Saturday, December 25, 2010

Foresight 2011

Thought leaders in politics, economics and business recently gathered at the Gordon Institute of Business Science (GIBS) to forecast how the world will change in the year ahead. They concluded that the global economy will continue to tremble and the South African political arena will once again endure many highs and lows.

Adrian Saville, CEO of Cannon Asset Managers and a senior lecturer at GIBS, identified the greatest challenge for the world in 2011 as being whether or not the traditional powers could break free from the fetters of the recession.

In Saville’s view the developed economies, the US and the EU in particular, had failed to see that this is “no ordinary recession.” The ever-increasing mountain of debt these countries are having to pay off will eventually lead them into a situation similar to that experienced by Japan in the 1990s and 2000s, where endless debt obligations hampered long-term growth.

“The fact that our three largest trading partners, and our three largest investment partners, Japan, Western Europe and North America are going to continue to stutter causes headwinds for South Africa,” he cautioned.

But potential openings also existed for South Africa out of the re-alignment in the international political economy. “We tend to be enamoured with the China and India story, yet Sub-Saharan Africa is growing almost as fast as India and the per capita incomes of Sub-Saharan Africa are higher than India.” he noted. “So we are embedded in an incredible opportunity.”

Dr. Lyal White, a consultant and lecturer at GIBS, echoed this view and noted that 2011 would mark the start of the decade of the Dynamic Markets. He predicted that mature markets would grow by 1.7% (at best), while dynamic markets would grow at an average of about 6.5%. “In short, growth has really shifted from the North and the West, to the South and the East and debt has moved decisively to the North,” he said.

Phuthuma Nhleko, Group President and CEO of MTN, also marvelled at how the tectonic plates of the global economy were shifting. Like Saville, Nhleko saw a chance for SA, Inc. to take advantage of this crisis, especially as corporations begin to engage more actively in the continent (as MTN had done to great success). "Africa is in effect the best-kept open secret from an investment perspective - and a return perspective," he said.

Nhleko also commented on the decline of some of the formerly venerable institutions of the West. “If you had said five years ago that some of the sovereign funds would be taking over Citibank and UBS and so on, somebody would have said ‘you’re smoking something’, but the reality is that this has happened and I think for me that is a fundamental change.”

For Nhleko, demography was a key barometer of future competitiveness, with Europe and Japan rapidly ageing, and the youthful populations of India and China swelling the size of their workforces at a remarkable rate.

Focusing on the public sector and the political realm back home, executive director of FeverTree Consulting, Roelf Meyer argued that the issue of service delivery would be one of the defining points of the coming year and beyond.

“There are huge, huge problems in this area, and they are not decreasing,” he said. “On a daily basis there are more and more local authorities that can’t supply some sort of service that is desperately needed by the people that they are supposed to deliver to.”

Water, electricity and sanitation were all affected, he noted, and those who suffer the most are those who cannot afford to pay for alternative services.

Meyer also observed that this deterioration was not confined to remote areas, pointing to the supposedly developed town of Stellenbosch in the Western Cape, which is experiencing severe capacity problems. Meyer speculated that campaigning for the local elections in 2011 would lead to even greater delivery shortfalls.

Gauteng MEC for Education, Barbara Creecy discussed some of the immense challenges that have arisen in education, particularly following the prolonged public sector strike that gripped the country in August.

Creecy explained that although the question of “redress, access and equity” in the education system had largely been resolved since 1994, the issue of learner performance needed to be addressed, particularly in maths, sciences and literacy.

Creecy said that institutional factors and the impact of poverty were affecting the state’s ability to make these improvements, and that internal migration and deteriorating facilities were taking their toll. “So not only have we not managed to address historical back-logs, but the back-logs in fact get greater and greater.”

Compounding the problem, approximately 60% of this year’s curriculum simply wasn’t covered owing to an inability on the part of teachers to fully engage with course material. The problem is teacher understanding and knowledge of curriculum content, the MEC said, and not teachers’ level of qualifications, which are relatively high. As an illustrative example, Creecy admitted that in 2008 the department had a sample of matric maths teachers write the grade 6 maths exam and only 60% of them passed.

Shaka Sisulu of Cheesekids argued that young people would react strongly to the increasingly more testing and rapidly evolving environment bestowed upon them by their elders. Sisulu warned that the current establishment will resist some of the pressures of this transition.

“Even though we have always seen the youth being vigorous, and vigorously challenging the status quo, there is [now] a lot more at stake for the status quo globally, but particularly in South Africa.”

Gary Morolo, Chairman of Datacentrix, spoke about the general feelings of anxiety in the country when looking to the future. “As South Africans we have extreme sentiment swings. We are either wildly euphoric or we are deeply pessimistic and we are in one of those phases where we say ‘this country is going to the dogs’.”

While many of these problems are cause for concern, Morolo said it is possible to be vigilant in guarding against abuses of power without resorting to hysteria. To do this the country needs strong checks and balances.

“What we have to ensure is that those important structures of state that are constitutionally protected continue to be that way, that we don’t find ourselves in a position where our institutions are perverted…where we allow the Constitution to be subverted in any way. So long as people are not touching those institutions then we have recourse to do something about it,” he said.

Thursday, October 14, 2010

Social Media and the Context for Corporates

By David Ansara and Sarann Buckby

A tweet there, a status update here, a blog post over there. This seemingly inconsequential stream of online commentary has suddenly begun to challenge the orthodoxies of traditional marketing approaches. Granted, corporates may have come to the social media party late, but they are showing every intention of playing catch-up. And those companies that don’t embrace these new methods of communication risk being left behind in the turgid realm of old media.

Justin Spratt, managing partner at Quirk eMarketing, brought some of SA’s top social media thinkers and doers together at the Gordon Institute of Business Science (GIBS) on Tuesday 12th October. They discussed the effect that new technology platforms are having on brand awareness and consumer behaviour, as well as on society itself.

From left to right, Andre Hugo, Mary Mzumara, Justin Spratt, Mike Stopforth, and Jarred Cinman, who sees the fervour surrounding pop star Justin Bieber as a symbol of the tyranny of the crowd.

The power individuals now have to broadcast their opinions to friends and followers on their networks can be to the benefit or detriment of any brand, no matter how powerful. As news of a company’s triumphs or missteps can spread like a virus, how do marketers and PR agents respond?

Mike Stopforth, founder and CEO of Cerebra, illustrated the power of new media by arguing that brand identity was formed through the collective thoughts, associations, emotions and experiences of the user. Such modes of behaviour have been with human beings forever, he argued, but were now being amplified by technology. “It’s word-of-mouth on steroids,” he explained.

Social media was about ordinary people doing extraordinary things, Stopforth chimed. He urged businesses to empathise with, and listen to, their customers, and to see the product as their buyers do. “It can be very difficult to read the label when we are inside of the bottle,” he said.

The consumer is getting smarter faster than we can keep up, he added, and thus companies looking to understand social media need to get to grips with the idea of community, rather than a de-humanized set of data to be manipulated and codified. “Community-building happens over the long term. It’s not a T20 match; it’s a five day test,” he said.

Jarred Cinman, strategy director at Native, articulated a more contrarian perspective. Firstly, he said, social media has had an insidious effect on people’s conduct, as it cultivates egoism and was highly distractive. “Human beings love distracting things,” he observed, at which point, Stopforth quipped that idling on Facebook in the workplace was “social not-working.”

Justin Spratt, Jarred Cinman, and Mike Stopforth. An audience member playfully reprimanded Stopforth on Twitter for being distracted by his phone during the discussion, to which he tweeted back: "@candiceburin pff. I have the attention span of a goldfish"

The ongoing infatuation with networking is the ultimate opiate of the masses, Cinman scoffed, drawing on Marxist theory. “[Users] might hate a brand, but they’re still talking about brands.”

“It’s a playground for the worst aspects of human nature – greed, power, lust, revenge and the sheep mentality,” Cinman said. He added that the anonymity enjoyed by people commenting on online news articles or YouTube videos allowed racism, sexism and fundamentalism to flourish.

There was also the alienation of having scores of fake friends, which Cinman observed was odd when compared with the increase in depression in young people. “A thousand friends, how could I be depressed?” he joked.

The networks also bred a culture of sameness and unoriginality that he claimed was built into the system. “For me the notion of the long tail is a complete misnomer.” People are clustering around a few ideas and repeating them, he explained.

Mary Mzumara

Mary Mzumara, another managing partner at Quirk, countered this with some revealing examples of the consequences of disobeying the crowd. She used the recent experience of clothing retailer GAP, and its hasty withdrawal of an ill-conceived rebranding exercise. Online users voted down its new logo, forcing the company to revert back to its iconic tag. Judgement was still out on whether this was a marketing coup or catastrophe.

There are three broad categories of social media objectives - sales or marketing gains; increased engagement and; improved relationships or reputation. Mzumara alluded to this by differentiating between sales media and social media.

Employers too, Mzumara suggested, could tap into the power of online crowds and suck the marrow of talent out of their employees by better engaging them on social networks. The only thing stopping corporates from taking the leap is fear and trepidation, she warned.

According to Andre Hugo, a director at Deloitte, the auditing firm had already made that leap, and with amazing consequences. As a pioneer of Deloitte Digital, Hugo spoke of the improved intellectual capital and originality that had come out of obliging employees to generate more ideas and share them on internal networks.

In a recent drive, Deloitte employees created a pool of thousands of original business proposals, half a dozen of which resulted in concrete ventures. The effective internal use of social media whittled a six-month process down to six weeks, and increased the dynamism and elasticity of the business.

Andre Hugo demonstrating the power of social media

Contra Stopforth, Hugo argued that social media was just another set of data that companies could analyse and use. He illustrated this with a series of inkblot graphs that demonstrated the spread of key messages through targeted networks. Hugo’s approach highlighted how online data can inform and improve communication tactics, resulting in a better return on investment for companies.

The panel expressed the view that if corporates did not integrate social media into their marketing strategies they could be sure their competitors were doing so. This motivation, while true on some levels, seemed to fall prey to the “sheep mentality” derided by Cinman. A more effective approach, as shown in Hugo’s case study, is for marketers to understand what they want to achieve through social media before they set out, and to convince management to buy into the expectations and definitions of success in social media.

The overarching message of the evening was that social networking is fast reaching its zenith and those who do not engage with it will simply be ignored. And whatever you do, don’t ban your employees from surfing their networks at the office.

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Sarann Buckby is a director at Phatic Communications, a digital PR and social media agency. David Ansara is a freelance writer.

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This article was originally written for MBAnetwork, an information portal and networking site for prospective and current MBA students in South Africa.

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Photos: David Ansara

Monday, October 11, 2010

Obama and the Middle East


In April 2009, my friend Robert Krause and I took part in a series of televised current affairs programmes in London featured on the news channel Press TV. The show was called Forum, and was structured around audience participation and debate. Above is an excerpt from the episode focusing on 'Obama and the Middle East' and contains both mine and Mr. Krause's questions to the panel.

Robert Krause: "It's very possible that even according to some Israeli NGOs that actually the two-state solution has already been, or is about to be, buried just by the sheer scale of settlement construction, [and] bypassed roads in the West Bank, which have sliced up the territory and made a Palestinian State economically impossible; so how is Obama going to react to the death of the two-state solution and find other solutions (a single state solution or a bi-national solution)?"

David Ansara: "Do you think Mr. Obama will be able to adopt a more principled position towards Israel, rather than one that just solely protects Israel's interests?"

I do not believe that America solely protects Israel's interests, as I implied unsubtly in my question to the panel, but the country still remains the most important strategic ally for the US in the Middle East. This has not changed under President Obama, who has nevertheless bravely attempted to bring both parties to the negotiation table, albeit with limited success.

It will be interesting to observe how he reacts to the current thaw in the Israeli settlement construction freeze on the West Bank. Even if there is an extension of the freeze period, the issue could be sufficiently sticky to prompt the withdrawal of the Palestinian Authority from the present negotiations. Obama will have to use all his persuasive powers to keep them at the table.

Perhaps Mr. Krause is correct when he suggests that a unitary state within a single set of borders might be a better option than the two-state solution. I don't know for sure, but I still think that two sovereign territories along the 1967 borders would be preferable. However, if the Palestinians are left with a cantonized, segmented territory, then that might not be acceptable to them and a negotiated settlement could remain forever elusive. Alternatives such as the one expressed here by Mr. Krause should be seriously considered if both sides wish to see peace sooner rather than later.

Friday, October 8, 2010

A Small Movie with a Big Message



The South African film A Small Town Called Descent is currently being screened at the Tri Continents Film Festival in Johannesburg. Directed by first-time filmmaker Jahmil X. T. Quebeka, the film is a hard examination of some the ugly realities of contemporary SA.

Descent is not the easiest film to watch: production and sound quality are variable, the plot takes too many twists and turns, and there is an over-reliance on stock footage, which sometimes detracts from the narrative and the characters before you.

That said, there is something quite brutal and honest about Quebeka’s confrontation of the xenophobic violence of May 2008, and the effect that these events had on the collective psyche of the nation.

Moreover, his work documents how the gush of violence exposed a deeper uncertainty about the institutions of our democracy and the perception of our own moral certainty after the end of apartheid. The fallibility of our policing services and the difficulty of their task in an environment of official lawlessness and corruption was another striking aspect of the film.

I caught up with one of its stars, Paul Buckby, who will be familiar to fans of television series Generations, and Egoli. He is also currently on our TV screens as detective Eddie Holmes on Isidingo on SABC3.

David Ansara: In the film you play a member of the Scorpions tasked with investigating a xenophobic attack in the titular (and fictional) Karoo town of ‘Descent’. Describe your character and what motivates him.

Paul Buckby: The character I play is a Scorpion called 'Nathan Liebowitz'. The idea of giving him an Israeli identity was to avoid the too-often-seen, stereotypical relationship between the black cop and the Afrikaner cop. This also helps to mystify him somewhat. Nathan alludes to having served in the Israeli Special Forces and in the SA Parabats, so he's not an open book as far as his experience is concerned. He is motivated by seeing justice done and takes his career seriously.


DA: What were the challenges of playing Liebowitz?

PB: Liebowitz is a walking paradox. He appears to be in complete control of his world around him, but inside he wages war with his demons. To show this contrast gently, was a challenge.

DA: Descent is wide-ranging in terms of its subject matter. In fact, it probably tries to tackle too much (xenophonbia, corruption, gender violence, the legacy of Apartheid, crime, racism, etc). But it nevertheless paints an interesting portrait of the eventful period between the end of 2007 and late 2008. What themes in the film resonated most strongly with you, and how have audiences reacted to the issues portrayed in the movie?

PB: South Africa certainly offers the film maker a kaleidoscope of subjects to focus on and I agree with you that maybe director Jahmil X. T. Quebeka tackled too many of them at once, but so much was going on around that time, not least of which, was the sudden recall of Thabo Mbeki. It’s hard to avoid references to Apartheid in this film or corruption for that matter, which has become cannon-fodder for the media. Xenophobia, a term I hadn't really heard of until 2007-8, has now become a part of my daily dialogue.

The variety of subjects shown in Descent has certainly gotten audiences talking. However, the Issue of xenophobia is to me what the film is all about. Even though the Scorpion characters have different backgrounds and political convictions, they discover that their humanity is a constant and it brings them together.

DA: The role was very physical and there are several action sequences. Were you up to the task?

PB: It’s amazing how willing actors are to throw themselves into risky situations, just to get the perfect shot. The fight sequence with 'Demon' (John Dlamini) was very physical and he was great to work with. He has no experience as an actor, but rose to the occasion admirably.
There is a scene where we are grappling with each other near some shacks, when he is choreographed to pick me up and bulldoze me into a shack wall. After a slightly measured first take, I asked him not to hold back his aggression. Well, the second take was somewhat different…

Paul Buckby in action as Nathan Liebowitz

He picked me up with the same ease as I would a sheaf of wheat and rammed me into the shack. I felt something give in my rib cage, which left me winded! I was in agony, but we had to soldier on. The sequence shows me wincing, which I used, without any choice, to full effect. It took me a month to recover from what I thought was a broken rib, but turned out to be less than so. It was worth it!

DA: Ouch. What were some of the other highlights from the shoot for you personally?

PB: The black Golf GTi played a vital role, not only as the 'Scorpionmobile', but as a car I really enjoyed driving around our shooting location, Somerset East. It’s an awesome car to drive. It created a stir with the locals, who must've thought we were the real deal.

I remember an amusing incident one morning: We were standing next to our Gti, adorned in imposing Scorpion insignia and a blue light. We were waiting to get the call to set, fully kitted out in Kevlar vests and wearing our 9mm Brownings, when a coloured gentleman, looking quite distressed, asked if we could assist him to break up a fight between two farmers! I must say, I was tempted to do so! I'm sure we would've diffused the situation, even though our sidearms were empty!

DA: A convincing portrayal indeed! There are many graphic depictions of violence and sexual assault in the film. Did you feel it was necessary to show, for instance, the photograph of the Burning Man, the Mozambican Ernesto Nhamuave?

PB: This tragic event is what spawned the idea for the film. When Jahmil saw the photo on the front pages, he was moved to try and investigate this further - if only on a fictional level. The showing of this photo will hopefully serve to remind us of what we don't want to experience ever again.

DA: Has filmmaking become more or less difficult in South Africa, particularly for young or first-time directors? I am referring particularly to funding, logistics, distribution, etc.

PB: I’m planning to produce my first film next year, so maybe I will have to put my answer to that one on hold until I've experienced the challenges for myself. I can say that Anand Singh from VideoVision, the distributor for Descent, said at the recent Durban Film Festival that it’s an exciting time for filmmaking in SA, however, the challenge of securing a distribution deal remains enormous. His advice is to continue making the films you want to make and don't give up.

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A Small Town Called Descent is produced by A Moment's Entertainment and is showing at Cinema Nouveau Brooklyn Mall (18h00) and Rosebank (20h00) tomorrow, Saturday 9th October, 2010. It is scheduled for nationwide release in February 2011.

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Images courtesy of Paul Buckby

Tuesday, October 5, 2010

Pledge to take back the racial middle ground in South Africa

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My friend Patrick Madden wrote a call to action in April of this year, which was a period of intense racial animosity and uncertainty in the country. He crafted this pledge as a way of restoring some sanity to the discourse surrounding the national question in South Africa, and it bears repeating. See Patrick's explanation as well as the original pledge here.
  • I recognise the feelings of tension and anger felt between people of different races in South Africa today.
  • I recognise that nurturing these feelings undermines our mutual best interests and our highest ambitions for ourselves, our communities and our nation.
  • I recognise my interdependence with all South Africans. I affirm that South Africans of all races and cultures can work together to improve the conditions of our lives and our environment.
  • Recognising our common humanity, I pledge to relate to all South Africans with compassion and respect and to work with them in an atmosphere of openness and mutual recognition.
  • I aspire to create a South Africa that is safe and caring for all. Therefore, I personally vow to refrain from violence and from violent speech towards anyone, regardless of their race or culture.
I was particularly moved by the statement concerning the inherent interdependence of different racial groups. The goodwill of the World Cup went some way towards pushing these concerns aside, but the issues Patrick raises are no less cogent today than they were six months ago. It is the responsibility of all of us to treat others with dignity and respect and to view our interests not simply as a zero-sum racial game.

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Original image: Poplicks.com

Monday, October 4, 2010

Business as usual is not good enough anymore

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The global financial crisis has changed the way we do business. It has forced society to re-evaluate its attitude to risk and wealth generation, and prompted a critical appraisal of corporate responsibility and ethics.

The crisis has also affected thinking on management. The manner in which business leaders interpret these phenomena and accordingly alter their conduct in the marketplace has profound implications for the future of the international economy. The need to adapt, argues Prof. Walter Baets, the head of the University of Cape Town’s Graduate School of Business (GSB), is urgent and unavoidable.

Speaking at a UCT alumni event in Sandton on September 28th, Prof. Baets argued that being ethical or socially responsible are not nice-to-haves. Rather, not to be more socially engaged would run the risk of fundamentally misunderstanding how the world really works, and business’s role in that world.

What characterises emerging markets such as our own, Baets explained, are high degrees of uncertainty, high degrees of complexity, and extreme levels of inequality. Reflecting on his years in the financial services sector, he criticised the process of financial modelling. Many of these analyses, he said, have no bearing on the reality of emerging economies and the complexities of their social landscapes.

Baets described the traditional managerial technique of solving problems through assessing cause and effect as a classic Newtonian Paradigm. However, the challenges facing businesses today are different: they are non-linear, deeply complex and full of unforeseen variables. The problem with most financial models, he noted, is that they presume we can solve a complex world solely by examining causal relationships. You can’t.

Ninety five percent of what business schools teach is Newtonian, he said, but what is really needed is something akin to Quantum Mechanics, a practice which takes into account multiple, and seemingly invisible paradigms when approaching a problem.

“You can never understand a phenomenon in three dimensions if you live in a two dimensional world,” he said, “If you want to understand an organisation you have to understand it systemically.”

As head of the UCT GSB, Baets also attacked the pedagogy of business schools, insisting that MBA students need to grasp that their learning is not about a fixed set of outcomes. “Traditionally in an exam we don’t test intelligence; we test your capacity to say what [the examiner] wants you to say,” he criticised, gesticulating wildly.

“I can’t teach you anything! I can only teach you how to learn […] For example, I can explain the rules of soccer but I can’t make you a soccer player. The same is true for a musician or a pilot.” The latter, he explained, aren’t given the joystick and told to fly; they are introduced to piloting gradually through flight simulators. The same approach should be taken with managers, he mused.

The professor used yet another metaphor, that of the motorcycle racer who has to balance on the threshold of collapse while taking a corner at high-speed. He insisted that if you want your business to win the race you need to go beyond the equilibrium and push yourself to "the edge of chaos". Like the motrorcyclist, you need to do this at every turn, not just once or twice.

In terms of business' social strategy, Baets submitted that companies should ask themselves what they add to society - a broader question than simply evaluating their philanthropic contribution. “It all starts with values. What are you doing it for? If you company is bankrupt, what are you missing? And if the answer is 'nothing', then why do you exist?”

Baets insisted that you cannot decree to become a sustainable or ethical company overnight. “If you really want to have a transformational impact on society you have to understand society and people in a holistic way.”

Photo: David Ansara

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This article was originally written for MBAnetwork an information portal and networking site for prospective and current MBA students in South Africa.

Tuesday, September 28, 2010

McKinsey report - 'Lions on the move: The progress and potential of African economies'

Africa presents myriad opportunities for growth and investment in the near future and beyond. So says The McKinsey Global Institute, a think tank focusing on business and economics research worldwide. McKinsey partners presented the findings of their June 2010 report Lions on the Move: The progress and potential of African economies at the Gordon Institute of Business Science (GIBS) on 14 September. Their conclusions were both surprising and encouraging.

Mutsa Chironga, Engagement Manager in McKinsey’s Sub-Saharan Office, observed that in the global political economy most growth has come from emerging markets, and that Africa forms part of this new dynamic fold. “Growth has headed South, while debt has headed North”, he said.


Mutsa Chironga

This growth is about far more than simply resources, Chironga observed. Referring to the report, he noted that although the boom in commodity prices had certainly helped Africa, this growth was also the result of government actions to improve the political and macroeconomic environments and to create a healthier overall business climate.

“Africa’s business opportunities are potentially very large, particularly for companies in consumer-facing industries, resources, agriculture, and infrastructure,” the report noted. The question to ask from here is whether this growth will be sustained if the oil price drops?

The answer is: most likely. Africa is seen as the final frontier of growth, Chironga said, and the last opportunity for many companies to significantly grow their market share, especially in strategic industries such as telecommunications, banking and retail.

Chironga pointed to some key factors that could lead to potential long-term and sustained success. For instance, investment in Africa has increased seven-fold in the last decade. In addition, GDP growth has reached levels of USD 1,5 trillion, making the combined value of the continent’s economy the tenth largest in the world.

With approximately a billion people within its borders, Africa comprises about 14% of the global population. Half of these people are under the age of 35 years, representing a huge untapped reserve of potential skilled and unskilled labour. In this light, the report notes that, “[by] 2040, the continent will be home to one in five of the planet’s young people, and the size of its labour force will top China’s.” (p.50.)



However, Chironga cautioned that the downside to this remarkable story is political risk and uncertainties surrounding stability and security. Perceptions of these risks are still high, and are the number one factor hindering investment. Another challenge is in education, where improvements have been made, but not at the desired rate.

Arend van Wamelen, a Principal in McKinsey & Company’s Johannesburg office, developed these concepts further.

He referred to a key element of the report: “Long-term growth also will be lifted by internal social and demographic trends, particularly Africa’s growing labor force, urbanisation, and the related rise of middle-class consumers.” (p.1.). Although urbanisation is not uniformly good, and comes with many challenges (e.g. slums and strains on services), urban dwellers tend to be more productive and add positively to consumer spending, he said.

Another topic van Wamelen addressed was the role of China on the continent and the growing infrastructure investment that the world’s second largest economy has provided for many African countries (levels that are now higher than that of the World Bank’s).

Arend van Wamelen

Van Wamelen took note of, but ultimately dismissed, fears that this represents a neo-colonial push that will benefit only one partner. African governments, he said, were becoming far shrewder in their dealings with China, and the demand for commodities which has bolstered growth has come largely from the East.

Rates of credit provided by the Chinese were also far lower than those offered by other Development Finance Institutions (DFIs) such as the IDC and DBSA, which aided development.

Both speakers were particularly excited about the potential for an “African Green Revolution” on the level of those experienced, for example, in India and Bangladesh. According to the report, Africa contains 60% of the world’s unused arable land.

If, and only if, improvements in policy and technology can be applied to the agricultural sector then this too could potentially contribute to Africa’s economic growth. The McKinsey report underscored that this is by no means a certainty, and that a lot of work will have to be done to realize this potential.

Generally speaking, this is exciting news for a continent long mired in low rates of growth, hyperinflation and political instability. With the cessation of several major conflicts and the liberalization of many core economies, Africa is now set to lift off, but the right buttons will have to be pushed before that can happen.

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Photo: David Ansara
Graph: McKinsey Global Institute & International Monetary Fund

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This article was originally written for MBAnetwork, an information portal and networking site for prospective and current MBA students in South Africa.

Friday, September 17, 2010

Right 2 Know campaign launches in Gauteng

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William Bird of Media Monitoring Africa

The state is seeking to undermine media freedom and restrict access to information according to the Right 2 Know campaign. The umbrella body, comprising NGOs, media and civil rights groups has gathered over 9000 signatures of individuals and organisations to protest against the Protection of Information Bill currently before parliament (as well as the proposed Media Appeals Tribunal or ‘MAT’).

The movement launched its Gauteng chapter on Wednesday 15 September at the Wits University School of Law to an audience of academics, students and interested citizens. Campaign organisers argued that these plans represent a threat to constitutional rights such as freedom of speech and access to information, and conflict with existing legislation, such as the Promotion of Access to Information Act.

William Bird of Media Monitoring Africa, one of the principal NGOs behind the Right 2 Know campaign, spoke in no uncertain terms about the potential dangers. “Let the truth be told, stop the Secrecy Bill!” he proclaimed. “It affects all of us … anybody within SA’s borders will be affected by this Bill if it were to go through in its current form; meaning that we wouldn’t have half the access to information that we currently do."

One of the problems of the “Secrecy Bill” is the appeal mechanism. If a citizen wishes to oppose classification of a document, he or she needs to lodge a complaint to have it overturned – to the very minister who classified the information in the first place. Said minister could easily deny this request by citing state security concerns defined under a broad ‘national interest’ clause in the act.

This, according to Freedom of Expression Institute Executive Director Ayesha Kajee, will create “super-ministers” who will lack accountability. Kajee warned that when writing legislation the effect can be lasting. The present government needs to consider how its worst enemies would misuse these laws were they to get into power, she said.

In addition, no ‘public interest’ clause was present in the Bill, which effectively forbids leaks of classified information being made under any circumstances. It would make revealing, or being in possession of, such information a criminal offence, potentially having a chilling effect on citizens or journalists seeking to investigate corruption or of whistle-blowers revealing malfeasance.

The Freedom of Expression Network, a grassroots organisation seeking to promote transparency and accountability, was adamant that the message be carried to ordinary citizens. “This Bill will turn South Africa into a society of secrets, impeding the free flow of information,” said Siphiwe Segodi, a coordinator of the FXN. Segodi called for forums such as Nedlac to be used to pressurize the government to revise its stance. The campaign needed to work closely with Cosatu, as the Bill will affect the right to protest and to strike, he said.

The Secrecy Bill would also have a negative affect on the ability of academics to pursue their research effectively, according Anthony Butler, Professor of Political Studies at Wits. Butler noted that the ANC had a long history of antagonism towards academic institutions and other civic groups that have sought to influence the public policy agenda, and that the Bill was a continuation of this. But he also added that “Universities have not perhaps reflected hard enough on their own limitations and weaknesses,” in terms of their historic place in a divided society.

Gabriella Razzano, of the South African History Archive, insisted that “if this Bill is passed in anything that looks like its current form there will definitely be a challenge in court run by this campaign.” However, there were also calls to let the legislature consider the Bill in full and to report back with adjustments. A judicial challenge could be left open as a secondary means of resistance, following civic action and public participation into the drafting process.

Photo: David Ansara

Thursday, September 16, 2010

South African Business School Expo hits Sandton



Why embark on an MBA? Does it add to your professional development or is it an expensive way of multiplying your stress levels? Crucially, how do you choose the institution that best fits your interests, your career objectives, and your budget? On September 9th prospective MBA students were able to ask these questions themselves and sample the offerings of some of the best business education institutions at the SABSA MBA Open Day at the Sandton Convention Centre.

A range of business schools put together displays manned with friendly and informative personnel eager to hand out their brochures, free pens and wrapped sweets. There was also a long programme of presentations and workshops running throughout the day focusing on a range of subjects such as the best companies to work for, and the challenges of transformation, corporate wellness, and strategic leadership.

Zimasa Koyana, right, answering questions about the Wits Business School’s offerings.

Many feel the MBA is worth the long hours, diminished family time and the added pressure and certainly its advantages are more multifaceted than simply boosting your CV. “The learning doesn’t end in the classroom; it is a much broader learning environment,” said Zimasa Koyana, of Wits Business School. With extensive use of case studies and integrated learning, not to mention the huge potential for networking, the MBA has benefits that extend beyond the curriculum, she said.

Koyana noted that most graduates leave their initial degrees having specialized in a particular academic discipline - whether it is accounting, history, or IT - that taught them specialised skills. “The MBA moves them from that specialised space to the general management space so that they can better understand how their skills fit together in the working world,” she said.

UCT GSB's Segran Nair, right, took a holistic view of the MBA.

Segran Nair a Director of the University of Cape Town’s Graduate School of Business emphasised that the degree was not a shortcut to a fat pay check. “You come to a business school not purely to achieve success, but to be transformed,” he said. Apart from the academic rigour of the programme, UCT GSB also integrates personal and leadership development, and even yoga and meditation classes into its programme to help maintain the balance between learning and improving one’s state of mind.

In addition to the MBA, many schools offer a postgraduate diploma in management, which is aimed at recent graduates or those with one-to-three years of work experience. These are typically individuals who are looking to fast-track their way into the world of business, but who are unwilling or unable to pursue the full MBA.

At schools such as Wits or the Gordon Institute of Business Science (GIBS) for instance, the graduate diploma can form the foundation for an MBA further down the line, sometimes contributing credit towards the higher degree. Should students excel academically in the diploma they can potentially be accepted for the MBA if they wish to further their studies (conditional upon a 65% aggregate in the case of GIBS). If students are unsure about whether an MBA is right for them, they can always leave with the more basic qualification and still benefit immensely.

GIBS staff members were kept busy by a multitude of interested perspective students.

Shaun Rozyn, Director of the Company Specific Programmes at GIBS, drew attention to the fantastic opportunities that being part of an MBA alumni network can bring. “It gives you the chance to benchmark and to ask yourself ‘How good am I?’” he beamed, referring to the dynamism that comes with brainstorming and problem-solving with some of the brightest up-and-comers in various industries. Rozyn says that the University of Pretoria, the school’s umbrella body, gives GIBS the freedom to respond to market needs by giving it a measure of autonomy.

Letisha Greyling, left, and Owen Skae, right, of Rhodes Investec Business School emphasised sustainability: even encouraging visitors to recycle their sweet wrappers.

Prof. Owen Skae of the Rhodes Investec Business School emphasised his institution’s focus on environmental sustainability, which he said is integrated into all facets of the course. I asked him why somebody based in the metropolitan centres would want to journey all the way to Grahamstown to complete an MBA. He replied that many residents of Johannesburg and Cape Town make their way down to the Eastern Cape, and that the modular block release format of the degree allows them to spend as little time away from home as possible. The beauty of the campus and the youthful atmosphere of the town were big drawcards, he said, as well as the backing of a major financial service provider.

Whether you are a fresh graduate, a mid-level manager or a director, there is always potential to learn, interact and create within the business school environment. You have to be ready for it financially and intellectually – and also ensure that you time your studies to coincide with a strategic point in your career.

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Photos: David Ansara

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This report first appeared on MBAnetwork, an information portal and networking site for potential and current MBA students in South Africa.

Tuesday, September 7, 2010

GIBS Forum: A leadership and vision beyond 2010

This report appeared on MBAnetwork, an information portal and networking site for potential and current MBA students in South Africa (link).

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African markets are the new frontier of growth in the global economy, and South Africa requires a coherent long-term strategy for its engagement with the continent. This was the message from three of the World Economic Forum’s Young Global Leaders at the Gordon Institute of Business Science (GIBS) on Monday 6th September. The strengthening of South-South trade relationships and the emergence of China has the potential to dramatically transform Africa’s economies in the coming years.


Left to Right, Abdullah Verachia (MC) and Dr. Martyn Davies of Frontier Advisory; Leslie Maasdorp of Absa Capital; Dr. Acha Leke of McKinsey & Company.


Leslie Maasdorp, Managing Principal and Vice Chairman at Absa Capital and Barclays Capital, observed that SA’s self-perception as a nation “vacillated between excessive optimism and needless pessimism.” It was important, he noted, to have an open discussion about what we can learn from successful economies.

Pointing to middle-income countries such as Indonesia and Malaysia, Maasdorp observed that, “the notion of an economic miracle is a misnomer. There were very specific targeted interventions that these countries took that lead them on a path to economic growth. There is no formula for success, but they did have a very specific vision,” he argued, “In South Africa there is no such single coherent vision, nor is there a growth strategy that can take us to that.”

Maasdorp called for far-sighted leadership, noting that “people and countries are responsible for their own destinies.” He speculated that the National Planning Commission, the cabinet portfolio headed by former Finance Minister Trevor Manuel, “could emerge as the single most important initiative of this government, provided that it challenges current paradigms and takes note of global forces shaping the 21st century.”

Dr. Acha Leke, a Director in McKinsey & Company’s Sub-Saharan African office, took a sweeping view of Africa’s remarkable upward trajectory over the last decade. Fundamental changes had occurred throughout the continent: political and macroeconomic stability, combined with microeconomic reforms had effectively loosened the fetters to growth, he said.

Leke added that many markets had liberalized and diversified into key areas, especially user-facing industries such as retail, banking, and telecommunications, thus bolstering growth during a time of recession in the industrialised world. He cited the little-known fact that Africa’s commodities exports only accounted for 24% of GDP (from 2002-07), illustrating the plural nature of its economies.

Considering Africa’s combined Real GDP growth of 4,9% from 2000-08, Leke believed the continent now offered the highest return on investment on capital in the world. He gave the example of Nigeria, which suffered from an image of being a high investment liability. In fact, the scale of profits generated by international companies such as MTN showed the extent of the potential in the Nigerian market and the gulf between perceived and actual risk.

Added to the mix is the fact that South-South trade flows were growing significantly. “We need to expand our networks beyond our traditional links,” Leke said. He also insisted that African countries have to exchange goods and services more readily, “We need to work more and better together.”

Leke also warned that newly diversified African economies face challenges and “must increase their global competitiveness. Unit labour costs are much higher in Africa than they are in China or India and this needs to change.”

Dr. Martyn Davies, CEO of Frontier Advisory and a faculty member at GIBS, looked at the forces behind the rise of the major emerging markets, and most importantly, The People’s Republic of China. Having recently eclipsed Japan as the world’s second largest economy, China’s appetite for raw materials and its willingness to invest in Africa to fuel this demand should be embraced, he said.

President Jacob Zuma recently concluded a trip to China along with a large delegation of cabinet ministers and leaders from business and civil society, including Davies himself. It was the last in a series of diplomatic missions the President made to all four of the BRIC emerging economies this year – having earlier visited Brazil, Russia and India. Davies argued that these overtures are indicative of the realignment of SA’s interests with a changing global order.

Africa’s growth over the last ten years paralleled China’s with a differential of 0.919972, the smallest of margins, he said. This was no coincidence, considering China is the single largest foreign investor and deployer of capital to African economies. Both are inextricably linked.

However, he added that despite these moves, SA needed a more coordinated response to changing global realities. “We need to show the ‘vision thing’ and some leadership,” he said. “How do we as a country, as organisations, and as individuals rethink our worlds?”

Davies argued that the rise of the emerging economies had been unleashed, not caused by, the ‘Western Financial Crisis’, and stressed that power is changing hands. “Europe is something of an old-age-home,” he said wryly. “In the next five years the Eurozone may unravel. This is not a banking crisis; it is a discrediting of an entire model….There will be profound implications. This crisis is not going anywhere soon so sell your euros!”

Photo: David Ansara

Wits Debate: How should the media be regulated?

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On Monday 24 August I attended a public debate at the Wits Great Hall. The discussion concerned the Media Appeals Tribunal that the ANC has proposed as an alternative to the current self-regulatory system.

Speakers included:

  • Jackson Mthembu - ANC spokesperson and Chairman of the ANC National Executive Committee sub-committee on Communications
  • Lumko Mtimde - CEO of the Media Development and Diversity Agency
  • Thabo Leshilo - Chairperson SANEF Media Freedom Committee)
  • Jeremy Cronin - SACP Deputy General Secretary (absent due to illness)
  • Joe Thloloe - Press Ombudsman
  • Prof. Anton Harber - Head of Wits Journalism

Jackson Mthembu argued that although the instruments of media self-regulation were in place, such as the Press Ombudsman and the Press Council, there had never been any influencing of these instruments by "ordinary" South Africans. He criticised the fact that these organs were products of, and accountable to, the media industry itself. He instisted that the public could only have its say via "an independent body created through a transparent and public platform." Following the Polokwane resolutions, the ANC would consider the possibility of a statutory tribunal to which wronged citizens could lodge their complaints. In the past, he said, the only recourse available to those who had been maligned or defamed in the press was to have the Ombud order the paper to issue a retraction or an apology. However, Mthembu said that the Ombudsman or "Bra Joe" had no ability to issue a fine, thus limiting his effectiveness. "Can he himself be exonerated from the influence of the meedia when he himself is being paid by the media, when his offices are next to the editor's forum when the he depends on the whole structure and edifice of the media itself." Mthembu stated that such controls were designed to promote media freedom and not to muzzle it, but he failed to elaborate on what this actually meant.

Lumko Mtimde echoed the call for a public enquiry into an "independent" statutory appeals tribunal. He called for the "modalities to be debated," while also adding that media indignation at the proposal was disproportionate and needless. He pointed to other similar investigations in the UK and New Zealand, which he said revealed that self-regulation was not sacrosanct. Maybe South Africa could show the world the way in terms of such a statutory body, he argued.

Joe Thloloe pointed out that the UK report that Mr Mtimde had referenced actually said that self-regulation, while imperfect, was a far preferable system to statutory regulation. The principal of self-regulation was also maintained in New Zealand. The UK parliamentary sub-committee in question suggested improvements to self-regulation, but did not demandthat the system be replaced, as the ANC was now doing. "You are trying to reinvent the wheel - at what cost?" he asked rhetorically, "The constitution says that everyone has the right to freedom of expression. You can't tinker with that right unless you amend the constitution. If you tinker with freedom of expression you tinker with the very foundation of our democracy."

He concluded on a defiant note, taking issue with the threatening manner in which the ANC had initiated the debate, as if the MAT were a fait accompli: "We are prepared to review what we do, but for heaven's sake don't put a gun to our temple and ask us to cooperate in our own... I nearly used the word 'rape'."

Thabo Leshilo crticised the proposals, saying that the MAT has been in the works since the Polokwane conference in 2007. "That's two years and 9 months; that is an awful lot of time. By now we should have some idea of what this animal should look like." Leshilo also said that the choice of advocates for the MAT had been awful, as they had revealed that the real reason the ruling party desired tighter regulation lay in the fact that the media was sewing disunity in the ANC.

Anton Harber agreed that newspapers must be accountable, but he insisted that holding the press to account was the duty of peers, readers, the public itself, the courts, the law, and the Constitution, and not politicians. He also made a plea for the public to recognise good journalism, instead of merely trashing it. The press was one of the principal areas where government can be held to account, especially for exposing corruption. He called for the role and funding of the media to be debated, but stressed that this should not mean an increase in regulation. In this regard, he also noted that there is little evidence to suggest that regulation and journalistic quality are linked.

Illustration: John Dyson