- Article by Bruce Whitfield, EWN (2015)
A chirpy colleague from our sales division greeted me this week. All smiles. "Hello Prophet of Doom," she gushed. Sales types by their nature are eternal optimists. I replied something along the lines of: "Hurumph…"
But it got me thinking.
We are surrounded by wave after wave of bad news. We are on the cusp of recession. Interest rates are going up this year and depending on the performance of the rand, it will be by a little, around 1% in four bite-size 0.25% bits, or by a lot more as imports push up the cost of everything. Rates and taxes will rise as local authorities seek to balance their books, the crippling drought will cause significant increases in the cost of food and bet your bottom dollar, or rand, that the nice Finance Minister Pravin Gordhan will find ways to extract more money from your pay packet on Budget day.
So 2016, from a household budget perspective, looks tough. No two ways about it.
Far too many South Africans want to forget what is increasingly being called ' Nenegate'- seeking to sugar-coat last year's biggest political economy blunder with the relief that sanity prevailed and economic order was restored with the appointment within days of Gordhan. Sure, there was relief, but confidence has been shaken.
As I wrote in those dizzying hours after the announcement that Nhlanhla Nene had been replaced by Des van Rooyen, it was the most grotesquely irresponsible move by the president. Our economy, already vulnerable through its heavy dependency on mineral exports and failure to grow manufacturing and beneficiation of raw materials, did not need a loss of confidence of the scale that one decision wrought.
Just one CEO has gone on the record with me this topic. Bounty Brands CEO Stefan Rabe told The Money Show that within days of the sacking, his firm, chaired by former Pick n Pay CEO Nick Badminton, decided to be a lot less risky in their investment process in South Africa. Goodness knows what they were planning but those plans have been diluted. When trust goes, it's hard to win back.
Ironically, the president inadvertently did the country a favour. Nene was a fine finance minister, but by sacking him, it showed just how pivotal the National Treasury is as the anchor for the country's future. By returning Gordhan to that job, the country's petty cash tin is in safe hands.
So yes, things are gloomy and will get worse before they get better.
However, there is a reason why I am not (perpetually) gloomy.
I am constantly inspired by the stories told to us on the radio every Thursday by Aurik founder Pavlo Phitidis about how great small business are forged in the toughest of times.
Brian Joffe started Bidvest in the aftermath of the Rubicon speech, when many around him were despondent. The seeds of Discovery were sown in the early 1990s when many people with options bailed on the country rather than face what they regarded as the uncertainty of the new democratic age in South Africa. Adrian Gore saw opportunity where others did not and has been handsomely rewarded for that. He was funded by three guys few people knew of at the time - but they went on to build the mighty FirstRand Group. It was at that time that Graham Mackay, Meyer Kahn and Malcolm Wyman saw opportunities opening up in emerging markets for a little brewing company headquartered on Jan Smuts Avenue, Johannesburg, and went on to create the world's second biggest brewing company, now being rapidly assimilated as part of the biggest beer maker in the world. Standard Bank began its pan African expansion. Two university chums called Christo Wiese and Whitey Basson started Shoprite around this time - seeing opportunity where others saw only problems.
The dawn of democracy brought new opportunities and the creation of a host of businesses like HCI, Sekunjalo, and in the past decade there has been a growth of black-owned asset managers competing for mandates against the established players like Old Mutual, Sanlam and Liberty. Patrice Motsepe made a fortune and then like Allan Gray, more recently, made a decision to give most of it away.
I don't know who will be the next Brian Joffe, Adrian Gore or Patrice Motsepe, but I get excited by the enthusiasm and passion for business exhibited by younger South Africans every day.
I caught up with two great young South African entrepreneurs over the holidays. Miles Khubeka, aka Vuyo - was inspired by the Hansa ad - and decided to turn that fiction into reality. He's had more setbacks in recent years than most of us could tolerate. But Miles is made of sterner stuff than most - watch out for his food trucks at a market or office near you as the year progresses.
Watch out too for the Nic Haralambous - the sock entrepreneur whose December interview blew me away. With our obsession around creating apps and online shopping, Nic is taking hard lessons from online retail and opening physical stores this year and doing it with a confidence and a zeal that will carry him through inevitable tough days.
That's why my colleague can take her 'Prophet of Doom' comment and smoke it.
- Article by Bruce Whitfield, EWN (2015)