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Northern Cape investment shows confidence in South Africa’s largest province

Main courtyard at the Sol Plaatje University. Picture source: Savage + Dodd Architects.

A regional overview of the Northern Cape

By John Young

South Africa’s largest province is also the country’s sunniest and investors in solar energy are taking advantage of large tracts of sunlit land to build giant solar farms.

South Africa’s newest university is growing in Kimberley and one of the world’s biggest scientific projects, the Square Kilometre Array (SKA) radio telescope, is taking shape around Carnarvon.

Sol Plaatje University has a strong suit in teacher training, but an expanding curriculum speaks both to being able to exploit the SKA link through subjects such as ICT and data science and an appreciation of the past via heritage studies and paleo-sciences. The university’s location in an arid region means that future programmes will be developed to study agriculture in water-stressed conditions.

Building on the campus, which will eventually cover 190 000 m², is expected to continue for another decade. The competition held to choose architects for the first new buildings lead to some award-winning designs, including the multi-functional building (pictured) which houses a canteen, residences, offices and a retail section. The colourful wind-driven louvres were designed by Savage + Dodd Architects and executed by RVI Architectural Solutions.

Several black and women-owned companies have been active on the 12 projects currently underway. A Great Hall is planned on a portion of the Oppenheimer Gardens.

Mining and agriculture, the traditional pillars of the provincial economy, remain important. Both sectors continue to contribute (despite fluctuating iron-ore prices and periodic droughts) but both sectors are showing potential to expand into new and productive terrain.

The Kalahari Basin contains 80% of the world’s manganese reserve, but only 15% of global production comes from this area so there is enormous scope for development. Several new black-owned manganese projects are underway. The world receives 7% of its diamonds from the Northern Cape, and exports of zinc and lead from the province account for 13% of global demand.

Vedanta Zinc International started exporting product from the mine in 2018 and has so far invested about $400-million in the project. (Photo: Kevin Wright/Vedanta Zinc International)

Iron-ore miners have done particularly well recently but it’s the development of new zinc and copper projects that is catching the eye. Vedanta Zinc International has invested $400-million in the first phase of its Gamsberg project and Orion Minerals announced in 2019 that its bankable feasibility study was positive for a planned zinc and copper project at Okiep.

The modern global economy needs particular minerals for its cellphones, renewable energy batteries and electric vehicles, and the Northern Cape has a lot of them. Investors are expected to follow in search of cobalt, copper, lead, nickel and zinc.

A notable feature of Northern Cape agriculture is its diversity, a result of the diverse soil and weather conditions. The 38 000 ha Vaalharts Irrigation Scheme produces wheat, fruit, groundnuts, cotton and maize and along the banks of the Orange River many high-value horticultural products such as table grapes, wine grapes, sultanas and cereal crops are cultivated. A quarter of the country’s onions are produced in the Northern Cape and in the drier areas, goats and sheep do well.

Niche products such as rooibos tea and karakul pelts are other provincial specialities, with aquaculture and mariculture showing great potential. Sea Harvest, the new owner of Viking Aquaculture, has started work on expanding its Diamond Coast Aquaculture facility near Kleinzee. It currently covers 400 ha and produces 100 tons of abalone per year. The plan is to increase production five-fold to cater for increased demand, particularly from Hong Kong.

The Provincial Government of the Northern Cape wants to develop an industrial base for the province based on agriculture and mining.

Various projects such as the creation of a rooibos tea plant are supporting that plan, as are the various spatial planning initiatives being pursued by provincial government. These include corridors of development, industrial parks and Special Economic Zones.

There are plans to build on the existing infrastructure that lies on the east-west axis roughly aligned with the existing N14 national highway and the Sishen-Saldanha railway freight line.

  • At the far east of this corridor lies the mining towns of Sishen, Kathu and Kuruman – an
    industrial park is planned for Kathu.
  • In the middle is the town of Upington – an industrial park is envisaged with a focus on solar energy and manufacturing. The existing airport is an important part of the region’s transport and logistics infrastructure.
  • Aggeneys lies 277 km west of Upington on the N14 where Vedanta Zinc International is mining zinc – a smelter and a refinery would be the centre pieces of the Namakwa Special Economic Zone.
  • Boegoe Baai/Port Nolloth – feasibility studies are being done into deepening and expanding this harbour to be able to export minerals. This would happen in conjunction with investments into fishing and aquaculture.

The Northern Cape is home to six national parks and five provincial parks and nature reserves. The Richtersveld Cultural and Botanical Landscape is a World Heritage Site and the Namaqualand spring flower display draws many visitors.

Most of the province is semi-arid (with a coastal strip) and it receives relatively little rainfall. Summers are hot and winters are cold.

Municipal summary of investment opportunities in the Northern Cape:

The Northern Cape has five district municipalities.

1. Frances Baard District Municipality

Towns: Kimberley, Barkly West, Warrenton, Hartswater, Jan Kempdorp

This district accounts for 40.3% of the province’s economic activity. It is the smallest but with a population of approximately 325 500, it is the most densely populated. Although Kimberley is historically renowned for diamond mining, its economy is now driven by its role as the administrative headquarters of the province. Strategically located and with good infrastructure, Kimberley is the leading centre in the province for retail, financial services, education, commerce and light industry.

The Mittah Seperepere Convention Centre and the Sol Plaatje University are in Kimberley. Mining and agriculture are found in rural municipalities. Agriculture in the region comprises crop cultivation and stock and game farming. The Vaalharts Water Scheme is the largest irrigation project of its kind in the southern hemisphere.

Investment opportunities:
  • Sol Plaatje University
  • Kimberley International Diamond and Jewellery Academy (KIDJA)
  • Mining: diamonds and precious stones
  • Manufacturing: textiles, agri-processing.
2. John Taolo Gaetsewe District Municipality

Towns: Kuruman, Kathu, Hotazel

Kuruman is the headquarters of local government in this region and contributes 19.7% to the province’s economy. The local spring produces 20 million litres of water every day.

Most of the district is situated on the Ghaap Plateau, over 1 000 metres above sea level and can experience extreme temperatures. Most agricultural activity is limited to grazing and boer goats are a popular breed among farmers, although game hunting is growing.

Kathu has a well-developed CBD with shopping malls that arose when iron demand was high. The Sishen iron ore mine outside Kathu is a vast undertaking, providing employment for thousands of people. Samancor’s Mamatwan and Wessels manganese mines and plants are situated at Hotazel.

Investment opportunities:
  • Kathu Industrial Park (IDC involvement)
  • Eco-tourism and hunting
  • Boesmansput diving resort
  • Gamagara Mining Corridor (housing, infrastructure)
  • Goat commercialisation
  • Agri-processing: olives, grains, pecan nuts, medicinal plants.
South African raisins are produced in the Orange and Olifants river regions, which are in the Northern Cape and Western Cape respectively. (Picture Source: Raisins South Africa)
3. Namakwa District Municipality

Towns: Springbok, Calvinia, Niewoudtville, Garies, Williston, Fraserburg, Sutherland, Pofadder, Okiep, Port Nolloth, Alexander Bay

The Namakwa district stretches from the north-western corner of the province, and the country, bordering Namibia and the Atlantic Ocean to the southern border of the province with the Western Cape Province. It includes the famous star-gazing town of Sutherland on its southern edge. The district is sparsely populated, and predominantly rural. It contributes 11.1% to economic activity in the province.

A major new investment has been undertaken in zinc at the Gamsberg project.

The mining and agricultural sectors provide most employment, while tourism and small-scale manufacturing are also present. There are plans to upgrade the harbour at Port Nolloth.

The region’s economy gets a boost every spring when tourists flock to see the veld in bloom. The climate and soil support certain niche crops, and the sites and sights are unique to the region, offering opportunities in agriculture and tourism. Niewoudtville is the site of a rooibos tea factory.

The /Ai/Ais/Richtersveld Transfrontier Park, the Namakwa National Park and the Tankwa Karoo National Park have the potential to grow as travel destinations, as does the western coastline.

Investment opportunities:
  • Development of Port Nolloth and smaller harbours
  • Hondeklip fish factories
  • Abalone and hake
  • Kelp processing and export
  • Game and nature reserve infrastructure
  • Rooibos tea
  • Calvinia: sheep and goat processing.
4. Pixley Ka Seme District Municipality

Towns: De Aar, Hanover, Carnarvon, Douglas, Marydale, Prieska, Hopetown, Richmond, Noupoort, Norvalspont, Colesberg

The district covers 102 000 square kilometres in the central Karoo and contributes 11.3% of the economic activity of the province. It has four national roads passing through it. De Aar, the site of the municipal headquarters, has national significance as a railway junction.

The provincial government has published plans to create a logistics hub at De Aar. The area around the town has several new solar farms.

Star gazing is Carnarvon’s great claim to fame, and it is host to the Square Kilometre Array (SKA) radio telescope project.

The district is home to three of South Africa’s major dams. Agricultural production includes wheat, maize, peanuts, grapes, beans, potatoes, nuts and sheep farming.

Pixley Ka Seme is the largest wool-producing district in South Africa, but most of what is produced is processed in the Eastern Cape, so opportunities exist for the establishment of a cotton mill, a tannery and a facility to add value to semi-precious stones. Horse breeding is a valuable contributor to the regional economy.

Investment opportunities:
  • De Aar rail cargo hub and workshops
  • SKA engineering, science, logistics support and education
  • Douglas holiday resort
  • Booktown Richmond festivals
  • Wool, pistachio nuts and venison processing
  • Water tourism activities on dams.
5. ZF Mgcawu District Municipality

Towns: Upington, Groblershoop, Kenhardt, Kakamas, Postmasberg

The Orange River supports a thriving agricultural sector and a growing tourism sector. The investment climate is ripe for tourism along the Orange River and around unique physical attractions such as the Augrabies Falls.

Upington is already a busy town with processing facilities for agricultural products. The planned development of an industrial park in the town and next to Upington International Airport will boost manufacturing. The main targeted sectors at this stage are in the renewable energy sector, for example, solar panels.

Most of the population of the //Khara Hais Local Municipality lives in Upington. Agriculture is a prominent feature of the local economy, as well as wholesale and retail services in and around the town. Various kinds of high-speed car racing and testing takes place on the roads, tracks and airport runway in or near the town.

The processing of wine and dried fruit is one of the biggest manufacturing activities in the province. Mining activities take place in Kgatelopele, where diamonds and lime are found. Together with sheep and cattle farming, mining provides most of the employment to be found in Siyanda.

Investment opportunities:
  • Upington Cargo and Electronics hub: SKA, renewable energy and aircraft storage
  • Upington International Airport
  • Orange River Smallholder Farmer Settlement and Development Programme
  • Tourism: wine tours, adventure and hunting
  • Upington vehicle testing site
  • Business Process Outsourcing (BPO)
Find more insight into business and investment in the Northern Cape, read the e-book here:

Enquiries

For more information about a specific investment opportunity, please contact the Northern Cape Department of Economic Development and Tourism:

[contact-form-7 id=”1320″ title=”Northern Cape Department of Economic Development and Tourism”]

 

Upskilling is vital to the construction industry

Building capacity

According to the recently released Quarterly Labour Force Survey by Statistics SA, 40.1% of people between the ages of 15-34 were not in employment, education or training in Q4 2019, highlighting the fact that skills development is more important than ever. Amid positive job creation news, it is now especially vital for the construction industry to adapt to advancing standards and adequately train the emerging workforce.

The construction industry currently contributes 8.3% to total employment numbers and has shown a positive uptick in job opportunities according to the Career Junction Index – which revealed a notable increase in hiring activity in the construction and building sector.

The opportunities for small, medium and micro enterprises (SMMEs), or subcontractors, have been growing over the past 20 years, especially as large contractors subcontract out the majority of their work, with their main aim being to ensure the employment of site supervision to manage risks, quality and productivity. However, SMMEs in the building sector often do not have the continuous workload required to place young people on apprenticeships. In addition, due to the casualisation of labour, small businesses also cannot sustain employment over long periods.

As such, it is great to see that in the past year, many Centres of Specialisation have been established in the hope that more young people strive to become artisans of the future.

The Department of Higher Education, through the Quality Council for Trades & Occupations (QCTO), has also embarked on developing the skills programmes. These skills programmes often are not scoped by experts in the industry but by instructors from Technical and Vocational Education and Training (TVET) colleges. Once published, these skills programmes will become part-qualifications. This system suits the Collective Agreement as our T4, T3 and T2 will be formally recognised. We are proud that the Master Builders Association in the Western Cape (MBAWC) has a Skills & Education Trust that runs free courses for those already involved in or wishing to enter the construction industry.

These skill programmes assist with growing the workforce in the construction industry.

The Trust will issue a certificate of receipt of donation and these receipts are recognised by all South African National Accreditation System (SANAS) approved verification agencies.

Another advancement for growing access to higher education in South Africa is the new Broad-Based Black Economic Empowerment (BBBEE) Codes of Good Practice amendments which came into effect in December 2019. The amendments have introduced a new scorecard indicator whereby employers can now provide bursaries for tertiary education to students and claim points. We urge any corporates in the industry who are able to provide this opportunity to please do so.

In order for the construction industry to survive and thrive it is vital to invest in the future workforce by way of upskilling and continued learning. It is important to note that ongoing training should be considered a Key Performance Area for each site. If the variety of construction enterprises make every workplace a training area, we will see an improvement in quality and productivity. The MBAWC suggests that each business sends at least one supervisor on a mentorship programme in 2020.

As an industry, it is necessary for members to take up the role of being leaders in training Construction Supervisors, Health & Safety Officers and Apprentices, as well as upskill their workforce through numerous short skills programmes.

By Anthony Keal, group skills facilitator at Master Builders Association Western Cape (MBAWC).

Expanding e-commerce under Alert Level 4 will help small businesses

A Granadilla Eats fruit & veg delivery.

Media release by David Maynier, Western Cape Minister of Finance and Economic Opportunities.

Today (08 May 2020), I have written a letter to Minister of Trade and Industry, Ebrahim Patel with an attached submission, requesting him to issue additional directives alongside the Alert Level 4 Regulations to permit online retailers to sell all goods, the delivery of those goods directly to customers and for the importation of those goods to be allowed.

The e-commerce industry in South Africa represents an expansive supply chain of businesses across retail and logistics sectors, and provides an online platform for businesses, especially SMMEs to access and compete in markets where they would ordinarily not have been able to trade. The sector employees at least 40 000 people in South Africa, and given the fact that e-commerce can facilitate trade with minimal human interaction, it could potentially employ a lot more if allowed to expand under Alert Level 4.

Now more than ever, businesses need to be able to continue to trade safely and responsibly to ensure that we save jobs, livelihoods and the economy during the Covid-19 crisis. The e-commerce sector presents an opportunity for just that, as it offers business a means to innovate and adapt during these tough times, with even traditional businesses being able to pivot and continue to operate, even in a limited way, due to its ease of implementation. In this way it is an enabler of competition and access to economic opportunities.

This morning I met with two of the founders of Granadilla Eats, which is an incredible success story of an e-commerce company that has pivoted during this crisis. Prior to the  hard lockdown, this company only sold swimwear, but now they deliver fresh produce and other food items right to your doorstep.

Minister Maynier visits Valota Farm.

Speaking to Josh Meltz and Hannah Duxberry from Granadilla Eats, I heard how they have implemented strict health and safety protocols during their packing process, together with contactless delivery, to stop the spread of Covid-19.

I also had the wonderful opportunity to meet Sameena Kariel and Abdurahman Kariel, the owners of Valota Farm in the Phillipi Horticultural Area (PHA). Valota Farm is one of the small businesses whose products, together with others from the PHA farms, are available to buy on the Granadilla Eats website, providing up to 80% of their fresh produce.

Speaking to Sameena and Abdurahman, I heard how the e-commerce platform provided by Granadilla Eats, and their own e-commerce website, has provided Valota Farm with the opportunity to continue their operations and keep farming during this crisis.

Minister Maynier with Sameena Kriel.

The e-commerce sector has already shown that it is able to limit physical interaction and transact through electronic or card payments, making it one of the safest retail options for limiting the spread of Covid-19.

We therefore see no reason why this sector should not be allowed to open up fully and sell all goods through e-commerce platforms. In doing so, we can significantly support jobs and increase economic activity in the Western Cape and South Africa during the Covid-19 crisis.

Africa Travel Week charts the future of the African travel trade

Over the past few weeks, the team at Reed Exhibitions Africa has had their ear to the ground, catching up with all the key players and listening to the travel industry’s needs, in this uncertain time. And, what they found was that the industry needs to connect with each other more than ever.

It is for this very reason, that Reed Exhibitions has revitalised Africa Travel Week (ATW). The rebrand promotes the beauty of the African continent and invites the “world to return home.” ATW comprises World Travel Market Africa (WTMA); International Luxury Travel Market Africa (ILTMA); EQUAL Africa; ibtm Africa; Travel Forward and the African Travel and Tourism Industry Awards.

Africa Travel Week (ATW) will bring these premier B2B travel trade entities under one roof at the Cape Town International Convention Centre from 7 – 9 April 2021. The event will be more important than ever for the industry to write business following a devastating halt due to COVID-19.

In parallel, ATW has been working very hard to bring you ATW Connect – a virtual hub bursting at the seams with interesting content, industry news and insights, and the opportunity to hear from experts on a variety of topics.

“Events as we know them have been disrupted and we have been forced to embrace new solutions for our partners. Adversity often helps us to foster innovation and our current reality has prompted the rapid development of online platforms,” says Megan Oberholzer, Portfolio Director for ATW.

She goes on to say: “ATW Connect is full of information about how to survive – and grow – travel-related businesses at a time when at least 146 countries have imposed travel restrictions for the foreseeable future,” she says. “This means that 91% of the world’s population (7.1 billion people), currently live in countries where borders are shut, or only open for essential travel”.

Digital Resource

ATW Connect will focus on inbound and outbound markets for general leisure tourism; luxury travel; LGBTQ+ travel and the MICE/Business Travel sector, as well as travel technology. A key aim of ATW is to provide ways for travel industry professionals to support each other and share vital information that will allow the industry to survive this tumultuous time – and be ready to grow the industry again when travel restrictions are lifted.

“We believe that ATW Connect will prove to be a vital digital resource for the industry, and will continue to serve as an important touchpoint that will complement ATW events, in future,” says Oberholzer.

The hub will feature four sections:
  • Knowledge Centre contains must-read articles with updates and trends from key industry professionals and experts focusing on LGBTQ+ travel, luxury travel, business travel, responsible travel and travel technology.
  • Industry Connect is a place to share positive news from travel professionals and will contain a library of videos from industry speakers and professionals, offering information and inspiration.
  • Destination Focus keeps the travel dream alive by putting a spotlight on various destinations that form part of the ATW family.
  • Armchair Travel showcases the beauty of Africa and ATW exhibitors’ incredible destinations and products.

Virtual Events

ATW Connect, in collaboration with travel content and market agency, Big Ambitions, will host its first virtual series on Thursday, 7 April. Bring your brains and join the first in ATW Connect’s #INTHEKNOW virtual event series, which will tackle crucial problems the industry is facing, right now. Save your spot, here.

“What the current situation has highlighted is that nothing will ever truly replace the importance and benefits of face-to-face interaction – particularly in our industry. We hope that the portal will become a go-to resource for the industry to access critical information and share creative ways to remain relevant,” concludes Oberholzer.

To stay up-to-date and inspired visit www.atwconnect.com today!

Adjusting procurement & SCM mindsets post-COVID-19

The 14th Annual Smart Procurement World Indaba, scheduled to take place in Johannesburg from 23-26 November 2020, will take an in-depth look at ‘Rands vs Sense’.

Not only is South Africa faced with the challenges of 4IR and digitisation, but also with a drastically different post-COVID-19 economic landscape.

“Strategies need to be looking beyond what’s here and more towards what’s coming so that when they are in full bloom they aren’t already redundant. The Smart Procurement World Indaba 2020 theme – Rands vs. Sense, may seem to talk to the age-old money over value scenario, but in fact that’s just scratching the surface.

It will be a showcase of the future of procurement in a developing world and an insight into just how intertwined the procurement and supply chain industry is with the 4th industrial revolution.” says Jodi-Lee Rood, Project Director for Smart Procurement, the organisers of the event.

The Indaba is aimed at directors, management, supply chain and procurement specialists, CFOs, sourcing professionals and internal audit managers in both the private and public sectors. “As the COVID-19 virus traveled through the world, global supply was halted, due in great part to a common reliance on one nation as the global trade hub. We need to change this mindset if we are to survive,” says Rood.

The conference will bring strategic thinking to the fore to prepare CPOs to rule the boardroom. The conference is driven by case studies to give a practical ‘how to’ approach.  It incorporates four streams: Private, Public, Municipalities and ESD Round Tables,” says Mediacy Mudekwa, Head of Content for Smart Procurement.

Visit Website

The programme is confirmed and the lineup is extremely strong, a number of commitments have been received from local well-known personalities including Masechaba Sesing (Provincial Accountant General (PAG), Free State Provincial Treasury); Stephen van Coller (Chief Executive Officer, EOH); Tim Modise (South African veteran journalist and broadcaster, The Modise Network); Xolani Mpahlwa (Public Sector Governance Strategic Advisor); Jonathan Klaaren (Research Associate, Public Affairs Research Institute –PARI); Dr Masimba Phillip Dahwa (Former Procurement Officer and Chief Advisor – Procurement, South African Express Airways); Sydney Tshibubudze (Executive: Strategic Sourcing (CPO), Barloworld Automotive and Logistics).

The event will provide delegates with valuable tools on:
  • How to come out of a recessionary economy from a procurement perspective
  • How to transform procurement from merely a function into a mission that businesses can rely on for a safe and sound, cost-effective consulting hub
  • How to rebuild confidence in SOEs
  • How to prevent corruption
  • How to implement 4IR
  • How to focus on value and not only cost
  • How to grow small businesses and make them sustainable.
For more information on the upcoming series of Smart Procurement World events for 2020 please visit the website at www.smartprocurementworld.com

Due to the pandemic outbreak, we are excited to announce that we have moved our Western Cape conference online on 19 and 20 May 2020.

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CPT+U SMME Covid-19 Toolkit

SMME COVID-19 Toolkit

We are committed to supporting SMMEs and curve the impact of the pandemic on your business. To help, we have created a limited edition SMME COVID-19 Toolkit filled with essentials that will help you get back to work safely.

Included in the toolkit:
  • Two A3 employee & customer safety posters
  • A business support brochure
  • 5 litres of hand sanitiser
  • Ten face masks

We only have 3000 toolkits available and will allocate these on a first-come-first-serve basis.

The cut off date for applications is Friday, 15 May 2020.
Apply HERE

Useful links:

Wesgro Content Centre
The Small Business Covid-19 Survival Guide
Cape Town Tourism – Small Business Survival Checklist
The Business Hub:

The way forward: How Africa can make a comeback from the oil & gas downturn

(Johannesburg, South Africa, May 4, 2020): Stunning drops in crude oil prices—the result of COVID-19-related declines in demand and an oil price war between Saudi Arabia and Russia—have been taking their toll around the globe this spring. For Africa’s oil-producing countries, where crude oil exports make up a large portion of their revenue, the situation is especially dire.

In Nigeria, for example, Finance Minister Zainab Ahmed recently warned of an imminent recession and requested billions of dollars in international emergency funding. As of the second week of April, national oil production in Angola was expected to fall from 1.8 million to 1.36 million barrels per day as the government prepared to freeze 30% of its goods and services budget. And Ghana, according to the Africa Centre for Energy Policy, stands to see a 53% shortfall this year in projected revenue from crude oil sales. There are similar difficulties across the continent.

There has been a ray of hope: a landmark production-cut agreement among OPEC, OPEC+ and G20 stakeholders on April 12 put an end to the oil price war. Shortly after that historical agreement, the African Petroleum Producers Organization (APPO) committed to significant crude production cuts of its own, effective May 1. While demand remains a concern, the production cuts will help lower oil inventories and should bring some stability to the oil market.

NJ Ayuk, Executive Chairman of the African Energy Chamber

I am not saying we can expect smooth sailing from this point on. There’s no denying that the COVID-19 pandemic will continue to test African countries on multiple fronts, from the health and safety dangers it poses to our people to the economic devastation and low demand for crude. The situation is painful, but it’s not permanent. And when this chapter is over, African countries will recover.

This is the time to lay the framework for that recovery. When demand for crude oil increases again, and it will, Africa will need exploration and production activities to resume. That means oil and gas ministries should be working now on regulations that foster a more enabling environment for investors and businesses. We should be fine-tuning our local content policies and exploring technologies that can contribute to a leaner, more profitable petroleum sector. Last October, I released a book that explains how we can accomplish these things, along with other measures that will help Africa better capitalize on its oil and gas resources. The ideas and examples it provides remain on point. We can still do this.

Exploring solutions

With demand for oil at a historic low, it may seem odd to talk about E&P activity. But, as I have said, the situation we find ourselves in now is temporary. After we get through the current crisis, production will play a critical role in our economic recovery. We need indigenous companies involved so employees, business partners, and suppliers can benefit from these activities. We also need foreign companies that are willing to share knowledge and technology—and to create economic opportunities in the communities where they operate. That’s why it’s vital that government leaders take steps now to remove obstacles to launching production, from red tape and lengthy delays to excessive taxes. Governments also need to support smaller independent companies by breaking exploration maps into smaller sections. And we need better fiscal terms for companies like breaks on import duties.

This isn’t my first time to call for these things, I cover them in-depth in my book, Billions at Play: The Future of African Energy and Doing Deals. But in the COVID-19 era, they’ve become more important than ever.

Local content: striking a balance

African countries need to develop fair, balanced local content policies that create economic and educational opportunities for Africans without overly burdening foreign investors and discouraging them from operating here. A shining example of this kind of balance can be found in Equatorial Guinea, which I wrote about in Billions at Play. “The government enacted requirements for international companies to hire Equatoguineans, contribute to training programs, and work with local subcontractors. They were careful to balance the need to boost local industry, however, with the limitations of the current local industry. They understood how unrealistic it was to require 100 percent local content until more training, education, and local capacity in that field is created.”

I’d like to see more African countries consider the example of Equatorial Guinea, along with successful local content policies in Nigeria and Angola, also covered in my book. Effective local content is key to helping everyday Africans realize the benefits of Africa’s oil and gas resources. This is a good time for leaders to look at what works and what doesn’t in their own policies and make the necessary adjustments.

It’s time for more tech

COVID-19 has forced companies around the globe to rely on technology to function, whether they’re using it to hold virtual meetings or monitor vital assets. I’m confident that technological solutions will play an important role in the comeback of Africa’s oil & gas industry, too. In my book, I described technology’s potential to help indigenous African oil & gas companies operate more efficiently and boost profits, which in turn, benefits their communities and promotes economic growth. “Innovations such as the development of new ways to drill wells and handle equipment, the design of new seismic data collection programs, the management of petroleum data systems, and the monitoring and protection of internet-connected equipment have the potential to redefine how business is done in this sector.”

Now, with economic difficulties and low oil prices, benefits like these could be more valuable than ever. I encourage African oil and gas companies to work with one another, and with local tech firms, to augment their technological capacities. African companies also should be pursuing partnerships with foreign investors that are open to technical knowledge and skills transfers. Billions at Play describes the successes that Angola-based Friburge Oil & Gas has had partnering with international technology providers to drive efficiency and environmentally friendly production methods. We need to see more companies doing the same. Governments can support these efforts through local content policies that call for knowledge sharing, along with the creation of educational initiatives and public-private partnerships.

NJ Ayuk is Executive Chairman of the African Energy Chamber, CEO of pan-African corporate law conglomerate Centurion Law Group, and the author of several books about the oil and gas industry in Africa, including Billions at Play: The Future of African Energy and Doing Deals.

The book can be found here.

We will support businesses to open safely in the Western Cape

The Port of Cape Town

Media release by David Maynier, Western Cape Minister of Finance and Economic Opportunities.

We note the release last night (29 April 2020) of the Covid-19 Risk Adjusted Strategy regulations by the Department of Cooperative Governance and Cooperative Affairs (COGTA), which will allow for the start of the opening up of our economy following the last five weeks of hard lockdown across South Africa.

We are pleased to see that a number of the suggestions that we submitted on Monday (27 April 2020) to COGTA have been included in the final version of the regulations that were released.

These include:
  • Allowing exports of wine and agro-processed goods, both of which are critical job and GDP contributors to the provincial economy
  • Permitting hardware stores to open for the general public and not just for emergency traders
  • Permitting the BPO sector to serve a wider market, including the international market
    However, we believe that there are still critical aspects which require further clarify and which should still be included under the Alert Level 4 regulations.

We are encouraged that Minister of Trade and Industry, Ebrahim Patel, is committed to further enagagement on the regulations having stated last night that they “will be giving some of the proposals further thought, including engaging with representative organisations,” and so we will continue to engage actively with the Department of Trade, Industry and Competition to push for additional amendments in the regulations.

Specifically, we will continue to motivate for the following to be allowed, subject to suitable health guidelines:

  • The export of other products such as yachts and boats, engine parts, plants and herbal products and any other products deemed essential in another country
  • Manufacturing to operate at 50% capacity where it is safe to do
  • The construction industry to be fully opened, especially where there is minimal labour and more use of capital equipment
  • e-Commerce to open fully
  • Certain speciality businesses, like nurseries and bakeries, to open for trade
  • The film industry to operate utilising local labour and inputs
Minister David Maynier

We firmly believe that if done responsibly, the economy in the Western Cape can open up while preventing the spread of Covid-19. We are committed to supporting business in the Western Cape through this crisis. That is why we are finalising a set of health guidelines for business informed by the Department of Health. We are also actively working to unpack the regulations so that we can help to advise businesses if they are permitted to operate under Level 4.

And finally, we will be providing guidance to businesses on what to do if a staff member displays symptoms or tests positive for COVID-19.

For support and advice on the Alert Level 4 regulations, and what this means for your business please email supportbusiness@wesgro.co.za or visit www.supportbusiness.co.za

Small Business South Africa. A Plea to Big Business and Government

“Getting Big Business South Africa and Government to pay their small business suppliers on time is one of the biggest challenges facing small businesses and when the problem persists too long, it can ultimately shut down a small business. More than ever before, now is the time to ensure that all your small business suppliers are paid quickly. We are urging Big Business South Africa and Government to release these all important payments now.” That’s the urgent plea from Mike Anderson: NSBC Founder & CEO.

COVID-19 and the economic downturn has and will continue to have a devastating impact on small businesses throughout South Africa. Small businesses need to pay their workers, their rent, suppliers and other key operating expenses, and survive as a family. What they don’t need right now, or at any time in fact, is that additional burden of not receiving payment on outstanding invoices. We have limited control over how long the pandemic will disrupt our nation, but we are in control how quickly we can pay our small business suppliers, says Anderson.

Intentional late or non-payment is totally unacceptable, says Anderson, as in most cases when a small business goes out of business a family goes out of business.

For any business, the amount of money flowing in or out is critical to its success. When money is tight, paying basic bills can get challenging. But when cash is plentiful, a business can invest in its future by expanding, buying new equipment, hiring key staff or retaining key staff by rewarding them further.

Anderson continues: “Through the Prompt Payment Code, a National Small Business Chamber (NSBC) initiative, the NSBC is challenging the way small businesses are being paid. We are championing the importance of big business and Government paying small business suppliers within 30 days or much quicker. It’s a highly recognised process where Business South Africa and Government openly commit to paying small businesses on time.”

The findings of the recent COVID-19 National Small Business Survey clearly indicates that late payments are at an all-time high as small businesses are waiting too long to get paid. The average amount owed to each small business is now at its highest level. Big Business and Government are mainly to blame for small businesses waiting for payment. More than half of all small businesses in South Africa are burdened with late payments. The result is that small businesses are going out of business due to late payments.

Prompt payment is vital to the cash flow of every business, and especially to smaller businesses.

Intentional late or non-payment is totally unacceptable, says Anderson, as in most cases when a small business goes out of business a family goes out of business. Procurement policies urgently need to be changed to accommodate for early payments. Late payments to small businesses coupled with the current crisis and the economic downturn spells out disaster for many small businesses, the mainstay of our economy, the very engine of our society and the future of job creation.

“We see small businesses going out of business every day, in many cases due to cash flow as a result of late or non-payment. Prompt payment is vital to the cash flow of every business, and especially to smaller businesses. The Prompt Payment Code is about encouraging and promoting best practice between government, larger organisations and their small business suppliers.

“We all have a collective responsibility to do whatever we can to keep small businesses in business and their workers employed. By paying small businesses quickly, this is the most meaningful step in the right direction”, concludes Anderson.

The NSBC is Africa’s leading SME organisation and the fastest growing organisation of its kind in the world, committed to helping business owners and entrepreneurs become tomorrow’s business legends.

https://www.nsbc.africa/

 

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