Vacancy Announcement: Manager - Membership Advocacy and Events, SASDC

The South African Supplier Diversity Council (SASDC) is recruiting for the position of Manager - Membership Advocacy and Events.

Read the vacancy announcement here. Read more...

SME: Small Businesses Bear the Brunt of Crime in South Africa

The Economist’s Africa Blog, Baobab, recently celebrated the 6-month anniversary of the Gautrain, in Joburg. The train, for those readers you who haven’t had the chance to go for a ride, will take you from the Eastern part of the city to downtown, or to and from downtown to O.R. Tambo Airport. (Check out this couple’s pictures of the Gautrain experience). As the Economist notes, for those residents geographically well placed to benefit from the train, “the likelihood of being mugged or delayed has been reduced considerably by the Gautrain” .

In other words, the train brings down indirect costs, the bain of the African private sector. (The train is priced to be more expensive than bus or taxi, but less expensive than using a private car).

I will address additional indirect costs more in our next blog entry, but for now I want to focus on crime, and its impact on small business in South Africa. In survey after survey South African businesses report that crime is a significant impediment to enterprise. In the 2008 World Bank/DTI collaboration—“Investment Climate Survey”—30% of respondents rated crime as a “major” or “severe” problem. Reality is broadly in line with perception. AllAfrica reported in July of 2010 that, on average, “crime was costing [South African] businesses about 3,2% of turnover a year.”

In a study commissioned by the South African presidency, entitled “The Impact of Crime on Small Business in South Africa”, 54% of respondents reported that they or their businesses had been victimized in the year preceding the survey. While this small business victimization rate is similar to that of developed economies such as the U.S. or U.K, South African small businesses are far more likely to experience a violent crime, or to come face to face with their aggressor. Conversely, the overwhelming majority of crimes perpetrated against small business in the U.S. or U.K involve theft or property vandalism.

Police Minister Nathi Mthethwa reported in 2009 that the number of business robberies increased by more than 40% from 2008-2009, and that small, often informal business were the most affected.

The direct and indirect costs of criminal activity pile up quickly; the Impact of Crime on Small Businesses Survey offers the example of an air conditioning business in Roodepoort, Johannesburg:

After experiencing a number of thefts, the company had to install trackers on their vehicles (R 12,000), purchase additional insurance on their building and certain assets, and begin paying R 250 per month for armed response. This is all in addition to lost staff time and wasted overheard as staff members arrange for additional security, and report the crime to the police. (source)

The near flawless World Cup proved that South Africa has the power to limit crime. As the government and civil society work toward that goal I know our readers, and SAIBL clients, would be very interested in hearing about ways to mitigate these costs in South Africa, especially in and around Johannesburg and Cape Town. Please feel free to leave ideas on good security companies, insurance options, best practices, and thoughts on risk mitigation.

Conor Godfrey, saibl office, Washington DC
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Specialty Food: SAIBL Specialty Food and Wine News Round-Up

Every two weeks SAIBL publishes a round up of important news and trends for entrepreneurs and business owners in Specialty Food and Wine. Please find our e-newsletter below. If you would like to sign up for our Specialty Food and Wine news round up, kindly email me at cgodfrey@africacncl.org.

Read the most recent Specialty Food and Wine news roundup ... Read more...

Specialty Food: WOSA promotes Integrity and Sustainability Seal

For 2010 vintages and beyond, qualifying South African vineyards will have a new Integrity and Sustainability Seal to put on their bottles. As the WOSA video shows, the seal guarantees the following:

Validity of information:

1. 100% of the grapes come from the region indicated on the bottle
2. 85% of the grapes are of the varietal indicated on the bottle
3. 85% of the grapes are from the vintage indicated on the bottle

Sustainability:

1. Wineries will be audited to verify sustainable production, including treatment of waste water, the introduction of natural predators, health and safety of workers, use of chemicals, and the conservation of biodiversity.

I commend this initiative in so far as in promotes sustainable agribusiness, and protects the wine growing regions' rich environmental heritage. This will help South Africa cement its position as a leader in sustainable development.

I also wonder how SA might recognize wineries that exemplify the values enshrined in the 2007 Wine Industry Transformation Charter. The charter recognizes that " broad based change and development are essential if the industry in to move forward in the 21st century--and indeed, if it is to thrive in a highly competitive global market."

WOSA and other industry stakeholders have launched a number of initiatives to facilitate transformation in the wine industry. This e-book offers a detailed account of the ongoing process of the wine industries' transformation in South Africa.

As consumers of South African wine, or as industry professionals, we should recognize and reward wineries that actively promote transformation and social sustainability just as we recognize those that promote positive environmental practices.

SAIBL currently supports two empowered, South African wine business exporting to the United States-- Stellar Organics and Koopmanskloof. These businesses not only represent the best of South Africa's emphasis on sustainable production, but also place a heavy emphasis on social development and transformation. Most importantly, Koopmanskloof and Stellar Organics have maintained their commitment to sustainability, both environmental and social, while remaining extremely competitive. Koopmanskloof recently signed a contract with American Airlines, among other victories in the U.S. market, and Stellar is the #1 organics Brand in the U.K.

For more information on either business, please see the 2010 SAIBL E-Catalog

Contributed by Conor Godfrey, SAIBL Trade and Communications Specialist
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Trade: Making the SADC Market Viable one road, port, and custom house at a time

Image courtesy of Trademark SA

Yesterday I attended a meeting at the Corporate Council on Africa concerning the proposed North South Trade Corridor running from Durban to Dar Es Salaam, and from Tanzania to the Eastern Congo through Rwanda and Uganda. This North-South Corridor will link up a number of existing trade corridors in an attempt to join the EAC, COMESA, and SADC economic communities.

In the medium to long term, this is especially great news for South African producers. Upgrades to regional trade infrastructure should make SADC markets more attractive and accessible as the strong Rand makes overseas market entry extremely costly.

The trend toward regional integration and intra-African trade should inform any South African exporter’s 5 year plan. Read this Africa Business Report for a wider view of regional integration’s march forward in Africa.

Recently released World Bank figures predict robust growth in 2011 for many SADC countries, specifically Mozambique (7.5% predicted GDP growth), Angola (~7%) and Zimbabwe (~11%). Improved trade infrastructure and customs procedures in SADC are creating a 230 million person market one road, port, and customs house at a time (The SADC population will reach 500 million by 2050).

This vision is not yet reality. A look at this Regional Trade Facilitation Program’s report reveals how painful intra-regional trade can be. The report describes a Brenthurst Foundation travel diagnostic conducted for the Rwandan government; it notes that, “the truck used to move a container of coltan over five days from Kigali to Mombasa did not move for 60% of the time”. Wow.

My point is the following: trade corridors and other manifestations of regional integration have already opened up trade opportunities, but they will open up many more. Companies should stay abreast of regional infrastructure developments as they design mid to long term business strategies.

For example: Yesterday several participants in the discussion lamented the failure of the Beira and Walvis Bay port upgrades to draw off significant traffic from Durban. Now policy makers are discussing how to further incentivize shippers to utilize ports other than Durban…what incentives would change your businesses’ calculus? Similarly, would dramatic changes in the efficiency of customs along the SA-Mozambique, or SA-Namibia border affect your business plan? Because they may be right around the corner.

Keep abreast of trade developments with Trademark SA.

Conor Godfrey, saibl office, Washington DC
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Impacting Policy: USAID FSP and The Revised Draft Regulations Under the Companies Act

This article was contributed by the Financial Sector Program, a USAID Funded initiative in Southern Africa.

The Companies Act – 71 of 2008, is widely regarded as a fundamental change in company law in South Africa and is slated to commence on April 1, 2011. The initial draft of the Companies Regulations was published in the Government Gazette December 22, 2009. In that same Gazette the Minister of Trade and Industry published a “Notice of Rectification” announcing a number of corrections and some fundamental changes to the Companies Act – 71 of 2008.


The Companies Amendment Bill 40 of 2010 was the result and is currently before Parliament. Please see the Financial Sector Program website for further analysis ...
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