It happened one Saturday afternoon; the meat was on the fire, the smoke was in the air, and a father sat his 13-year-old son down for a paternal chat that was to change his life.
The father was billionaire investor Jannie Mouton – known as the &#8216;Boere Buffett&#8217;. The son was Piet Mouton who was to grow up into a multi-million-dollar investor. Billionaire and son have beefed up PSG, the investment holding company worth $4.3 billion (market cap) that has spread to a combined market capitalization of approximately $12.5 billion in just 22 years.
&#8220;Growing up in our family, at the age of 13 I already knew what options and futures were… It was a new thing on the JSE and my dad came home and, at a braai on a Saturday, he sat me and my brother down and explained it to us. So here I had some great knowledge that I didn&#8217;t know what to do with at school, but I understood the concept of options and futures,&#8221; says Piet.
&#8220;[PSG] was part of our life growing up, the entire business concept. Being mathematically inclined, [my future idea] wasn&#8217;t necessarily to go into business with my father, but it was to go into business.&#8221;
This was the incredible inside story told from the two men as FORBES AFRICA sat down at 35 Church Street, Stellenbosch, in the heart of the quaint South African wine farm to hear how one family built an investment giant.
&#8220;My wife once told me that was your favorite child, PSG, you never ask anything about Jan or Piet, or Charity. It’s only PSG, PSG. The whole braai [barbeque], the whole evening was talking about PSG. It was very much part and parcel of how we started,&#8221; says Jannie.
The choice of the building in Church Street for this interview was a spot-on smart investment.  They call it Ou Kollege and it is as much of a reflection of their humble characters as their life stories. The wooden panels, grey walls, African paintings and sculptures of leopards have that millionaire touch. Jannie bought it with his old friend GT Ferreira, FirstRand founder and also a multimillionaire. The two men decorated it with paint pot and brush in hand.
&#8220;We bought this building and we haven&#8217;t left.  I remember GT saying to me &#8216;Jannie, it&#8217;s just a structure, you must put stuff in it as well&#8217;, so he ended up being the interior decorator here as well,&#8221; says Jannie.
&#8220;You can see this wood paneling is the same as GT&#8217;s office on the third floor which looks very similar to what we&#8217;ve got. It had the same interior decorator at the end of the day,&#8221; says Piet, as they both laugh.
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On this day, in the very room where they plotted billions of dollars of investment around the world, Piet and Jannie don matching black suits and white shirts. They are every inch the shrewd businessmen, with a dash of down-to-earth humility.
Thomas Edison, the man famous for the lightbulb, once said opportunity is missed by most people because it is dressed in overalls and looks like work. The Moutons are dressed in suits and look like investment.
Jannie founded the group just 22 years ago after a kick in the gut. He was fired by his partners from his own stock broking firm. To add insult to injury, his name as part of Senekal, Mouton &amp; Kitshoff was on the door. The fact that Mouton will never forget August 5, 1995, shows how deeply it hurt him. At the time, probably the last thing on his mind was that this humiliation was the best thing that ever happened to him.
<div id="attachment_32675" style="width: 270px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-32675" class=" wp-image-32675" src="http://www.forbesafrica.com/wp-content/uploads/2017/07/IMG_2492.LR_-200x300.jpg" alt="" width="260" height="390" />Jannie Mouton (Photo by Jay Caboz)</div>
<blockquote>&#8220;If you were fired in your life, you must have realized you&#8217;ve made a mistake. I think it was a good lesson. It&#8217;s a team effort and all the team must be happy and must respect their standing credibility and wisdom. I&#8217;ve learned a lot about that,&#8221; says Jannie.</blockquote>
That lesson hit like a sledgehammer when young Piet was told the news.
&#8220;I was in first-year and was 19 years old. The first part started with Jannie being fired. He was so ashamed he got my mother to phone us up and say he&#8217;d resigned,&#8221; says Piet.
Jannie searched his soul and vowed to own a financial services JSE-listed company. It took three months to get onto the JSE. Jannie, then 48 years old, bought a 51% share of JSE-listed PAG for R3.5 million ($273,000). He sold it two years later for R107 million ($8.35 million).
Then he went home. He settled in Stellenbosch, the town where he studied alongside fellow decorator GT, in the Western Cape.
From these humble beginnings the PSG Group took off like a rocket with annual compound growth in earnings of 50.8% a year.
Their main investments are in bank start-up Capitec, private education firm Curro Holdings, PSG Konsult and agribusiness firm Zeder – with the 31% interest in Capitec constituting roughly 40% of the value of PSG&#8217;s portfolio.
Here&#8217;s how rapidly PSG has grown: An investment of R100,000 ($78,000), on its first day in business, would be worth approximately R390 million ($30.5 million) today if all dividends were reinvested. No other company in the world matches this, according to the Moutons and researchers at the Top Performing Companies &amp; Public Sector.
Jannie is Afrikaans with a capital A. When you speak to him you can see he thinks in Afrikaans and speaks in English. Yet when it comes to business he knows, whenever he speaks, English is king. So when it came to sending his sons to school he bent the rules to claim he was English-speaking so they could grow up learning the world language.
&#8220;My wife was a bit smarter than me. She was in an English school her whole life at Rustenburg Girls’ High. She realized how important English was in life and in business… To send your children from an Afrikaans background to an English school, you had to apply officially. Otherwise they wouldn&#8217;t do it. I still have the little document that says I am English-speaking. That was to protect Afrikaans, they didn&#8217;t want Afrikaans schools and English schools to mix.&#8221;
With parental guidance, and the English language, Piet took to business like a duck to water in his first year at Stellenbosch University where he studied actuarial science.
&#8220;Remember, this was at a time when we were coming into a new democracy. We were at university, there was massive growth in the PSG share price, I think it went up from 36c and peaked at about R18 which was my last year at university. Students do take interest in what happens in the world and it&#8217;s a phenomenal story, so everybody knew who Jannie was, and obviously Jannie and GT were Simonsberg Old Boys, which was the residence where I went to,&#8221; says Piet.
With seven years as CEO of PSG, Piet is the new generation injecting adrenalin into the beating heart of this $4.3-billion company. There were no short cuts for the young Piet, according to Jannie, he had to work his way up the corporate ladder.
<div id="attachment_32676" style="width: 266px" class="wp-caption alignleft"><img loading="lazy" decoding="async" aria-describedby="caption-attachment-32676" class=" wp-image-32676" src="http://www.forbesafrica.com/wp-content/uploads/2017/07/IMG_2503.LR_-200x300.jpg" alt="" width="256" height="384" />Piet Mouton (Photo by Jay Caboz)</div>
&#8220;Piet had started in the group in 2004 with a company called Arch Equity. It was actually a tough day in our lives, because his mother and my wife passed away on 11th of May. On the 17th we launched Arch Equity. We never discussed him becoming CEO,&#8221; says Jannie.
&#8220;Piet was a candidate and I stood back. His colleagues selected him. Here, in private and in public, Piet was the best candidate, I couldn&#8217;t get involved. I would never do that in my life, misuse my title and it was the shareholders decision to appoint him head of the board… For us, it&#8217;s the best CEO who must be in charge.&#8221;
Despite this, you can only imagine the pressure that Piet feels. Not only does he juggle billions in other people&#8217;s money, the chairperson is also your father, the person who started to build it.
&#8220;[Jannie&#8217;s] entire business philosophy is a lesson. The biggest one is don&#8217;t give me problems, give me solutions. Jannie always says &#8216;it&#8217;s easier to tell a guy something won&#8217;t work, it&#8217;s a lot more difficult to sit with an idea and think of a way of doing it differently&#8217;,&#8221; says Piet.
A cornerstone of PSG&#8217;s success is a 30.7% stake in Capitec Bank. In 2002, Capitec’s individual shares listings were worth less than a rand and now they are worth R531 ($41.50). The guiding spirit of Capitec is Michiel le Roux, who disrupted South Africa&#8217;s once cozy banking market by bringing in an aggressive strategy in search of deposits from low-income earners.
<blockquote>&#8220;The Moutons, as the main drivers behind PSG, have built a company that created wealth for many. Their active involvement in the beginning years to get the Capitec dream off the ground was crucial to our success,” says Le Roux.</blockquote>
Capitec was built on 300 micro-lending branches. It shook up the banking sector with new ideas, like the no-brainer of opening on Sundays.
&#8220;The five big banks, prior to Capitec, sat back and they had a nice little oligopoly. Capitec came around and they were allowed to build a great business. By the time the competition realized this is a real player, it was too late. Now Capitec is a serious competitor,&#8221; says Piet.
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PSG has proven time and again that opportunities can be found in the pessimism of others. These are tough times for South Africa, one of Africa&#8217;s most developed economies. It has suffered a string of downgrades, political uncertainty and questions about corruption and fiscal mismanagement.
&#8220;Everybody is always outwardly focused in South Africa… But it means you can actually operate in a very uncompetitive environment. You would not have been able to start a Capitec in London,&#8221; says Piet.
Now technology is also a factor.
&#8220;Each and every week, we at PSG level encourage our subsidiaries to look at the changes. It&#8217;s a fact of life. From the start [Capitec] was a bit of an IT business but now it&#8217;s becoming more and more an IT business. Just look back 10 years; it&#8217;s unbelievable how business has changed. I&#8217;ve also realized my generation has to step back, because we don&#8217;t keep pace with this generation,&#8221; says Jannie.
&#8220;It&#8217;s going to continue changing in the years ahead. It&#8217;s a big thing at all the companies at the moment. You have to sit down and look at your business model and say ‘can it be interrupted?’ There are businesses that are just not there, take for example Kodak,&#8221; says Piet.
&#8220;Now you sit at the Capitec level and you say we mustn&#8217;t be caught with our pants down, because there are guys sitting in garages developing FinTech stuff. At least we at Capitec acknowledge – we don&#8217;t know where the problem is going to come from, we&#8217;ve got to constantly be smart about it,&#8221; says Piet.
&#8220;There are 150 people working on innovation and it’s costing us R200 million ($15.6 million) a year, to constantly scan and see if we can implement some of this new innovation.&#8221;
A recent purchase of an online lender in Poland is a Capitec move toward technology.
&#8220;The model is slightly different here. Whereas here in South Africa we are backed by bricks and mortar with 800 branches with a massive 300 ATM network, there it will be an online operation. Michiel coined a great phrase, shortly after I came back from the UK: it was either going to be a small failure or a big success. Now, where a lot of corporates go overseas and make massive acquisitions and then try implement them, Capitec actually tackled a very small business that has the potential to expand and they can contribute capital if it grows… It&#8217;s a longer path but it&#8217;s a sure way of hitting success at the end of the day. If it&#8217;s a failure it&#8217;s a small failure,&#8221; says Piet.
Another of PSG&#8217;s success stories is Chris van der Merwe&#8217;s Curro Holdings that develops, acquires and manages private schools in South Africa. What started off as a school of 28 learners in the hall of a church in Durbanville, Cape Town, now has a market cap of $1.4 billion.
&#8220;Chris van der Merwe is a unique person. Education and doing something great for the company is his passion. He tells you to your face he doesn&#8217;t understand accounts or profits. He is one of the people I admire in life, he isn&#8217;t fanatically orientated but he has a big thing about education,&#8221; says Jannie.
&#8220;Chris was a primary school teacher who knew he was also phenomenal businessman. He built the school himself, with his own hands. He took his early pension, started with 28 kids in a class, now it&#8217;s up to 50,000,&#8221; says Piet.
In May, Curro Holdings announced it would buy the South African School of Motion Picture Medium and Live Performance (AFDA) – a film, television and live performance higher education institution. Step one of an expansion into the tertiary education system under the soon-to-be JSE-listed company Stadio. In six years, the share price has increased more than 300% to R44.70, with pupil numbers rising 14% to 47,589 in 2016, reports CNBC AFRICA.
&#8220;A typical school class has about 45 students. At varsity, a class could be 100, and the fees are even a bit more than school. It could be a fantastic model,&#8221; says Jannie.
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Asked if this decision had any particular influence from recent education crisis events, like FeesMustFall, the campaign that saw South African universities come to a standstill amid violence over tuition fees, the Moutons were open.
&#8220;See, there you have almost hit the nail on the head of investments. Big macro themes, if you can get it right, you shouldn&#8217;t be limited to growth. Take the whole education sector as a whole, primary and core, if you can get it right, there is actually a massive scope for growth. You are right about the FeesMustFall, because people are becoming disillusioned [with education].&#8221;
Another company Jannie believes could surprise investors is PSG Konsult. With 270 branches and 800 advisors, each branch is its own company, 70%-owned by the individuals who run it – what Jannie calls ultimate empowerment.
&#8220;You should attract very good people alongside you and you must make them co-workers inside the business. You must trust them implicitly and give them the space to grow. That has worked significantly for our group, because they act like shareholders and look after the company,&#8221; says Piet.
Back in the boardroom, the conversation shifts toward the lighter side of life, something the pair can&#8217;t agree on – rugby.
&#8220;It&#8217;s one of the points we don&#8217;t see eye to eye on. Jannie is a Stormers supporter whereas I am a strong Lions supporter. Literally, Saturdays would be a fight to behold.&#8221;
Imagine if the idea to invest in the Stormers or Lions was raised in this Stellenbosch boardroom.

One Name, Two Investors, $4 Billion

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

Tag: Jannie Mouton

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