‘Black busi­ness has a duty to the com­mu­nity’

CityPress - - Business - PETER DE IONNO busi­ness@city­press.co.za BIÉNNE HUIS­MAN bi­enne.huis­man@city­press.co.za

Along with the closed ses­sions, the glad-hand­ing and self-in­ter­ested net­work­ing for World Eco­nomic Fo­rum in­sid­ers, the fo­rum is­sues a bi­en­nial Global Com­pet­i­tive­ness In­dex for Africa and se­lected com­para­tors.

Anal­y­sis of the lat­est list of 144 coun­tries, on which South Africa sits at 56, shows Africa’s best-per­form­ing econ­omy is Mau­ri­tius at num­ber 39, and the worst is Guinea at num­ber 144.

South Africa has slipped three places since the 2013/14 in­dex and Mau­ri­tius has gained six places, while Guinea just bounces along the bot­tom.

The in­dex is the re­sult of col­lab­o­ra­tion be­tween the World Eco­nomic Fo­rum, the In­ter­na­tional Bank for Re­con­struc­tion and Devel­op­ment/the World Bank and the African Devel­op­ment Bank, as well as the Or­gan­i­sa­tion for Eco­nomic Co­op­er­a­tion and Devel­op­ment.

The World Eco­nomic Fo­rum sees 2015 as a “promis­ing” time for the African con­ti­nent: for 15 years, growth rates have av­er­aged at more than 5%, and rapid pop­u­la­tion growth prom­ises a large emerg­ing con­sumer mar­ket and labour force po­ten­tial.

The rapid take­off of mo­bile com­mu­ni­ca­tions points to the con­ti­nent’s growth po­ten­tial in other sec­tors.

But the rah-rah is only about po­ten­tial, not the re­al­ity for most Africans.

“How­ever, Africa con­tin­ues to be largely agrar­ian, with an econ­omy that is un­der­pinned by re­source-driven growth and a large and ex­pand­ing in­for­mal sec­tor,” the re­port says.

“In­deed, more than a decade of con­sis­tently high growth rates have not yet trick­led down to sig­nif­i­cant parts of the pop­u­la­tion: nearly one out of two Africans con­tinue to live in ex­treme poverty, and in­come in­equal­ity in the re­gion re­mains among the high­est in the world.

“What is more, across sec­tors – from agri­cul­ture to man­u­fac­tur­ing and ser­vices – pro­duc­tiv­ity lev­els re­main low.

“It will be nec­es­sary to raise pro­duc­tiv­ity across all sec­tors of the econ­omy to achieve higher growth and cre­ate qual­ity em­ploy­ment, and turn this progress into sus­tain­able and in­clu­sive growth,” the re­port says.

“Across the re­gion, agri­cul­ture’s share of gross do­mes­tic prod­uct (GDP) is de­clin­ing and man­u­fac­tur­ing is stag­nat­ing, while the ser­vice sec­tor, in con­trast, is in­creas­ing as a share of to­tal em­ploy­ment and GDP, pro­vid­ing crit­i­cal in­puts to boost other eco­nomic ac­tiv­i­ties.”

This evo­lu­tion in Africa’s eco­nomic struc­ture is hap­pen­ing in par­al­lel with Africa’s unique and evolv­ing de­mo­graphic dy­nam­ics: 450 mil­lion work­ers were pro­jected to join the work­force be­tween 2010 and 2035.

High un­em­ploy­ment rates among youth with sec­ondary and ter­tiary ed­u­ca­tion even in coun­tries that do well on ed­u­ca­tional at­tain­ment, such as Mau­ri­tius and Tu­nisia, in­di­cate a mis­match be­tween the ed­u­ca­tion sys­tem and the needs of em­ploy­ers.

Sur­veys among em­ploy­ers con­firm th­ese trends: 54% of African em­ploy­ers state that job­seek­ers’ skills do not match their needs, and 41% of em­ploy­ers be­lieve that un­em­ployed peo­ple lack skills in gen­eral. At a time when in­ter­na­tional in­vest­ment flows were stalling else­where, for­eign di­rect in­vest­ment into the re­gion reached $57 bil­lion (R715 bil­lion at the cur­rent ex­change rate) in 2013.

Mau­ri­tius and South Africa, the con­ti­nent’s top per­form­ers, come in above the southeast Asian av­er­age – an im­prove­ment since the last re­port, when they ranked be­low that com­para­tor re­gion. They also rank above the emerg­ing mar­ket economies of Brazil and In­dia.

They are fol­lowed by a sec­ond clus­ter of coun­tries – Rwanda (62), Morocco (72), Botswana (74) and Al­ge­ria (79) – which, on av­er­age, are more com­pet­i­tive than Latin Amer­ica.

Bil­lion­aire busi­ness­man Pa­trice Mot­sepe ad­mires Afrikaans en­trepreneurs for “in­ter­twin­ing” their suc­cess with that of their com­mu­ni­ties. He says en­trepreneur­ship in South Africa is dis­ap­point­ing and gov­ern­ment nepo­tism is laugh­able.

He feels strongly about re­dress­ing black in­equal­ity, but has no plans to be­come a politi­cian him­self.

On Thurs­day, the soft-spo­ken Mot­sepe ad­dressed jour­nal­ists at the World Eco­nomic Fo­rum on Africa, hosted at the Cape Town In­ter­na­tional Con­ven­tion Cen­tre.

“We have no fu­ture in South Africa if we don’t cre­ate op­por­tu­ni­ties for poor peo­ple. And re­gard­ing [gov­ern­ment] cor­rup­tion and jobs for pals, you can­not build an econ­omy on that,” he said.

When asked whether he would en­ter the po­lit­i­cal arena him­self, the 53-year-old min­ing ty­coon laughed and said he wouldn’t.

“I can make a big­ger change, make a larger pos­i­tive con­tri­bu­tion, by say­ing po­lit­i­cally in­cor­rect things from where I am sit­ting right now,” he said.

Mot­sepe, founder and ex­ec­u­tive chair­per­son of African Rain­bow Min­er­als, and the owner of Mamelodi Sun­downs foot­ball club, again spoke of his com­mit­ment to The Giv­ing Pledge, an in­ter­na­tional char­ity through which bil­lion­aires do­nate vast chunks of wealth to phi­lan­thropy. It was founded in 2012 by Bill Gates and War­ren Buf­fett.

“Most suc­cess­ful fam­i­lies have a duty to their com­mu­nity and to those less for­tu­nate. Take the Afrikaans busi­ness com­mu­nity. The great suc­cess of fam­i­lies was in­ter­twined with the suc­cess of their com­mu­ni­ties,” he said.

He said his par­ents, who owned a thriv­ing gro­cery store and beer hall out­side Pre­to­ria, did the same when he was younger.

“They paid school fees for peo­ple in the vil­lage. This re­flected their recog­ni­tion that they had no fu­ture if no one in their vil­lage suc­ceeded,” he said.

He said en­trepreneur­ship in South Africa was a dis­ap­point­ment.

“There needs to be more fo­cus on en­trepreneur­ship. When I was grow­ing up, my fa­ther and grand­fa­ther were en­trepreneurs. From them I learnt that the colour of skin is ir­rel­e­vant to be­ing com­pet­i­tive.”

Asked about BEE pol­icy in­hibit­ing eco­nomic reg­u­lar­ity and cer­tainty in South Africa, he said while the lat­ter were cru­cial, so was BEE. In prin­ci­ple, it helped to re­dress black in­equal­ity. “If you look at what hap­pened in many African coun­tries, when colo­nial­ism came to an end, there was a new black elite in power.

“They were the ex­clu­sive ben­e­fi­cia­ries of eco­nomic growth and devel­op­ment. But the ma­jor­ity of the black pop­u­la­tion went back­wards, or did not ben­e­fit. This is a recipe for long-term po­lit­i­cal and so­cial in­sta­bil­ity.

“So the think­ing be­hind BEE is sound, that we cre­ate mean­ing­ful black par­tic­i­pa­tion in the econ­omy.

“We need to cre­ate a mid­dle class of black and white peo­ple.”

When asked about the Fifa scan­dal, he said: “I have learnt not to ex­press an opin­ion un­til I know the facts.

“South Africa has to ad­here to global best con­duct. But I will use the start­ing point of in­no­cent un­til proven guilty.”

Mot­sepe’s for­tune is es­ti­mated to be worth R36 bil­lion.

DRIV­ING CHANGE

Pa­trice Mot­sepe

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