Govt revamps Transformation Fund with enhanced B-BBEE incentive and SA losing war on illicit trade

Episode Transcript
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Speaker 1 (00:01):
And now The Money Show with Stephen Sribis on seven
oh two.

Speaker 2 (00:06):
Let's walk little. The Money Show with Stephen Curtis is
brought to you by ABS Corporate and Investment Banking, a
Pan African bank that's invested in your story because your
story matters. Good evening, just gone eight minutes after six.
I'm Stephen Curtis. Quite a lot going on in a way,
not all of it here, but I suspect that global
trade is literally being rewired right in front of our eyes.

(00:29):
And I say that because of what can only be
described as the massive trade deal between the EU and
India two billion people in what is almost a common
trade area. Now after that deal, and for years and
years and years, India used tariffs to protect its farmers,
in particular to protect many parts of its economy. I

(00:49):
think perhaps the fact that the prime Misnerendro Moldi is
so strong, the fact that India is worried about China
and the US doesn't want to be dependent on them,
may have sort of made things a little easier. And
then the EU isn't exactly the same position. They did
the same thing. They also used tariffs to protect their
industries and now suddenly you have this huge deal. I

(01:10):
do wonder what is going on in Beijing and Washington
tonight and how they're seeing it. There's another question, of course,
which is we saw last week Mark Karney at the
World Economic Forum, the Canadian Prime Minister saying middle powers
need to work together. India and the EU probably too
big to be considered middle powers, but just perhaps it

(01:30):
leads to a lot more people thinking, well, we can
do the same thing and get ourselves out of the
difficulties that the Trump administration and maybe to an extent
Beijing are putting us in, at the very least sort
of remove some of the power they might have. I
thought it was very interesting. I was intrigued today to
see a report in Business Day about the sort of
latest iteration of the Transformation Fund. If you remember, the

(01:52):
first draft was going to be one hundred billion rand, etc.
People were going to contribute to it. A couple of
big issues around it. One was just the shear size
to us who controls the money? And I think that's
still going to be an issue. Business Day suggesting that
there would be an initiative that if a company gave
three percent of their post tax profits to the fund

(02:13):
they would give thirty broad based black economic empowerment points
that will basically make them eligible to bid for government
contracts and other corporate contracts too. Would really change the
game and maybe we're seeing a big shift there. I
was not entirely surprised to see Edward Kiswetter, the SARS Commissioner,
writing today that I think the phrase he used was
we're not winning the war against the illicit economy. That

(02:36):
driven of course by tobacco and what we're seeing with
old Cohal, but so many other issues as well that
we'll talk a little bit about that. Zimple Tique is
the CEO of the Consumer Goods Council of so that
we will have some strong views on that tonight. Tourism
numbers seem to be up very strongly. In November last
year there was the G twenty and the B twenty
that helped, but then also going into December we had

(02:59):
high numbers and higher revenues for the tourism industry. To
beat Finger, the CEO of the Tourism Business Council of
South Africa, and before seven o'clock to Mbisavakuda, the Senior
Research fill and Director at Africa Asia dialogues about that
EU EEU India deal that I really do think is
very very important. Lots to talk about tonight. Good to

(03:20):
hear from you on O double one double A three
oh seven two and two one four, four, six, five, six,
seven eleven minutes now after six The Money Show.

Speaker 1 (03:28):
With Stephen crutis live on ninety two point seven and
one O six FM, streaming on the Prime Media Plus.

Speaker 3 (03:35):
NAP and DStv channel eight five six.

Speaker 2 (03:38):
I don't know if you go into a place every
day and get a cup of coffee, if you buy
your coffee. I've got to the point where coffee is
so expensive now I am quite boring. I make it
at home. I spend some money on an ice big thermos,
and I take that and people sort of know him
in the office if they can see the thermis at
my desk or not. But I was struck by a
story on Reuter's talking about stuff in the US. Now

(04:01):
this is not Starbucks here, let me just be clear.
But in the US, and it seems the main problem
that they have is that they keep running out of things,
you know, like milk, that they can't manage their cup
lids to make sure they fit on their cups in properly,
and as a result, they run out. And the problem
is basically their supply chain, and they've been various promises

(04:24):
that this will all get fixed. One of the problems
seems to be that they have too many suppliers. They
don't have a few big suppliers over the years, they
have lots of different supplies. Another one I found this amazing,
and Reuter's quotes this. They said in the late nineties
they were using a particular IBM kind of computer system
to manage things, and their systems still work on that now.

(04:48):
I'm sure you can look at your cell phone from
the late nineties you didn't have one. I think that's
my point is that essentially things have changed so much,
and yet starbucks supply system probably has not. And you
wouldn't get that sense if you walked into their stores.
You'd think, well, their stores have kept up, but what's
going on behind the scenes is really the problem. And
it led me to ask you this question. How often

(05:10):
are you going into a place and they don't have
what you think they should have. Could be a coffee shop,
could be a pub, could be I don't know, a florist.
I always find florists never have anything that I need,
could maybe be something else, And isn't that really where
the real battle for some of the retail chains is.
If you look at Shopwright and Peck and Pay and Wilworths,

(05:32):
it's that that supply chain is really where the competitive
advantage is.

Speaker 4 (05:37):
You know.

Speaker 2 (05:37):
For wil Worth's it's the sort of cold supply chain
making sure your AVO is fresh. For Shopwriter, it's making
sure for check as they're never out of anything, and
that the sixty to sixty guy is ready when you
need him. For Theck and Pay, it's kind of the
same thing. It's just your thoughts. You ever go into
a place and find they don't have what you need? Oh,
seven two seven o two one seven o two, what

(05:59):
impacted on how you feel about that chain? Thirteen minutes after.

Speaker 3 (06:03):
Six, Stephen gone x at at Stephen.

Speaker 2 (06:09):
The Important Business Day this morning, saying government is preparing
to now launch the new Transformation Fund. They aim to
get twenty billion rand from companies. They would give three
percent of their net profit after tax to the fund.
That would mean that quite a few more companies would
now qualify for government and corporate contracts. They wouldn't have
to change their ownership or their management to do that.

(06:32):
We're seeing so many changes to be at the moment,
the whole point of ownership seems to be kind of
almost disappearing. Heightened Kishava is the CEO of Unconventional CAA
Heightened Good Evening. I really do appreciate the time. Thank you.
The Transformation Fund sharply criticized by business groups and it
was first proposed. Do you think this new version of

(06:53):
it is any kind of improvement.

Speaker 5 (06:56):
Steven good Evening, thanks for having me on the show.
The short answer to it is no, there's no changes
to the previous release of what was first drafted three
months back there, and so we were fundamentally sitting in
the same position of government proposing to centralize funds, but

(07:17):
they have no form of direction as to how these
funds are actually going to create a positive narrative for
the growth of SMMs in our country.

Speaker 2 (07:28):
I mean, there's so many issues, I mean, on the
one side, and I think it was up to Stuart
Theobald who pointed this out at group from some time
ago that we have quite a lot of money that's
supposed to go to helping startups and black owned businesses
and the output of all of that money is not great.

Speaker 5 (07:45):
Yeah, it's unfortunate. It's unfortunately not the case right now.
And I guess with the centralization being introduced create a
concentration risks further, and especially where the governance is weak
or politicize for a better word, capital letg is going
to become more likely than this. And with the lack
of confidence that we already have in our state owned

(08:06):
entities and our economy itself and how it's run, I
think this is going to create even further red flags
on whether this is really true in essence transformation or
actually just they tech tick box to allow companies to
get a v squocer.

Speaker 2 (08:24):
Well, isn't that the issue? The whole idea of BEE
was supposed to be about ownership, and ownership would be
assets that should be generational wealth, and that seems to
be falling by the wayside. Whether it's Elon Musk and
Starlink or whether it's this proposal suddenly be means something
completely different to what it meant five years ago.

Speaker 5 (08:45):
You're spot on with that, Stephen in saying that, because
if you look, there's an article that was released by
the Minister of Small Business Development also with this article
when mister Abraham she highlighted that you know, Africa receives
less than two percent of venture capital funds, et cetera
from overseas funding and that funding is a big problem

(09:09):
for the growth of startups and as now with the
intention and initiative of what the and transformation was essentially
created to do to lift economic embalmment for a better word,
the question then lies to government, is this actually a
case or are you all actually trying to subsidize gaps
in your budgets that aren't being able to fully be

(09:32):
correctly fulfilled due to in additacy in how we are
managing our economy currency because in her article she stipulates
that they at the Department of Small Business Development have
a shortage in their budget to dispose to startups and.

Speaker 2 (09:47):
A big part of it, and this has always been
the main point of criticism and I think is going
to sort of remain, is that this fund would get
money from private companies. A board of direct would run
the fund. They would decide where the money goes, who
gets some powered, who doesn't, and that board gets appointed
by a minister and this goes back to your central

(10:09):
point about how people feel about government at the moment.

Speaker 5 (10:13):
Yeah, and that's the biggest red flag that comes out
of the article. Clearly stipulates that it's really be a
self appointed board. Now are they proposing that the fund
be managed by the NYF? And if you look at
the mandate of the NYF is very specific in how
they invest in, what type of self companies that they

(10:34):
invest in, and also the industries that they're looking at
investing in. So to disperse twenty billion RAN towards SMA
means but only segmenting it to a specific industry and
size of business. It boils down to the question is
this really thantru economic empowerment or is this actually corruption
or mismanagement that's inevitably being.

Speaker 2 (11:00):
In rail. I've made the same point several times on
the Money Show that I mean the very concept for
me anyway, or BEE is coming under so much pressure,
partly because the das in the coalition with the A
and C, partly because of the Trump administration. I see
so few constructive proposals for anything that could replace it.

Speaker 5 (11:21):
You're right, I don't think we have a quick, fixed solution.
Considering that to your point, ownership, and you know, the
entrenchment of being in the in the roots of corporate
in the communities, for example, in the minds where a
lot of community work and development has to take place,
the trusts that have been set up to support some

(11:41):
of the communities where they actually is impactful work and
good work being done. It's going to take a lot
more than just coming up with a quick fixed solution
such as the Transformation fundenting this is going to resolve it.
I think it requires all the political parties to put
their minds together as to what is right for this
kind of taking away ego and emotion from it and

(12:04):
rather putting logic and perspective to how do we move
our country forward connectives.

Speaker 2 (12:09):
I think we're asking a lot of our politicians, Heiden,
I think I don't know if it's going to happen.
Thank you so much. Heighten Kashavez, the CEO at Unconventional CA,
your thoughts please, oh seven two seven oh two one
seven two. Twenty minutes after six.

Speaker 1 (12:27):
On The Money Show six to eight pm.

Speaker 2 (12:29):
A reminder from the SARS Commissioner Edward Kisswetter. Today again
in Business Day, we're not running the war against the
illicit economy. Responding, of course, to British American Tobacco's decision
to close down their tobacco factory in Heidelberg, the eighty
says three quarters of cigarettes sold in South Africa are
now sold illicitly. Keisswetter saying this cost us between eighteen

(12:51):
and twenty eight billion round a year in tax revenue.
And obviously it's not just cigarettes. Zintlet Tiquet is the
CEO of the Consumer goods Counts of South Africa. Isn't
there good evening? I mean we see this everywhere. We
see it in tobacco obviously, we see it in alcohol,
We see it in bizarrely fake medicines, fake clothing, all
of that kind of thing. It must be having a

(13:12):
huge impact on your members.

Speaker 6 (13:15):
It doesn't good afternoons given to you, get evening to
you and your listeners. It does illicit. As an economy,
it has become an economy of its own. It accounts
to over one hundred billion annually, runs nearly ten percent
of the South African economy. It's growing and it's not
just about our members. It's about how we impact our

(13:35):
people because our people are consuming this fold medicine. As
you indicated on. These are issues of life and death.
So it's really really a big issue for our economy,
for our ability to create employment, and for our health.
You know, Bat's closure with just a wake up call
because Bat, that cetera has been in South Africa in

(13:58):
the nineteen fifties and it's secured and it's sustained the
hydrobed town, and that town is now going to be dying.

Speaker 2 (14:07):
I mean what I don't really understand. I mean I
can imagine, well I don't smoke and never really have,
but I can imagine sort of, you know, someone trying
a cigarette that they know to be illicit, but fake medicine.
I mean, you would never want to give that to
your child, and yet people are desperate, people aren't sure
what it actually is, people are lied to. All of

(14:28):
those things are major problems definitely.

Speaker 6 (14:31):
I mean, yes, cigarettes, alcohol, clothing, medicine, toys. We're given
our children toys that we do not know what chemicals
are in those plastics that are making those toys. And
we are a society continuing because it's cheap. We understand
the scales of economy and the challenges that South Africans
are going through, but we really need to be aware.

(14:53):
We have suffered in South Africa with our children dying
because of continuing goods that were kept unsafely. We know
the pain that this parents suffered, and we continue to
go as communities. We need to create awareness because if
as a community we continue to fund and buy this product,
we are funding illicit trade, which is not even funding

(15:14):
a solid economy than not paying taxes. As you heard
from the SUS Commissioner, they're funding things that are untoured,
that are not for good for this countrol on anywhere
else in the world.

Speaker 2 (15:25):
Isn't that I can feel. I mean that we're kind
of just losing this that no matter what happens, it
just seems to get worse. I mean, what measures work?
So I would think a stronger stars and we've seen
some evidence of that. It is getting a bigger budget,
all of those things. We're back again to the perennial
question in South Africa so often, which is better policing

(15:47):
and more effective police. I would also say probably more
investigators within the police.

Speaker 6 (15:53):
Definitely we want law more law enforcement. But also it's
not only an issue for us. It's gone beyond because
we had last day said yeah already that the Minutes
of Finance promise resources into fighting illicit and the year
on we're still trying to find the right resources.

Speaker 5 (16:09):
What resources are though, So we as.

Speaker 6 (16:10):
An industry are ready to come to the party. We
have written to Netlik and yes Netlik has responded and
they are happy to partner. It doesn't work with us
on this matter because it's network. We have all the
social partners, we have government, we have civil society, and
we have labor. So that's where because that's where the
policeed regulatory issues are going to be determined for the

(16:30):
economy of this country. So because network is better positioned,
because if it set us do it on its own
or police do it on its own, it's not going
to be an impactful that you're going to see immediate results.
So we need to come together, stakeholders and read together.
Because illicit is not just about finding oh there's an
illicit product. You need to identify that product. You need

(16:52):
to know for sure. There's issues where you have to
have proper auditing, where the finances, where the production of
the threat and trace issues. There's a lot that goes
into that because you cannot just on face value and
say oh, this is an illicit product or this is
a counterfeit product. You need to look deeper and identify
the source of where this product is, where was it

(17:15):
supposed to be sold, Where was this manufactured by whom?
And you have to check all of those things. And
with an industry, we are the owners of these goods.
We know who's a rightful owner of these goods, and
we can tell sus or any law enforcement agencies that
these goods are legitimate or not. I mean, let me
tell you a nice, really big story of the work

(17:36):
that we're doing with government. Were working with government in
particularly in the First State. We work with the Environmental
Health practitioners. They're using my CGS a app. They have
the app online because you know, we did a campaign
last year talking about the six hundred bark hold South
African that is the wetter. So these illicit producers and

(17:57):
untoward producers have now copied six hundred barcode and put
it on products in particularly alcohol. So the environmental practitioner,
because they worked with us, they went to the shop
when they're doing their inspection, they scanned and they could
not find this product. They made they made a suf
away of this and we are taking legal or actually

(18:17):
spotting to our lawyers to get those people to stop
issuing these numbers, because now because they're not every South
Africa knows that you have to look at the barcode
and the six hundred. Now they're doing that, So it's
becoming deeper and crazy every moment. So because now we
have to have legal issues and have to litigate to
make sure that people stop using this in correct barcode

(18:38):
that they're issuing, because anyone, any company now goes and
buys these barcodes that are wrong, that don't have ownership.

Speaker 2 (18:46):
I mean, are there things measures that have worked in
other countries? Other markets have the same problem of illicit goods?

Speaker 6 (18:54):
I mean, the South African case is the worst in
the world. What is happening in other markets? What is
happening in the other markets is that in Europe number
and they're implementing something called the Digital Product Passport the DPP.
What it needs every product that you are buying and
you have it's in your hands physically, it needs to

(19:14):
have a digital twin. And that's what does that mean me?
When you are a producer and manufacturer, you need to
say I can be able to scan this product and
see its digital twin online which will tell me the
country of the region, the country of sale, the image
is offered, the content offered, and much more information. Now
we're getting into packaging and environmental information about whether it's

(19:37):
too cyclable or not. There's much more information that is happening.
And yesterday is one of the other asserts you news
that you're doing. Within the agriculture, we're talking with Cape Wool.
They are tracking the wool that is supposed to stay
in South Africa because that's what Europe wants they're trading
with globally. When you go and trade in Europe, they
want to know this jersey or the blanket that you

(19:59):
are wearing or whatever it's spared out of food, Where
did you source that wood? Have you sourced it sustainably?
In which farm? In which sheep? How are the conditions
and how was you know? So that's what other countries,
the extent of other countries are doing, and in South
Africa because we're working with care Would and we're at
that point. We've done that for Careful and also direct
meat industry because of the food and mouthe diseases. These

(20:21):
are the issues that we are doing because that is
the strength of the just Ran bark hold that we
were trying to showcase in this country. And we've been
showcasing the two government for a very long time. And
now we have to get to illicit issues the extent
of the ilities that we are coming from. And now
that's where we're at. We're losing BE eighty since two

(20:42):
thousand during COVID BE eight before before then, we have
been saying elicits is an issue. COVID made it worse,
saying government covered that made it worse, and illicit is
becoming worse.

Speaker 2 (20:54):
And west Zinclai thank you so much. The see of
the Consumer Goods Counsel of South Africa show Mark Ryan
Hills had a fundamental sales at Absency ib Ryan good Evening.
I suppose a pullback from gold stocks was inevitable after yesterday.

Speaker 7 (21:11):
Yeah, absolutely, evening, Steven and yeah, look, I mean that's
all one about three point three to six percent today,
no surprise, as you say, and to be frank, I
mean they're up twenty percent in this month alone, so
probably just a bit of profit taking going on, but
there are some interesting dynamics of player. I mean, gold
stocks are now about twenty percent of the top forty.
Goldfield I was just looking at the numbers earlier is

(21:32):
now the same market capitalization as NASA, surprisingly, which is
the bigger stock on the top forty, and in fact
it's about sixty percent, and the Goldfields alone is about
sixty percent larger than the first round group. So surprisingly,
it now becomes quite hard for active managers to express
and overweight for you on the stocks. And I do
think you're seeing some of that play out to some
extent here, maybe just as a quick a side. I mean,

(21:55):
we're still very constructive on gold. I think the tail
winds that enjoyed last year still very much at place.
So you've got central bank buying, you've got a difficult
geopelitical environment. You've got, of course the weakness and the dollar,
and then I think there are some seasonal factors that's
probably supported as well. You've got the Chinese New Year
coming up, and of course the Indian wedding season. So yeah,

(22:16):
probably a bit of a blip back. I suspect Goal
will continue to rally.

Speaker 2 (22:21):
We've got retail updates starting tomorrow and that should also
give us an understanding of what was going on during December.

Speaker 7 (22:26):
Yeah, I must say.

Speaker 8 (22:28):
So.

Speaker 7 (22:28):
Yeah, we've got I think mister Price out tomorrow and
Willie's out probably later this week. So our data suggests
that the consumers probably remained quite constrained. In fact, if anything,
I think tu It's numbers showed that clothing spend was
marginally softer. And of course we understand that the environment
of the challenge at the moment. You've got imports from
Sheeran and Temu. You've course also got the consumers pushing

(22:50):
into the gambling arena. So I suspect that these top
line numbers from the retailers are going to be quite neuted.
But I think the key question, yeah, is whether the
valuation currently on the jcs for the for the cloning retailers,
for example, whether those are fully discarded all of the
bad news or could we still see some further sell
offs if the updates do disappoint.

Speaker 2 (23:12):
And then net Bank down a little bit today.

Speaker 7 (23:16):
Yeah, I mean that's been playing out for a lost
the last few days.

Speaker 8 (23:20):
Now.

Speaker 7 (23:20):
I mean you could argue that this is largely a
function of the fact that they've decided to make a
bid for a majority stake in one of the East
Africa's largest banks. At the NCBA UH and in fact,
to your point, I think the index up today about
one percent, ned Bank down about two. But you know,
there have been some concerned expressed by investors, so for example,
things like the premium being paid and of course the

(23:42):
execution and regulator risk. But to be fair, Nedbank has
actually outperformed the bank's index since the index started rallying
in earnest in October, so possibly some of the sell
effects we're seeing at the moment could be relateing Gibert
of profit taking on the goal.

Speaker 2 (23:56):
Ryan Hill, thanks so much. I had a fundamental sales
at ABSCIB Stephen.

Speaker 9 (24:00):
On seven two seven two one seven two.

Speaker 2 (24:04):
Well, I started the show tonight with the story of
what's happening at Starbucks in the US and how their
supply chain problems are causing so many issues. I asked,
if you've come across the same thing here in any sense,
just not finding what you need when you expect to
find it.

Speaker 10 (24:20):
Some responses Hie Stephen to answer your question around when
I can't find what I need in a store all
the time, in pretty much every store, if I base
my purchasing criteria on supply chain ethics, as well as
retailer ethics, and I look at things like ethical production

(24:44):
and packaging that is minimal with regard to environmental awareness
and so forth. I almost buy nothing all the time.

Speaker 11 (24:54):
It saves me a fortune.

Speaker 10 (24:56):
I go home and improvise and make a plan.

Speaker 12 (24:58):
And do it part.

Speaker 10 (25:00):
And that is my message to all the retailers.

Speaker 6 (25:04):
They really suck at making things ethical.

Speaker 13 (25:08):
Stephen. I don't know if nail bus qualifies here, but
I feel that every time I go and do my nails,
they are always running out of the nail polish that
I need that I want at the time.

Speaker 4 (25:20):
Always.

Speaker 13 (25:21):
And also when you go and go to the hairdresser,
they are either any out of shampoo or conditioner. It's
just weird. They always have to leak out that bottle
for the conditioner. Always, always, always sam by Stephen.

Speaker 14 (25:36):
Regarding going into a place and I'm not having what
one is looking for, it honestly doesn't bother me so much, because, yeah,
often when I walk into a Checkers or a Pickapet
or All That's or whatever shop and I see, you know,
the fully stocked shoals and all the fresh produce and
baked goods and all things, all I think is how

(25:56):
much of that is actually going to go to waste,
just so that every person who walks in has the
option of buying anything on the shelf. Because of that,
we land up with a whole lot of food waste,
and unfortunately don't have.

Speaker 11 (26:11):
The infrastructure in place to supply that food waste to
people who need it. There are a few people that
do it, but you know, not enough quite fortunately. So yeah,
just my two cents.

Speaker 2 (26:23):
Yeah, thank you for that. Some very interesting perspectives. The
ethics is important. The wastage also, you see that actually
in many places, in fact, Starbucks in the US is
having a huge amount of wastage. It's really interesting how
difficult it is to manage a supply chain. Why someone
could run out of a particular type of nail polish
or hair conditioner which really should kind of expire in

(26:46):
about the year twenty thirty six. I have no idea.
I mean, it's long term stuff. It's going to smell
like that forever. You really don't need to run out
of it. Very strange. Thanks for that. Nineteen minutes now
to seven.

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Speaker 3 (27:57):
Today the money show were Stephen on seven O two,
seven O two.

Speaker 2 (28:03):
Call it to seven the time and after the good
news yesterday, Gold doing so well, the JC doing so well,
the RAN getting stronger. I'm amazed to say even more
good news today. The number of tourists visiting South Africa
seems to be improving quite strongly. Nearly four million travelers
through our entrants and exits during December. In November, the
tourism industry, according to stats Say, increased its revenue by

(28:25):
around twelve percent. Don't forget the G twenty and the
B twenty majure that Joe Berg's hotels were full. Tafia Chafenger,
the CEO of the Tourism Business Council of South Africa Joints,
is now no Tafila. Good evening. I mean we've been
hoping for a kind of step change in our tourism
that at some point the kind of dam will break
and we'll start to get a lot more people coming through.

(28:46):
Do you think we're seeing that now?

Speaker 17 (28:48):
Well, good evening, Stephen are to you and to your listeners. Well,
you know, the numbers that came in today showed us
that we we have, for all intents and purposes, have
grown our Chris arrival between generally to December twenty twenty
four vessels this year and to December well last year

(29:09):
twenty twenty five by about seventeen point seven percent. What's
critical is also to look at the overseas arrivals, which
have grown by eleven point nine percent. However, we need
to sort of dissect these numbers and make sure that
you know we're looking at the correct picture. Number one

(29:31):
is that the what drives these numbers in the main
is the travel between the seven countries. So if you
look at Lisuchu, you look at Mozambique, you look at Swazerland,
you look at Zimbabwe and Malawi, you see that there's
a whole lot more people that came from those countries
to boost these numbers. One, can you know, put a

(29:51):
question mark to say is this pure travel or is
it economic migration? Does the debate for another day. But
if you look at the international arrivals the overseas, however,
outside of the African continent eleven point nine percent growth
twenty twenty four vessels twenty twenty five. However, this is
still below the twenty nineteen figure of about two point

(30:12):
six million, So our recovery rate is still behind from
the overseas arrival point of view. In fact, the only
two countries that have recovered that two hundred percent or
twenty nineteen, which is the pre COVID numbers, is the USA,
which is sitting one hundred and four percent, and it's
also Australia, which is sitting one hundred and eight. The

(30:32):
rest of the country like UK is still on ninety
two percent. Germany but ninety frant eighty one. If you
go to China and India, the numbers are even less.
China hin is sitting at forty point seven percent. So
it's very important that we put perspective in these numbers
that as much as we see this huge growth which

(30:53):
exceed in overall number, exceed the twenty nineteen figure, is
largely driven by those that are crossing Lisu to If
you look at it between twenty twenty four versus twenty
twenty five, it's over forty percent increase in terms of
crossing the border, and the similar type of numbers for
Malawi and other places. So we need to look at

(31:13):
it purely from what touches the value chain in its entirety,
or at least partially to a point where we can
say it's meaningful, you know, tourism contribution. We're still quite behind,
but we have the momentum and we should be able
to buy this year, you know, by way of us

(31:34):
as a private sector getting involved in many of these things,
able to recover in these critical markets so.

Speaker 2 (31:40):
If you were so for a lot of time. I mean,
there's some things that we fix, load sheddings being fixed.
Crime is going to be a problem with tourism for
a long time that certain parts of Cape Town, the
Western Cape kind of maybe manage that a bit more effectively.
Is there more that government should be doing in terms
of visas making it easier to come perhaps, I think
so dropping the requirement that I think still exists that

(32:02):
you know, parents have to give mission for children to
come and all that sort of thing. Is there still
redtape that's unnecessary?

Speaker 17 (32:11):
Well, we still do have redtape that's are necessary, especially
you know when it comes to the motor vehicle licensing
those tourist you know, vehicles that carry stories around. We
still struggle to get licenses for those vehicles. And there's
some work that we are doing as the tourism business
comes from to unlock that space. The issues around Home

(32:32):
affairs and the visa processing has improved. I must say
that for the past a few years of working together
with Home Afairs hand in hand, I have seen a
great deal of improvement. Uh the introduction of the ETA.
But the Minister for My Fairs, who regularly attend our
conference and updat as on what home a Face is doing.
It's a well come news because if we get this

(32:54):
electronic travel authorization, it means that a lot more people
don't need to go to our missions abroad when they
need to come to South Africa, especially those countries that
require visa to come to South Africa. So we still
need to roll that out across the board and we
make sure that the system, the underlying part of the
system is robust, it can produce results and people can

(33:14):
be able to get their visas on time. That is
the challenge that you know, we need to solve and
we need to solve agently because we still need, as
I've said, to grow some of the markets that are
outside of these core markets that I've mentioned, they sat
the markets that are growing India and China still require visa.
As marchers. We've introduced they what we call the tetos
trusted to operator our schemes in those markets. But individual

(33:38):
travelers needs to have it easy, you know, when they
travel to the country. So there is improvement and we
have momentum, we still need to make sure that we
implement those things. But from where we come from, I
can say, from Homo fast point of view, there's a
great deal of momentum and we're working well together, but
we need to make sure that we implement and those

(33:59):
things can produce results.

Speaker 2 (34:01):
Wise, if you're thanks so much. Schaftafengra is the see
of the Trusen Business Council of South Africa.

Speaker 18 (34:06):
The money show was Stephen Kuetas is brought to you
by abs as cib a Pan African bank invested in
your story and the potential it can unlock because your
story matters that as a Rester.

Speaker 2 (34:18):
Fsp seven minutes now to seven the time well news
today of what can only be described as a mega
deal between the EU and India creating a market, a
common market almost of two billion people. And I suppose
you can imagine the changes to the power relationships between
India and the EU and the US and China. To

(34:39):
Bias of Akuda is the senior Search Fellow and director
at Africa Asia Dialogues TANVISA good evening, tariffs on ninety
seven percent of European exports to India will be cut
or eliminated. Indian goods get into the EU a lot
more easily as well. This is a huge deal.

Speaker 9 (34:57):
Huge still that has been nause for the past two decades,
we are told, and I think this is not good
used for Trump, of course, but it's going to open
new opportunities for both Europeans and the Indians. And this
come days after Marconi of Canada went to visit Jian

(35:18):
king and then there they have also signed some shular
stills intruding dropping the visa dequirement for Chinese. So overall
it's a game change in terms of trade between the
Western Hemisphere and the East.

Speaker 2 (35:32):
For a long time, India in particular, but the EU too,
But I suppose particularly India have used tariffs to protect
their local industries and there have been big changes in
that society. They have an Indian Prime Minister is not
as strong as he was, but Narin Dromordi's still a
dominant political finger figure. What do you think change that
allowed him and then the EU to agree to the steal.

(35:54):
Was it just you know, the Trump administration in China
or their internal things happening in India as well? Well.

Speaker 9 (36:01):
All the points that have just mentioned contributed to it.
But there's something else that's been going on between India,
Middle East and Europe. There's a new corridor called the
India Middle East European Corridor, which seeks to avoid that
it's sea and the Suave Canal. And for me, the

(36:22):
signing of these delude Europeans indicate that that corridor is
going to be up and running pretty soon, and it's
going to be of course competing with the belt Roal
initiative of China. So I think that's what actually prompted
to this move is in preparation of the utilization of
that corridor that's going to go straight from India, going

(36:44):
past some of the Middle Eastern countries all the way
into Europe.

Speaker 2 (36:48):
I mean, it must change relationships with I mean, if
you think about China and the US, both of them,
I mean both have close relationships with India, complicated relationships
with the EU at the moment, but it both India
and China, but both China and the US would like
to think they have a lot of power of the
EU and a lot of power over India. Are they

(37:08):
suddenly less powerful over those two countries or blocks?

Speaker 9 (37:13):
Not really. I mean the United States still controls the
IT sector and the IT market, so you can't do
without the United States and Trump being unpredictable might just
come and you know, institute a new tariff regime when
it comes to matters of it. That's the first one.
The other point, of course, is that India, which is

(37:35):
then English speaking human resource is largely dependent on, or
has been for a very long time, the United States.
India has been producing a lot of IT specialists and
human resource and they've been supplying the United States with
their capabilities and specialization. I think what is going to
be happening now, I think is going to start looking

(37:58):
at Europe and they're going to start to read out
at the human resources into Europe.

Speaker 2 (38:02):
A fascinating comment by the European Union Commissioner Ursula Vondrelayan
as part of her official reaction. She said, we are
showing a fractured world that another way is possible, and
I was interested in that. Mark Carney saying last week
that that Middle Powers must sort of unite, that's a
fascinating comment in this current environment.

Speaker 9 (38:24):
It's true, and it's all against one country, which is
the United States. So we're seeing bilaterals are going to
be strengthening, and I'm not quite sure whether it's going
to be good news for a multilateral world. But the
Middle powers are certainly looking at strengthening by literals. I'm
not quite sure whether that's good enough because.

Speaker 6 (38:44):
You know, it.

Speaker 9 (38:45):
Puts aside the most effective blootform instrument which have been
used by Middle powers and small countries, which is a
multi literalism. So in the absence of that, and with
Trump intendent destroying that, you're going to start having countries
negotiating what's good for them. We've seen with Canada last
week in China, now we've seen with India. South Africa

(39:06):
is also doing its own. So a multiletle system, multiletoral
system is going to collapse, which means therefore that the
bigger and the stronger countries will negotiate good deals and
those that are going to be left behind are going
to be smaller countries. And that's not good news.

Speaker 2 (39:22):
The economies of both India and the U. I mean
generally speaking, a trade between two economies is good for
both economies. It's incredibly controversial at times, of course, on balance,
do you think that's going to happen here? India has
been growing very quickly, the EU not quite as quickly,
but the chances are I would think of the trade
deal like this there are opportunities for all sorts of

(39:43):
businesses in both of those economies to grow very strongly.

Speaker 9 (39:48):
I think so. I think Larunda Modri has been smart
because what has been happening is that India has had
a number of warehouses and manufactured and plants that have
been supplying particularly the United States. With Trump pulling on
all factories and companies to go back and invest in
the United States, you have these factories that are we're

(40:08):
likely going to be white elephants. So what's going to
be happening now is you might just see the Europeans
sending the infrastructure and all other necessities to India to
the place what's been lost and begin to produce using
the competitive labor market of India to supply Europe and.

Speaker 2 (40:31):
Vice Vessa and Visa for good. Thank you so much,
Senior Research Fellow and directed Africa Asia Dialogues. Bringing the
time to seven Aloes.

Speaker 3 (40:39):
And now The Money Show.

Speaker 2 (40:41):
With Stephens on seven O two network at all. The
Money Show with Stephen Crotis has brought to you by
I'm the Corporates and Investment Banking, a Pan African bank
that's invested in your story because your story matters. Plenty
to come in the next little while. I'm sure your
business somewhere some manager is telling you how are you
going to change, how are you going to use AI

(41:04):
this year, and how it's going to make your business
so much better, and how it's going to make your
business more productive. I don't know if you share the
enthusiasm for the moment. I'm a kind of aipessimist, but
I'll probably be shown to be wrong at some point.
It will speak to Marshall Luser, the partner for Technology
and Innovational lead that KPMG Africa got some interesting views

(41:27):
on it, doctor or Tender and DINGUI is he here?

Speaker 4 (41:30):
Oh, yes, there he is. He's ready to.

Speaker 2 (41:32):
Talk to us, waving in a few moments as well,
Updated is what's happening in our continent? And Warren Ingram
how to maximize your finances before the year the tax
year ends. Looking forward to that conversation at seven point
thirty as well. Good to hear from you on double
one double A three oh seven oh two two one
four four, six oh five, six seven, and of course
voice notes on seven two seven oh two one seven

(41:52):
oh two.

Speaker 3 (41:53):
What up to Stephen on seven two seven oh two one,
seven oh two.

Speaker 2 (41:59):
Well plenty we've been talking about tonight, and plenty of
responses too.

Speaker 12 (42:04):
Hi Steen on the issue of illicit goods, Amen, I
honestly feel that's a broken record from the government and
all other relevant stay cooleders, because, for instance, where I
live right now, I've never seen an inspection from any
government entity into locals pozzit shops. All I see is

(42:26):
vans of police men coming to collect payola bribes. But
as to the Department of Health, training, industry or whatever,
and you just come in to investigate what are being
sold to the people, what's on the shelves, Where does
those products, Where do those products come from?

Speaker 4 (42:44):
You know who? Manufacturers.

Speaker 12 (42:46):
I've never seen such a raid in my neighborhood. And
believe you me, when coming to cigarettes, I for one,
by illicited cigarettes are by a brand that prior to
the last fifteen years or so, it didn't exist, but
now it's every.

Speaker 2 (43:01):
Week sure honesty there, Hey, how interesting is that? Yeah,
the illicit economy is huge. Other voice notes tonight.

Speaker 19 (43:11):
Walks heisteven I just drove from an ATM in the village.

Speaker 2 (43:17):
They don't have money. It's an ATM. Yeah, supply chain problems.

Speaker 4 (43:25):
Oy, what are you doing?

Speaker 2 (43:26):
If you're an ATM with no money? What are you for? Seven?
Eight minutes after seven, The.

Speaker 1 (43:34):
Laney Show with Stephen Krudis live on ninety two point
seven and one six FM, streaming on the Prime Media
Plus NAP.

Speaker 3 (43:42):
And TSTV channel eight five six.

Speaker 2 (43:45):
Well, so many companies claiming that one of their big
priorities this year is to make full use of AI.
You'll probably see it in every company report that you
can think of. You heard on The Money Show earlier
this week. In fact, that many people are not making
much use of it at all. And while everyone in
management is probably telling you to use AI, I don't

(44:06):
know if you, as a worker are quite so key.
And the KPMG Global Tech Report out this week, they're
looking at what companies are planning to do. Marshall lust
is the Partner in Technology and Innovation Leader KPMG Afrigat Marshall,
good evening to you, and thanks for your time. I mean,
everyone says we're going to use AI properly this year.
What are most companies telling you about what they're actually

(44:27):
planning to do?

Speaker 8 (44:28):
Hello, Stephen, and thank you for having me on your show.
And indeed you're writer. There's a lot of excitement around AI,
but there's also a lot of skeptists in and I
think what the report is showing us is that while
some ambition is high, the execution is lagging.

Speaker 17 (44:44):
And what we're really.

Speaker 8 (44:44):
Seeing is a shift from that excitement to accountability. And
organizations are no longer debating whether AI matters, they're debating
where they delivers. And in our report, nearly seventy percent
of organizations want to reach the highest level of AI mature,
but yet only a quarter are there today. And what
we're seeing in what companies are telling us is the

(45:05):
gap isn't access to technology, it's really alignment around skills,
readiness and the ability to execute its scale. And those
high performance companies that we're seeing are moving beyond pilots
and embedding AI into their core operations. And that's really
where we're seeing the direction of most companies going. So
the conversation has moved from possibility to payback.

Speaker 2 (45:30):
I presume that some companies in some sectors are kind
of a better place to do this in others. I mean,
do you see certain sectors really pulling ahead with AI,
and some for various reasons not quite keeping up.

Speaker 8 (45:44):
I think the report, whilst it's global, it's good for
us to anchor it on Africa. And I think what
we're seeing in Africa is specific to cost and affordability reality.
And in Africa the economics matter more because cloud power, connectivity,
specialized skills all cost more relative to margins.

Speaker 17 (46:07):
And so what we're.

Speaker 8 (46:07):
Seeing is the companies that are doing a little bit
better than most are able to raise the bar for
AI and don't lead with experimentation. What they're trying to
do is say, okay, a lead with productivity and cost reduction.
And if AI can get traction when it reduces either fraud,
improves collections, shortened cycle times, or lowers operating cost, if

(46:31):
it can demonstrate that early payback, then we can tail it.
So I think they're very cost conscious and that's just
the reality of Africa. And the discipline is not a weakness,
it's actually a competitive advantage. In Africa. AI must pay
for itself early or it doesn't survive.

Speaker 2 (46:49):
And I presume also this has an impact on who
actually gets a job and who doesn't. I mean in
South Africa, as you know, our youth unemployment rate is
sky high, and people with a little bit of AI experience,
a little bit of tech experience are probably first in
the queue to get a job. Other people are going
to fall further and further behind if they don't even

(47:10):
know where to start.

Speaker 8 (47:11):
I think there's a concern that AI, as you say,
could worse an unemployment or inequality.

Speaker 17 (47:17):
So when we.

Speaker 8 (47:17):
Look at the report and we ask ourselves, how should
Africa think about this? And I think it's quite simple.
AI changes the nature of work more than it replaces it.
I think there's this notion that AI will replace jobs.
So even with the advanced AI, organizations expect a substantial
permanent human workforce. It's got to be that human led change.

(47:40):
So the real risk for Africa is not so much
the automation. It's exclusion if we don't invest in digital
skills at skill and so, as you rightly say, those
who have some skills are finding themselves in a better position.
But managing AI systems, supervising digital agents, combining human judgment
with all that machine intelligence, there's a cost. Skill and

(48:03):
countries and companies that invest in riskilling will see those
productivity gains without that social disruption.

Speaker 2 (48:10):
It's fascinating to watch the way kind of thinking is
changing around AI, because at first there was the oh
my word, what is this? Then there was the wow,
look at what it can do. Then there was what
I'd call the gloriously optimistic phase. It's going to help
us grow the global economy. I think someone said by
thirty percent a year. I remember thinking that's not going
to happen. Then we had the oh my word, no

(48:33):
one's ever going to work again. The machines are coming
for our jobs. And now we seem to be in
a bit more of a realistic phase that yes, AI
will make us more competitive, it will make us a
lot more productive, but actually it doesn't really do very
much in this there's a human to add value, and
I suppose one of the things one of the big
challenges for companies is going to be to extract the

(48:56):
highest amount of possible value from a combination of AI
and a human workforce. That is true.

Speaker 8 (49:04):
I think when you look at one of the common
mistakes a lot of companies do is around the ROI
and understanding what that ROI needs to be, and the
value and returner end up being at different stages. So
many organizations will experience, as you said, early efficiency gains
and think, Wow, this is really going to transform and

(49:26):
change everything. And then there's the risk reduction in isolated areas.
But the real return on investment, the ROI, only appears
when AI is scaled across core functions and measured consistently.
And I think that's where as companies start to mature
with the use of AI, we're seeing high performing organizations
now focusing on a smaller number of strategic use cases,

(49:50):
focusing on redesigning workflows around them, and then aligning leadership
incentives because I think most organizations tend to dilute impact
by spreading investments too Sindy, So it's it's quite important,
but a lot of organizations understand how they want to
measure that r I and and then then think about

(50:11):
the governance of trust and the institutional capacity that that
that is needed then to safeguard those games.

Speaker 2 (50:18):
I started this conversation in a fairly cynical light saying
this is what management wants to do. Do you think
most of the companies who say they want to each
AI maturity are actually going to do it? As you
point out, very few of them are there at the moment.
And that's what suggests actually there's quite a lot of
work to be done.

Speaker 8 (50:36):
I think, I think some some will, and a good
number are starting to understand the how to do it.
And I think that's where partnership and the whole ecosystem
become very important. Why are partnerships partnership such a strong
theme in the report?

Speaker 17 (50:54):
An organization can.

Speaker 8 (50:55):
Scale alone scale us scars. Technology is complex and the
pace of change is fast. So ecosystems allow organizations to
share risk, access capability and reduce cost. And in Africa especially,
partnerships are how AI becomes affordable and sustainable. So those
who will really leave Frog and use AI confidentially and

(51:18):
maturely will need to focus on three things. Take a
small number of AI use cases tied directly to productivity
or cost reduction and scale them properly as I said earlier. Secondly,
investing people and leadership capability alongside that technology. But lastly,
as I just mentioned third and most important, build partnerships

(51:39):
that you know, rather than trying to do everything alone.
AI success is not going to be about ambition, It's
about disciplined execution.

Speaker 2 (51:48):
Marshall LUSA, thank you very much. Indeed, Partner for Technology
and Innovation Leader KPMGFCA. Really appreciate the time on the
Money Show tonight.

Speaker 3 (51:56):
You may show business focus.

Speaker 2 (52:00):
Attendo and Dingley, the founding director of Tribe Africa, advisory
author of the book Rumble in the Jungle reloaded in
the studio. Nice to see your Rotendo, it's been a
little while.

Speaker 17 (52:08):
How are you doing?

Speaker 4 (52:09):
Not too sure, Stephen.

Speaker 20 (52:11):
Always a pleasure to be with you and your listeners
and excited for this year is always in terms of
what we have in store for the continent.

Speaker 2 (52:17):
No, I think a lot. I think a lot's going
to happen. Eco charcoal, I mean eco charcoal. Can there
be such a thing? It's a sort of cleaner, cheaper
alternative to fire with. This is in Cameroon.

Speaker 4 (52:27):
This is in Cameroon.

Speaker 20 (52:28):
So just to sort of define eco charcoal, it's made
up of agricultural waste of fast growin non native plant species.
So like you summarized it, Stephen, it's a combination of cleaner,
cheaper and more.

Speaker 4 (52:40):
Affordable form of coal.

Speaker 20 (52:43):
Why this is so key we know from an Africa perspective, Stephen,
the challenge we have is about half of the African
population that are six hundred million people don't have access
to energy and those that do because they use cheap
fossil fuels like normal call, it actually contributes to health problems.

Speaker 4 (53:00):
The average rate of the moment of death the one.

Speaker 20 (53:02):
Hundred thousand is one hundred and fifty five people, which
is quite higher and higher than the world average. So
the eco Chuckle solution, which is graining your Wanda Cameroon,
is allowing for this clean up source of fuel to
be able to be used. It's affordable, it reduces deforestration,
and from a strategic perspective in terms of solving Africa's
a health and energy problem at the same time, is

(53:24):
the right step forward. So it's quite a good solution
and your one Day is leading in terms of pioneering
this offering from a continental perspective.

Speaker 2 (53:33):
To make something like that work, you have to get
people on board. They have to agree to do it.
It often has to be the same price or cheaper,
otherwise it's not going to work.

Speaker 20 (53:41):
Yeah, and that's you should be able to scale, and
not just from a social impact perspective, but from an
economic perspective. And that's where the whole dilemma happens, because
obviously it's a combination that say from agricultural waste, a
fast grain, non native plant species. So the dynamic around that,
Steven is in terms of the amount of investment that
you have to put in or to scale is always

(54:01):
the challenge, and you need to get key investors and
skill sets that are able to drive that. So it's
still a long way from solves solving Africa's problem, but
definitely a step in the right duration, Stephen.

Speaker 2 (54:11):
And then Kenya has now got zero duty access to China.
I mean this is interesting. We were talking about the
India EU deal earlier today. There's a lot going on
around trade at the moment. This will be important for Kenya.

Speaker 20 (54:23):
Yeah, so this is a sort of a reflection of
the global shakeup that's happening Stephen.

Speaker 4 (54:27):
Kenya.

Speaker 20 (54:28):
Remember that two things that's happened to Kenya. One is
that it was also impacted by the terraffs by the
US in terms of higher terraffs. But having say that,
they got the lower bracket of terrorists I think THEIRS
was about ten percent. And more importantly, they also got
impacted by gore and the reality with trade globally, there's
never a vacuum, so Kenya was forced to look at
other options. Kenya has always been quite good in terms

(54:50):
of positioning themselves. So remember last year, the early last
year they broke at the deal with thirty EU countries
to send pre manufactured goods across to the EU from
an agri perspective, and what they've been able to still
to be ratified by Parliament, but they'll be able to
secure a deal with China to get zero percent rated
tariffs with regards to them exporting into China, which is

(55:13):
a big thing and the key products around agriproducts. So
for from a keener perspective, and I think from an
Africa perspective, it says the right tone because we've always
had the challenge of exporting and not being competitive in
the market to export to so with zero tariffs and
if this works out, it will be a key step
up for Kina in terms of grain in the Asian market.

Speaker 2 (55:33):
I was amazed when the story broke because I found
it fascinating. So we got on the one side. Fetch
the global ratings agency. Everyone takes them very seriously and
afrocsim Bank and AFFRACTIONM Bank has basically said we're no
longer going to be a part of you. We do
not accept your credit ratings like, wow.

Speaker 20 (55:52):
Yeah, that sounds quite familiar. I think somebody else has
been saying that in other parts of the world. But
on a more serious thought, I think from the positive side,
it's good Africian bank. It's kind of stood up.

Speaker 4 (56:02):
Well.

Speaker 20 (56:02):
They've highlighted that they've got last year a triple B
I'm saying a triple B rating which put them in
the negative outlook, and they've said, based on their member
states and as well as how they define the methodology
of FISH, they believe that it was an unfair rating.
So they've said it's no longer relevant in terms of
their strategy, and it's as a multilateral institution from an

(56:25):
African perspective, it's totally in their right in terms of
saying that. So they've stepped out and said, well, no
longer'mok going to use the FUT rating. I think the
risk festive is that when you have key associations or
entities like FISCH, which are obviously which ray from a
global perspective, and you step away from them, then the
question is who's going to set the right standard from
a global perspective.

Speaker 4 (56:45):
And so that's where the risk is. So I think
with where the world is going.

Speaker 20 (56:48):
Where the question in multi literism, where people are standing
out and saying yes to this and not that. It
does create a bit of a risk in terms of
how long is a piece of string in terms of
defining who's got the right standard we follow, because we
still need some sort of a global standard. In the
case of AFRICS and Bank, they've said not to feature
the other the obviously other rating agency that people can follow.

(57:09):
But it'll be interesting to see how this plays out
in terms of some of the concerns that AFFRICS and
Bank have reached out on and how that will shape
future discussions. Are out rated on the African continent. It's
also no use if you're the only one.

Speaker 2 (57:22):
If other countries say to fetchers like actually no, and
it would really help of an institution another part of
the world did it, But if it's just one in Africa,
or if it's just Africa, doesn't really help.

Speaker 20 (57:34):
It doesn't really help. And remember Africa is only three
percent of global GDP. Even if you look at VC
funding for take startups on Africa, we only attract three percent,
and the ratings by feature some of the things that
global players of investors look at. So when you stand
out and you say we're not going to use them.
The guys kind of said, look, you'relready high risk. Now
one of the measure in lines that is used to

(57:55):
measure your success you said no to.

Speaker 4 (57:58):
So where do we stand? So I guess on one.

Speaker 20 (58:00):
Side it's positive, but it does create a risk with
regards to grain forward and the perception in terms of
that part of the world.

Speaker 2 (58:07):
There's a fascinating story in history to Somaliland. Most countries
don't see it as a nation. South Africa doesn't recognize it.
Israel did controversially and that was about something else, I think.
But then it seems that they were at the World
Economic Forum and they had dinner with.

Speaker 4 (58:25):
Eric Trump, hey, the son of Donald Trump.

Speaker 20 (58:28):
So a chip off the old block, to put it lightly,
but as well well away Somalia Land has been for
a number of years, and over sixteen years, Stephen, they've
been saying, look, we want to be separate from Somalia.
One of the key assets that Somalia Land has is
the port of Barbera, Yeah, which is which is the
key obviously faces the Indian Ocean, and recently, I think

(58:49):
two months ago, you know, Israel as well as supported
by Americans, but obviously America hasn't endorsed it. But Israel
is the only country in the UA that has actually
stood out and say that they will recognize Somalia Land.
So apparently there was a dinner it with and the
president of Somalia Land, President Mohammad h and I present

(59:13):
Hazeg from Israel as also there. They did a pitch
to Eric Drap Apparently that was the presentation that happened.
What came out of it, nothing has been confirmed, was
any deal confirmed, nothing, So it was sort of a
pitch where nobody knows really what happened.

Speaker 4 (59:27):
What was pitch?

Speaker 20 (59:28):
Nobody really knows. But from a Wafe perspective, there's a
good dinner that was had. So again another great interest
is starting to follow through because obviously from an AU perspective,
they've made it quite clear they don't recognize so Many Land.
But again with global politics happening and America wiganing. Also
on the Ethiopian Egypt debacle, which is quite close to

(59:49):
so Mania Land, you never know what happened.

Speaker 4 (59:51):
So it's another thing to keep an eye on.

Speaker 2 (59:53):
Two important people are in a room and then where
you really want to feel sick if you're in Africa,
where which cities have access to the best health services?

Speaker 20 (01:00:05):
Now, an interesting report from the Africa Report where they
surveyed forty one cities in Africa and they looked at
about eight thousand health institutions and the criteria was really around,
you know, the staffing levels, primary health care, institutional stability
and the five top performing countries in terms of health conditions.

(01:00:26):
And that's for you or bridge also lends where you
do fall thick in Africa where you must fall seek in.
The first city that came up tops in terms of
great health facilities was Kigullibur not Joburt. Pretoria was number four,
the Pretoria Pamir Pretoria was number four in so So
South Africa was there. Number three was tunis in Tunisia,

(01:00:49):
number four Pretoria and number five our surprise was caught
to know in Benin. So those are the top five
again and finny enough for Wanda. One of the key
drivers of them coming up to the top was their
health insurance scheme which was which is named Mutualis de
Santi moving to say it properly because it sounds very French,
but has actually been endorsed by the world Health Organization

(01:01:12):
of the World Bank Capital was number ten. I think
Joe Berg was slightly below kept on but was interesting
again just in terms of a third party doing an
external survey and just highlighting some of the key countries
that are doing the right thing in terms of their
health strategy from an African perspective.

Speaker 2 (01:01:28):
Doctor Ortendo and Dingley, so good to see. Thank you
founding Direct Tribe Africa Advisory.

Speaker 3 (01:01:34):
The Money Show with Stephens on seven O two seven two.

Speaker 2 (01:01:38):
On the next Money Show, we meet our shape shifter,
Ernest Stucky, CEO of Stubbup and co founder of Jenny Internet.
Ye'll tell you his incredible story about he and his
brother Rolf as they built one of South Africa's standout
ISP success stories, bust this unusual. Richard Mulholland, founder of
the AI agency Too Many Robots, author of the book

(01:01:59):
Relentless Livan's bringing his trademark, insights and edge to the
evolving world of AI and business. Your consumer Ninja Wendy
Nola is ready to take on your consumer battles and
of course we bring you analysis of all of the
big business stories of the day. For the Many Show.
Personal Finance with Warren Ingram Warren Ingram, of course, is

(01:02:20):
a certified financial planner at Galileo Capital and a reminder,
our lines are open SOS a WhatsApp line if you've
got any questions for them on a double one double
A three oh seven oh two and two one four four,
six oh five, six seven. You can put your questions
two on oh seven two seven oh two one seven
oh two. How's it warrant? Tonight? We're talking about the tax, yeah,
which is always thoroughly exciting. We're a month away. How

(01:02:43):
do we make sure we get the most bang for
our back from our tax? And I'll start by saying
it's actually quite hard to get the most out of
your tax, isn't it.

Speaker 19 (01:02:54):
Yeah, sorrys are not the most generous lot to those
of us that pay in income tech and so you're right,
we don't get a lot of tax breaks, and the
few that we do get, I'm suggesting we should do
our very best to maximize all the legal things that
we can to pay our dues, but not to pay access.

Speaker 2 (01:03:15):
Okay, I suppose we should start. I should have known
your start with retirement funds, and this is about how
you make the most from your tax with your retirement
fund contributions.

Speaker 19 (01:03:25):
So just to give a little bit of a little
bit of background here, we can contribute a certain amount
every year to our retirement fund, so whether it's a
company retirement fund, like a provident fund, or your own
retirement in uity. And if you contribute up to a
maximum of twenty seven and a half percent of your

(01:03:48):
income or limited to three hundred and fifty thousand a
year for the big earners, you can get quite a
big tax break back from size for those contributions. So
just to give you a a simple example, if you
earn a salary that puts you in the forty one
percent tax bracket, and you decide that you haven't maximized

(01:04:09):
your retirement fund contribution and you top it up by
ten thousand rand. Now in the next month, you'll get
back around four one hundred from sorrow's in a tax
that saving. So it's it's real the tax saving that
we get from sorrow. So making a contribution to your
own retirement fund, in other words, investing in your future

(01:04:31):
for you gives you quite a big tax saving now
in the amount of income tax that you would pay
in this tax here, So I think it's it's quite
a big one that we should maximize, and most people's contributions,
they're not really maximizing the amount that they can paint
to their retirement funds. And it's to me a little

(01:04:53):
bit of a no brainer. It's something you really should
be doing.

Speaker 2 (01:04:57):
And you don't have to do this in advance. You
can do it sort of at the last minute if
you want one payment.

Speaker 19 (01:05:03):
Yeah, and and you know, especially for people who work
in the gig economy or you know, have very variable
earnings through the year, they might not want to do
it a monthly debit order. And so now just to
say you've got a month to go, and you know,
if you calculate what you've earned, whether it's been you know,
commission or salary or contract fees, interest or even rent,

(01:05:30):
you know, all all the things that that attract income tax,
it's worth working out what you've earned in the year
and and then saying, you know it, does that have
I done the contributions to get to the point of
twenty seven and a half percent of that amount of money?
And if you haven't, and you've got the money available,
then then you really should you should do it now, Okay.

Speaker 2 (01:05:51):
You don't, can you overdo it. I mean you need
to be You need to actually do the maths quite carefully,
don't you.

Speaker 9 (01:06:00):
Yeah.

Speaker 19 (01:06:00):
So this is one of those things where where people
disagree with each other in my industry. So if you
over contribute to your retirement funds, you're not going to
get penalized and you know, and saras won't find you
or rest you or do anything like that. But but
you're not going to get a tax break immediately. What
will happen is you will get a benefit that's very delayed.

(01:06:21):
So when you get to your retirement and you start
drawing money from your your your retirement investments, then your
over contributions will be will be beneficial there you'll get
an offset it. So some people would just say, well,
you know, don't worry about about the benefit. Just go
and contribute as much as you can to your retirement
funds and and then worry about that tax benefit later.

(01:06:42):
I think I'm maybe a bit conservative, but I don't
really want to over contribute during my lifetime. I'm happy
to do the maximum that Sorrows allows every year and
and and save save money for the rest.

Speaker 2 (01:06:53):
No, sure that does make sense, all right, medical expenses,
I mean lots of fights about the medical aid tax
credit at the moment is I think they will for
some time. And we're not talking about that, we're actually
talking about what you pay directly.

Speaker 19 (01:07:06):
Yeah, so there there is I mean, for people who
spend a lot of money on medical expenses, my suggestion
here is make sure that you've got all your receipts
and the expenses that you've paid for that haven't been
covered by your medical aid, because there is a point
when when you can actually start to claim those expenses

(01:07:27):
that are unpaid. Unfortunately, it's not for every cent that
you haven't been able to claim, and all sorts of limits.
But the bottom line for the next month is to
make sure you've got all your your your slips and receipts,
and you know, contact your medical providers if you haven't,
because you know they might not keep everything by July
when you start and start needing to submit. So so

(01:07:48):
get yourself ready now and be prepared now.

Speaker 2 (01:07:51):
Okay, the nations, the public benefit organizations charities NGOs, things
like that. What's the benefit there?

Speaker 19 (01:08:00):
Yeah, not many people know this, but you can donate
up to ten percent of your income, your taxable income
to register charity so they have to be registered with
SIZE as public benefit organizations and you get a tax
deduction for that. So in other words, if you contribute,
let's say you earn a million round a year and

(01:08:22):
you do your ten percent contribution, that will mean that
one hundred thousand round of which is your contribution, will
be deducted from the amount of income that you earn
for tax calculation purposes. In other words, SOS will say, okay,
for the purposes of this calculation, although you earned a
million round, we're going to look at it as if

(01:08:43):
you've earned it nine hundred thousand ruand and then work
out the tax that you owe from that perspective. So
the reality here is you get a bit of a
tax break for doing something very good. And to me,
you know, there are people in a position who would
like to make donations to whether it's animal shelter or
schools or you know, education funds, whatever it is that's

(01:09:03):
important to you, and and you know, use this time
now to to make sure that those organizations are registered
with SARS and then take advantage of this opportunity to
pay but less tax and do you know, do good
with your money in a way that you want to do.

Speaker 2 (01:09:18):
I've always been interested in this because I kind of
sometimes wonder if SIS is going to crack down, if
other people are going to get it quite cynical about
public benefit organizations have. In fact, that might change at
some point because it really does allow people to give
to their sort of pet causes rather than give the
money to government.

Speaker 19 (01:09:36):
In the end, I mean, I think the view is
that there are so many, you know, very good public
benefit organizations that do work that you know that that
government simply cannot get to, and and so it would
be you know, I always think about some you know,
an organization like Gift of the Givers, you know, I mean,
look at what they do in towns and situations of

(01:09:58):
great distress. And you know, if SARA, you know, it
doesn't do what they can to help organizations like that
deliver good to to to the South African public, you know,
that would be a tragedy. So I really hope they don't.
I'm very happy that you know that SOUS does the
work to make sure that these are legitimate public benefit
organizations doing real work and not just you know, tax

(01:10:18):
avoidance schemes. But but yeah, I hope, I hope that
that never happens, Stephen, that they're bands those deductions or.

Speaker 2 (01:10:25):
If your travel logbook and this is this is about
a car and and how you actually manage what you
can claim back.

Speaker 19 (01:10:34):
Yeah, so not everyone, what you know, gets gets travel
allowances or earns let's say commission where where you can
write off the expense of of the of the journey
that you do every day for for work purposes. So
so just to be clear, this isn't about you know,
traveling to and from your office every day. If you're
an office worker earning a salary, this is not this

(01:10:55):
is not for you, but but for people who travel
for two different places, you know, doing work and earning
income at that point that they can get a tax break.
And one of the things that people in this situation
often forget to do is make sure that their log
book is up to date. So you've you've got to
keep a record of every single trip you know, the
mileage of that trip, and then take notes of what

(01:11:18):
your mileage on your car is at the end of February.
So so don't you don't wait until July and then
then go gee, I can't remember what the mileage was
on my car at the end of the month, and
and and you know, at the end of February rather
and then you find yourself scrambling. So so just again
make sure your records are up to date now, because
the paperwork is important, and it is one of those

(01:11:39):
things that I think SIS is looking at very closely.
And you know, every time people get audited, this is
one of the things that trips them up because they
haven't got proper records, and then those deductions for their
expenses around their car not allowed.

Speaker 2 (01:11:53):
One of the things I find interesting about the whole
log book issue for a car is there's quite a
lot of pt even if you had good electronic system
and I'm sure someone somewhere has a kind of car
log book app thing for a phone that makes it
as easy as possible, you still have to remember to
do it each time. And obviously for some people you
travel quite a bit in your card really is worth it.

(01:12:16):
I'm sure there's some people who just think, ah, it's
really not worth the hack.

Speaker 19 (01:12:21):
Yeah, I wish, I wish, you know, Sarrus could find
a way to automate this, because it really is a hack.
And again, you know, for people who are legitimately traveling
for work and incurring expenses and you know, dodging potholes
in joe Burg and whatever the conditions are, and fires
in the Western care But it's kind of a hazardous
thing being on the road trying to earn a living.

(01:12:43):
And so you know, this should be one of the
situations where where the technology I'm sure is available and
if sarrus could offer it to people in that position,
everyone's life would be easier.

Speaker 4 (01:12:52):
You know.

Speaker 19 (01:12:52):
It's just it's such a simple thing to kind of
get the taxpayer and the tax man aligned. I agree
with you, it should just be done.

Speaker 2 (01:13:02):
For some people they like to try and claim on
an office when they work from home. If you have
a home office, are you able to do that?

Speaker 19 (01:13:11):
You can just you know, for example, if it's your
primary residence, it's the place where you live, and you say, okay,
I'm going to I'm going to dedicate some space. I've
got a you know, little office, you know that that
are now going to claim as a home office.

Speaker 2 (01:13:25):
It's it's possible to do that, I think.

Speaker 19 (01:13:27):
Again, you know, the documentation and the paperwork around this
is very important, and and and and are we getting
right to the limits of my tax knowledge, Stephen, But
what one of the things that's also going to happen
is that that portion of your property you will not
be treated as your primary residence when you then sell
it one day. And and why that's important is, you know,
if we've got our if we live in our home

(01:13:49):
and uh and we sell that home one day, you know,
if we've made a profit on on the sale of
that home, we do get a bit of a tax
break from sorrows before we start paying for capital ains tax.
And so if you've now used up, you know, a
third of the size of your home as a home office,
for example, then then you might find that you're not
getting such a big tax break on the capital gains.

(01:14:10):
And and you know, if if you live in a
place where property prices are going up strongly, it could
be that that benefit that you got from your home
office doesn't outweigh the last now of that capital gains
tax break that you got on your primary residence. So
I would suggest someone in this position should do the
work just to you know, go and pay a tax

(01:14:31):
consultant just to work, you know, walk it through with
you and make sure that you're making the right call
before you make a decision like this.

Speaker 2 (01:14:39):
So so much sort of put together ahead of the tax. Yeah,
your questions for An Ingram, the co founder of Galileo
Capital A double one double A three or seven two
two one four four six, O five six seven and
of course voice notes on seven two seven O two
one seven O two. We do have a question tonight
and it goes like this. Hi, I just got a
new job with a decent salary reincrease. At the moment,

(01:15:01):
my expenses are matching my income, so the increase would
give me some breathing room. I don't want to waste
the increased money, but I would like to buy some
extras to improve my life a bit. We all need
a little bit of ice cream in life. Warren, you know,
how should you manage that? We'll hear. We'll hear the
answer from you, Warren. The Interestament ten minutes to eight.

Speaker 18 (01:15:21):
The Money Show with Stephen Quets is brought to you
by abs A cib A Pan African bank invested in
your story and the potential it can unlock it because
your story matters, as as the rest fsp The Money
Show Personal Finance with Warren Ingram.

Speaker 2 (01:15:39):
Warren Ingram, of course, the co founder at Galileo capital.
Some questions coming in for him. Now we'll put to them,
to put them to you in a moment, Warren. At first,
a question that came in earlier. I've got a new
job with a salary increase. My expenses are matching my income,
so the increase gives me some breathing room. I don't
want to waste the money, the extra money, I would
like to buy some extras to improve my life. Warren,

(01:15:59):
how do you sort of judge that? How do you
assess what you should do in that case?

Speaker 19 (01:16:05):
I mean, I think it's one of those things where
let's say your increase is ten percent, then by all
means allow your lifestyle costs to increase as well, but
don't let them increase by ten percent in line with
your salary rise. Rather, let your lifestyle costs go up
by five percent, And that means that you are saving

(01:16:26):
half of that big you know, that big increase that
you've got. And so what you're doing is you're allowing
your savings to grow at a faster rate than your
salary and or maybe than your expenses is growing. So yes,
you get to give yourself a bit of a reward,
but you don't fall subject to something called salary creep
where or lifestyle creep where you just you know, allow

(01:16:46):
your expenses to grow as fast as your income and
then you never get to save enough. Your goal here
is save more as you can, and a salary increases
a great time to give yourself that opportunity to save
for your future.

Speaker 2 (01:16:59):
Yeah, I mean, I've I've seen that where someone gets
an increase in salary and then they kind of strangely,
you get you're so used to the money you can't
get out of it, and actually your options become very limited.

Speaker 19 (01:17:10):
Yeah, you know, and as your expenses rise, you know,
along with your your income, it's very hard to adjust
yourself from that new lifestyle back to the last doll
you had, you know, one or two increases ago. So
the pain of going backwards is much worse than just
not going there. And so allowing yourself an extra little
bit of breathing rome is great and you should do that.

(01:17:32):
It is a reward for the hard work. But just
don't get used to that new lifestyle and then you
don't feel the pain.

Speaker 2 (01:17:38):
Goth Lisaou's got in touch with us tonight, saying Hi, Warren,
I've certified. I think satisfied. She means with my contribution
to my RA and I also max my tax a
free payment every year. I have the Discovery Vitality rewards
between one thy six hundred rand and two thousand round
every month, and I'd like to deploy it effectively. My
portfolio is very poorer in cryptos. Should I add these

(01:18:00):
funds to my RA, my retirement annuity or to crypto?
That's Cacliso's question, Warren.

Speaker 19 (01:18:08):
So my view is like, I'm I understand investments, and
I understand you know, how you can value shares and
and you know property companies and even government bonds, but
but I can't value crypto. So so for me at
the moment, it's one of those things that's evolving. I
think it's I still struggle to call it an investment.
I think it's still a speculation. So so rather going

(01:18:31):
to the retirement funds than than than the cryptos.

Speaker 2 (01:18:34):
Yeah, I mean, it's so interesting because so many people
will go the other way, but actually some of it
is still very difficult to kind of know what's going
to happen. Mon Tomby asks any advice on a retirement plan.
I'm just going to quote this word for word, any
advice on a retirement plan that one can take on
the side, and how do I determine the correct amount
to add in line with the maximum allowance? Thanks? That's

(01:18:55):
from from mon Tomby Warren. Great question, man, Tomby.

Speaker 19 (01:18:59):
I think so the thing that you do on the side,
I'm assuming that means that you've got a company retirement
fund and you want to do something extra on your
on your own and and for all of us that
that would be a retirement tenuity. And you can, you know,
you can do almost any size contribution to retirementinuity, so
you can either do a debit order or an annual
lump sum. And the way to decide on what retirement

(01:19:22):
innuity to choose look for one that's you know, on
a unitrust platform where there's no upfront fees or exit penalties.
And then when you're trying to decide how much to contribute,
work out what your your pre tax salary is. So
if you earn you know, one hundred thousand around a year,
then you know twenty seven and a half percent of
that is what your maximum contribution to the retirement fund

(01:19:44):
can be. So then you can work out what you're
currently contributing to your company fund and you can then
do the balance. If there's a gap, you can do
the balance into your own ra and choose the investments
that work for you.

Speaker 2 (01:19:56):
Okay, now that makes a lot of sense. Okay. At
this point in time, Warren, you you you know, be
coming to the end of February, that's when the end
of the tax here is. But you only have to
do the return much later in the year. What's the
right thing to do. There's a lot of admin and
you kind of want to get everything in order.

Speaker 4 (01:20:14):
Yep.

Speaker 19 (01:20:15):
I think one of the things that people struggle with
here is that you know, as as especially if they're
going to order you, what they want now is every
document that you know that's relevant to your tax position,
so that you might need every single month worth the
bank statements, you know, your your cell phone accounts, your landline,
you know if you've got data data at home, all

(01:20:37):
of those, you know, your your car expenses, everything. And
it's much easier to get it now at the very
end of February than trying to try and scramble around
in July or August. You know, if you're then trying
to do your returns, often you know you have to
pay for those if the statements are older than three
months from when you're trying to look for them. So
my suggestion here is, you know, check your car mileage

(01:20:57):
for for for the people that do travel log books,
and note that down. Go and get all your bank
statements and all the pieces of paper that you need.
If you've got investments, make sure you get statements for
the end of the February month so that you know
what the values of those are and you've got statements
to prove it and say that. So just do all
the saving and the filing now. It's much easier than
trying to scramble around in July and August. You know,

(01:21:20):
when the time comes to do your taxes.

Speaker 2 (01:21:22):
I've often wondered if there's a specific reason why if
the taxia ends at the end of February, we can't
all have to do our returns by the end of March.
Never really understood why there's such a big gap gap,
and it's been like that for years and years and years,
and I'm actually sure there must be a good reason.
I just don't know what it is.

Speaker 19 (01:21:39):
I have nothing to contribute to. I think it's far
too long and it's far too late, So I feel like,
you know, it makes sense that sometimes it takes a
bit of time for the providers to give you statements
and to actually collate those, you know, your IT three's
or your rp fars from your employer. But surely nowadays,
you know we're not doing this by paper anymore. It
should be a bit faster.

Speaker 2 (01:22:00):
Quickly, in thirty seconds. How do you know when you
need a tax practitioner.

Speaker 19 (01:22:06):
If you've got you know, if you earn more than
just a normal salary where you're just paying your normal taxes,
and you earn variable income, and you've got you know,
things like this home office conversation, all of those situations,
then it's worth your while just to consult the tax
practitioner to make sure you're doing the right things before
it's too late, and doing it now where you've got
a month to top up retirement contributions, etc. Makes sense

(01:22:29):
to me.

Speaker 2 (01:22:29):
Thank you very much, indeed, Warren Ingram really do appreciate it.
Co founder of Galileo Capital with Personal Finance on the
Money show business decision makers, This one's for you. Sunlam
Corporates Insurance Solutions helps you protect the people behind every
pay slip. Income protection, disability and life cover that keep
household steady when life turns. They make it simple to

(01:22:54):
recommend and easy to implement, so you can focus on care,
not admin. Because when you care, everyone benefits. Visit Sunum
Corporate dot Co dot z da to partner with the
team that treats employee protection personally build an age of
confidence together.

Speaker 18 (01:23:11):
The Money Show with Stephen Quotas is brought to you
by abs as cib a Pan African bank invested in
your story and the potential it can unlock. Because your
story matters, that does the registered FSP well.

Speaker 2 (01:23:25):
In the US record highs again for the S and
P five hundred, They and about the Dow Jones is
down a full percent tonight. The Nasaka is up point
ninety seven, the S and P five hundred up zero
point four to two. We'll be back with the Money
Show tomorrow. Aubrey's next Good Evening at eight o'clock

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