Forbes Africa March 2013 (e-magazine full)

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VOLUME 3 NUMBER 2 CONTENTS — MARCH 2013

10 | EDITOR’S DESK // Chris Bishop

12 | BRIEF 360°

FORBES FOCUS

24 | BISmARCK STARES ThE BEAST In ThE EyE AnD DARES nOT BlInK

Tendai Biti—the rough tough inance minister of Zimbabwe they call Bismarck—has the toughest job in the world, especially on days when the country has only $217 left in the bank He believes President Robert

Mugabe should have resigned years ago

by Lazarus HLenga

28 | DIggIng FOR pROFITS

Every citizen of our world will need 1,343 metric tons of minerals, metals and fuels in their lifetime That helps explain why Cape Town’s annual Mining Indaba—the third largest in the world, arguably at the highest

level—is a huge event

by Peter suLLivan

30 | SpECIAl REpORT: ThERE’S OnE FlyIng nEAR yOu

There is a swarm of stealthy machines You may not see nor hear them but they are about to transform your life There are thousands of them lying as you read this This month, FORBES AFRICA brings you a special

report on drones in Africa.

by HamiLton Wende

COVER IMAGE BY MARK CAMERON fOR fORBEs AfRICA; AssIstANt: GAVIN VAN dER BERG

REtOuChING BY thE VANIllA RAIN CREAtIVE

“The objective for people like myself is not to

see how much money you can make, because

there’ll always be somebody richer than you

are So what the heck?”

exchange departments.”

— Sudhir Ruparelia

Ruparelia Group Chairman

Page 46

“He inclined his head, made the Indian ‘Namaste’

spiritual greeting sign with his hands and said:

‘Forgive me but I do not want to talk about it’

before diving into his waiting limousine.”

— Robert Friedland

Founder of Ivanplats

Page 44

ENTREPRENEUR

40| nO nAIl lEFT unpOlIShED

If someone were to tell you that a thriving beauty chain was started by a 50-something-year-old man

who had dropped out of university, you may ind it hard to believe But once you talk to the man

himself, it starts making sense.

by Lerato seKo

48| gO WEST!

Each year, increasing numbers of business and leisure tourists head for West Africa

Paul Ansah is waiting for them.

by abisoLa oWoLaWi

LIFE

50| ThE CAR ThAT ChAuFFEuRS yOu

Imagine a car you could put on autopilot so you can sit back and relax.

by Peter PiegL

52| nO lAW AgAInST ChASIng lIghT

Photographer Kelechi Amadi-Obi turns in his barrister’s wig and gown for a zoom

lens and pixel power.

by raditHebe rammutLe

TELECOmmUNICaTIONS SUPPLEmENT

54 | DAvID TAKES AIm AT gOlIATh

Alpesh Patel plans to down the Goliaths in the battle for half a million cellphone users.

80| mBA! On A SunDAy OF mADnESS AnD glADnESS

Nigeria is back on top of African football and it means their jubilant fans

will expect even more from the Super Eagles

by CHarLes idem

82| KIRSTy’S On A mISSIOn WITh ThE COmmISSIOn

Olympic gold medalist Kirsty Coventry wants a better deal for athletes.

to the clients in their home market etc If we can partner together

to provide investors through us, access to capital and that would

be a win That’s what we

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MARCH 2013 – VOLUME 3 NUMBER 2

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EDITOR’S DESK — CHRIS BISHOP

“Carpe Diem”

Mining Puts Its Money

Where Its mouth Is

by CHris bisHoP, managing editor

of cynicism among journalists One joked that Motsepe had already done his bit for charity by bankrolling South Africa’s strug-gling premier league team, Sundowns.Joking apart, at the very least, Motsepe

is trying to do something for his fellow man Talk is cheap and a wise man once said that the only time you can be sure of

a person’s sincerity is when he or she puts their hand in their pocket Motsepe has a very large pocket at that He could empty

it quite easily by buying every house, toy and car known to man; instead he is trying to spread a little wealth where it

is most appreciated

True, Motsepe is not the irst billionaire to hand over his hard earned millions There have been billion-aire benefactors from John Rockefeller to Warren Buf-fett and Bill Gates They are made even more remarkable

in that often those who have amassed a fortune can—in my dear late grandmother’s words—be as mean as charity

Let’s hope that many other wealthy Africans will follow suit and make this con-tinent a better place to live Africa’s richest man, Aliko Dangote of Nigeria, told me last year that he is thinking of doing the same

As for Motsepe, I saw him at the Mining Indaba in a very warm Cape Town, early

in February, and wished him well with his bold move This year’s Mining Indaba was

a gathering of more than 7,000 of the great and the good, to chew over the issues of the day It is the best place for the inside

station talking about my ite subjects—journalism and FORBES AFRICA—one tweet

favor-is inevitable It usually goes something like this: “How can you celebrate rich people when most people in Africa have nothing?”

It is an uncomfortable thought Africa has one of the widest gaps between rich and poor and it is little to be proud of In the last

20 years, I have been nate to walk the road less travelled: from Khartoum

fortu-to Kigali; Goma fortu-to Giyani;

Maputo and Lusaka to anda and Lilongwe That is the road that starts with the ive-star hotel red carpet, leading to the sandy lines through the shanties and on

Lu-to the dusty villages where water, food and doctors are scarce; where people scrape

by on less than a dollar a day If you have walked that path, you know; you don’t need anyone to tweet about it

That is why the news that South Africa billionaire Patrice Motsepe is to give away

a large slice of his family fortune to those who have not, warms the cockles of the heart—it’ll go to education, health and the promotion of the entrepreneurial spirit

Analysts calculate that around R360 million ($40.3 million) from the Motsepe Founda-tion will change hands, each year

When Motsepe made the surprise nouncement at a luxury Sandton hotel in late January, there was the usual sprinkling

an-Views expressed by commentators in this publication are not necessarily those held by FORBES AFRICA or its members of staf All facts

printed in FORBES AFRICA were conirmed as being correct at the time the magazine went to print

A factual mistake occurred due to miswording in the February article The Return Of The Technocrat It should read: “Growth markets

contributed 22% of IBM’s geographic revenue in 2011, up from 11% in 2000 and we expect them to approach 30% by 2015” The image for

Driving Ambition should have been of the ML350 CDI 2012 model and not the ML350 2003 model Apologies from the FORBES AFRICA

editorial team for any confusion this may have caused.

running on mining

Over the course of my four days there, I had scores of

conversations with experts, ministers and miners that

would take ten columns to document Instead I will give

you the edited highlights

Well, it seems that South Africa’s crown as the king of

African mining appears to have slipped a little further

In-vestors are concerned about threats of government

inter-ference in mining, lingering talk of nationalization—even

though the Mining Indaba heard a number of times that it

was of the table—plus costly wildcat strikes

Chinese investment is heading this way in abundance

as the world’s super power scours the earth for strategic

resources to keep its gargantuan economy ticking over

Wealthy state companies are leading the way into a number

of African countries

Experts say there is going to be stif competition

be-tween African nations to secure the lion’s share of Chinese

investment The deal is infrastructure in return for market

access; a prime example being the newly opened 1,000km

railway line between Lagos and Kano in Nigeria; Kenya has

new roads and Mozambique a new airport On the other

side of the coin, experts fear that Africa may not be able to

strike good deals for its resources because it does not have a

united voice

Overall, many nations are on the prowl for Africa’s grade, low-cost resources Melbourne-based global mining leader for Deloitte, Philip Hopwood, told me that Australian mining companies get excited when they ind 1.5 g of gold in

high-a ton of rock high-at home but high-are lhigh-abberghigh-asted by the 30g-high-a-ton they ind in the Democratic Republic of Congo, especially when it costs a mere two thirds of what it would cost to extract at home True, the roads and reining are not the same in the DRC as they are in Australia but the margins are handsome for anyone with a steady nerve and deep pockets.Among the surprises at the Mining Indaba was the news that Nigeria is on the verge of becoming a gold producer with four mines ready to go; Malawi wants to produce a million tons of coal a year and become an exporter It wants

to piggy back on a railway line Mozambique plans to build through Malawi to carry coal from its booming Moatize coalields to the sea

One last surprise was my friend Frans Baleni, a member

of the executive of the South African Communist Party and general secretary of one of the most powerful unions in Af-rica, the National Union of Mineworkers I greeted him and asked him why he was rubbing shoulders with capitalists

“I am trying to convert them,” he said with a laugh

As supporters of the entrepreneurial spirit, FORBES AFRICA hopes he does not succeed!

FORBES AFRICA Coming To A

Screen Near You!

This digital edition of FORBES AFRICA will give our loyal readers an

enhanced experience of the magazine Take it with you, wherever

you go Now you will have the opportunity to watch

behind-the-scenes footage of our cover shoots with Africa’s wealthiest It will

provide readers with additional coverage and exclusive images of

our special features FORBES AFRICA fans across the world will

receive much more than just the magazine’s signature content, for

which it is renowned

The app is available on: Android and iOS devices as well as on the

Magzter webstore

Download the app for free from the Apple Appstore, Google Play

and the Amazon Appstore

Write to us at letters@forbesafrica.com

CHoKri beLaid deatH:

tunisians mass For buriaL

Chanting loudly and waving lags, tens of thousands gathered

for the funeral of Chakri Belaid a Tunisian opposition leader,

whose assassination sparked political uncertainty and violent

protests The 48-year-old was shot at close range on his way

to work on February 6, by a gunman who led on a motorcycle

Unions say the government, led by the Islamist Ennahda party,

is to blame for the killing, an accusation which it denies Prime

Minister Hamadi Jebali has tried to defuse tensions by calling

for a non-partisan technocratic government However, his party

has refused to accept this.

HeaLtH WorKers sHot dead in nortHern nigeria

Unidentiied gunmen killed at least 12 health workers who were administering polio vaccinations in the northern Nigerian city of Kano, police say The attacks, in two diferent locations, happened in early February Witnesses said the attackers arrived on three-wheel taxis and opened ire, also killing the vaccine workers’ driver Kano, Nigeria’s second largest city, has been regularly targeted by Boko Haram—an armed group, which has condemned the use of West- ern medicine Nigeria remains one of the few countries where polio is endemic Several years ago religious clerics encouraged their followers to stop receiving the vaccines, saying that it would sterilize their children.

Nigeria’s four main

opposi-tion parties have merged

to form the All Progressive

Congress party that will

challenge President

Good-luck Jonathan in the 2015

election The four

merg-ing parties are the Action

Congress of Nigeria (ACN),

All Nigeria People’s Party

(ANPP), All Progressives

Grand Alliance (APGA) and

Congress for Progressive

Change (CPC) Chairman of

the merger committee of

NEWS LINESCHamPions: Nigeria’s Super Eagles

were crowned the 2013 Africa Cup of Nations winners, after beating Burkina Faso 1-0

disaPPointment: South African

musi-cian Hugh Masekela lost out on another Grammy award, after being nominated for the second time in his 57-year musi- cal career.

revoLution: Sudanese democracy activists staged a wave of small protests against Omar Hassan al-Bashir, who has been in power since 1989.

pro-resigned: Pope Benedict XVI, 85, stepped down on February 28 saying he

no longer had the strength to fulil his duties He became the irst pontif to do

so since Gregory XII’s resignation in 1415.

senegaL: A tribunal investigating atrocities committed by ex-Chadian president, Hissène Habré, started last month It’s the irst time a former Afri- can leader faces trial in another African country.

taX: The Guardian reported that Zambia

lost more than KR41 billion ($7.7 billion)

in the last decade through tax evasions, traced mainly to mining multinationals.

the ACN, Tom Ikimi, said the need for a formidable party

to challenge the People’s Democratic Party (PDP)

is more urgent than ever

National chairman of the PDP, Bamanga Tukur, told

The Punch that his party

is unfazed by the merger

Referring to his party as the Lionel Messi of Nigerian politics, he said the merger

is not a threat to his party

The new party controls 10 of the 36 Nigerian states.

nigeria unveiLs neW oPPosition Party

soutH aFriCan ParaLymPiC atHLete aLLegedLy KiLLed girLFriend

South African Paralympian Oscar Pistorius was charged with murder in February after a shooting that killed his 29-year-old girlfriend Reeva Steenkamp, at around 4am on Valentine’s Day at his house in Pretoria South African Police Services conirmed that Steenkamp was shot four times and she died on the scene The 26-year-old athlete was taken into custody after being questioned by police and appeared in court the same afternoon At the time of going

to print, Pistorius was due to appear in court for his bail application and was forming a legal team

to defend the charge of premeditated murder.

The Ethiopian government launched a

one-stop facility for the payment of utility bills

in a commitment to provide better services

The system, known as Lehulu, is powered

by an Ethiopian company Kiiya Financial

Technology It is the irst such initiative in

Africa Addis Ababa currently has 2.1 million

monthly transactions and 1.1 million

bill-paying customers.

A prosecutor’s oice has ordered the autopsy of Mohamed Al-Gendy whose attorney argues was tortured

to death after his arrest by Egyptian police Three other detainees, who were kept with Al-Gendy, testiied on the injuries sustained by the victim, who was announced dead due to haemorrhaging, by Helal hospital.

After paying public workers’ salaries in January, the balance in cash-strapped Zimbabwe’s government public account stood at just $217, according to inance minister Tendai Biti.

Zimbabwe’s economy went into free-fall at the turn of the millennium, after President Robert Mugabe began seizing white-owned farms

drC CouP PLotters arrested

a special police sting operation Government prosecutor, Shaun Abrahams told the court that the men were members of the Union of Nation- alists for the Renewal (UNR) of the DRC.

Worst traFFiC aCCident in zambia’s History

At least 53 people were killed in a crash involving a bus and lorry in Zambia, in what is being

called one of the worst traic accidents in the country The accident occurred around 100km

north of the capital, Lusaka, on a two-lane highway known for heavy traic Poorly maintained

and overloaded vehicles are commonplace in Zambia President Michael Sata conveyed his

government’s “deepest condolences” to families of the victims Police are investigating the

cause of the crash According to reports, the bus was operated by the Zambian postal service,

which provides passenger services on buses which carry post.

CHina ‘smuggLes’ mozambique timber

Nearly half the Mozambican timber exported to China is

illegal The Environmental Investigation Agency (EIA) said

its undercover investigation showed that Mozambican

politi-cians and Chinese traders were systematically involved in

timber smuggling and illegal logging Of all the Mozambican

timber exported to China last year, 48% was thought to have

been illegal This has caused Mozambique to lose tens of

millions of dollars a year in tax revenues China’s demand for

raw timber is having a devastating efect on Mozambique,

which is one of the world’s poorest countries High-level

poli-ticians, working with Chinese traders, are breaching

Mozam-bique’s export and forest laws The EIA said the Mozambican

government should introduce an immediate timber export

ban and investigate corruption in the forestry sector.

At least 640 households could be afected by the construction of a hydro-electric power dam on the Akagera River along Rwanda’s border with Tanzania According to the provisional results from the project development studies, the households

to be afected are mostly on the Rwandan side, while others are on the Tanzanian side Burundi is seems to be in the clear of any human displace- ments The Rusumo Falls Hydroelectric Project is

a multi-state venture involving Burundi, Rwanda and Tanzania It is expected to cost the three countries around $440 million to produce 80MW

of electricity to be shared among the states

at Heathrow Airport to being lambasted by the press over his business with the tax man, Christo Wiese has no airs about him Only his gold Rolex watch gives you a glimpse of his wealth.

There is no doubt that Wiese is a formidable businessman, who has made a meaningful impact in the South African retail industry As he sits in his boardroom—which is larger than his family’s irst store—overlooking Industria, Cape Town, he’s either on the phone making arrangements, giving assurances or chatting to his broker This

is a far cry from his childhood in a small South African farming town, a place he calls an oasis

Wiese’s father was a farmer and businessman in Upington in the Northern Cape, like many in his family before him, armed with basic informal schooling and his entrepreneurial spirit

Wiese is proud when he talks about how his parents never worked for anyone

“I grew up in a household where that [entrepreneurship] was the way one approached life, which I found was a great beneit to me,” says Wiese

Wiese shows much afection towards

his late mother, referring to her as a woman

of great wisdom with a lot of drive, who had a strong inluence in his life She was a housewife who eventually owned her own business too

Unlike his father, Wiese spent his last two years of high school at the prestigious Paarl Boys High school and moved to Cape Town to study further at UCT After

a year, he dropped out and moved back to Upington to join his father in business

At 21, Wiese left Upington to study law

at the University of Stellenbosch, whose alumni include some of South Africa’s wealthiest: Johann Rupert, Koos Bekker,

GT Ferreira and Jannie Mouton Wiese’s parents co-founded Pep Stores in 1965 and were its second largest shareholders

He worked for the company during his vacations, driving around the country with the major shareholder looking for locations

to open new shops

Wiese graduated in 1967 but returned

to the family business instead of practicing law There, Wiese dealt with administrative duties such as keeping minutes and

updating share certiicates He got stuck in

it and did what needed to be done

In 1973, law came calling and Wiese practiced at the Cape Bar until 1979 During this time he bought a stake in a diamond

FORBES/FOCUS

FORBES FOCUS — CHRISTO WIESE

mining company, the largest in South Africa not belonging

to De Beers

A businessman at heart, Wiese bought the controlling

stake in Pep Stores from the founder in 1981, at the age of

36, and renamed it Pepkor Limited

The decision to expand Pepkor’s footprint to Europe

in the early ‘90s came about as Wiese realized that

international brands would be coming to South Africa

to compete with them Once again, proving to be a

savvy businessman, Wiese made the choice to take the

competition to the rest of the world, with what he deemed

a good formula that could be transferred to developed

economies

“We realized that as South Africa was opening up to the

world, the world was opening up to South Africa,” says

Wiese

Pepkor’s business model is simple: high volume, low

margin If you look at the group’s history all the businesses

follow this model except Stuttafords The premium

department store caters to the high-end customer and was

a default acquisition when Pepkor bought Greatermans

Department Stores in 1991 This was not the business the

group wanted; their target was the Checkers supermarket

chain, Stuttafords was sold a few years later

Wiese’s Shoprite became the irst of the group’s

companies to expand into Zambia The old OK Bazaar chain

was bought from the government after being nationalized

and run into the ground by the Kaunda government The

chain was rejuvenated and Pep opened in Zambia in 1994

In 1999, Pepkor delisted from the Johannesburg Stock

Exchange, at $331.4 million, after being listed for 27 years

as Pep Stores Pepkor had been approached by Brait, a

private equity company, which advised them to delist Brait

proposed that Pepkor would do better at that stage as an

unlisted entity Following this, management acquired a

substantial stake in the company Brait owns a 37% stake in

Pepkor Wiese says the group, or parts of it, could be listed

in the future

Pepkor’s success has led it to have Pep, Ackermans, Best

& Less, Dunns, Pepco Poland, John Craig and Shoe City in

its stable

As cut-throat as business can be at times, those that

are successful have spent years building and maintaining

good relationships Wiese and South African investment

millionaire Jannie Mouton go a long way back The two sit

on the board of KWV Limited and Wiese used to sit on the

board of Mouton’s PSG Holdings Mouton has nothing but

admiration for Wiese

“I think what’s important is that he understands risk He’s not scared to take risks He believes in himself and

he will back it, he’s not scared to raise money for a good business proposition,” says Mouton

Wiese’s investment strategy is three pronged: get the best possible returns; invest in ethical businesses and remember that investing is a long-term game This is the philosophy

of the chairman of Pepkor, Shoprite, Tradehold and executive chairman of Invicta Holdings and Brait SA Tradehold is an investment holding company listed on the main board of the JSE, its main interests lie particularly

non-in property non-in the United Knon-ingdom, which is hopnon-ing to expand Wiese owns around 80% of the company, with a market capitalization of around $137.5 million

Invicta is an investment holding and management company with a market capitalization of around $770.6 million The company controls and manages assets of

$934 937 and inalized an acquisition in Singapore, its irst outside Africa Wiese owns around 37% of the company.Wiese feels that the driving force of any entrepreneur should be to build businesses and help people develop This, he says, is the true measure of success

“The objective for people like myself is not to see how much money you can make because there’ll always be somebody richer than you So what the heck?” says Wiese

“I often say to people that I know a lot of people who’ve made a lot of money in diferent businesses, in diferent formats, with diferent styles but the one golden thread is that to make money takes decades.”

Pepkor is testament to this in its 57 years; Wiese has been part of 47 of them As the man behind this growth, Wiese points out that it was a step-by-step process that had its ups and downs His worst knock happened in 1985 when the rand collapsed The company bled money, when the rand lost 50% of its value in a few months because of its signiicant dollar exposures The balance sheet was under strain and the company had to be restructured Shoprite

was listed separately and some of the non-core assets were sold of In one year, the company went from interest bearing debt of R140 million to having R110 million in the bank, at the time

Getting out of a corner is something, Wiese says, only experience can teach you

As a man who has done business across the continent for decades, Wiese calls himself a committed and optimistic African He feels that Africa is shedding its old image;

“It’s my money I didn’t steal it from anybody I didn’t defraud anybody.

It’s my money and it’s certainly my right to do with it as I please”

FORBES FOCUS — CHRISTO WIESE

that a new Africa is emerging He

marvels at how people can still look

at the continent with, what he calls,

“old eyes” He says that whenever

something negative happens in Africa

the “afro-pessimists”, as he calls

them, turn it into a catastrophe but if

the same were to happen anywhere

else, it would purely be a setback He

considers the events at Marikana,

where Lonmin mine strikes turned

violent, a prime example

Although Wiese is best-known for

his business interests in retail, he has

also tested other waters Wiese was

not looking to get into the hospitality

industry when he bought the Lanzerac

Wine Estate in 1991, on the outskirts of

Stellenbosch With a ive star hotel on

the premises, Wiese bought it as a new

home for his family but as much as

they loved the estate they loved their

Clifton beach house even more

Wiese chose not to walk away from

Stellenbosch when his family did,

simply because the place gave him

too much pleasure The wine estate

was run down and the vineyards had

been neglected for 25 years But he

saw something in it Wiese spent a

lot of money refurbishing the hotel,

replanting the vineyards, building the

cellars and developing the property

The magniicent 300-year-old estate

was sold in 2012 The billionaire now

“The objective for people like myself is not to see how much money you can make, because there’ll always be somebody richer than you are So what the heck?”

owns Lourensford Wine Estate in Stellenbosch, bought in 1998

On the rare occasions when Wiese isn’t too busy buying companies and making deals worth millions, he enjoys hunting, clay pigeon shooting, playing with his dog, catching up with old friends and spending the last three weeks of the year at his beach house

None of this compares to his private game reserve in the Kalahari Wiese always dreamt of owning a farm close

to where he grew up but never spends more than two or three days at a time there It’s his way of giving back through conservation, while running it

as a business to keep it sustainable

“If it pays and washes its own face and gives a little of a return

on the capital employed, then it is sustainable,” says Wiese

Wiese is no stranger to making headlines In 2009, Wiese was stopped

by customs oicial at London’s Heathrow Airport where he was carrying a briefcase illed with just over a million dollars The money was coniscated and the matter went

to court Wiese insists that he acted

on the advice that it would not be an issue Wiese’s advocate stated that the money was less than what his client made in a week The courts ruled in his favor and the money returned

“It’s my money I didn’t steal it from anybody I didn’t defraud anybody It’s

my money and it’s certainly my right to

do with it as I please,” he declares

The media criticized the earnings

of Shoprite CEO Whitey Basson, who topped the list of top earning executives in 2010, which was released

by the Business Times Basson earned

more than $82.7 million that year but dropped in rankings to 20th the following year He did however earn the largest bonus of $4,398,470 in

2011 Wiese counters that Basson is underpaid for the work he does and all he has produced for Shoprite’s stakeholders Wiese says it’s too big a job for him to ever be tempted to do it himself

Shoprite was bought in 1979 for R1 million, with fewer than 500 employees and eight stores Basson

Lanzerac Wine Estate

was put in charge and the company

is now Africa’s largest food retailer

with a reported turnover of more

than $9.25 billion for the year ended

June 2012 Shoprite has a market

capitalization of more than $23.23

billion and 2,033 stores across Africa,

including the group’s subsidiaries

Wiese is the largest shareholder of

Shoprite

“I’m not an entrepreneur…

You could best describe me as an

entrepreneurial inancer or investor,”

he says

But he understands entrepreneurs,

which is exactly why he thinks so

highly of Basson He has brought

others into businesses who are the

opposite of Basson These individuals,

however, either didn’t grow the

business or ran it down, despite their

impressive credentials and promises

In return Basson thinks highly of

his boss

“Christo Wiese is probably the

most respected businessman in South

Africa He has the ability to dissect

problems and opportunities without

emotions or personal complexities As

non-executive chairman of Shoprite

and a close personal friend we not

only respect his judgments but also

seek his advice,” says Basson

Another painful media experience

for Wiese was about his tax payments

He was reported as owing the South

African Revenue Services, SARS,

$274.905 million in unpaid taxes

While it’s unlawful to disclose a

person’s tax afairs, he says that he

doesn’t settle his legal matters in the

press and that SARS has not dragged

him to court regarding this

“Personally I don’t have, as an

individual, any taxable income

because my income comes from my

companies and that income comes

from dividends, which are not

taxable If I owe you money, sue me,”

challenges Wiese

Wiese’s company Tradehold won a

court case against the commissioner of

SARS regarding additional assessment

of $48,533,200 on the company’s

capital gains in 2003

This newsworthy 71-year-old billionaire is not looking to retire anytime soon He wouldn’t know what do with himself if he did He

is, however, grooming his eldest son, Jacob (30), to take over the business Wiese also hopes that both his daughters, one a non-practising lawyer, like her father, and the other

a recent graduate from the London School of Economics, will join the family business someday

“I asked Rob Walton, of the Walton family, whether their children are in the business and he said: ‘No’ and I said: ‘Well, what

do you teach your children then?’ and he said: ‘We teach them to be responsible owners.’ And maybe that’s a good thing,” says Wiese.The next 10 years for the Pepkor Group are said to be very much like the last 10: a continued high growth path focused on plugging into technology

down on his luck, down to his last dollar,

desperate Ran Neu-Ner cold-called his

way out of a spot.

by siyavuya madiKane

Ran Neu-Ner was looking

forward to the day at

his technology start-up

company, Wealth Maker

When he arrived he

found the doors locked and a sherif’s

note declaring the company investor’s

bankruptcy

Eleven years later, Neu-Ner, 36,

is the Group CEO of South Africa’s

leading activations agency—The

Creative Counsel (TCC) The company

makes an annual turnover of R500

million ($57 million) and has 650

permanent employees around the

country

On any given weekend 15,000

promoters can be seen promoting

some of TCC’s clients’ products With

a 50% market share of the promotions

space, the company is not doing too

badly But the picture was not always

so rosy

“We lost everything in an IT

venture during the dot com bubble

It was supposed to be South Africa’s

irst online stock trader website Our

investor went insolvent and we shared

the same building The sherif came

and locked us out I had invested

everything; my business partner, Gil

Oved, had invested everything,”

Neu-Ner says

After arriving at the oice that

fateful day, Neu-Ner summoned his

business partner to a cofee shop in

nearby Norwood

“We wrote on a serviette all the things we had We worked out that we needed to pay everyone who worked for us in the IT business We paid our staf salaries and then we were jobless and hopeless,” he says

At the time the two entrepreneurs were 25 years old and everyone around them was making a bit of money as employees in the corporate world

However, neither of the two was willing to look for a job

Neu-Ner credits his business partner and co-Group CEO, Gil Oved, for sticking it out during those dark days

“There is nothing worse than not having direction, an income or job

You lose all your conidence and self-worth When I didn’t believe, he pushed me When he didn’t believe in himself, I pushed him That is what is good about having a partner,” he says

The partners go way back, when they met in grade 10

“We started our irst entrepreneurial business in matric selling make-up kits imported from China to pharmacies and hair salons

Literally, going from door to door We set up a company called Still Thinking

so that when people asked us what the name of our company was we would say, Well, we’re still thinking’ It was a great conversation starter,” says Oved

After six months of doing nothing, the two came across an opportunity

in the promotions space They had no plans to make it a long-term business

They just wanted something to keep them busy They needed R100,000 ($11,000) to get started but there was

no money lying around Oved took a job as a computer consultant and the money he made he gave to Neu-Ner to start the promotions company

“The irst six months were the continuation of the worst period of my life,” says Neu-Ner

The two business partners took to

“cold-calling” companies in the yellow pages telephone directory And then one day, it looked like their luck was about to change for the better

“I cold-called Danone, by luck the company that did their in-store promotions had closed down.”

The requirements from the dairy and dessert producer’s marketing team were high and included the instruction, “Never break the cold chain and execute with the highest standards of execution and creativity” Unfortunately, they were up against more established companies, who also wanted the account

“I created a PowerPoint presentation and arrived to present it Once I got there, the agency before me walked out and there were ive of them carrying briefcases In that moment I just decided to ignore the PowerPoint presentation and speak from the heart,” says Neu-Ner

Neu-Ner’s moving speech won them their irst big client The two had

to promote Danone’s products at 12 stores, simultaneously, and came out with lying colors However, challenges still lay ahead

“One of the promoters on the irst day decided to steal from the stores on

my irst show piece.”

Luckily, this was only a small glitch Neu-Ner—who has been an entrepreneur since a young age, when he sold cut-out calendar photos

in an Israeli neighborhood before

he moved to South Africa with his engineer parents—had arrived He managed to put things right with his entrepreneurial lair

“I was always an entrepreneur I had many ventures when I left matric

I didn’t spend too much time at university I studied and inished my degree [he has a inance degree] but I was never there I love business,” he says

Oved agrees that his partner has always been a driven individual and

“It is important

to make mistakes

because you learn

much, much more

from your mistakes

than from your

successes.”

MY WORST DAY — RAN NEU-NER

ofers some light-hearted criticism

“This means he accepts brilliance or nothing from

himself and all those around him People who work with

him get swept away and are therefore willing to sacriice

and give their all to him Sometimes his uncompromising

nature is hard Some people struggle to accept such

toughness,” he says

TCC has been rolling out its expansion program over the

last couple of years; they bought 50% of the well-known

Mr Delivery franchise, which home delivers food from

restaurants and fast-food chains The delivery business is

one of many subsidiaries falling under the TCC umbrella,

such as the events companies, Minanawe and PopiMedia, a

social media specialist

While the company has grown beyond what the two

could have hoped for in the early days of 2001, the partners

want to expand even further

“We are using South Africa as a springboard for the next step, which is how to get into Africa,” says Neu-Ner

“We also believe that unlike the days of the past where everything started with a TV ad; in the future concepts will become agnostic of medium The start would often be in activations where consumers interact with the brand on a personal basis and mediums such as TV, radio and others will be support functions,” adds Oved

The two have traveled a long road to becoming a major promotions company in South Africa and have picked up a couple of lessons along the way

“It is important to make mistakes because you learn much, much more from your mistakes than from your successes If you are a real entrepreneur by blood, don’t give up What separates the men from the boys is those who carry on even when it is looking bleak,” says Neu-Ner And that’s exactly why they made it

What Did I Learn?

Don’t doubt that you can be big

When you do, you think small and when you think small it is the biggest barrier to becoming big

The wise, white-haired

lawyer who has seen a thousand trials, nodded sagely as he spoke about the shooting that shocked the world He believes the

South African Police Services and

government will pay for the deaths

of 34 miners at Lonmin’s Marikana

mine in Rustenburg, north-west of

Johannesburg

London-based criminal defense

lawyer James Nichol traveled 5,600

miles to Johannesburg for a couple

of weeks, to give his services for free

Those weeks turned into months of

shocking evidence

“There is no question of self-defense

here, these are police oicers who had

gone completely berserk and had ired

into these people And in some cases

there’s evidence of a number of strikers

who had been shot in the back,” says

Nichol

The hearings are revealing evidence

on how the miners died and 78 others

were injured The week before, 10

people—six miners, two police oicers

and two Lonmin security guards—were

killed as thousands went on a wildcat

strike, over pay

When Nichol saw the images of

the Marikana massacre in his living

room in England, it reminded the

67-year-old of the shock he felt about

the Sharpeville massacre in 1960 On

that fateful day in the township south

of Johannesburg, the police shot into

a crowd of around 5,000 unarmed

anti-pass protestors, killing 69 people—

many shot in the back—and wounding

more than 200

At 15 years of age, he took to the

streets, in his hometown of Newcastle,

calling to boycott the apartheid regime

Nichol knows how hard mining is

He started work as a miner at 15, while his father worked at a coal mine from age 14 near Newcastle Nichol senior died from dust related heart disease when he was just 40 It left Nichol bringing up his siblings—their mother had died earlier from tuberculosis

Nichol worked his way up to specialize in miscarriages of justice and

is a lawyer for the Socialist Workers Party, of which he is a member He

defended miners during the famous miners’ strike in Britain between 1984-

1985

With the help of a legal team from the Socio-Economic Rights Institute of South Africa (SERI), Nichol represents the families at the commission, which

is chaired by retired judge Ian Farlam

It is examining whether the police were justiied in using lethal force, whether union rivalry triggered the violent strike and whether Lonmin played a role

Nichol says the National Union of Mineworkers (NUM) had abandoned its members He says the union did not write to the bereaved families or represent them at the commission

“I can think of no graver betrayal than to do nothing for the family of a

dead member of your union.”

The families were wholly ignored

by the state until Nichol and Joseph Mathunjwa, the president of rival union the Association of Mineworkers and Construction Union (AMCU), found them

“It seemed to me that it was wrong

I knew then that I was here to stay,” says the lawyer

However, NUM’s general secretary, Frans Baleni, says that it is the responsibility of the company or the owner of the infrastructure where the incident happened, to call or write to the bereaved families He added that the families would have had to give consent to be represented by the union and its lawyers

Nichol believes that the killings could have been avoided because stopping the strike was not about public order but more about strike breaking

The evidence suggests the police set up an operation of 800 oicers the night before the massacre, including several machine guns, riles with stun grenades, gas grenades and water cannons, plus helicopters and razor wire The operation also organized ambulances and ire brigades

“The decisive point for me that this was not about public order and more about strike breaking came on the morning of August 16, when two statements were made: one by the police commissioners when she said:

‘This strike stops today’ and one by the head of press for SAPS when he said:

‘Today is D-day.’ Why? Why did it have

Bismarck Stares The Beast

Tendai Biti—the rough tough inance minister of Zimbabwe they call Bismarck—has the toughest job in the world, especially on days when the country has only $217 left in the bank He believes President Robert Mugabe should have resigned years ago

by Lazarus HLenga

economy has twisted slowly in the wind It has broken records for all the wrong reasons: the highest inlation the world has ever seen and 80% unemployment

After a disputed 2008 election, a creaky political agreement ushered in

a power sharing government In this brave new world the task of running treasury was given to a man, who calls himself a poor constitutional lawyer;

an Arsenal fan, who thinks Arsene Wenger’s time is up

Tendai Biti, 47, is a workaholic who without education would

be a demon They called him Bismarck at university—after the iron-isted military founder of a united Germany—because of his uncompromising approach to debate Bismarck is bitter about Wenger:

“He has been torturing us with poor results He must do the right thing” The analogy is irresistible and perhaps Wenger would feel the same way in return

The main entrance to the seat of power has tinted windows and an intercom It is possibly the only oice

at the new government complex oices, in the capital of Harare, with such an electronic device The voice

of the security guard asks politely:

“How can I help you?” These security measures are not surprising—a group

of war veterans once threatened to

Inside, his desk is full of

paperwork Biti wears a blunt face as

he speaks to a mystiied oice aide

who is handed back a ile

“He doesn’t want this and that

signature I don’t need to sign this

paper Where is he? He should be

doing this and that I don’t like that

This is nonsense,” says Biti

Suddenly, I’m told: “Let’s do the

interview now, I have no time.” No

smile No greeting He starts swiping

across his iPad and ignores several

incoming phone calls

Biti has been at the helm of the

leaky inancial ship that is Zimbabwe

for years He took the job in 2009, in

the midst of the global inancial crisis,

with the aim of achieving a tough

balancing act for a nation loundering

in a dreadful recession For a country

with a power-sharing government

and several power centers wanting

money, especially state security, Biti is

also in the midst of ugly politics It is

a job that needs guts, patience and the

gonads of an elephant

He stormed out of a cabinet

meeting, which until then was

unheard of in conservative Zimbabwe, stunning both President Robert Mugabe and prime minister Morgan Tsvangirai

I ask him how he manages his emotions, after telling him he can be very diicult

“Yes, I do have mood swings but I’m

a very vulnerable person I hide in a shell of machoism I’m very emotional, too emotional I think and act with my heart I know I can be a disaster I get

so angry and I speak my mind What afects me are the tiny little things

People who are late; people who are sloppy; typographical errors kill me;

bad English; bad grammar,” he says

But why did he storm out of a cabinet meeting in July 2010?

“The discussions were going nowhere and I knew I was right

so I just expressed my right of disassociation I don’t like people who are dishonest I also feel that I don’t owe you, so let’s be objective, let’s be impartial,” he says

This year could make or break it for Zimbabwe If the elections go ahead, with violence along the way, the country could go of the rails, taking investment hopes with it

“Zimbabwe has been sculed

so much, sufocated so much

by mediocrity, dictatorship and mendacity when other countries are moving The election in 2013 must make a distinction It’s a vote between the past and the future; it’s

a vote between opportunity and the liquidation of opportunity,” he says, with a stern face

Investors are apprehensive about elections Like eagles, they are keeping

an eye on the country from a distance

Biti has been wooing European investors but the odds are against him

His boss is a hard sell abroad And what more can he expect, he doesn’t like him either but is managing him

in a fragile coalition government in which the right hand, doesn’t know

what the left hand is doing

So far, the economy is fairly stable but the manufacturing sector is dead and investors are still watching, reluctant to walk through the open door

Biti says they should get a bit

of credit for cutting half a trillion percent inlation to 7% in a matter of months

“What we did bordered on the miraculous… It has never been done;

I don’t think it will ever be done again You wear and tear, the arrows are thrown at you, pressure is like a tornado, it afects even your marriage and it’s phenomenal,” he says

The Zimbabwe Accelerated Debt Arrears Clearance Debt and Development Strategy (ZAADDS) has been crafted to deal with the extensive debt It is just as well as the country has a staggering $10 billion foreign debt, and will be negotiating its arrears with a visiting IMF team this quarter Biti says they will try to negotiate out the arrears but the debt remains a structural issue dependent

on elections

“The country has two choices: the crocodile scenario and the cheetah scenario I don’t want to be

a crocodile… I want to be a cheetah I want to sprint,” he says

African Investment Markets’ Farai Dyirakumunda says Zimbabwe is on the radar

“A lot of investors gave a wide array

of investment opportunities with good upside potential Some will sit

on the fence during the election year due to uncertainties but there will be

an eventual inlux of foreign capital under the right conditions,” he says.Hope pales in the face of reality.The Confederation of Zimbabwe Industries (CZI) painted a desperate country teetering on the brink, late last year Several banks have closed, the liquidity crunch is stalling domestic investment and the CZI

“Zimbabwe has been

sculed so much,

sufocated so much by

mediocrity, dictatorship

and mendacity when

other countries are

moving The election

in 2013 must make a

distinction It’s a vote

between the past and

the future; it’s a vote

between opportunity

and the liquidation of

opportunity.”

has called it an economic emergency

Many people, who elbowed out of

the formal sector, are selling goods

by the roadside, with little or no

manufacturing in the heavy industrial

sites, which means that fewer taxes

low into the iscus

After paying January’s salaries, the

government was left with just $217

in its cofers, just about enough for

dinner at a posh restaurant Luckily,

$30 million lowed into the iscus

the following day; it highlighted the

paucity of government cofers

“It’s basically a cash economy,” says

Biti

Dyirakumunda says Biti is a

practical minister

“He has done reasonably in

controlling government spending so

that it is fully funded by tax revenue

and government income There have

been funding constraints to what he

could do to stimulate the economy

through iscal policy,” he says

No wonder Biti has been tasked

to beg for $200 million for the next

referendum and elections

In the retail sector, the painful

reality is that most products in

supermarkets are foreign-owned The

country sufers from a huge current

account deicient The imports

amount to $7 billion, with exports a

mere $3.5 billion, a gap the treasury

wants to narrow Zimbabwe is placed

132nd of 144 countries in the Global

Competitiveness Report 2012-2013.

“There is still a lot to be done… and

some of us we will look the beast in the eye and we will not blink,” he says

Biti says his wife, Charity, is his rock She couldn’t understand why someone had thrown a bomb at their house in order to, in her own words,

“stress a point” but it was her unruled demeanor, which helped Biti cope with the trauma

Economist John Robertson, who has been studying Zimbabwe’s economy for nearly half a century, says that Biti’s opponents in government made promises about civil service salary increases, which they knew Biti could not keep

“They pilloried him through the press for failing to keep the government’s promise The intention was to force his resignation but all attempts failed,” says Robertson

Biti describes his party boss, Tsvangirai, as the most open and humane person he has ever met He wonders how after having emerged from one of the poorest villages in Zimbabwe, without a university education he has managed to achieve such great heights against the odds

At home, he reads at lot about economics and philosophy Perhaps it was this thirst for knowledge, which helped Biti become the youngest

FORBES FOCUS — ZIMBABWE

partner at a top Harare law irm Honey and Blackenberg at the age of 26

“I can take the bull by the horns and I’m not afraid of work.”

He is inspired by biblical prophets and is fascinated by the books of Jeremiah, Judges and Solomon—“a fascinating collection of stories about cruelty, blood, murder, love and commitment,” he says Biti also draws inspiration from American politicians, musicians, footballers and Nelson Mandela He admires how, “You stay

in prison for 27 years and walk out without bitterness” And Thomas Jeferson amuses him

“What did he mean by crafting in pursuit of happiness?” he asks with a chuckle

As he warms up he reveals that he is

in awe of how Barcelona’s Lionel Messi weaves his magic on the ield His love-hate relationship with Mugabe has deined his career but he doesn’t mince his words Take a recent interview

with state newspaper, Sunday Mail:

“I’m still critical of him I think if he had resigned many years ago a lot of the problems that are happening in this country would not be happening

I have a problem with people who are not democratic How can someone sit in one position for 32 years? He

Biti on Mugabe:

“I have a problem with

people who are not

democratic How can

someone sit in one

position for 32 years? He

belongs to a generation

that is history, that is in

the archives.”

Fine words of economic recovery may

resound in government oices but they

ring hollow in the battered and weary

world of Zimbabwean business.

On the streets of Harare you could

call supermarket chain Food World

a monument to survival For years, it

sufered emptying shelves, job losses and

a currency meltdown The business kept

breathing through a decade of economic

disasters Prices were pulled around by

speculators and black marketeers Then,

government statutory price controls ate

into its proit margins.

“We lost a lot of business in the era,”

says Denford Mutashu, Food World

manager

“It’s certainly a period I don’t want to

go back to, industry went to its lowest

point, local supply dwindled later and we

had to rely on imports You didn’t have

a strategy to implement, you could not

plan.”

In 2013, Mutashu still feels his

company is living on the edge He fears

the temporary stability brought by

dollarization of the economy could go up

in smoke if the elections turn violent

His supermarket may be full but

Mutashu feels that the inance minister

isn’t helping much by imposing punitive

duty on imports Zimbabwe has bought

around $7 billion worth of imports, while

only exporting $3 billion worth.

“There is little production going on

We have to import 70% of the products

you ind here, cooking oil, lour and other

products That badly afects our proit

margins… The disparity between exports

and imports is worrisome; the country

is facing serious challenges in terms of

liquidity,” says Mutashu.

Food World imports the majority of its

commodities from South Africa.

“There is quite a lot of inactivity and

industrial capacity utilization has gone

down Other than looking at industry

capacity, we then have to concentrate on

Too Many WorrIes spoIl THe BroTH

industrial competitiveness,” he says

Mutashu believes dollarization, which has seen dollars and rands used as legal tender, has been a salvation, saying that the worthless Zimbabwe dollar was killing

business

“The functional currency system has brought predictable prices, which rarely luctuate, it has brought some sanity We used to sell a loaf of bread for millions of dollars But now there is restocking and prices have stabilized.”

On the other side of the coin, be it a dollar or a rand?

“Since we are using a currency, which

we do not own and control, it is still a challenge for us to be able to control the economic pendulum Whatever happens

in South Africa also afects us because

we don’t have control over the currency,” says Mutashu

Zimbabwe used to export cooking oil, now it’s importing As the recession heat took its toll, many companies went under National Foods, one of the major cooking oil producers shut its plant Household name Olivine weathered the storm but failed to cope

At the very least the struggling supermarkets of Zimbabwe, such as Food World, are cooking but hope that the elections don’t spoil the broth.

Denford Mutashu

belongs to a generation that is history,

that is in the archives.”

After years of debate, the draft for

the new Zimbabwean constitution was

drafted on February 6 Both the

ZANU-PF and Movement for Democratic

Change put forward their interests

Tsvangirai tried to reduce the power of

the presidential oice, while Mugabe

tried to include clauses that would help him maintain power Once the draft is passed by Senate, Mugabe will set the date for the 2013 elections, which are tentatively scheduled for late June

Biti said he has never been trusted

by the ruling ZANU-PF because

he emerged from a Movement for Democratic Change formation to run

treasury

“Some people don’t read; they are ignorant They didn’t and some still don’t understand what we were trying

to achieve Some say education is important, I would like to submit that the cost of ignorance is incalculable.”Zimbabwe can’t aford any more costs

Every citizen of our world will need 1,343 metric tons of minerals, metals and fuels

in their lifetime That helps explain why Cape Town’s annual Mining Indaba—the third largest in the world, arguably at the highest level—is a huge event.

by Peter suLLivan

has to be dug out of

the ground Mined

Then manufactured,

transported, sold and

consumed

First, it has to be found, where

it hides, mostly deep underground

So, exploration companies with

their massive machines, technology,

geologists, agronomists, hydrologists,

geophysicists and acoustical engineers

lock to the Mining Indaba at Africa’s

Southern tip As do prospectors, who

tell exploration companies where to

look

Then come the investigative drillers,

reserve deiners, junior miners and

risk assessors, metals analysers, remote

camp builders and computer software

writers Feeding at the edges, as always,

are the lawyers Next come those who

do actual mine construction Here, the

big boys get involved: banks, investors,

partners, governments, fund managers,

engineers, employment agencies

Lawyers move in And we still have

nothing tangible, nothing yet taken

out of the ground to feed metals and

minerals to a hungry populace

Once gold, copper, coal, iron ore,

bauxite and a hundred other elements

surface from undergound, a new breed

of people get involved, until the cars,

jewellery, electricity or cellphone gets

the stuf into consumer hands

The extracted total of mining

production is worth two trillion

dollars, putting the worth of the whole

industry and associated ones at about

$2,000 trillion

The Indaba itself? Probably worth

$20 million And its value to Cape Town? Ten times that

There are 3,000 listed exploration and mining companies, half of them in Canada The three deepest mines are

in South Africa Coal is easily the most valuable mined commodity, with 7,700 million tons a year worth an annual

$693 billion The next three are iron (2,000 million tons worth $238 billion), gold (257,000 tons worth $132 billion) and copper (16 million tons worth $122 billion) All these numbers from Chris Hinde of IntierraRMG, who ran “A three-hour PhD in Mining” at the 2013 Indaba

Besides the 7,532 people registered for this year’s event, there were around that number again hanging around, often in suites near the venue, organising meetings with those who are registered

One top chief executive of a mining company told me: “I don’t bother to

go in anymore, otherwise I have to say

‘hi’ to a lot of people instead of just talking to the ones I need to meet I take a room and get investors to see me privately.”

In the Cape Town International Convention Centre (CTICC) itself are hordes of people in black suits and red ties, anxious looking if they need money, urbane if they are investors or lawyers Milling about, chatting, drinking, eating and of course networking

Oh, and there are speeches as well

As a fraction of total delegates, the audience for scheduled addresses seldom exceeds half, which is still close to 4,000 listeners in the hall Yet the talks are fascinating, especially the women this year South Africa’s minister of mines, Susan Shabangu, tried to allay investors’ fears about real nationalization but failed to convince them that creeping resource nationalization in the form of taxes, labor laws, fees, licences, community demands and union demands were not a threat to investment One mine owner muttered: “We’ve already been nationalized, we just didn’t notice it…”Anglo American CEO, Cynthia Carroll, responded by telling the minister and her Cabinet colleagues:

“Mining companies need to work in partnership with their employees and trade unions, to move on from conlict and to build positive relationships for the future Partnership between business and government is also critical, particularly in ensuring that development objectives and initiatives are aligned Partnership is essential But it isn’t easy Partnership is about dialogue—not monologue It requires listening as well as talking And above all it requires understanding and acceptance Companies need to understand that in a vibrant democracy there will always be a lively political debate, in which not all the views expressed will be to the liking of business In return, governments and political parties need to accept that business has an important role to play

and a legitimate voice that deserves to be heard Business is

a partner, not a pariah.”

The third tough woman speaker was Mamphela

Ramphele, who told delegates to be patient when asked if

she was creating a new political party

Her substantive address damned the current government

by saying, to a ripple of laughter: “For the most, mining tax

revenues vanish in the black hole that is the central iscus

and end up funding large rural estates for presidents.”

She took the audience on a tour of the key issues needing

frank discussion if a viable and sustainable future for mining

is to be forged How do you build a mine to best share the

resource? How do you deal with legacy issues to enable

co-ownership of risk and reward? What needs to change to

create sustainable economies and socio-political systems?

There were many speakers, each with platinum-plated

wisdom to convey It can get too much, so I took a tour of

the 400 stalls in the exhibition center, mostly manned by

Australians—who love Cape Town, seem to despise their

government and see Africa as the future of mining globally

Every single one told me they were happy to be at the

Indaba ($12,500 per stand), would be back next year, and did

not expect to do business but were there to collect leads for

future business

Jonathan Moore, MD of the Mining Indaba, said because

it attracted investors and mining chief executives, it should

probably not grow to be very much bigger as quality could

sufer

“It was started by a bright female entrepreneur, Sandy

Lawrence, who realized when SA came out of apartheid

there would be an opportunity The irst one only had about

200 people, but after it grew bigger she sold it to a private

equity irm who held it for about ive years, and Summit Business Media, based mostly in New York, bought it in

2007 She thought the intent of the event should be to drive foreign dollars into African mining.”

It has certainly done that

“I bring 15 people from the USA but employ locals for

PR, tech, IT, printing, signage, transport, bags, building stands, some 50 to 60 temps, security We ill hotels, lights, restaurants, the CTICC, taxis, shops.”

“The CTICC is world-class, as are the staf Everyone is happy to have it in Cape Town, and the city beneits big time The world is still waking up to what this continent of Africa has to ofer The Indaba has moved in unison with that awakening and in a few decades things will be very diferent from now We haven’t come close to tapping Africa’s mining resource.”

Levels of optimism are high, despite Marikana and the platinum recession New inds everywhere, all bigger, better, richer, higher grade Only the Australians seem unhappy, probably because they have to return to a depressed economy coupled with boring politicians

Africa is on the move Most of the stuf that has to be dug out of the ground, metals and minerals and increasingly oil and the gas, will come from Africa Those who will reap the rewards of doing that are the people who people the corridors of the Mining Indaba It is simply one of the world’s most successful conferences

Susan Shabangu 19th Investing in African Mining Indaba, February 2013, Cape Town, South Africa

flYING NEAR YOu

There is a swarm of stealthy machines You may not see nor

hear them but they are about to transform your life There are

thousands of them lying as you read this This month, FORBES

AFRICA brings you a special report on drones in Africa

PRESS FOR VIDEO:

CHRIS BISHOP, MANAGING EDITOR ON WHY FORBES AFRICA FOCUSED ON DRONES

Unmanned Aerial Vehicles (UAVs), or as

they are more commonly known drones,

are the latest technology boom that is

growing exponentially across the globe

and African skies are seeing an increasing

number of them too

What are drones? And how do they work? Briely,

they are aircraft without a human pilot lying inside

They are lown either by operators sitting in control

rooms hundreds, or even thousands of kilometers away,

using satellite feeds or radio signals, or increasingly,

many drones are lown entirely by computer

Most people have a vague idea that the Americans

have been lying strange unmanned vehicles, called

Predators and Reapers over the skies of Afghanistan and

Pakistan to spy on and often kill suspected Taliban or

other militants What is startling is the growth of drones

in the military A decade ago, according to a recent article

in Time Magazine, there were only 50 drones in the

Pentagon leet, now there are some 7,500 and more than

a third of the US Air Force leet is unmanned

The military use of drones, particularly by the States,

is troubling but it is a reality that is not going away

And one which has changed the nature of warfare The

Bureau of Investigative Journalism reports that there

have been some 360 drone strikes in Pakistan, killing

up to 3,500 people—over 300 of the strikes have been ordered by the Obama administration—while there have been multiple strikes in Yemen and Somalia The US conirmed, as far back as 2011, that it had been operating Reaper drones alongside Ethiopian forces battling al-Shabaab militias in Somalia They also have secret drone bases in the Horn of Africa, the Seychelles and Burkina Faso The government of Niger recently gave the US the green light to operate surveillance drones to help monitor the movement of extremist groups in the Sahara and Sahel The US and France are certainly sharing intelligence over ongoing events in Mali, although there are no conirmed reports of drone strikes as of going to print

The largest manufacturer of drones in Africa is Denel Dynamics based outside Pretoria, South Africa They have been making drones and other Unmanned Aerial Systems (UAS) since the 1980s They make four diferent drones aimed at both the commercial and military markets

Their lagship product is the Seeker 400; it is the only long range tactical UAV made on the continent It

is an upgrade on the successful Seeker II, which was exported to two other countries, neither of which can

FORBES FOCUS — SPECIAL REPORT

be disclosed, but Denel Dynamics has

“Clients in Africa, Asia and the Middle

East, South America, especially Brazil

We are not considering entering the

market in North America but in Europe

there might be some possibilities,”

says deputy CEO of Denel Dynamics,

Tsepo Monaheng.The Seeker 400

is what Monaheng describes as an

entry-level long range UAV In the

industry, it is known as a ‘MALE’ or

Medium Altitude Long Endurance

drone It can remain airborne for 16

hours and carries two payloads so that

it can operate diferent cameras on

the same light, say, a high-resolution

optical camera and an infrared one

It has a range of 250 kilometers and

relies on line-of-sight communications

It has the potential to be upgraded

for satellite links but at this stage,

“We cannot hand control of the

communications to a third party”

The Seeker 400 is also designed to

carry an armed payload if necessary

“None of our drones carry weapons

at the moment but the system can

be customized for diferent client

requirements,” he says

So, South Africa is a potential player

in the game of international drone

warfare

“We can sell anywhere that is

morally okay Anywhere our country is

okay with,” says Monaheng

At the moment only the States,

United Kingdom and Israel are known

to have used armed drones But as the

pressure builds on South Africa to

become more involved in continental

peace-keeping missions, the questions

of who to sell drones to will become a

foreign policy dilemma that could have

political ramiications South Africa

will, in the near future, have to contend

with the growing use of drones by

other militaries, especially by Western

forces, on the continent and decide

what the country’s response to this will

be

Johan Potgieter of the Institute for

Security Studies explains that in the

recent conlict in the DRC, after the

M23 rebels had taken control of parts

of the east, there was renewed interest

in the United Nation’s (UN) use of

at least three drones to get real-time information for their peacekeeping forces

“The US had trained the Ugandan forces in the utilization of drones because the UN had agreed to it but then the Rwandans complained.”

What most vexed the Rwandans was their national sovereignty being violated by drones—an issue for which,

at this stage, international law has few,

if any, precedents or guidelines

“Africa shall not become a laboratory for intelligence devices from overseas,” says Olivier Nduhungirehe, Rwanda’s deputy UN ambassador

Where South Africa, as the largest drone manufacturer and exporter on the continent, might place itself on this question is anybody’s guess at this stage

“Africa is very sensitive about other people interfering in their airspace—as they’ve often got something to hide,”

says Potgieter

The questions raised on the matter

in international politics are only going

to proliferate, and the military drones themselves are going to get more and more sophisticated In recent years, however, there has been a rapidly growing parallel development of simpler and far less expensive drones for civilian use

“There has been an evolution in thinking about UAV technology They can be used to courier information, blood samples, data of all kinds They used them at Fukushima to monitor radiation levels You can use them wherever you don’t want humans to be involved,” says Monaheng

With this in mind, Denel Dynamics has developed a much smaller drone called the Hungwe, which is small enough to be transported in a single commercial 4x4 vehicle

“The design concept is for it to be used in civilian airspace The challenge

is to work with the CAA (Civil Aviation Authority).”

Civilian drone technology, both

local and international, is developing

so fast that it is now prompting a rapid review of South Africa’s aviation laws

to integrate drones for civilian use into our air space, as currently there are no regulations for the use of UAVs outside

of restricted military airspace

According to Sam Twala, certiication engineer for CAA: ‘This is not a unique problem to South Africa, the whole world is still searching for

a working solution The UAV interim policy of 2009 is under review and

we hope to have something out by the end of this year But we need to ind a solution that not only suits the South African market but harmonizes with the international market”

There is huge economic potential for both military and civilian drones

“UAVs are a successful business for

us Our turnover is about R200 million ($22.5 million) and we employ about

90 people But the industry is growing and we want a big chunk of that and we expect to grow 10% year-on-year.”

At the moment the potential for making money in the civilian drone business is still at a sort of Klondike stage; everyone knows that there

is gold out there but no one knows exactly where it is or how to get hold

of it

A 2012 market study by defense consultants TEAL group predicts that global UAV spending will almost double in the next decade from $6.6 billion to $11.4 billion bringing it up

to $89 billion over the decade But really, who knows? It could be even bigger if certain conditions are met: appropriate legislation, enough air space being made available and the technology being safe enough to operate successfully

The second biggest players in the African market, Advanced Technologies and Engineering (ATE), are currently undergoing cash low problems but they have over 15 years

of experience in the industry and are conident that a turnaround is near

“The applications for non-passenger UAVs are unlimited The only

restriction is legislation The CAA

is key but so is ICASA [Independent

Communications Authority of South

Africa]—they have to make bandwidth

available to the industry We need

regulation urgently for diferent

classes and types of UAVs We can

create an airspace where only UAVs

operate There are two types of

aircraft: unpressurized planes ly

beneath 12,000 feet, most pressurized

craft ly over 28,000 feet, so there is

a whole band of airspace that UAVs

could operate in,” says Jan Vermeulen,

programs manager at ATE

Their main UAV products are the

Vulture Tactical UAS used to assist

long-range artillery with inding targets

and correcting both aim and range

The mobile Vulture is launched by

catapult of the back of a truck, while

the Sentinel-LE UAS uses a similar

light body but takes of and lands on a

runway

“We don’t make armed UAVs

Deinitely not,” Vermeulen points out

Like Denel Dynamics, they won’t

reveal the identity of their clients but

Africa, the Middle East and Asia are on

the list

Perhaps their most innovative

project is one that is stalled for the

moment as the company’s inancial

position is being considered Using

a tiny UAS called a KIWIT weighing

less than 4 kilograms, they developed

a system in conjunction with the

National Health Laboratory Service

The KIWIT, guided by a PC, would

ly from a small rural clinic, carrying

a blood sample to a laboratory or

hospital with laboratory services The

KIWIT is then programed to drop the

sample by parachute and return to the

clinic for another load

“We got a 97 out of 100 success

rate but the program is now stalled

because of [air space] regulations,” says

Vermeulen

When asked about the future of the

company Vermeulen is positive

“The last two years our turnover

was on average R100 million ($11.26

million) a year but we had one big

overseas contract who didn’t pay and our cash low was badly afected

Everything depends on the new owners but we have the potential to do amazing things.”

It’s uncertain exactly how big the UAV manufacturing sector is in South Africa but there are successful smaller companies like Tellumat, which specialize in avionics for UAVs and exhibited at last year’s African Aerospace and Defense show in South Africa

S-Plane Automation is a Cape based UAV manufacturer, which builds the Swift and Nightingale drones

Town-“They are both still in development phase The Swift is a tactical class surveillance UAV, not designed for armaments, that can ly at 18,000 feet

The Nightingale is a much smaller unit, with a wingspan of only 1.5 meters,”

says technical director Iain Peddle

The company’s website explains that they were designed, like ATE’s KIWIT, to transport blood samples

S-Plane is still working on its UAVs

“At the moment they are not mature products We prefer, for the time being, not to compete with the Denels We are staying in the sub-system market, light computers, simulators, power managements systems.”

The Swift and Nightingale are elegant machines that are potentially extremely versatile Peddle won’t go on the record about what their turnover is

“It’s a sensitive industry but let’s say we’re a growing player We’ve gone from 6 or 7 engineers to about 20 now.”Small companies, such as S-Plane, are part of an exploding international market A 2012 report by the US Government Accountability Oice (GAO) on drone proliferation states that the number of countries possessing drones has risen to 76, with over 50 countries developing more than 900 UAV systems

The South African UAV market faces stif competition Potgieter points out that, “Seeker is not necessarily cheap In an open market it will

be relatively easy to ind a tested and proven UAV that is much more competitive”

“China and Israel are our biggest competitors They put together a whole package where they give a country UAVs and build an airport in exchange for, say, coal We still operate

in a traditional business way, where

we have to receive money for our product,” says Monaheng

Perhaps the most immediately pressing and exciting development for civilian and tactical unarmed UAVs in Africa, is their potential for combatting rhino poaching Damien Mander, an Australian ex-Special Forces soldier and Iraq veteran, who founded the International Anti-Poaching Foundation has pioneered the use of small drones in tracking elephant poachers in Niassa province,

CEO of Denel Dynamics, Tsepo Monaheng

FORBES FOCUS — SPECIAL REPORT

Mozambique He is developing a

scheme to track poachers and watch

over rhinos in the Hoedspruit area of

Limpopo Province in South Africa

“There are heaps of drones

on the market that have a 20-40

kilometer capability The drones that

conservationists need cost $250,000

The components that go into them

cost $100,000 tops The rest of the

price is intellectual property We don’t

have that kind of money so we are

developing a UAV that is sold for the

cost of its parts,” he says

Mander has assembled an

experienced team that is building the

UAVs in Australia

“You can ind the parts on diydrones

com, from all over the place We

want to stay comfortably behind the

technology curve We want them to

be afordable, easy to operate in rough

remote areas and easy to repair.”

He aims to get ive airframes

to South Africa by September and

pending CAA approval, hopes they will

be used against poachers soon

The unparalleled surveillance

capabilities of drones mean that

very soon they will become standard

equipment for law enforcement

Clearly, they can be used to track

criminals, watch borders, guard key

installations, help protect VIPs among

a number of other uses

They take us into a 21st century

world of Big Brother legal issues What

does their use mean for privacy and

entrapment issues? CAA concerns

aside, lawyers, legislators and courts

are going to have to rewrite a number

of laws within the ambit of this new

and growing technology In the very

near future, at, say for example, the

massacre of miners in Marikana,

there will be police drones recording

crowd movements; anticipating where

they might move next; pinpointing

individuals with GPS and face

recognition software Some of them will probably be armed with tear gas

or, perhaps, even missiles At the same time, the mine owners will have their own drones lying overhead, as will the unions and this is not to mention that all the major news companies will most likely have drones too There will be so many competing streams

of information that can be referenced that the whole nature of the investigation will be changed

cross-The psychological, social and economic efects of this are diicult

to predict Increasingly, drones will become an indispensable tool of the media We will expect to watch events across the world in real-time video fed from drones overhead edited in with pictures from cameras and cellphones from journalists and even members

of the public on the ground as they are happening Live broadcasts have been around for decades but drone technology takes it to a new level

Journalists will be able to ly drones over police cordons, prison walls, national borders to be able to bring the events to their audience Laws might make certain areas or events out of bounds to drones but there will

be equally compelling arguments in favor of freedom of expression and the public’s right to know In purely practical terms, to prevent drones being used, the police might have to shoot them out of the sky or interrupt their light control signals, which will potentially bring them crashing down

We’ve hardly even begun to imagine what the widespread availability and

use of drones will mean for the future

The unstoppable morphing of drones from the military to civilian worlds and the inevitable growth in their availability and use is not all good news As Vermeulen points out, “Any guy can buy the components and, with

a little bit of technical knowledge, slap

them together and then you have a drone.”

The web is illed with sites such

as the DroneZone.co.za; www.SMac.co.za (SMart Automotive Components)

or even Amazon and Kalahari where you can buy small drones like the Parrot that is operated of an iPhone The smallest drones available are called MAVs (Micro Air Vehicles) and their designs are inspired by bird and insect wings In the last month, the British military announced that it was providing its forces in Afghanistan with a 16g Norwegian-designed Black Hornet Nano drone, the size of a weaver bird

Criminals and killers can all buy these drones and the components

to upgrade them for more ominous

uses A recent piece in the Spectator

described how in the near future the software will exist for drones to

ly autonomously and to make their own ‘kill’ decision based entirely on computer algorithms with no element

of human choice involved

Drones are going to change everything Soon Society will have to struggle constantly with their dark, and potentially deadly, aspects but they also represent the next frontier for entrepreneurs Their potential is enormous They can be used to courier parcels, monitor locks of sheep, check the fences on game farms, ilm aerial shots for movies, ind natural disaster victims, monitor schools of ish in the oceans and the illegal trawlers that

go after them, survey pirates, rescue yachtsmen in distress, provide live

traic updates, check the quality of soils on wine estates Their uses are endless

As Twala says: “UAVs are the future

In the next ive years, UAVs will change our lives as much as cellphones did The list is limited only by one’s imagination”

“africa shall not become a laboratory for intelligence devices from overseas.”

Lord Frederick Lugard

proclaimed the union

of the northern and

southern protectorates of Nigeria,

a single entity known as the colony

and protectorate of Nigeria Until

then, both protectorates had separate

capitals and budgets The merger was,

in the words of Lord Lugard, for the

moral and material advancement of

Nigeria as a whole A century later the

Nigerian government is preparing to

celebrate the anniversary On February

4, at the presidential Villa in Abuja,

a year of commemorative events was

launched It was a gathering of the

powerful men: all but two of Nigeria’s

living, former heads of state were

there; along with state governors and

senior government oicials

An army band played as President

Goodluck Jonathan lit the centenary

torch Then a documentary took

the audience on a journey through

Nigerian history It told the story of

the ancient civilizations that lived in

what is today known as Nigeria: the

8,000-year-old Dufuna canoe, which

was discovered in Borno State in 1987;

the Igbo-Ukwu and Bini civilizations;

the heroic exploits of icons like

Queen Amina, King Jaja of Opobo,

Nana Olomu, Ekumeku, and Oba

Ovonramwen of Benin

The documentary also spoke of

key players in the colonial enterprise,

the likes of Lord Lugard, businessman

Sir George Taubman Goldie—after

whom the conquered land was

almost named—journalist Flora

Shaw, who irst suggested the name

‘Nigeria’ and married Lord Lugard

At no point did the documentary shy away from presenting the cruel and sobering reality of colonialism and the slave trade There were stories

of other Nigerian heroes onscreen:

Olaudah Equiano, the former Igbo slave, who was captured as a child and transported to the West Indies

He bought his freedom and settled

in Britain where he campaigned against the slave trade; Sarah Forbes Bonetta, also a former Yoruba slave who became Queen Victoria’s goddaughter; Nathaniel King, Nigeria’s irst medical doctor; Christopher Sapara Williams, the irst Nigerian lawyer; Oreoluwa Green, the irst female Nigerian pharmacist; Herbert Macaulay, newspaper publisher and nationalist and Candido da Rocha, one of Nigeria’s irst home-grown millionaires Abubakar Abdullahi is the winner of a national contest to design the centenary logo The theme song,

This Land, written by Onyeka Onwenu,

one of Nigeria’s best-known and most accomplished female musicians, was performed by her and a line-up of some

of Nigeria’s inest, including Omawumi, Tosin Martins, Zaaki Azzay and J’odie

“Here we are, standing tall, through adversity, we are one, 100 years of unity, Nigeria will stand,” declares the chorus For Nigeria’s citizens there’s much debate over whether the uniication is deserving of celebration,

or public funds, as many see it as merely an ill-advised experiment of an imperialist administrator

On the night, the government

pointed out that no public funds will be spent The ceremony was paid for by a number of Nigeria’s biggest companies The government insists that the anniversary, provides an opportunity for deep relection on Nigerian unity

“The question we must devote time and efort to is: How do we build the foundation of the Nigeria we seek in the next 100 years?” says President Jonathan

There were sprinklings of this unity

on the night First was the presence

of Muhammadu Buhari, runner-up

to President Jonathan in the 2011 elections Following the elections, Buhari challenged the results in court, and his party has been one of the leading voices of the opposition to the Jonathan government On this day it appeared both—one a northerner, the other a southerner—had set aside their diferences It wasn’t only political opponents who buried the hatchet The Dangote Group and Ibeto Group—who has traded words in the newspapers for months in a tussle over the cement market—sponsored the celebration side-by-side The government is projecting that the celebrations will create up to 15,000 jobs, as well as lots

of investment opportunities at a forum

to be held in Abuja The Centenary Project is an ambitious one It will include a brand new 100,000-resident

“Centenary City”—covering more than 1,000 hectares, which is to be built within Abuja—a new Abuja City Gate and ‘Unity Squares’ in all 36 state capitals Monuments that will prove a legacy for the next celebration in 100 years’ time

This year Nigeria will celebrate its 100th anniversary as a uniied nation.

referred to Africa as the

“dark continent”, although

the Victorian term has fallen

from usage, until recently it

accurately described the approach of

foreign investors to Africa Risk was

thought to be too high, returns too low

A decade ago, the region’s share of FDI

was less than one-tenth of the amount

lowing into Asia or Latin America

Until a few years ago, a single company,

Exxon Mobil, was worth more than

all of Africa’s listed companies put

together, excluding those of South

Africa

But what a diference a few years

can make Since the inancial crisis hit

in 2008, there has been a dramatic shift

in how investors view Africa One of

the markets that has best epitomized

this change is Ghana

The West African county was near

the top of worldwide tables in 2011

in terms of GDP growth with a rate

of more than 14% 2012 igures were

equally robust, coming in at above 8.5%

buoyed by strong growth in the

non-oil sector of 8% While the country is

largely dependent on commodities for

export revenues, increased activity in

housing, construction and banking has

spurred an expansion of the services

sector, which makes up more than half

of GDP

Last year saw a gradual depreciation

in the cedi, which fell by around 14%

against the dollar, driven by increased demand for imports While the country’s robust growth also stoked inlationary pressures, at least over the short-term, the CPI fell to 8.8% in December—its thirty-irst consecutive month of single-digit inlation

The country beneited from a statistical rebasing a few years earlier, which dramatically improved data collection and accuracy As a result, the country was catapulted into middle-income status

The biggest recent watershed moment for the country is as a result

of its newfound oil and gas reserves

The ofshore Jubilee ield, discovered

in 2007, began production in record time, with the irst barrel being lifted

at the end of 2010 The speed with which Ghana went about capitalizing

on its new oil wealth, 42 months from discovery to production, led to a few hiccups For four months, light, sweet crude lowed without a regulatory framework to determine how the revenue would be channeled and how future production would be handled

Eventually, the Petroleum Revenue Management Bill was put in place

It allocates a proportion of revenue

to future generation funds and price stabilization funds and some $444 million worth of oil revenue lowed into government cofers by the end of

2011 The production, in relation to the country’s overall economy, is modest

Gas And Cocoa Oils

Ghana Growth

The world’s second largest cocoa producer has

struck oil and gas Standby for liftof.

and by some estimates will work out

to around $50 per capita annually but the rush of investment into the sector—and ancillary industries, such

as construction and services—helped ensure the country was one of the largest FDI destinations in Africa last year

Associated gas deposits in the ield brim with equally promising potential, particularly in terms of domestic industrial and electricity production, although timing has been problematic Currently, with a ban on laring and

no oftake infrastructure, gas has been

by robert tasHima, aFriCa regionaL editor oF oXFord business grouP

re-injected into the deposits but at a

certain point this will negatively afect

oil production As a result, the country

has been racing over the past year to

inalize infrastructure for its gas master

plan, which will see the construction of

more than $750 million worth of new

processing and pipeline infrastructure

by China’s SINOPEC Gas is due

to begin lowing to the newly-built

Aboadze power plant over the next

month or two—and none too soon,

given the blackouts last year when the

country’s alternative gas supply, the

West African Gas Pipeline, experienced

supply shortages

While hydrocarbons dominate

the headlines, Ghana’s traditional

commodities have provided the bulk

of revenues in recent years Cocoa,

which indirectly supports more than

one-sixth of the population, had a

successful year with an estimated

production igure of 860,000 tons,

down slightly from the previous

year but enough to make it the

world’s second largest producer The

distribution of more than 20,000 new

hybrid seedlings and eforts to improve

the ability of small farmers to tend

FACT FILE

and replace their crops, looks set to strengthen output over the medium-term

Similarly, gold, which accounts for roughly 40% of exports, grew

by double-digit igures over 2012

Although production fell slightly, higher prices on international markets helped keep prices aloat and fund new exploration in marginal deposits

Ghana has revamped its regulatory scheme, introducing a new bidding system and increasing the iscal burden for operators, including a windfall tax and higher royalties

Of course, with all this laudable growth comes a note of caution

This rapid change must be managed carefully, for the downside risks facing the country are sizable Ghana was the third-largest recipient of FDI in Africa last year, but it remains worryingly dependent on commodities Gold, cocoa and oil dominate exports and while Ghana is not as sensitive to price luctuations as it was in the 1980s, when the economy seesawed according

to international prices, volatility still impacts overall performance

Furthermore, labor-intensive activities such as manufacturing remain marginalized, exacerbating unemployment and weakening the balance of payments The beneits

of the economic boom have been disproportionately concentrated in the south and development in the north lags signiicantly

However, Ghana has the ideal foundation for future growth It has natural resources, policy stability and reasonable infrastructure and it has beneited accordingly But exporting raw materials, by sending gold and cocoa elsewhere for processing, is

a short-term solution The country has begun aggressively encouraging increased value-added production in the secondary and tertiary sectors,

to improve the sustainability and inclusiveness of growth and to ensure that the country’s current performance

is not a temporary blip

The Decision Makers:

PREsIdENt: JOhN dRAMANI MAhAMA

MINIstER Of fINANCE:

sEth EMMANuEl tEKPER

MINIstER Of fOREIGN tRAdE ANd INdustRY: hANNA tEttEh

CENtRAl BANK GOVERNOR:

KWEsI BEKOE AMIssAh-ARthuR

MINIstER Of fOREIGN AffAIRs:

MuhAMMEd MuMuNI

**The Parliament of Ghana is currently vetting and approving ministers nominated by the president as required by law This accounts for the unavailability of the full list of new ministers

on the government’s oicial website.**

INflAtION RAtE (CONsuMER PRICEs): 9.1%

OffICIAl uNEMPlOYMENt RAtE: 11%

Sources: CIA World Factbook, www.123independeceday.com

TO EARN IS HuMAN;

To GIve DIvIne

Umuntu ngumuntu

ngabantu—this age-old

Zulu proverb explains

the spirit of ubuntu;

translated it reads “A

person is a person through others”

but many paraphrase it to “I am

because we are”

You’ll ind ubuntu in any

close-knit community where neighbors

help each other with anything

from sharing sugar and bread to

babysitting and mourning Ubuntu

in business is called philanthropy

The Latin origins of the word means

the love of humankind; the desire

to promote the welfare of others,

mostly, through the generous

donation of money to good causes

In a historic press event in a plush

Sandton hotel in Johannesburg,

South Africa’s richest black man,

Patrice Motsepe announced that

he and his wife, Precious, would

donate half of their family fortune

to philanthropic causes during their

lifetime and beyond

The room was full, from

clergymen and traditional leaders

to South African businesses’ top

brass as well as ministers and

union leaders Among them were

Pamodzi CEO, Ndaba Ntsele; Jessica

Motaung, daughter of Kaizer

Chiefs FC owner Kaizer Motaung;

chairman of Shell SA, Bonang

Mohale; Zulu nation Monarch, King

Goodwill Zwelithini; basic education

minister, Angie Motshekga and

Archbishop Tutu’s daughters to

name a few

“We want to build a track record

where ordinary South Africans feel

we’re making a humble contribution,”

says the 8th richest African

He assured the audience that

he would make sure his children

continued the tradition

The move put the Motsepes on

a list of elites who have pledged

to give a majority of their wealth

to philanthropy They are the irst

Africans to join the Giving Pledge,

founded by Bill Gates and Warren

Bufett in 2010 Today, it has nearly

100 members including New

York mayor, Michael Bloomberg;

world-famous designer, Diane von

Furstenberg; Facebook founder, Mark

Zuckerberg and PayPal co-founder,

Elon Musk

Is this pledge a new trend in

business or just an age-old tradition of

ubuntu under a new light?

This is not the Motsepes’ irst

contribution, in 1999 they started

the Motsepe Foundation, which to

date has donated around R40-R50

million ($4.5-5.6 million) to business

development Last year alone they

gave R20 million ($2.3 million) to

major churches in South Africa They

say this move is just an acceleration of

what they’ve established

While the Motsepes have had a

lucky turn of fortune, it wasn’t always

that way

“There were times when we had

nothing… When I came back from

America we had so many loans that

we couldn’t pay our children’s school

fees [and] we had to send them to

good schools But there was always

belief because we come from parents

who succeeded during the years

when there was no black economic

empowerment,” says Motsepe

But many ask themselves whether

other African entrepreneurs and companies will follow in Motsepe’s footsteps

Philip Fauré, head of Citadel Philanthropy Advisors, says there are many wealthy entrepreneurs who are philanthropists but prefer

to remain under the radar

“Africans are more private than Americans,” says Fauré

He also says that they avoid requests for money and security risks by doing things privately However,

he is quick to emphasize the diference between philanthropy and charity

by using a ishing analogy—

philanthropy is teaching one how to ish

“Charity is never going

to go away; aid is not the solution,” says Fauré

He also says that philanthropy is a major industry worldwide, mostly

in the States He hopes that more prominent South African families will give publically

There are a number of other African billionaires who are active philanthropists

In 2012 alone, Johann Rupert, the third richest African and CEO of luxury goods group Richemont, gave his R3.6 million ($406,700) annual

salary to charity The Oppenheimers—

the second richest family in Africa—

donated R1 billion ($112.9 million) to support education in South Africa

In Nigeria, Africa’s richest man, Aliko Dangote, gave away around $35 million and Zenith Bank founder, Jim

Ovia, gave away an estimated $6.6 million And Zimbabwe’s richest man, Strive Masiyiwa, gave away around

$6.4 million

According to wealth management

company Galileo Capital, if Motsepe plans to give away half of his wealth—bearing in mind his current net worth of $2.65 billion, interest and inlation—he will give away around $40 million annually to his philanthropic missions

“There were times when we had nothing… When I came back from america we had

so many loans that we couldn’t pay our children’s school fees [and] we had to send them to good schools But there was always belief because we come from parents who succeeded during the years when there was no black economic empowerment.”

If someone were to tell you that a thriving beauty

chain was started by a 50-something-year-old man

who had dropped out of university, you may ind

it hard to believe But once you talk to the man

himself, it starts making sense.

by Lerato seKo

university dropout who moves like a cat through business Ian Fuhr is probably the unlikeliest owner of a beauty chain you

will ever ind He inds his constant

change of career exciting, others may

think him confused

It all began on July 1, 1976, two

weeks before the Soweto student

uprising Fuhr, then 22, and his brother,

Rodney, opened the doors to the

predominantly black-stafed retail store

Kmart After ive years in retail, Fuhr

was lured away by the sweet sounds

of the music industry His record

company, Munjale Productions, signed

artists like Letta Mbulu and Hugh

Masekela

Fuhr and fellow South African

Clive Calder from Jive Records, an

American label, bought a mobile

recording studio, which they drove

to Gaborone, Botswana This was

in 1983, when the two would camp

out at the Woodpecker Inn to record

exiled artists Five years later, Fuhr left

the music industry and rejoined his brother at Kmart

The store name was changed in

1988 to Super Mart, after a lawsuit by the American chain that owned the trademark for Kmart

“They came into one of our stores, all in suits and stuf and started taking photographs So the manager of the store took one look at this and said: ‘No ways, you can’t take photographs’ The guy started panicking and tried to run out the door and they locked him in the store,” says Fuhr

The Americans added a lawsuit for wrongful arrest

Fuhr left again in 1991 to start a new career as a race relations consultant for seven years

It was in 2004 that Super Mart was sold to the Edcon Group—a leading clothing, footwear and textile retail group in southern Africa—for R112 million ($16,034,400) After the sale, Fuhr worked directly under the Edcon CEO, Steve Ross, for 18 months

When you ask Fuhr if he’d ever imagined, when he irst started out,

that his company would be worth millions, he laughs and says: “No ways” He says the key to his success has been to sort out the employees irst He says treating and paying them well, coupled with getting the culture right, lead to unimagined levels of productivity

With another career in his rear view mirror, Fuhr was far from inished

“I looked for my inal shot into the entrepreneurial world,” Fuhr says beaming

And what a shot that was An innocent suggestion by his massage therapist, Liz Goldberg, turned Fuhr