mojapelo.
When she got the opportunity to join Barclays in 2015, she wasted no time.
“At Barclays, we look at how we can be good corporate citizens in the communities we operate in… We have introduced a strategy founded on the principles of creating shared value. Basically what that means is how we are able to have a commercial competitive advantage while driving the social agenda and creating impact.”
The bank’s Shared Growth strategy was launched in 2016, looking at education, enterprise development and financial inclusion across Africa.
For education, Mojapelo categorizes the youth as employed, under-employed and unemployed.
“If you look at the employed, most young people do get employed but you find they are under-employed – where a doctor is working at a call center; they have a job but they are not doing the job they studied for. And then you got those who are Not in Education Employment or Training who fall in what we call the NEET category; who are unemployable, because either they have dropped out of school, they do not have a skill that can enable them to move into the next phase of their life and that category of young people is where the most focus should be, and the ability to start looking at how we use technology to create and open opportunities for those young people,” says Mojapelo.
<a href="http://www.forbesafrica.com/focus/2017/08/22/waste-doctors-waiting-tables-answering-phones/" target="_blank" rel="noopener">The Waste Of Doctors Waiting on Tables And Answering Phones</a>
She also admits to several anxious moments when she moved to the corporate world.
“I had some anxiety on my side in terms of my ability to land effectively and be able to achieve the agenda that I really want to drive from a corporate perspective. The biggest part for me was literally looking at the agenda, that I have a personal agenda of creating a meaningful change in people’s lives and creating that kind of social impact. So it was key to change the strategy and introduce a way of working that made business realize that the social agenda is a business agenda.
“So in Barclays, you find that big corporate clients will work with us based on how you treat the ESG (environmental, social and governance) element. It has become very important within the business.”
<a href="http://www.forbesafrica.com/focus/2015/08/01/winters-tale-two-sleepouts/" target="_blank" rel="noopener">A Winter&#8217;s Tale Of Two Sleepouts</a>
One of Mojapelo’s passions is financial inclusion – especially of women.
“For Barclays, I think it’s a space we dream about disrupting and in its entirety that is integrated banking but it’s really from a shift in the mind-set of asking what the customer wants and how do we service them better.”
Far from the farms and fields of Zimbabwe, to the smart Sandton boardroom we are in, this Harvard Business School graduate has her sights set on one dream – a better Africa.

‘The Social Agenda Is A Business Agenda’

As soon as I graduated from university there was an invitation from the managing director of a top Nigerian engineering company to join the organization. There I learned the business of construction and after four years of strategic support work I left to start my own building engineering service firm with a partner. It looked easy!
In Nigeria, starting a new enterprise seems like a piece of a cake and it’s very convenient for people to suggest you should “start something on your own”.  Lagos, where I live, has an annual government revenue one of around $1 billion. With this kind of cash seemingly flowing through the streets, it is assumed it is easy to finance one’s start-up.
My partner and I started our business with our tiny fund – around $320 – and within a few months, had invested most of it on marketing. We didn’t have a car to drive around Lagos so we used taxis to get to meetings. We pushed on until we eventually landed a construction site deal. This process taught us how unsupportive financial institutions in our part of the world can be.
The average entrepreneur in Africa finds it difficult to get their idea to market because of ridiculous interest bearing loans. As we began to talk to our banker for financial support, it became clear that the banking sector was not going to be of much help. We did not have a property, in a choice part of the city, to guarantee the loan which in itself attracts over 20% interest.
With time running out, and needing to get our workers and equipment to site, we resorted to a desperate measure. Desperate people do desperate things. In this case it was a ship sinking decision for us. A private investor offered us a short-term loan with a monthly interest of 15%. We assumed all would work out; we had millions to get people and equipment to site, and substantial work could be done to impress our client. Within 30 days, we would be paid and refund our creditor. It was unrealistic.
In an environment where uncertainty is high, relative to other part of the world, such a straight-line strategy requires many back-up plans. Our company defaulted and the loan extended to a third month, with an accumulated interest of 45% on every million naira. We defaulted because our client delayed payment. He couldn’t pay us because his funds were not released. That circle of failure is the undoing of many businesses.
In a society where moneylenders and investors place an emphasis on the reputation of an entrepreneur, one needs to have a plan to protect this. The harshness of the African business environment triggers desperation and keep entrepreneurs focusing on short-term plans. This needs to change; the longer a business’s plans are considered, the better it will be. There are other strategies that work with raising fund. In south-western Nigeria, Yoruba parlance says that “it is from home that treasures are taken out”. The interpretation is that success begins at home.
Many business owners that I have had the opportunity to talk to use their relationship with family and friends to raise funds, equipment and other resources. The benefit of this is that family is more willing to forgive you and this type of loan usually comes without interest. However, this strategy is limited on a continent where around 70% live below the poverty line.
This provides a huge opportunity for capital ventures and angel investors. It provides opportunities to bridge the poverty gap and create wealth on a continent that is thought to be the next global investment destination. To truly realise this opportunity, the purse of an entrepreneur shouldn’t be bullied.

Desperate People Do Desperate Things

After a decade studying and working in Australia, Swazi-born Roberto Russo had just been granted citizenship when he took a phone call from his father in Swaziland. The telephone conversation was to change his life’s trajectory overnight.
“I never thought of coming back to Swaziland. I was happy in Perth. But when my old man said to me he was thinking about selling the business I thought ‘what is the worst that can happen?’ I can always go back to Australia. I have not looked back,” says the 35-year-old Russo.
<img loading="lazy" decoding="async" class="alignleft size-medium wp-image-4686" src="/wp-content/uploads/2017/04/001-1-224x300.jpg" alt="" width="224" height="300" />
The lay of the land for entrepreneurs in Swaziland and Australia are poles apart. Australia is an open democratic society with a large middle class customer base, government support for emerging businesses, and perched on the doorstep of Asia’s huge and burgeoning economies.
Swaziland is an undemocratic feudal society ruled by sub-Saharan Africa’s last absolute monarch, King Mswati III. It has a population of 1.3 million, the majority living in poverty, unemployed or practising subsistence agriculture, and a government actively favoring international and local corporations at the expense of small and medium enterprises.
To compound its reputation as an entrepreneurial backwater, Swaziland’s tentative claim to being a stepping stone between the economies of South Africa and Mozambique is wishful thinking at best.
In reality, the construction of world class road infrastructure between the industrial and business hubs of Johannesburg and the port city of Maputo has left Swaziland out of the loop. The South African city of Mbombela boomed at Swaziland’s expense by servicing the trade route.
Swaziland’s national economy is habitually mismanaged for the benefit of Mswati and his expansive royal household and was one of the factors resulting in the country flirting with a financial meltdown in the wake of the global recession in 2008. A lifeline of a $335-million loan from neighboring South Africa was refused as the fine print included political reforms. Financial oblivion was only averted after the Southern African Customs Union (SACU), discovered that Swaziland, as a customs union member, was eligible for an $88 million windfall in 2012 and it came with no strings attached.
The financial crisis was caused by a drop of more than 50% in SACU receipts as a consequence of the recession and squeezed Swaziland’s public sector wage bill that accounts for about 18% of the approximately $4 billion GDP – the highest ratio on the continent.
Russo was clearly looking through a different lens at the business opportunities that existed when he decided to return home in the midst of the country’s financial crisis and swing for the entrepreneurial fences. In the eight years since buying out his father, his businesses have grown eightfold to record a $10 million annual turnover. Russo’s stable includes a paint manufacturer, tool supplier and advertising firm.
Swaziland’s proximity to Mozambique has proved an advantage against Russo’s South African competitors.
“We export seven to eight tons of paint daily to Mozambique. Purely on geography we are able to load two trucks in the morning and make delivery and they are back by 5PM,” he says.
Sandwiched between two countries allows for different business strategies for each, while also benefitting from lower water, electricity and labor costs. Mozambique provides for bulk paint sales, while the South African market offers a niche that sidesteps the competition from South Africa’s thousands of paint manufacturers.
The company supplies specialized paints to a Johannesburg-based architectural firm, including insect repellant paint for malarial areas and paint that can be applied in wet weather.
“We are small enough to be able to custom-make our product to fit client needs… the bigger guys would ask ‘look, how big is the project?’ and it would not be worth their while,” he says.
“One of the downsides of being such a small, isolated country is that you get comfortable at what you are doing, even though you do it well. It’s important to attend tradeshows and ensure we remain current, to give us a competitive advantage.”
Technical staff recruitment can also be difficult.
“There is only a small pool of paint chemists that you can get hold of in southern Africa… but people are quite naive. People in South Africa think that Swaziland is a small little farm town. People that do know the lifestyle we live in Swaziland would come at the drop of hat.”
Swaziland’s formal economy is dominated by corporates, from telecoms to sugar producers. At its center, and controlled by King Mswati III and his coterie, is the opaque Tibiyo TakaNgwane, meaning  wealth of the nation, fund that has shares in many foreign and local corporates operating across diverse sectors.
Tibiyo was envisioned as a national empowerment vehicle and was established by Mswati’s father King Sobhuza II after independence in 1968. From its small beginnings, where every Swazi man was required to donate to it, usually a cow, the fund has grown to an estimated $2 billion. Like Mswati, whose personal fortune was put at $200 million by FORBES in 2008, the fund is exempt from tax, as well as civil and criminal scrutiny.
<img loading="lazy" decoding="async" class="alignleft size-medium wp-image-4688" src="/wp-content/uploads/2017/04/Swaziland-Lynette-Fraser-300x200.jpg" alt="" width="300" height="200" />
The fund’s rapid expansion is attributed to many factors, including eviction of small-scale farmers without compensation to grab some of the country’s best agricultural lands for the fund’s sugar interests and the government’s favoritism for contracts, tenders and beneficial regulations to foreign and local corporates the fund has stakes in.
Swaziland has the trappings of a democracy, but is not recognized as one. Mswati and his royal household, government and the state have become all but indivisible.
A small business owner based in Manzini with an annual turnover of R10 million ($770,000), who declined to be identified, says “If you fly too high, you are going to come short if you come up against businesses with government interests.”
“The main driver of business in Swaziland is the government. Pretty much everyone is dependent or indirectly dependent on government,” he says.
Lynette Fraser, Russo’s 38-year-old sister, established her own water bottling business, Viva Beverages, through purifying municipal water using reverse osmosis. She sells about 100,000 500ml bottles monthly and is able to compete with her South African competitors through lower transport costs. There was a business spike recently for sales of her five liter water bottles, after the capital Mbabane experienced debilitating water shortages, where Matsapha did not.
In recent years, she says there is a growing number of entrepreneurs opening businesses, where in the past “a lot of people would go to Johannesburg because the opportunities are just so vast.”
Excluding sugar production, about 90% of Swaziland’s economic activity occurs in the Mbabane, Matsapha, Manzini corridor and entrepreneurs recognize the benefits of businesses being concentrated within easy reach of each other.
But government business involvement remains a debilitating factor. Founder and Managing Director of the internet service provider Real Image, Ali Resting, has wrestled with government for deregulation of the sector, especially a legislative clause giving Swaziland Posts and Telecommunications Corporation (SPTC) exclusive rights for importing bandwidth, resulting in hugely inflated and uncompetitive internet costs stifling investment.
“The first question investors ask is if connectivity is reasonably priced? …It does deter investors if they are spending huge amounts of money towards connectivity, when they shouldn’t have to,” says Resting.
Deregulation would not only act as a lure for companies to invest in Swaziland, it would also benefit connectivity in the region.
“There is an opportunity for Swaziland to become a transit location between Johannesburg, Durban and Mozambique by using it as a conduit for fiber infrastructure. If you can position yourselves to have the shortest route, because the internet is distance sensitive, it makes more sense to go through Swaziland… it’s a huge opportunity,” says Resting.
For entrepreneurs in Swaziland, opportunities seem to be limited to the government.

The Call  Of The African Kingdom

Sure, optimism shone forth in Cape Town like the late summer sun bouncing off Table Mountain, as more than 6,000 powerful people, including more than 20 government ministers, headed for the biggest mining gathering on the planet.
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There were more mining companies this year, up 50% on last year, after more than five years of decline. The keen-eyed investors were back and looking for contenders across the continent. A fruitful place to be for the brave, like the motorbike riding maverick Mark Bristow who has spent the last 20 years making money digging gold in mines from Mali to Cote D’Ivoire. Two decades ago many fellow South Africans may have laughed at Bristow for taking risks far from home, in what many see as barren land for mining, but now they’re laughing on the other side of their faces. At the Mining Indaba, Bristow’s Randgold Resources announced it had increased gold production, for the fifth year in a row, plus it was debt free with more than $500 million in cash. Many mining companies would kill to be in that position.
Among the investors looking to blaze a trail across Africa is the Lagos-based African Finance Corporation that began life, in 2007, with a fund of $1.1 billion and now has assets of $3 billion, according to one of its directors, Osam Iyahen. It is a public-private fund, 42% owned by government, that invests in: oil; gas; resources; infrastructure and power. In January, it broke ground on a $200-million bauxite mine in the Boffa region of Guinea Conakry, just 15 kilometers from the coast, with plans to ramp up to 15 million tons.
“I think there has been a rebound in the industry this year,” says Iyahen in Cape Town.
“Last year was a bit of a disaster. People were not interested in talking about transactions; all they were worried about was protecting their downside. There was a lot of sulking going on.”
You could be forgiven for thinking the host nation is still sulking. South Africa, the biggest mining country on the continent, has been like a boxer on the ropes since the power cuts and global financial collapse of 2008. More than 60,000 jobs have been lost since 2012; capital expenditure ground to a halt and the South African industry lost R38 billion (about $2.8 billion) in 2016 alone, in a year when mining output fell 4.8%.
“We have to get our house in order in South Africa, capital is a coward and it goes to the place where there is least risk. We have to remember mining is a global game now and it is easier than ever for foreign investors to move capital around. Our grandchildren will live with the legacy of what we do now,” says Kieran Whyte, a lawyer and partner at Baker McKenzie, who specializes in energy and infrastructure.
The last few months of 2016 were better as commodity prices lifted, according to the Chamber of Mines, especially the risk haven of gold in the wake of the unpredictable, to put it kindly, presidency of Donald Trump.
“I think we are seeing the green shoots here, we just have to watch out for frostbite,” says Roger Baxter, the CEO of the Chamber of Mines, with a smile on the first day.
Baxter was alluding to two cold fronts: the first, the fact that South Africa – that mined more than a third of the world’s gold – is no longer the king of mining. In fact, in these troubled economic times, more and more nations, from West Africa to South America, are ready to accept foreign investors with open arms. A sign of the times is that, on the eve of the Mining Indaba, analysts in Cape Town were extolling the virtues of the copper, gold and coal mining nation of Chile.
The second frosty front is regulatory uncertainty. The South African government, which has met six times with the Chamber of Mines, has been working on amendments to its mining law since December 27, 2012. It promises to gazette the amended Mineral and Petroleum Resources Development Act (MPRDA) by the end of March; the Chamber of Mines feels it could be April.
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What is likely to be in the bill could cause conflict. It is expected there will be greater ministerial discretion and set in stone that all mining companies have to have 26% black ownership at all times. One of the problems is black shareholders, once they have passed their lock-in date, often cash in their stakes by selling to white shareholders, thus diluting the empowerment stake.
The Chamber of Mines, which represents almost all South African mining houses, disagrees strongly with this. It feels that once mining companies have borne the cost of financing black shareholdings it has done its job regardless of dilution. If this so-called “once empowered, always empowered” principle is accepted, many of the country’s biggest mining houses will be compliant overnight.
“I have never seen the Chamber of Mines so aggressive. Normally they get along to go along, but it seems the worm has turned,” says one mining insider in Cape Town.
It is all likely to end up in court where mining lawyer Peter Leon reckons they have a strong case.
“All they have to do is challenge section 100 of the MPRDA. This gives the minister the power to promulgate the act, but doesn&#8217;t give the minister the right to rewrite or amend the act. That would blow it out of the water,” says Leon.
There appears to be little sign of a U-turn by the government over an issue that could further confuse and deter investors.
“We don&#8217;t want to encourage a place where courts take the place of government. We don&#8217;t agree with the norm that if you don&#8217;t agree with us you take it to court,” says South African mining minister Mosebenzi Zwane.
It’s a cold front that could mean a Chile future.

Beware, It’s Chile Out There

When Colonel Satya Pal Wahi took his morning walk in the park near his home in Gurgaon, a city 32 kilometers outside the Indian capital of New Delhi, he always took a few copies of FORBES AFRICA with him. When influential people stopped him for chat, which happened often to one of India’s best known people, he would hand them a copy with a recommendation that they read it. He believed that our reporting was promoting business in Africa, 5,000 miles away, and gave his time and energy, selflessly, to support this. That was the kind of man Colonel Wahi was; always working, looking forward and willing a better world.
In his busy office, Colonel Wahi read and dissected every line of FORBES AFRICA. Often he used to correspond with me about our articles with beautiful, flowing, prose; always concise, and precise.
In person, he was a warm, humble, kind, and gentle man, with whom there was never a dull moment. I had the honor to meet him a number of times, on his many visits to Africa, and also at the weddings of his grandchildren on home soil.
I was always struck by his energy and tireless erudition. With his eyes lit up, it was always straight into the issues of the day. The last time, in Chandigarh, we debated, at length, the opportunities and pitfalls of artificial intelligence.
Colonel Wahi passed on this passion for business and life to his son, Rakesh, who was also an Indian Army officer engineer and the present publisher of FORBES AFRICA; his grandson, Sid, is the executive director of our magazine.
A remarkable man, who had lived a memorable and illustrious life, was born in Khushab, a small village near Lahore, in what is now Pakistan. He graduated in electrical and mechanical engineering from Banaras Hindu University. On graduation he joined the Indian Military Academy, Dehradun, before joining the Corps of the Electrical and Mechanical Engineers, in 1950, where he reached the rank of Colonel.
On retiring from the army, Colonel Wahi served many corporate enterprises which included Bokaro Steel Plant (1969-74), Bharat Heavy Electricals (1974-78), before joining Cement Corporation of India (CCI), a wholly-owned company of the Government of India as its chairman. He turned the loss-making CCI into a profitable business and, in 1981, was appointed chairman of ONGC, the largest oil and gas exploration and production company in India. His tenure at ONGC coincided with the development of Bombay High offshore oilfields and he is credited with contributions in raising India&#8217;s oil output from 9 million tons to 32 million tons per annum. His efforts are also reported behind the modernization of the organization by the introduction of computerization and modern office facilities and the establishment of a training center for the organization.
There were a number of occasions where Col. Wahi&#8217;s charismatic leadership was hailed. One such incident was his deft handling of the blowout in the offshore drilling rig Sagar Vikas. His professional stewardship in the case not only handled the blowout effectively, but ONGC was praised all over the media for the courageous act of the Oil Soldiers of India. A more significant victory, perhaps, was the confidence that grew in the cadres of ONGC after this incident.
After his stint at ONGC, he was associated with Bharat Ophthalmic Glass Limited and served as the Chairman of the Standing Committee of Public Enterprises.
A recipient of the degree of Doctor of Science (honoris causa) from three Indian universities, Wahi has also received honors such as Petrotech Lifetime Achievement Award, Indian Geophysical Union Silver jubilee Award and Giants International Award. The Government of India awarded him the third-highest civilian honor of the Padma Bhushan, in 1988, for his contribution to society.
The world was richer for the life of Col Satya Pal Wahi and poorer for his passing. His legacy will live for all time.

Farewell To A Gentle Titan

Arun Chadha has done well for himself far from home. He overcame racism, built a company from the ground up and now runs a steel exporter that employs 300 people and turns over billions of rands, in a cutthroat business, in Johannesburg.
It all began in India, 7,559 kilometers from Johannesburg. It was humble fireside teachings from his father, who worked for the government, that led him to a career that took him to Africa 28 years ago.
“The one thing my father gave us was good education. I did my chartered accountancy, took up a job in the Middle East and then moved to Zambia in 1988,” says Chadha.
He was poached by another company and transferred to South Africa as an expatriate. It was here where trouble began.
“I came and took over as the Chief Executive of a British company. I faced a lot of problems because people refused to come and meet me because I am Indian. I used to get phone calls from people threatening me because of the color of my skin or cars following me,” he recalls.
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It was hard but Chadha was harder. It took him just three months to show people skin didn’t matter to him.
“Surprisingly these same white guys became some of my closest friends as soon as they realized that our blood is all red, it’s not the skin that makes the difference, what makes the difference is the approach to things and the important thing is work.”
In 1994 he was transferred to New York. He decided South Africa was a beautiful country and he came back, became a permanent resident and Allied Chemicals and Steel, a general export business, was born.
“I had no problems setting up the company, getting a VAT registration or opening a bank account, none at all. I got all my approvals within three weeks,” he says.
Running his own business wasn’t easy. The first year’s turnover was R9-million ($656,000) but profit was a mere R20,000 ($1,500). This wasn’t enough to sustain the comfortable life he was used to as an expatriate.
“Life as an expatriate is very cushy because your house, car, furniture, children’s education and everything is paid for by the company. All of a sudden when you resign and start your own company, you have to pay for everything yourself,” says Chadha.
Expenses rose. He had to cut back. With his wife, they moved to a small rented flat for R3,500 ($250) where they stayed until the year 2000 when they bought their first home.
“Everything that was earned went back to the company to grow the company. What you see today is from those beginnings. The one [thing] that was there, which was on my side, was education… You might not use your education but it’s a stepping stone towards your next level,” he says.
In 1996 the company focused on its core product, steel. The business grew at a rapid rate. From the year 2000 to 2008, they touched a turnover of over a billion rand ($73 million).
“The problem thought though was always that I am a trader and not manufacturer. Sooner or later, someone will override me or overstep me and I will not be able to compete with them.”
In 2010, Chadha bought a piece of land, near Vereeniging, south of Johannesburg, to build a steel factory.
“That’s when I met Warne Rippon, he used to have a company called Steelrode and we decided to merge the two companies because we were not conflicting with each other. One was exporting into Africa and the other was focused on South Africa,” he says.
It was a long process. It took six months for the merger to be approved.
“From the days of 1994 where it took me 24 hours, it took us six months to get a VAT registration. That’s some of the frustrations new business people are facing now. I do not understand why it takes so long…,” he says.
The merger was finalized on March 1, 2013, giving birth to Allied Steelrode, which employs 300 people. The company has tripled its turnover in the last three years; but not without problems.
As an export company into Africa, it deals with emerging markets, some suffering from a cash crisis and others with unstable politics which weakens the economy.
“In Zimbabwe we are facing problems because the people we export to have the money in the banks but the banks can’t remit the money to us. We now have to accept money in pounds, euros, US dollars, and whatever is available… The devaluation in Zambia has been great. But after the elections are over and [President Edgar] Lungu has come in, it has been fairly stable.”
For Chadha, the biggest problem in Africa is the falling commodity prices.
“We hope the commodity prices start looking up in 2017. We see that oil has gone up, gold prices have gone up and that’s why steel prices are shooting up at the moment. I have a feeling 2017 is going to be a better year than 2016.”
It is optimism, steadfastness and kindness that led him to the top at the end of a 7,559-kilometer journey.

‘People Refused To Come And Meet Me Because  I Am Indian’

As if Zimbabwe doesn’t have enough problems, in October the government will try what could be an ill-fated experiment of printing so-called bond notes.
It’s a reaction to the shortage of US dollars that have been legal tender in Zimbabwe since the Zimbabwean dollar disappeared. The shortage is so bad the banks are trying to ration dollars.
“I can only withdraw US$100 a day and that’s if I’m lucky. I have to wake up very early in the morning to queue, otherwise there will be no money in the ATM. If I come late I can find even 60 or so people queuing,” says Tukudzwa Mutasa, who lives in Harare.
The southern African country has been unlucky, to say the least, when it comes to currency. It printed its way into hyperinflation and even introduced bearer cheques that carried and outlived their expiry date. In 2008, it suffered catastrophic hyperinflation and even had a one hundred trillion dollar bill which could be exchanged for US$0.40. Almost 10 years later, it is worth more as a souvenir on eBay, where you can buy it for US$70.
This all led to the Zimbabwean dollar being ditched and the country adopting up to nine currencies from other countries.
The US dollar is king in Zimbabwe. In 2009, 49% of people used the US dollar, 49% used the rand and 2% used other currencies. In 2016, 95% of people use the US dollar.
The Reserve Bank of Zimbabwe (RBZ) says the stronger US dollar is encouraging traders to take the currency out of the country.
“I can’t take the rand because it is weak. I buy the things I sell in South Africa and have to factor in costs, so I would rather sell in US dollars so that I make a little bit of profit otherwise I would be wasting my time,” says informal trader Chipo Dungare, in Harare.
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Into the mix, in October, come piles upon piles of what many see as worthless paper. Zimbabwe will use the gold standard, which is a monetary system where a country’s currency or paper money has a value directly backed by gold, to print its own version of the US dollar, called bond notes. There is a guarantee of US$200 million by the African Export-Import Bank (Afreximbank) to back the bond notes. The scheme will also reward people bringing foreign currency to the country with a 5% incentive on all foreign exchange receipts.
Reserve Bank Governor, John Mangudya, says the bond notes, like the US dollar, will come in $2, $5, $10 and $20 dominations. This is unlikely to convince people to use it.
“This is a shakedown; casino economy presided over by dangerous clowns who don’t see beyond today. How can you explain repeating a failed experiment of 2008 of printing dollar signs and figures on bond paper and declare that as currency? Really? Do these people learn at all?” asks political economist, Maxwell Saungweme.
“This is the return of the Zimbabwean dollar by another name. It won’t work. It will crash on day one,” says a Harare-based analyst who chose to remain anonymous for fear of victimization.
Former Finance Minister, Tendai Biti, called citizens to anger.
“The return of the Zimbabwean dollar marks the gross admission by this regime that it has failed, and failed in absolute terms, and that it will drag everyone along in the plunge to abyss that now awaits this economy. It is a cynical, disrespectful and contemptuous move that has absolutely no logic, sense or justification on any rational ground whatsoever,” writes Biti on his Facebook page.
“Zimbabwe is effectively a supermarket economy consuming goods produced in other countries. In 2014, its exports were US$3.7 billion against imports of US$6.3 billion. 2015 was no better; exports were $3.2 billion against imports of US$6.03 billion.”
Promise Mkwananzi, Director of Zimbabwe Informal Sector’s Organisation, says this policy reveals confusion.
“The tragic result is that there is already panic and despondency in the country. This will cause an unprecedented decline in FDIs already at its all-time low. This will see the Zimbabwean economy continuing to suffer,” he says.
But the people running Zimbabwe believe there is no problem.
“The bond notes are coming no matter what because we are trying to solve a problem here. The media exaggerates what is going on here in Zimbabwe. They talk about protests but I don’t even know what they are talking about. It’s always business as usual here and often I have to see in the news that there was a protest,” says spokesperson of the office of the president, George Charamba.
Along with the RBZ and the government, the Employers’ Confederation of Zimbabwe (EMCOZ) is behind the bond notes, but it has reservations.
“The consultations before the announcement, if any, were less than inclusive and the confusion and fear that was created could have been anticipated and, to a large degree, reduced if not avoided. It would have given business the necessary confidence if it had also been announced whether this is a short, medium-term or long-term measure and the fate of the bond notes once they have served their purpose,” says EMCOZ president Josephat Kahwema.
What is certain is that in October the banks will be full of freshly printed paper. You’ll know for sure whether it’s worthless when you go to spend it.

Starting a  bon(d)fire

In the space of four months, a small group of athletes will have gone full circle – from the tough life in refugee camps, where sometimes food is rationed, to rubbing shoulders with the world’s most celebrated names in world-class facilities.
This is the strange reality for South Sudan’s Olympic athletes.
Being at the Olympic Games in Rio de Janeiro for three weeks will be a completely new experience for these young athletes, who might never have got to the world’s largest sport event if they were not refugees.
Even their compatriots in South Sudan are stunned  how the athletes got access to an arena reserved for the crème de la crème of international sports.
Olympic Villages have world-class infrastructure, with beautiful apartments, paved roads, working sewerage systems, hospitals, and shopping centers.
For the five young men and women from South Sudan, this is a far cry from the refugee camps they come from. Here, the refugees live in tin-walled houses, with little sanitation. The camp is littered with long-drop toilets, although refugees prefer to use thickets and bushes, leading to the rampant outbreak of deadly diseases are rampant. They are conditions the majority of athletes at the Olympic Games will find unimaginable.
The civil war has destroyed South Sudan’s economy. Before the current bloodletting resumed in early July, the newly-formed Transitional Government of National Unity asked for international support to rebuild the country. The conflict has halved oil production which, coupled with the global decline in oil prices, has left the government short of cash.
Although better than living among warlords, life inside refugee camps is not for the faint-hearted. Roads are dusty and rough. Some schools within the camps have sports fields, but the lack of grass makes playing on them difficult.
These young athletes will leave these fields of dirt and be welcomed to Rio with roads lined with exotic flowers and trees. The Olympic Village’s gardens rivals those found in Buckingham Palace.
When those inside the Kakuma and Dadaab refugee camps heard their brothers and sisters would be at the Rio Olympics, they burst into ecstatic celebration. The five South Sudanese refugees were selected by the International Olympic Committee (IOC) to form part of the first-ever Refugee Olympic Athletes team. The other athletes making up the 10-man team are two judokas from the Democratic Republic of Congo, a marathon runner from Ethiopia and two swimmers from Syria.
The President of the International Olympic Committee (IOC), Thomas Bach, says the team will raise awareness of the refugee crisis, which, according to the United Nations, stands at over 59 million displaced people.
“This will be a symbol of hope for all the refugees in our world, and will make the world better aware of the magnitude of this crisis. It is also a signal to the international community that refugees are our fellow human beings and are an enrichment to society,” says Bach.
Kenyan marathon legend Tegla Loroupe, who founded the Tegla Loroupe Peace Foundation, identified the South Sudanese athletes that will make up the rest of the refugee team. They are Pur Biel Yiech (800m), James Nyak (400m/800m), Rose Nathike (800m), Angeline Nadai Lohalith (1,500m) and Paulo Amoton Lokoro (1,500m).
The athletes have tear-jerking stories. They fled to neighboring Kenya as civil war erupted in Africa’s youngest nation, where compatriots supporting rival leaders were tearing into one another with machetes and guns. Girls and women were raped, property vandalized and homes looted. Tens of thousands died and many more were displaced. The survivors, mostly orphans and widows, were forced to cross into Kenyan camps.
The athletes are unified in their call for peace. They say this would allow many more young South Sudanese to pursue their dreams – whether in academics, sport or business.
“I would be representing my country in the Olympics had there been peace in my country. While other athletes will be carrying their countries’ flags, which is an honor and prestige, we will be participating under the Olympic Flag. That is good, and we are grateful to the IOC for remembering refugees, but sometime in the future, I would wish to run under the South Sudanese flag,” says Lohalith, who left home in 2001 and reached Kakuma the following year.
Lohalith started running for fun while attending primary school inside the Kakuma camp. She was among those scouted by Loroupe and transferred to Nairobi for specialized coaching.
Lohalith believes the refugee team at the Olympics will inspire other displaced people, even if they don’t win medals.
“It will be the first time refugees are represented in the Olympics, which will inspire other refugees because they will realize that they are just like normal people,” she says.
Jackson Pkemoi, who is managing the team at the church-run Anita Children’s Home in Ngong, 20 kilometers south of Nairobi, says the athletes are not taking the selection for granted.
“It is never easy to make an Olympic team. These athletes appreciate that this is a godsend, an opportunity to join the rest of the world at the Olympics,” he says.
Lokoro is glad he will be able to represent the refugees he lives with in his camp.
“When the refugees, and our people at Kakuma camp, heard of this, they were proud and celebrated. They are happy for us,” says Lokoro.
Nathike, who escaped her war-ravaged country with her parents, is running to help those she left behind.
“My people are happy and praying that I perform well so that I can change their lives,” she says. “Since we have talent, this can help promote peace all over the world.”
Nyak sent a massage to warring factions.
“Fighting is not the right way for people to solve issues. The more people fight, the more young people who have talent run away from home. So those countries [that] have conflict have to sit down and see where the problem is because this affects so many countries,” he says.
While their competitors are running for gold, these athletes from South Sudan are competing for something more important – peace.

The Olympians Who Want Peace  More Than Gold

They were led by cavalier gentlemen who believed they could overthrow an African government with 600 men, eight Maxim machine guns and three light artillery pieces. It was a band of brigands, aristocrats, adventurers and opportunists who carried out the so-called Jameson Raid on Johannesburg in December 1895 – one of the greatest botched coups in African history. On July 28, it will be 120 years since their trial ended in London in 1896 where the raiders got a slap on the wrist for trying to jump a country – their leader, Leander Starr Jameson, was one of many who walked free from prison five months later.
FORBES AFRICA looks at what would have been made of the Jameson Raid in the 21st century. For a start, it would have been the cellphone and not the gun as the lethal weapon, according to strategists.
“In some aspects war has never changed. For a start, it’s getting the right amount of men into the right position. Today your first prize would have to be an attack on a digital level,” says Colin Webster, Secretary General of Mind Sports South Africa (MSSA).
By day, Webster is a tax consultant living in Germiston, in the east of Johannesburg. On weekends, he is a three-time World Champion of Ancients Warfare of the International Wargames Federation.
<div id="attachment_5014" style="width: 218px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-5014" class="size-medium wp-image-5014" src="/wp-content/uploads/2017/05/GettyImages-463894213-208x300.jpg" alt="" width="208" height="300" />Leander Starr Jameson, Scottish-born South African politician, </div>
“What you would want to do is, like in the Jameson Raid, rely on the chaotic state of affairs between different nationalities. To attack a country you need to create the chaos. For example, in World War Two, the Germans created huge printing presses to create counterfeit currency. The idea was to devalue the British pound.”
“With technology it’s become so much more complicated. You would have to disable the entire country’s electronic infrastructure. A country sitting without its internet, TV and radio, makes it difficult to get information out to different regiments. It’s not impossible because all you need is a couple of electromagnetic pulses (a bomb that will fry your electronics) in the right places.”
Webster’s great grandfather was a commandant at Pilgrim’s Rest, in Limpopo after the South African War.
“I prefer the historical gaming, to computer games like Age of Empires, because it is all interactive with people. There are three different types of wargames that you will play. One is competitive. Two is recreating a battle from history. The third is simulating a battle.”
“Warfare today has become a very different kettle of fish. A lot of it is computerized. Your whole way of conducting a battle is different from the less technological society during the Jameson Raid. You have to realize the ranges of weaponry today far outrange anything that’s previously handled. These days you are able to pinpoint where you are going to fire your shells.”
Another strategist is John Smith, not his real name, an investment analyst living in Johannesburg and a World War Two re-enactor hobbyist since 2012.
“Your main goal is to consolidate your power as quickly as possible. You want to seize the initiative – always attack, always strike first, always keep your opponent reacting instead of planning – and you want to cover as much ground as quickly as possible.”
Winning over the masses, controlling utilities such as water and electricity, and controlling the media are all part and parcel of success, says Smith.
“In the modern world, your most important technology is the media. Mobile phones, social media sites – you must control them. War in the 21st century is not about who has the smartest tank or the lightest assault rifle – Iraqi IEDs and Afghan tank traps and Syrian barrel bombs have proven that. Your most important tech is that which allows you to control the media – and to sell your ideology. Take internet servers offline, hack into television broadcasters, breach government websites or take them offline through DDOS attacks &#8211; that is the tech that will count. Whether your protestors are armed with AK47s or the latest German assault rifles means little when you are losing the media war.”
There was little media back in 1895 when doctor and magistrate-turned-soldier adventurer, Jameson, set off from the small town of Pitsane, just across the now Botswana border on December 29, 1895. The idea was to overthrow the gold-rich Transvaal run by Paul Kruger, the President of the South African Republic (SAR). Jameson banked on the raid triggering an uprising of so-called Uitlanders, foreigners, working in the mines in Johannesburg.
The mainly British Uitlanders outnumbered the Afrikaners two to one, paid taxes and had no vote. The plan was for them to seize the armory in Pretoria as Jameson rode in to Johannesburg.
It all fell apart when Transvaal troops stopped the raid dead in its tracks in Doornkop, 26 kilometers west of Johannesburg. The Transvaal soldiers had tracked the raiders from the minute they crossed the border. Jameson’s men believed, mistakenly, they were safe because they had cut telegraph wires to Pretoria; all they had cut was a fence.
Jameson suffered the ignominy of borrowing a white apron from an old woman as a makeshift flag of truce. The prisoners were sent to Pretoria and then to London for trial, after diplomatic horse trading.
“The Jameson Raid could have worked if it had successfully divided society. The Jameson Raiders were backing on the Uitlanders to support them against the Transvaal government. They were relying on Uitlanders, who were mainly British, however the [Uitlanders] had no intention of supporting the Jameson Raiders as they were quite happy with the SAR,” says Webster.
These days, an attack on a government would be a different story.
“Any battle relies on surprise. It would be extremely difficult today to do a raid on South Africa because of South Africa’s infrastructure&#8230; South Africa has one of the best armies in Africa, you would have to have the backing of a foreign government. That’s not going to happen today. From that point of view South Africa is very safe and secure,” says Webster.
“There are a number of international arms dealing laws and treaties in place, making it difficult for the nefarious plotter to get his hands on weaponry in general. This leaves the darker avenues. Seize existing stockpiles of weaponry from the current government, like the Arab Spring in Libya or Syria, or on the black market. This is usually an expensive and low-quantity proposition, and is better suited for getting niche items like a shoulder-launched anti-air missile for shooting down a civilian airliner than arming large numbers of insurrectionists at a time,” says Smith.
The full force in Jameson’s repercussions were felt in South Africa. Its backer, Cecil John Rhodes, mining magnate and Prime Minister of the Cape Colony, was forced to step down. His British South Africa Company paid £1 million in compensation. Other conspirators were found guilty of high treason and sentenced to death; this was commuted to 15 years.
As for Jameson himself, he was sentenced to 15 months and released after five. Eight years later, in 1904, Jameson went on to become the Prime Minister of the Cape Colony. Not a bad outcome for a gentleman convicted of treason who botched a raid to remove an African government. Jameson was buried on a high rock outcrop in the Matobo Hills, near Bulawayo, Zimbabwe, a few hundred meters from the right hand of Rhodes. What stories they could tell.

The Havoc Gentlemen Raiders Could Have Caused With A Cellphone

Nigeria is heavily dependent on the oil sector as a major revenue source. The Nigerian National Petroleum Corporation (NNPC) has oversight of the country’s petroleum trade and keeps records on domestic crude oil sales and reconciliation statement with the Central Bank of Nigeria (CBN). The NNPC is widely considered as one of the most powerful corporation’s in Nigeria, so when in 2013, one of Nigeria’s most respected central bank governors, Sanusi Lamido Sanusi, told a senate committee that $49 billion was missing from the state coffers, all hell broke loose.
“I had for many years expressed concerns that reserves are not going up but it never really hit me. I always thought there was some explanation of maybe the production sharing contracts were not favorable to Nigeria, the oil company was taking the bulk of the revenue, maybe we had some sort of financing arrangement with the oil companies and the revenues were going towards paying those debts, maybe NNPC had borrowed from banks and the revenue was going towards paying off the banks,” says Sanusi, who now goes by the name of Emir Muhammadu Sanusi after being crowned as the Emir of Kano in 2014.
The shocking revelation will forever haunt Sanusi as his worst day in business. It all began in a quarterly meeting at the CBN.
“We have within the central bank what’s called the Government Consultative Committee and it is made up of all the departmental directors, the deputy governors and the governor. We met once in a quarter to review the economy. At several of these meetings I had complained that I was not at all satisfied that we had understood what was going on with revenues because the numbers were not adding up to me,” says Sanusi.
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“So the initial report I got was that we had been seeing a huge and increasing gap between the value of crude oil shipped from Nigeria and the amount of money paid in by NNPC. So I said ‘why don’t you go back to just January last year ‘til now and bring out from your records how much crude we exported and how much revenue we got in’. He came back with numbers that showed a difference of $49 billion and I said ‘I don’t believe this’. So I got his deputy governor and other directors to look at the numbers again and they came back with the same number.”
After reconciliation, $29 billion was explained through a production sharing agreement where the money was paid to the state through the Federal Inland Revenue Service (FIRS) account instead of the CBN account. The remaining $20 billion however could not be accounted for. Sanusi had to make the difficult decision either to keep quiet and finish the remainder of his term as governor of the CBN or speak up. He decided to speak up.
“I thought the best thing to do was to write to the president and draw his attention to this and the reason is because, as governor of the central bank, I have the fiduciary responsibility to my customer to let them know if something is going wrong. So I wrote to the president and said to him ‘Mr President, I am concerned that reserves are not going up’ and explained to him what was happening. This was in August 2013; the president received the letter and did nothing. I saw him several times in meetings after that but he said nothing,” says Sanusi.
After being ignored for months, Sanusi’s letter mysteriously ended up in the hands of the former president, Olusegun Obasanjo, who wrote an open letter to the Goodluck Jonathan administration. The media frenzy that ensued resulted in Sanusi being summoned to the president’s office.
“I got a call and he said I should see him at 3PM and when I got there the place had been swept, there was no one apart from the security services, it was as if everybody had been asked to go. He says to me he is calling because he is surprised a letter I wrote to him got to Obasanjo and I said to him I was surprised as well. And he said he is calling me because he thinks I know who gave Obasanjo the letter. I said the letter was in different places, and Obasanjo had been a former president and lived in this villa for eight years and therefore he is more likely to have sources inside this villa than inside the CBN,” says Sanusi.
“He said he is convinced that the letter left the CBN to Obasanjo and I have 24 hours to find out who leaked the letter or sack somebody, and if I didn’t sack them then that was proof that I leaked the letter and that I should resign.”
The exchange was unexpected for Sanusi. The focus was not on the missing $20 billion but rather on who leaked the allegations to the former president. Sanusi redirected the focus of the conversation back to the missing funds and put the blame on the NNPC and the former Minister of Petroleum Resources, Diezani Alison-Madueke. From that moment, he knew he had signed his professional death warrant.
“I knew that taking on the NNPC was taking on the most powerful minister in Jonathan’s government and nobody who had touched Diezani had survived; so it was not a question of what would happen, I just didn’t care at that time. I did not want to go down in history as having seen this and kept quiet. Once I mentioned the minister he got very angry, his countenance changed and he said ‘you know, whether you like it or not, you are going to leave that office, I cannot continue to work with you, either you or I will leave government’.”
The following months were full of threats and allegations of corruption against Sanusi, which led to his eventual suspension by Jonathan on the grounds of financial recklessness and misconduct. His term as the governor of the CBN had come to an end just a couple of months before the end of his official tenure. The authorities seized his passports and made life uncomfortable, according to Sanusi.
“I always said that I didn’t see the role of being Governor of the Central Bank as an end; it was never really an ambition for me. It was a job and, if I wasn’t sacked, my term would end anyway. The only reason I stayed is because I believed if you are called to serve your country, don’t just walk away. You have a five-year term, complete the term and go. So it wasn’t an issue, the real issue for me was to get to the bottom of what had gone wrong,” says Sanusi.
These days, Sanusi still spends his time in service to his country but this time as Emir Sanusi, and the religious leader of the Kano Emirate. The role is a hereditary role and has been in existence for thousands of years, with his particular dynasty ruling Kano for over 200 years. The role has tremendous influence in terms of advice to political authorities and collaboration in the delivery of public services. As he looks back on the events that transpired just a few years ago, his resolve is as strong as ever when asked if he would have done anything differently.
“I am a prince and you need to understand the psychology of princes. The best place for a prince to be is a place where he can be a hero; at that point we had reached a point where I could not lose. If the president brought me down, I would be brought down while defending $20 billion of the Nigerian people’s money and if I brought the president down I am a hero for bringing the president down while defending $20 billion of the Nigerian people’s money, I could not lose. The only way the president was going to win was to sack his petroleum minister and investigate the money.”

The Pain Of The Banker Who Investigated The  Missing  $20 Billion

Nigerians are currently hard at work. What sort of work, you might ask? Economic reconstruction and the quest for social and political rebirth. The new sheriff in town seeks to sweep the dregs of a shattered polity into the cesspit of history. Clearing the skeletons and cobwebs of the past is, however, proving to be a delicate dilemma for the good people and managers of the Nigerian nation.
Grappling with sluggish growth, dwindling external revenues, double-digit inflation and a prolonged currency constipation, Nigerians must now wrestle with the seen and unseen forces of corruption and ineptitude, the gods of inertia and impunity, and the innumerable anti-development demons in its social democratic space.
A nation which was once embroiled in a two-and-a-half-year civil war in the 1960s, without borrowing a dime and without experiencing a run on its national currency, now finds it difficult to maintain a healthy balance sheet in peace time. No doubt, Nigeria has earned its spot in global economics by virtue of its position as Africa’s largest economy. This status will, however, not produce social harmony, wealth and economic growth for Nigerians.
Nigeria’s one-year-old government continues its search for the Chibok girls (#BringBackOurGirls), abducted two years ago from their school in the north east of the country. President Muhammadu Buhari has embarked on a global search for the country’s missing money, embezzled by past leaders and cronies of previous governments. Currently struggling to wean itself off crude oil addiction and diversify its productive base, it’s taken almost a year for the president and his All Progressives Congress (APC) party to begin to translate their social and economic agenda into a “SMART Framework”.
In what seems to be a blueprint and agenda-setting address to selected private and public sector leaders during a National Economic Council (NEC) retreat in March, the president listed agriculture, solid minerals and infrastructure investments as the fulcrum of his agenda, with national targets for self-sufficiency in tomato paste production by 2016; rice production and milling by 2018; and wheat by 2019. He also introduced a new phrase into the lexicon of governance: “import competition”, where states focus on growing selected crops in which they have natural comparative advantage.
These confidence boosting steps notwithstanding, Nigerians are increasingly wary of the future. They have come to terms with that fact that the path to the future is riddled with dead promises.
On the political rostrum, campaigning for votes between 2014 and February 2015, APC big wigs made numerous promises to Nigerians. Granted this was all done in the heat of politicking, Nigerians now want the current Lords of Aso Villa to quit blaming previous administrations and simply execute their well-intentioned strategies.
The president has been blamed for not ‘radicalizing governance’ fast enough, which was one of the reasons Nigerians voted for his party. He has also been blamed for reneging on a campaign promise to provide a monthly allowance for unemployed youths. The APC’s manifesto also promises to: “create additional middle-class of at least two million new homeowners in our first year in government and one million annually thereafter; by enacting a national mortgage system that will lend at single digit interest rates for purchase of owner occupier houses.”
Good idea. But have two million new homes been built in the last year?
In just one year, the national mood has swung from politically-induced hope to a calm and unnerving anxiety about “personal survival in a regressive system” as it becomes increasingly clear that things will get worse – for much longer – before they become better. Thankfully, Buhari has also said this much, as he pleads for patience against the growing wave of disappointment and despondency.
So, El Nino has finally caught up with the nation’s 2016 fiscal budget, as GDP growth for the 2016-2017 period is likely to remain below 3%, according to the IMF, unless of course global crude oil prices shoot up to $100 per barrel.
This is very unlikely, observes Bismarck Rewane, renowned economist and CEO of Financial Derivatives Ltd.
“That era is gone for good. The chickens (of decades of economic profligacy) have come home to roost. We are now going into a likely prolonged phase of belt tightening,” he told members of the Harvard Business School Association of Nigeria recently.
The smart, hard, work must go on.

Recalibrating Expectations

It had been a long hot Friday afternoon. As I drove home, towards the shacks of Zandspruit in Johannesburg, I could see black smoke. The voice on the radio warned of a service delivery protest as I drove into it. Women and men chanted and blocked the road. Words flew; then rocks, then bricks. A rock smashed into the face of one of the police officers, blood poured.
This is one of the many faces of discontent across Africa. Poor and rich alike feel short-changed in these tough economic times. The poor fight with rocks; the middle class with their bank accounts. People no longer want to pay. Their hard-earned cash, they complain, is wasted by politicians.
A tax revolt is rising. It may be in its infancy, but in South Africa, the threat is being taken seriously enough for Judge Dennis Davis to issue a warning.
In many ways, Davis is Mr Tax. He is head of the Davis Tax Committee, appointed by the Finance Minister to examine how revenue generated by the South African Revenue Service (SARS) can be used to improve the economy. He was a Technical Advisor to the Constitutional Assembly where the negotiations for South Africa’s interim and final constitutions were formulated and concluded.
“It’s a question of where government spends the money. People want to see results with their taxes. If they are not satisfied, they may choose to just stop paying. The greater the level of corruption, the less we will have tax integrity and the greater the possibility of a tax revolt,” says Davis.
Expenditure is through the roof in South Africa. According to Auditor-General Kimi Makwetu in his report for the 2014/2015 financial year, irregular expenditure amounted to R5.68 billion ($355 million). The report says 45% of this was spent by the Education, Health and Public Works departments. Irregular expenditure more than doubled from the previous year in Mpumalanga, a province in eastern South Africa, bordering Swaziland and Mozambique.
“Of the R936 million ($58.5 million) in fruitless and wasteful expenditure incurred in the year under review, R32 million ($2 million) was incurred to prevent further fruitless and irregular expenditure or losses. This normally relates to the cost of cancelling irregular contracts or contracts of non-performers,” says Makwetu in the report.
Due to overspending the budget, unauthorised expenditure amounted to R1.64 billion ($100 million). This is money emptied from the already lean pockets of people in a country where 12 million live in extreme poverty and top earners pay up to 41% in tax. On top of that, over the past decade, residents have been burdened with increases in property, electricity, toll and vehicle licencing fees; yet, potholes and power cuts persist. This is laced with accusations of corruption, an issue which has drawn the ire of veteran champion of the people Wayne Duvenage. He made his name standing up against Gauteng’s infamous e-toll tariffs. He is chairman of the Organisation Undoing Tax Abuse (OUTA), which says its aim is to challenge unfit taxation or the squandering of money.
“The public have become justifiably angry over the squandering and waste of their taxes. [A tax revolt is likely] but is however not a situation I would want or wish for our country and we should do everything possible to prevent such a situation from developing. This is why the Minister of Finance is calling for a positive and participative approach to resolving our problems. The issue, however, is that while a corrupt leadership remains prevalent and connected to the head of state, and other key positions within government and its state owned entities, very little can be done to mobilize a positive approach to addressing the key issues of corruption, cronyism and service delivery. This is what is driving the negative sentiment,” he says.
It appears many other people have also had enough. A survey by  NGO, AfriForum, says  none of the respondents say they are getting their tax money’s worth; 24% say they only pay tax because they are compelled to and 42% question why they should pay tax at all. AfriForum runs a viral #whatarewepayingfor campaign to hold government responsible for the misappropriation of money.
Monique Taute, National Campaign Coordinator at AfriForum, says the government promised to improve education, yet the national pass rate for Grade 12 students declined from 75.8% in 2014 to 70.7% in 2015. It promised to improve security, public order and safety, yet the crime rate increased by 0.09% from 2014 to 2015. It promised to decrease unemployment, yet the International Labour Organisation (ILO) announced in January 2015 that South Africa has the 8th highest unemployment rate in the world. The unemployment rate stood at 25.5% in the third quarter of 2015, an increase of 1.2% from 2014.
“It is clear that the government failed in all three objectives. Taxpayers should have the right to know what they are paying for. From what we see, in the consolidated general report on national and provincial audit outcomes as well as from 2015 statistics, it is clear that government once again failed to fulfil its responsibilities in the 2015/2016 fiscal year. Government is abusing taxpayers’ money. Even though taxes are increased, government does not fulfil its primary responsibilities,” says Taute.
CEO of the SA Institute of Tax Professionals, Keith Engel says people are at a breaking point.
“It is more about expenditure than anything else. People are saying, ‘yes we are paying tax but what are we getting for it?’” he says.
According to Engel, if entrepreneurs reach breaking point, they could play hide and seek with the revenue services.
“[You] won’t do that with the attorneys or accountants, because you will [lie] to your accountants and give them a different set of books to work from. So people can keep two sets of books. In small businesses, the employer might make a deal with you were he says ‘I am going to give you R300,000 but I will give you another R200,000 that we will not tell the revenue services about,” he says.
Alex Poole* (not his real name) who runs a tax revolt Facebook page, followed by 21,000 people, says: “Most people can sense that they’re being [robbed]… I believe all forms of mandatory income taxation are theft. The things its being spent on is so obviously not in the best interest of the country’s needs, people feel more and more ripped off. It now feels like the theft that it is. And the people are rightfully angry about it.”
Engel, however, commended Minister of Finance Pravin Gordhan for his 2016 budget.
“The budget was more about expenditure than it was tax. You can see very clearly they didn’t want to break the backs of the taxpayer. He spoke about cutting wages and a lot of government expense which made people a bit at ease,” he says.
SARS doesn’t think a tax revolt is likely. It says its compliance model is designed to foster voluntary compliance and says there is high tax integrity in the country.
“SARS has found the vast majority of taxpayers are fully tax compliant. This is testament to the patriotic and compliant culture of South Africans. In the very odd cases of intentional non-compliance, SARS recoups the taxes, as per the provisions of tax and customs legislation,” says an employee at SARS who asked to remain anonymous.
If Gordhan’s budget cuts don’t show in the numbers, South Africans may think the best form of defence is no tax.

Nothing For Nothing

Last month I suggested that the South African government is unsure of which route to follow to find a shared strategy with the private sector to deal with the infrastructure backlog preventing the region’s progress.
Has the ruthless march towards recession, higher unemployment, coupled with the prospect of credit ratings downgrades and potential changes in voter sentiment, finally struck home?
Finance Minister Pravin Gordhan’s recent bellwether meeting with 60 CEOs reminds me of the Union Buildings meeting I attended after South Africa successfully hosted the 2010 World Cup. The President and most of the Cabinet met with business in high spirits to reinforce the need to harness the collaborative momentum that had delivered so well.
Will the economic crisis that has followed the inaction and ineptitude after that euphoric session finally galvanize government and business into action?
Economic revival will not be achieved without massive investment in infrastructure and it cannot be delivered effectively without collaboration between the public and private sectors at the highest level.
In many countries there is a close relationship between the government, the national agenda and the construction industry. Many have transparent cross shareholding and collective arrangements that make for quicker infrastructure expansion.
The key is harnessing private sector funding for public infrastructure through commercially viable PPPs and concessionary projects, where each party takes a share in the risk for reward. This relieves the fiscus of having to fund everything and can then direct scarce public funds towards infrastructure that will attract industrial investment and drive long-term economic growth.
My previous company has decades of experience with this in Africa and Eastern Europe, but political ideology in South Africa has bedeviled this opportunity.
After 2010, we had numerous discussions with Brazilian groups and learned of this collective mindset in Brazil ahead of their 2014 World Cup and 2016 Olympics programs.
France has a deep collaboration between government and construction. The United States infrastructure is now undergoing massive rebuilding, with a strong private sector participation in both funding and implementation.
Likewise for overseas work, our competitors come into our region with robust political and financial backing from their governments.
The French approach to business is founded upon national interest and long-term foreign relationships, which was evident in recent years with the prospects for a fleet of nuclear power plants for South Africa. For several years, I participated in the developing French strategy for this work that encompassed major technology groups, their suppliers looking to localize in South Africa, the French national power utility and their government representatives.
Likewise, the Russians and South Koreans have strongly developed public/private trade institutions and strategies and have engaged with targeted partnerships with local companies. The success of South Korean business in our market is remarkable. The Russians are now firm contenders for nuclear power.
In stark contrast, in my experience in working across Africa and the Middle East, South African business generally feels alone and has to fend for itself internationally.
South Africa’s tax-payer funded development finance institutions have been known to fund projects in other African countries without involving any South African content. Most competitor nations would have contractual requirements that their funding has a high content from the lending nation.
This further diminishes South Africa’ growth prospects, the tax base and the desired employment and regional cooperation. The lack of support, and the time lost, is eroding the commitment to South Africa as the bigger companies shed local jobs and continue to shift to new international markets.
The construction industry has been through hell but it’s ready to make a difference. To do this it needs a champion in government, that has until now been absent.
The industry has tabled robust investments and long-term plans that include significant additional training and skills program. It has also offered to assist distressed municipalities and undertake social projects.
There is also a suite of execution strategies that will deliver on the commitment to collaborate with, mentor and jointly execute large projects with black-owned business to ensure the next generation of large construction companies are created from a solid experience base.
Perhaps out of adversity, the need for radical change in ideology and policy from government and for business to deliver more jobs, demographic and economic transformation and black industrialization, Gordhan’s new approach will find traction.
The engineering and construction industry in this country cannot wait much longer.

Tag: Government

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