South Africa joins Afreximbank and AGOA extension buys time for exporters amid uncertainty

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

Speaker 2 (00:06):
Let's walk little.

Speaker 3 (00:07):
The Money Show with Stephen Curtis is brought to you
by ABS of Corporate and Investment banking, balancing economic growth
with ecosystems. That's how they're invested in your story. Good evening,
Welcome to the program. I'm Stephen Curtis, seven minutes after
six Wednesday evening. Kind of don't mind the feel of
the week so far. It's been quite volatile in terms
of metals prices. That's had a big impact on the JC.

(00:30):
Quite volatile too in the US. But overall, were getting
quite a few sort of reports from some of our companies.
Some of them have done quite nicely over the last
few months, some of them not so nicely. Some of
them battling a little bit, sappy, battling a little bit,
although they share price was up, I think mainly because
people were expecting it. I was fascinated by the Votercom

(00:51):
numbers which show once again people are leaving Votercom in
terms of prepaid customers. I suspect they're making quite a
lot of that money back in data though, because those
numbers are up again, and of course we're in the
middle of that transition, especially in South Africa for various reasons,
from phone calls to kind of WhatsApp course, which is
more and more I found myself making those calls. I

(01:12):
was really interested to watch the President speaking today at
that big ceremony to talk about the fact that South
Africa is now joining AFREKSHIM Bank, which really doesn't roll
off the tongue, but it's the African Import and Export Bank.
Very important developments. We get a lot more money and funding.
We'll speak to Villain funder Spay, the acting Deputy Director

(01:33):
General of Exports at the Department of Trade, Industry and
Competition about that in just a moment. The other big story,
of course, around a goer, and I got to a
point where there's so many, so much wrangling in the
United States about it, that I was sort of beginning
to not pay that much attention. If it happens, it happens,
I realized I should pay a little bit more. In

(01:54):
the end, the extension came. We also qualify under a goer,
but only until the end of December. It seemed to
me that the Trump administration, if I were them, if
I had their ideology and let me be clear, I
don't you would want to keep the power, and by
extending a go only into December, you kind of keep
the power. I can take you away from it, if
you see what I mean. And I couldn't help. But

(02:15):
wonder if those maybe a little bit of that. Maybe
there are other things going on as well. Lots of
discussion over the last little while around manufacturing. We've seen
all of the conversations around car manufacturing in South Africa
impact yesterday's saying they have to probably close down their
springs mill there in the packaging business. Arsenal Mittal. Of course,

(02:36):
I thought it would be important to just have a
look at the year ahead for the manufacturing economy. We'll
speak to takats or Sale or from ned Bank Commercial
Banking about that after the news bulletin, and then are
really looking forward to speaking to the Ministry of Small
Business Developments. Still into Bennie Abraham's We've tried to get
her on a several times. Things just haven't always worked out, logistics, etc.

(02:56):
She's at a big event tonight. It's in the Western Cape.
It's the Western Cape provincial government. The jac they've been
doing running a sort of capital matching program both helping
as small businesses and looking forward to speaking to the minister.
We've spoken about her several times on the show, but
never to her in that I can remember, and just
ask about the role that she's playing, how she's finding it,
what strategies work. I often kind of wonder if we

(03:20):
should not hear her voice more in debates around small business.
So I'm looking forward to that conversation. And then from
seven point thirty tonight, Adrian Mayzi, the founder and SEO
of Rand Capital Collection. They own the Starbucks license in
South Africa, but late for a Starbucks now maybe, but
I'm sure you have a view. And if you look
at some of the problems at the US branches have

(03:42):
had supply, chain isshes and all the rest, we don't
have those problems here, but I do want to ask
about running a coffee chain store coffee chain in South Africa.
Really looking forward to that conversation. It's always good to
hear from you tonight or no double one doua A
three seven two two one four four six O five
six seven and Voice notes this evening on seven to
two seven oh two one seven O two The l.

Speaker 4 (04:02):
Show with Stephen krudis live on ninety two point seven
and one six FM, streaming on the Prime Media.

Speaker 1 (04:10):
Plus NAP and DStv channel eight five six.

Speaker 3 (04:13):
Well, two big events sort of involving other countries and
our economy today our official inclusion and the African Export
Import Bank and then the news overnight that a go
has been extended. Well, I suppose we should start rarely
with the ceremony today to launch our inclusion at the
African Export Import Bank, the President speaking there earlier today.
The bank now says we qualify for lending of up

(04:35):
to eight billion US dollars. Villam vunder spe is the
acting Deputy Director General of Exports at the Department of Trade,
Industry and Competition. Villain, good evening and thanks for your time.
Taken quite a long time to get to this point.
What advantages do we now get from being a part
of the bank.

Speaker 5 (04:53):
Thank you and good evening and thank you for having
us well. The overall program will aim to inject capital
into our priority industrial projects. It will support export diversification.
It will also support with infrastructure development as well as
transformation initiatives. If we look in terms of deepening so
Africa's industrialization projects will be targeted that contributes to the

(05:15):
national industrial policy areas of decarbonization, diversification, and digitalization. Examples
of projects for example which could include it includes advanced manufacturing,
green industries, critical minerals, beneficiation, pharmaceuticals, and the digital economy.
So I think that is in terms of deepening our
industrial projects. Support will also be sort for projects in

(05:38):
and development of special economic zones and industrial parks. I
think that's an important area for us in terms of
our industrial policy. And ano very important element was also
mentioned is that the Bank will provide support through it's
what it's called Inclusive Development Support Program, which will fund
it Transformation in the count that will look at the

(06:01):
allocating funding for projects to enable black businesses and entrepreneurs
to access finance, build assets and participate in the strategic
sectors of our economy.

Speaker 3 (06:10):
And there are lots of projects and we all know
there are lots of parts of our economy that needs
the money. Three billion dollars of the eight billion goes
straight to the Transformation Fund. Why there specifically, I mean
it's a big chunk.

Speaker 5 (06:22):
I think that's a big element. But I think that
was also an important contribution of the AFFLIS and Bank
to contribute to the issue of transformation in South Africa
and to make a practical contribution in terms of making
funding available to black businesses, to really support entrepreneurships and

(06:43):
as well as through as indicated, build their assets and
participate in strategic sectors of the economy. And that will
be then linked in with broader funding initiative linked to
the Transformation Fund and initiative, So it will be one
of the components which I think contributes to the Transformation
Funds overall framework of funding and support that it will provide.

Speaker 3 (07:04):
Does the Fund have the people who will make the
decisions about where the money goes yet, as I understand
that they're going to be appointed by the minister. Does
it have the machinery to do all of this? I mean,
I realized it's early days for both our inclusion in
the Bank and the Transformation Fund, but does it have
all of the machinery to do that?

Speaker 5 (07:22):
The Transformation Fund the process in terms of the preparations
for the launch that is underway, and I think it
is at an advanced stage and I think we should
probably be communicating We'll look for the details in the
near future around that. I think what is important though,
is that the trans in terms of the Transformation Fund,
that the Effects and Bank has put its hand up
and that it is allocating funds for that and that

(07:44):
it is already I think engaging certain aspects of the
Transformation Funds preparations and readiness so as indicated. I think
the preson of Effics and Bank indicated in terms of
the country program that they were not just for the launch.
They've started preparations so that practical implementation can start very strom.

Speaker 3 (08:07):
I do have to get to this point, Philam, and
I'm sorry, but I just want to make sure I
understand it. The money goes the three brilliant round that
goes in the Transformation Fund. Is the board of that
fund going to be appointed by the Minister and will
they decide which projects get funding? Is that how it's
going to work at this point.

Speaker 5 (08:25):
So the indications are that the Transformation Funds, once it's
launched and the relevant governance structures have been put in
place by the Minister, that they will then be assessing
various projects and that they will then be linking those
projects with potential funders such as the Effects and banker

(08:45):
is one of the options, and they will also look
at various options in terms of whether blended instruments for example,
that might be used, and those kind of elements of it.
So that is the understanding at the moment. But I
must also speak under correction that I'm not the specialists
on the transformation fund.

Speaker 3 (09:02):
No, sure, I understand, all right, thank you. We've also
brought shares in the bank where we have shares. I'm
talking now about the African Export Import Bank. We have
shares in the bank. Did we have to put money
in together those shares? It would make sense if we
did so.

Speaker 5 (09:19):
Originally several years ago through the Export Credit Insurance Corporation
of South Africa, which is one of the TTIC entities
in that South Africa's insurance enterprise, which supports political and
commercial risks, cover for key projects and for exporters, that
by what was called Class B shares into the Afflicts

(09:42):
and Bank, and those shares have remained with the Afflicts
and Bank, and through our accession which took place today,
those shares will be converted to Class A shareholding, which
is sovereign shares which have a greater say in the
management of the bank. That process the but it does
not require us to buy any additional shares, the conversion

(10:03):
of those shares does not require additional costs associated with that.
So in many ways, what we're doing is the existing
shares that we have will just basically as more valuable
meaning to them, so to speak. So in many ways
it's the positive utilization of our existing shares within that organization.

Speaker 3 (10:26):
The Bank's been operating for a long time, and I
realized obviously there was a very important reason we didn't
join it for a long time, because it was during
the Aparthe eight era. We're now the fifty fourth member,
which Fillam basically makes us the last member on the continent.
Why did it take us so long to get to
this point?

Speaker 5 (10:45):
I think what is important about it is that I
think there was various developments which took place through the years.
But I think what is very important is that, particularly
under the current seventh administration, that it became a strong
parity for us to become a member after a fax
some bent and I think through the various initiatives which
was undertaken and supported by both the Minister and eventually Cabinet,

(11:08):
and then supported by Parliament as all, we have managed
to finalize our accession process.

Speaker 3 (11:15):
Will thank you very much, indeed for the time. Villain
Funder of Spee is the acting Deputy Director General for
Exports at the Department of Trade, Industry and Competition. Eighteen
minutes after six well while that was happening today, overnight
confirmation that the US President Donald Trump actually signed the
African Growth and Opportunity Acting to law for another year,
well until December. That's despite all the diplomatic difficulties that

(11:39):
we've had with the Trump administration and the various Trump
administration comments about Africa and some of the other countries
on our continent. Peter Worthington is a senior e columnist
at abs A CRB. Peter Good Evening, So agous goes
through as I understand that we still face what I
suppose we would call the Liberation Day tariffs. Does it

(12:00):
goa really help our companies much considering.

Speaker 6 (12:02):
That in my opinion, not really. I mean, the difference
is between prior to the Liberation Day tariffs. If we take,
for example, the motor vehicle industry, the GOA preferences let
us export vehicles that are zero percent tariff, whereas under
MFN it would.

Speaker 3 (12:20):
Have been two and a half percent.

Speaker 6 (12:22):
So I go with something then. But the fact is
these liberation or so called reciprocal tariffs have raised the
overall tariff level considerably, and we're still going to be
facing these reciprocal terraffs in the section two three two terraffs.
So I don't actually think it's going to be a
huge advantage to us. Now that we have seen the

(12:43):
extension of a GOA for one year and inclusion of
South Africa at least for another year.

Speaker 3 (12:49):
I mean the same must be true of so many
other countries. The SUTU has a huge tariff to pay
as well, for example. I mean it does sort of
the whole thing weakens gomst below the waterline. You wonder
what the point is.

Speaker 6 (13:02):
In a way, I agree with you, Steve, and I
think it makes sort of the AGOA trade preference regime
in some ways redundant. It's all been superseded by US
raiff policy in twenty twenty five. It's a nice sort
of little symbol that the US is willing to continue
to engage and I hope for South Africa's situation it

(13:24):
means that they'll be willing to continue to negotiate on
a bilateral trade deal with US, But in and of itself,
this doesn't make a great deal of difference post the
events of twenty twenty five.

Speaker 3 (13:37):
The one sort of ray of hope might be that
if Trump's tariffs do roll back, and I mean in
some cases they have, or if we sort of look
three years ahead, if a go it gets extended each
of those years, and whoever takes over after that, things
could kind of go back to how they were in
terms of a go at least if it's still alive
by then. I mean that I don't know if that's
really realistic now that I think of it, Peter.

Speaker 6 (14:00):
Well, listen, I mean, I think we can hope. And
the fact is is that the extension of a GOA
and South Africa's continuing an inclusion means we're still in
the game, although the game has kind of gone against
Africa and a lot of other countries over the last year.
You know, there are still a lot of uncertainties. We
don't know what's going to happen with the US Supreme

(14:21):
Court rulings on Trump's tariffs. We don't know what the
response of the administration will be if the Supreme Court
in the US rules that the way he approached these
tariff increases was not lawful, so there's still a lot
of uncertainty going forward. But you know, listen, I mean,
we haven't been kicked out despite all of the things

(14:42):
that we've done to poke the bear. So we'll just
see how it plays out. My real hope here is
that the South African administration and the US administration are
sincere in the verbal stuff that they've said about wanting
to negotiate a bilateral trade agreement, which is the way
the US seems to be preferring to go in respective

(15:05):
trade policy these days.

Speaker 3 (15:06):
I mean, what's so interesting about that is that you'll
see a lot of noise from Trump about a particular country.
See you're enjoined by some other guests there, Peter on
the line. That's quite all right, happens at the time
of day. They're very welcome. So you have a situation
where Trump will often sort of up the ante before something.

(15:28):
He did it with his nominee for the share of
the US Federal Reserve as well, and then actually you'll
find there is a trade deal or it's not as
bad he said, or whatever it is. Sometimes wonder if
behind the scenes someone actually is making real Progres. It's
just impossible to know until a deal is signed, and
even then we could have another liberation day and any
deal is off the table, which is what makes all

(15:49):
of this so impossible.

Speaker 6 (15:51):
Yes, I mean we've got unpredictability from the US side.
We also have unpredictability in some ways from the South
African side, where we are such to out to the
US that the Iranians have participated in enable exercises even
though we say we told them not to. So I
think there's a lot of uncertainty going forward. But the
thing is, there does appear to be a bit of

(16:12):
a willingness to keep talking, and to my mind, amidst
all of this uncertainty, that's a very positive thing. And
let's hope that both sides recognize that we have an
interest in working together and that cooler minds will prevail.

Speaker 3 (16:27):
So all of that is true, and obviously we do
have an interest in working together and for the foreseeable
future of the US is the world's biggest economy. In
the meantime, though, it seems to me, just from my
vantage point in Santon, that bits of the world are
changing very quickly. We're getting a lot more goods coming
in from China, particularly cause, for example, our relationship with
other countries is beginning to change. We haven't seen the

(16:50):
Coalition government's policies expressed in foreign policy yet that that
might happen. If Trump continues with an America First policy
to the detriment of other trade partners, well things could
change almost around the United States. My point is that
all of this is not necessarily to the long term
benefit of the US.

Speaker 4 (17:09):
I would agree with that.

Speaker 6 (17:10):
And one thing is, you know, we should keep continuing
to negotiate and try and strike a good bilateral trade
agreement with the US, but that shouldn't stop us from
looking at sort of very actively seeking to diversify our
export markets and our economic relationships with other countries. One
of the things that I've been quite interested in is

(17:32):
whether China's offer to extend kind of zero tariff on
one hundred percent of product lines to all countries in
Africa is sufficient to offset the hit that we're going
to take from twenty twenty five US tariff moves. And
one of the things that I haven't had much indication
of progress on is where South Africa's discussions with China

(17:52):
are on implementing this offer, but we could stand to
benefit quite nicely. I think if we can actually finalize
those bilateral negotiations to secure this one hundred percent zero
teriff offer from China, we need to be thinking very

(18:12):
strategically about our trade policy, and we need to be
looking to expand export markets everywhere and not think that
we're going to rely only on the US. But at
the same time, we can't just to our trade relationship.

Speaker 7 (18:26):
With the US.

Speaker 6 (18:28):
Over the railing.

Speaker 3 (18:29):
Peter, thanks for your time. I hope that your other
guests in the room with you still gets they walk
at this late hour.

Speaker 6 (18:36):
Let's hope.

Speaker 3 (18:39):
Well, I'm with the dog, Peter. Thank you. Senior economists
at absincy Abby twenty six minutes after six the Money
Show the Market Chris Stewart, the portfolio manager at ninety one.
I don't know if you've got your hound with you.
Good evening. Votercom's update afterday quarterly updates, and it still
seems they're losing some pre paid customers but maybe making

(19:01):
it up on the data side.

Speaker 7 (19:05):
Yes, good evening, Steven.

Speaker 8 (19:06):
I mean it's I think it's certainly a sign of
just how competitive the prepaid market is right now.

Speaker 7 (19:13):
Prepaid revenue going down by almost four percent over the.

Speaker 8 (19:16):
Period, and that I guess driving a fairly lackluster top
line number for the South African operations in aggregate. And
you know, we've seen the significant disruption by some of
the Envy and O's in the prepaid market. You know,
Capitech comes to mind with their Capitech Connect offering, you know,
really coming in and setting that market alike with regard

(19:39):
to pricing and competition.

Speaker 7 (19:41):
You know, if you're operating an Envy.

Speaker 8 (19:43):
And O out of a bank, you don't really operate
a telco company to make telco profits. You're trying to
get your customers into your ecosystem and using that in
order to cross sell them for the banking services. So
you've got some pretty aggressive competitors coming out there. That's
making life quite difficult within the prepaid market. And if

(20:04):
you look at some of the new EQUASI regulations coming
in with regard to compulsory rollover of seven day bundles,
so you can't have expiry on seven day bundles, I
think that's going to further drive margins.

Speaker 7 (20:16):
Down in the prepaid market in South Africa.

Speaker 9 (20:18):
Other elements of the South.

Speaker 8 (20:20):
African business doing a little bit better, particularly outside of
the mobile business, and you know, the non South African
operations Egypt showing particularly strong growth still and the international
business is driven by particularly Mozambique and the DRC going
okay over this period as well.

Speaker 7 (20:37):
And as a result of that, you know, the market having.

Speaker 8 (20:40):
A fairly neutral reaction to both comes trailing update today.

Speaker 3 (20:45):
The markets didn't seem to mind Sappy's updates. I mean,
despite the fact they're taking hits in various sectors for
various reasons, oversupply in most of their markets, the share
price didn't tumble at all.

Speaker 8 (20:58):
Yeah, but for demand over apply operating losses guidance that
the next quart is going to be worse due to
accombination of pricing in the market as well as some
supply disruptions due to shutdown, you know, increasing their debt,
but you know, at the moment, still relatively comfortable with
regard to reset covenants, and possibly the market's reaction today

(21:21):
a reaction to less stress on the balance sheet than
perhaps had been fared. But let's not forget the stock
is still done twenty one percent year to date, and
that's only about twenty four trading days, so you know
it has had a pretty pile of start to the year,
and as a result of that, small bounced that it
doesn't mean too much.

Speaker 3 (21:39):
I don't think there's so many different elements going on
in the United States at the moment, but the markets
do seem to be a little jittery, particularly in the
software space linked as opposed to what's happening in AI.
You keep kind of expecting it to get back some
of its momentum, but it doesn't seem to be for
the moment.

Speaker 8 (21:58):
Yeah, I mean, the US market is in the rare position,
certainly in recent years of having been one of the
worst performing markets here. Today you've seen some pretty spectacular
performances from equity markets so far this year. Our own
market included a number of emerging markets posting some very
very strong gains and some of the developed markets in
detailing strong gains as well. US lagging tech has been

(22:21):
a problem space. You know, you saw an announcement from
Anthropic AI yesterday talking about certain AI tools that might
be used to replace some of the software systems that
are used within the legal and financial services fraternities, and
you know that getting the software stocks in anything related
to software stocks selling off quite sharply, and then you've

(22:43):
got the sort of bigger tech stocks. The market sort
of torn between you know, reasonably robust growth numbers right now,
but massive, massive expenditure numbers on AI and question marks
over whether that's going to Ultimately it turned out to
be an investment well spent on, an investment upon which

(23:04):
they're not.

Speaker 7 (23:04):
Going to get an appropriate return.

Speaker 8 (23:06):
So you know, you see the nastack down another percent
of today down into negative territory year to date as well.
So quite a lot of nervous is there, and also
compounded I think by some fairly modest macro data.

Speaker 7 (23:19):
You saw new car sales, you saw.

Speaker 8 (23:21):
Mortgage applications and in the job station in the US today,
and none of those were particularly we're particularly enterprising, not
enough to get the market going anyway.

Speaker 3 (23:30):
Chris Stewart, thanks so much, Portfolio manager at ninety one.
Just on six thirty on The Money Show, The Laney Show.

Speaker 4 (23:36):
With Stephen Cruds Live on ninety two point seven and
one o six a FM, streaming on the Prime Media Plus.

Speaker 2 (23:43):
NAP and DStv channel eight five six.

Speaker 3 (23:46):
Eighteen minutes now to seven the time. Well, the last
few months there's been a sort of chain of warnings
about manufacturing in all sorts of ways. So a British
American tobacco they said late last year they'll close their
last tobacco industry here Arsenal Mitziles starting their long steel
business impacts it yesterday. It'll have to close this packaging
plant in Springs. Sort of anxiety. I think about what

(24:09):
could happen to the car industry for various reasons. Takatso
Slow is the senior manager for manufacturing for net Bank
Commercial Banking at takatso good evening, Thanks for your time.
I mean, is the picture for manufacturing in South Africa
as bleak as it sometimes looks?

Speaker 10 (24:28):
Firstly, Stephen, thanks for the opportunity. I think when we
say bleak as it looks, we just need to understand
the opportunity behind it as well as the challenges. It
has been challenging over the past few years in terms
of what we've been facing and what do I mean
about this infrastructure issues element around the cost rising. It
has been difficult. However, opportunities still exists as this still

(24:50):
is the bedbone or private economy.

Speaker 3 (24:53):
In other words, there's still ways that we can actually
use manufacturing and we can still have a big impact.

Speaker 10 (25:00):
I mean, Stephen, think about it. On a day to
day basis, Any and everything that we do interact in
some form or another with manufacturing. And why am I
saying this is that end of the day, we do
have elements of employment comes from manufacturing, driving the economy
comes from manufacturing. Shaping of the economies or should I
say even the societies themselves is manufacturing generally driven. So

(25:23):
there is opportunity in that. So by us saying gleek
will be remissed by just saying that.

Speaker 3 (25:27):
No, sure, okay, So where do the opportunities lie? Where
do you think you know? Is where are the areas
we should be focusing on. Let me put it another way,
where are the areas that we should sort of be
looking at investing in manufacturing in South Africa given the
sort of global context we're in.

Speaker 10 (25:45):
So from a global contest perspective, it's that we are
having the elements of infrastructure is a challenge. We are
having elements of enage in some areas are still a challenge,
but we ask them from time to time that manufacturers
are finding a way to combat that. So in terms
of how or were to actually invest, let's enable the

(26:05):
manufacturers to be able to get these things going. What
do I mean by this? On a day to day
we do all the various clients, of which some would
need heavy lifting in terms of capex, heavy lifting in
terms of working capital. It means just equipping them to
ensure their remain competitive in the ever changing industry or
infrastructures that we're facing.

Speaker 3 (26:24):
Within the industry, you talk about the provisional services, I
mean load shelling was a major issue. The fact that
it's ended has that made any difference. I realized that
there's so many problems in local government that those problems
can maybe take over in a way.

Speaker 10 (26:41):
So the question is a quite overcome by virtue of
as much as we say it has ended, it is
not not necessarily a holistic element. Some manufacturers are still
facing the challenge of the energy aspect, so we might
still have supply at the cost of that particular supply
has increased this impact, of course, the margins on it

(27:02):
day to day, and as you well spoke earlier on
about which companies are closing, some are having to go
there to by virtue of it's unsustainable to run the
business because of the cost or because of the demand
that exists in the market. So yes, the challenges continue
even though the locating has been reduced in the country.

Speaker 3 (27:19):
We keep trying to compete with the rest of the world,
and there's a sort of narrative that no one can
compete with China, you know, is that right?

Speaker 10 (27:30):
As for nobody can compete with China, I think we
need to also take a bit of a step back
as to what are we competing with, Who we are
as a country, what defines our actual market. Because us
competing with for lack of a better way, it's much
more affordable inputs coming into the country, it is creating
a bit of a vacuum when it comes to demand. However,
we need to focus on the element of what we

(27:51):
can do to be more competitive. And one thing I
want to point out is South Africa doesn't have an
issue with capacity. It doesn't have an issue with capable
ability or that ability to do. The challenge is where
do we take it to? And that's where China is
taking away some of the elements. However, as I said,
to draw im back to our own strengths as a country,
what do we do best and where can we take it?

Speaker 3 (28:14):
Do you think there's enough thoughts going into what do
we do best and how to make the most out
of it? I mean, is there enough sort of strategic
thinking going on we're able to spot the opportunities that
they are.

Speaker 10 (28:25):
Oh and you're speaking quite well when you say strategic
opportunities or enough conversations. We've had a pleasurements and to
have conversations with industry as to where are we going,
where is the opportunity, how do we invest? Which is
why generally we make it a point that we understand
the industry, we understand the markets that we play in.
So there is opportunities, there is conversations happening. However, sometimes,

(28:49):
as they say, Roma's not built overnight, it takes time
for us to get there. However, with what's been happening,
be being caught in a multitude of external sectors that
are causing us to actually be a better backfoot in
terms of competing against the rest of the world.

Speaker 3 (29:04):
Takatzl Selo. Thank you, senior manager for manufacturing for net
Bank Commercial Banking.

Speaker 11 (29:10):
The Money Show, Stephen Ruts is brought to you by
Absolve Corporate and Investment Banking. Balancing economic growth with ecosystems.
That's how they've invested in.

Speaker 2 (29:20):
Your story.

Speaker 3 (29:22):
Ten minutes to seventh time. The JC announcing tonight the
results of its collaboration with the Western Cape provincial government.
The two have been matching each other in terms of
helping smaller firms access capital. The initiative has been running
around the country. Around two and a half thousand firms
have taken part so far. One of the people at
the event tonight is the Minister of Small Business Development,

(29:44):
Stella in Deberny Abrahams, and I'm very pleased to tell
you that she joins me now on the Money Show. Minister.
Good evening, I'm very glad that we're able to speak
to you on the show tonight. How important are collaborations
like this between the JAS provincial government and helping to
develop small and medium enterprises.

Speaker 12 (30:03):
Good evening, Steven, and good evening to all the listeners.
I must say this is very critical that we have
partnerships with the private sector. And of course you will recall,
Steven that when we launched our nationally Integrated Smaller Enterprise
Development Framework, we identified forpulas and one of those pillars
was the one that talked to public private partnerships. Was

(30:25):
this government we can't do it alone, and this is
why it was an exciting journey that we've traveled with
the JSE since the beginning of our partnership at three
years back.

Speaker 3 (30:37):
You've been in the position of Small Business Development Minister
for quite a while, well a little while now a
few years Minister. I mean from everything that you've seen,
your conversations with people, the programs that you've been involved in,
which strategies do you think are being the most effective
in helping develop small businesses in South Africa?

Speaker 12 (30:55):
Well, if you've been an exciting four years to be
precise at the time that I've been here, but of
course having had engagements with the ecosystem players who begin
to pick up certain gaps that I felt are important
that I really contribute towards too. That's why earlier on
I spoke of the mis set, the National Integrated Small
Enterprise Government Framework, because if we are to coordinate the

(31:19):
work that is being done on entrepreneurship, we've got to
make sure that there's a clear framework that guides the
partnerships that we must have, so that coordination has to
be informed and we had to agree with certain things
that we must do. That's the first thing that we
managed to do. And of course, Dvin, you will recall
that when I came to the department, there was no
founding legislation. We just had the Businesses Act that was

(31:43):
transferred in twenty twenty one, and then we relied on
the National Small Enterprise Act that was old belonging to
the Department of Trade Industry. So we developed our own
legislation that gives the Department some authority. And amongst those
things that we're trying to address in the National Small
Enterprise Act, what's the establishment of the Ombad's Office. Because

(32:04):
as we engage with the ecosystem, we listen to entrepreneurs
complaining and talking about how challenging it is for them
that at times they are victimized by those that are
contracting them. And then we said, let that be an
orbas that can represent the voice of the entrepreneurs and
be able to issue whatever penalties that are issued. Another

(32:24):
thing that was raised was the fact that the support
mechanism or instruments that are provided by the Department are
not coordinated. You go to what used to be Seeder,
you have to apply for a business plan and all
the non financial support, and when you go to SIFA,
which was our funding agency. Then they will tell look

(32:45):
to this business plan is not approved. But there was
no coordination in terms of priorities. So we then said,
let's manage those three entities. And then we had we
established what we call today's seedfar that's because of the
act that we passed and a lot of that we
are doing, including reviewing some of the programs that we
had in relation to ensuring that the programs or the

(33:08):
instruments that we provide to enterprise really talk to them.
Red tape that people are complaining about we had.

Speaker 10 (33:14):
We needed to say.

Speaker 12 (33:15):
It starts with us, because when we looked other than
Businesses Act of nineteen ninety one, there was a lot
of a tape from our side as government, especially the
department that is administering Businesses Act. So we then said,
let's develop the business licensing them.

Speaker 10 (33:30):
Which we're abused with.

Speaker 12 (33:31):
I'm citing there's a steven because it is important that
every intervention is anchored into law. We do want to
come and do piecemeal interventions that can be overridden tomorrow.
So that's why I'm outlining all those and of course
the partnerships that we've had with the different say gods
that you are awaken with.

Speaker 3 (33:53):
So your ministry has been around I think ten eleven
years now, you've only been responsible for it for four years.
So in the four years, do you think small businesses
have felt an impact. I mean, obviously it's long term
work and more and more with feel an impact over time.
But do you believe that small businesses are benefiting from

(34:14):
the Ministry of Small Business Development.

Speaker 12 (34:16):
I do believe they may not be immediate benefits in
all the interventions, as you know that the implementation of
the policy may take too longer, but I know that
there are instruments that have benefited most of them. If
I'm checking, for example, about the issue of the combatsman.
Although Pilamed, you're still dealing with the appointment, but we're
filled in some some staff that we are responsible for

(34:39):
the department and the BEGN to address some of the
con that the entrepreneurs are containing about. If you again
look at their funding policy for small businesses that we developed.
Entrepreneurs that will be asked for collateral when they went
to to to to ask for money from the financial
financial institutions, and we've managed to come up with that
policy and say relax certain things let's work on and

(35:00):
then move it to a collateral registry so that we're
able to include certain assets and we're finalizing that with
the Department of National Treasury. And again these are things
that now the private sector is able to listen to,
including BASA, which is the Bank Association of South Africa,
because we are working together to say we've got to
increase the pool for funding for small businesses if we

(35:22):
are to tend things around in South Africa. You've seen
managed Godnjuana. Now with the regulations on the public featurement,
we've made inputs to ensure that we do not only
allow small businesses to participate on tedy persons, but it
has to be defined where do they participate. So all
those interventions are interventions that, as I said, they need
to be anchored into law so that they are sustainable.

Speaker 3 (35:46):
So minnesot I mean there are many debates in our
society about small businesses, about the role for example of
informal businesses and formal businesses, about how to grow smaller businesses.
And forgive me, but I sometimes think the person in
the position of Minister of Small Business Development maybe needs
to be heard a little more in these debates. I

(36:07):
sometimes wonder if one of the political roles of the
person in the department. I mean, the legislation is very important,
all of that really mattered, but I wonder if from
a political point of view, it might also be important
for the person to play a sort of very public,
not cheerleading, but supportive role to say to small businesses,
I'm actually your champion in government. And I wonder sometimes

(36:30):
if maybe there's an opportunity there for that kind of thing,
because I think I think small businesses. When I speak
to small business owners, and we speak to small business
owners probably two a week on this program, if I
ask them how they feel about government, many will say
government doesn't help me. We've heard that many informal businesses
won't get registered because they just see government as acting

(36:50):
against them. They would feel differently if you were in
their corner.

Speaker 12 (36:55):
Well, we do have the interests of the informal and
formal businesses. This is why we engage with all the
business associations that respective municipalities deven because one thing about
the coordination, as I mentioned, is that we must hear
from them. That's why we go to the local level
working with the LED offices. That means par level, the

(37:17):
business associations that are nationally We engage all of them,
including the ones respons or the ones responsible for informal trading.
We even design specific interventions. Whilst I understand Stiven that
indeed there's a lot that needs to be done, but
the problem as things stand, as government, we have not

(37:39):
budgeted or not put more money into the work that
is being done by small businesses. That is why I said,
when we develop the funding policy, we then said what
are the other instruments that we must utilize liverating the
existing legislations, including amending others. If you listen to Minister
Parks who talks about the transformation files, it arises out

(38:01):
of the fund of funds Funds of funds proposal that
we made in our funding policy to say does a
need for us to close the funding gap. But it
doesn't end then as things then government spends one percent
on treasurement towards small businesses and those are engagements that
we're having with national treasure That's why elio I made
refers to the public traasurement regulations that are the Minister

(38:23):
has gaeted to say, let's be specific to say we
want to create competitive entrepreneurs and this is where they
must participate from this value to this velu let that
results for small businesses, and we are hoping that everyone
will support that because for these interventions to yield the
intended results, we need the entire ecosystem. If you're checking

(38:43):
about informal trader, it means that the by laws in
a particular municipality must be favorable to an informal trade
as things than municipalities they develop are the guidelines based
on what they would want to do, and this is
where we've seen the prohibition of participating of participation by
informal traders. Hence I spoke about the business licensing build.

(39:04):
We are not waiting for the deal this week. The
coming week, I'll be engaging with SALGAT because we have
said let's come together so that we can see it's
still in the competence of the municipality to say we
do see the need to deal with this because our
businesses are not growing or one two threde reasons that
they are fighting. That's why we say, why is to
workingman policy. Let's make sure that we engage the ecosystem players.

(39:27):
Infrastructure has been cited of as one of the critical
gaps for informal treaders that must be able to trade
in different spaces. And that's why it's the departments is
set aside funding for those to say, let's build proper
infrastructure so that pe we can trade in a free environment,
but in a safer environment. And we do that, it's
trust that their resources are minimal. I emphasize this, which

(39:49):
is why you see us partnering with the likes of
Safe and still calling for other partners to come and
join us in the work that we do.

Speaker 3 (39:56):
I mean the event tonight, Hopefully we'll encourage I mean
as the JAS, I mean it's a massive player in
our economy. You would expect that it'll encourage other people
to do what you're doing tonight, which is helping small
business through all of these projects.

Speaker 12 (40:10):
Definitely, we are doing that. It's just there as I'm saying,
this is the sad year, we're finalizing that the first
lack of our partnership. We are having engagements with the
PIC with thebasa to say, how do we resource the
township economy infrastructure? So we need all the players and
trust me, by the time we go to the patter vote,
we'll be announcing solid partnerships that I am certain that

(40:33):
will yield positive with us. You listen to the President
today when they launch their affects and partnership that we
have again, out of the eight billion brands that is
injected to our country for for for for investment, some
of that money will be going to small businesses.

Speaker 3 (40:49):
Minister, thank you very much. Indeed really good to hear
your voice on The Money Show. I really appreciate the
time I know you in the middle of an event
in the Benie Abrahams is a Minister of Small Business Development.
It's a minute after seve and.

Speaker 1 (41:01):
And now The Money Show with Stephen credits on seven
oh two. Let's walk little.

Speaker 3 (41:08):
The Money Show with Stephen Crotis has brought to you
by ABS, a corporate and investment banking balancing economic growth
with ecosystems. That's how they're invested in your story. Good evening,
eight minutes now after seven the time business unusual in
a moment. I've often wondered a little bit about this,
and actually let me put this question to you. Do
you think that the way in which a manager can

(41:30):
be effective has changed in the last just ten years?
I would say probably in my head. I would go
back to around twenty ten, but since then we had
m I get into trouble for putting it like this.
But what people often describe and I've seen described as
the sort of a peak period of wokeness which kind

(41:51):
of came to an end in around twenty eighteen twenty nineteen,
I think the pandemic had a role in that. Of course,
the issues, the social issues that led that, are still around,
but political power has changed. Need a point two. What's
happening in the White House at the moment. What I'm
trying to get to though, with everything that's happening so
working from home, hybrid working, the fact that more and

(42:13):
more people are personal brands and the media wherever and
not so much representative of the brands of their businesses.
How do you manage people in that context? And what
for you has been the most effective way to do it?
Oh seven two seven oh two one seven oh two.
I don't know. I hope you've done this. Warren Ingram
will tell you to do it if you haven't since

(42:34):
the start of the year. Just taken a month, taken
an hour and gone through everything you've paid for and
all your accounts, credit cards, banks, the hobbits, and to
see how much money you've spent on what we're looking
for things that you don't actually use anymore. Wendy Nola
has a story for you, she tells me in the
next little while, looking forward to that and then really

(42:55):
looking forward to your shape shift tonight. Adrian Maizie, the
founder and CEO ran a Capital collection. What they do
now is that he owns the license for Starbucks in
South Africa. So if you're a coffee ficionado, did I
get that right? You want to hear from him. But
also the business of running a coffee store, coffee chain,
how complicated? That is good to hear from you on

(43:17):
double one double A three oh seven two two one
four four six o five six seven and of course
seven two seven oh two one seven o two seven two.

Speaker 2 (43:27):
Stephen is gone x at at Stephen.

Speaker 3 (43:30):
Well, as was widely expected. Today the leader of the
DA John Cienhayesen saying that he is not available for
a third term as leader. There's lots of speculation as
to why this isn't my own personal view, and feel
free to disagree with me. Six months ago he seemed
to be very much in charge. I think most people
would have put money on him going for another term.

(43:51):
They didn't seem to be any natural contender, barring the
obvious one who said he wouldn't run against him. And
then it seemed everything changed. And to me it did
seem that the revelations about his personal finances, the way
in which he managed the Dion George situation must have
played a role. I can't see what else it was.
I realized people talk about the foot and mouth outbreak.

(44:13):
But if foot and mouth was the reason and his
handling of it was the reason, then why is he
staying as minister? So you know, anyway, That's just the
way I see it at the moment. I just want
to reiterate this point because I think it's important. The
Democratic Alliances is the second biggest party in our country.
It's not the opposition party anymore, of course, because it's

(44:33):
in the national coalition, and that means that its voice
on economic issues should matter. And I'm hoping that someone
somewhere during whichever leadership contest comes or however things pan out,
sparks a big debate around economic policy. Debates about economic
policy and the ANC have to my mind, become quite muted.

(44:55):
I was utterly amazed that there was virtually no reaction
to the decision to low the inflation target last year.
In the past, in the A and C that would
have led to a huge discussion, not so much that
I could see this time publicly anyway. So I'm hoping
someone in the DA season opportunity to have a really
big proper conversation around economic policy and see where we

(45:17):
go from there. I mean, the whole point of going
into politics should be about how to grow the economy.
I mean that should be the whole point, to put
it another way, how to make people richer and everybody,
how to do those quite complicated technical things. The science
of development has been well studied over the years. So
I'm just hoping someone in the DA does that and

(45:39):
makes it maybe a sort of festival of economic ideas.
I'm afraid to say, I'm not that optimistic. Twelve after seven.

Speaker 2 (45:45):
Money show business unusual.

Speaker 3 (45:48):
Lots of sort of complaints at the moment, kind of
in the ether, if you like or on LinkedIn in
different ways, if anything on LinkedIn is still written by
a human anymore, about the quality of leadership, about sort
of weak management, poor decision making, or no decision making,
a dithering, a sort of breakdown of cultures. Is is

(46:09):
something happening that maybe is changing, Avida and I do
is the Africa managing director at jack Hammer Global, Avita,
Great to talk to you again. How is it? I mean,
is something shifting that's making management harder? And I think
management's been getting harder for quite some time, but now
you've got lots of other factors, including AI, which I
think scares everybody. Is that having an impact? Maybe?

Speaker 13 (46:32):
I think there are one hundred things having an impact,
But I don't know. If you know this Gallop research,
it says it's usually simplified to people don't leave companies,
they leave managers. And I think that shows that the
manager is the strongest determinant of whether people are going
to stay engaged or not. And it's something we see
daily at jack Hammer. So personally, I think two of
the biggest things that leads to management degradation actually indicate

(46:56):
that it's a structural problem, it's not an individual personal one.
And the first is that traditionally management was learned through
kind of like an informal apprenticeship, like you observe a
senior leader how they made decisions, how they exercised influence,
how they manage conflict, and the trade offs that they made.
And now when people step into management roles without having
had that exposure, they start relying on policies, they become

(47:18):
a little bit efficient, they escalate issues more, and that's
because they don't trust their own discretion yet. So it's
not really weak leadership, it's just underdeveloped judgments. And then
the second thing is, you know what's disappearing in this
this corporate quest for efficiency and rationalization is the layers
organizations are just flatter, So promotions are happening faster, layers

(47:40):
are being removed because we're trying to retain high performers
or there's a technical or operational competence that must be rewarded.
And so you know, the lack of the leadership apprentice
and the greater hierarchy, or rather the leadership apprenticeship and
the greater hierarchyment that junior managers used to strengthen a
muscle by having graduated responsibility and the structure was the

(48:02):
scaffolding for them to learn management in a safe way,
rather than what we have now is kind of like
a ballderplane while flying it with I.

Speaker 3 (48:09):
Mean we see our managers less and less, even if
we're working in an office, you know, so much happens
on WhatsApp rather than in a phone conversation. I love
a phone conversation, mate, All of those things, and I
mean the lessons, the ability to see how to deal
with something. I just think that we've lost something about

(48:30):
being human and that's one of the consequences of everything
that's changed, and that means worse management, absolutely, And.

Speaker 13 (48:37):
It works two ways, right, So, once being able to
observe your manager making those decisions and grapple with those
things and understand the thinking behind it helps you learn.
But also from a managerial point of view, the remote
work or the hybrid work has shifted management itself away
from observation to you know, kind of like assumption and
inference about what people are doing and managers the output,

(48:58):
but less of the process that produces them. And sometimes
that means managers disengage and they just trust that whoever
is doing what they're doing is getting on with it,
which is fine. But then there are others who compensate
by overmeasuring or overcontrolling, and you know, neither of those
are particularly effective, and what they're missing is that judgment,
the context and the trust, which are really hard to develop.

(49:19):
When you don't see the process unfolding, you don't see
how people respond under pressure. You can't give real time
feedback on what they're doing and how they could improve.

Speaker 3 (49:28):
It's also managers not having enough time with other managers.
I mean, they also don't see their managers if you
see what I mean, so you know, I will see
a manager and think they're not doing this properly. Wasn't
like that in my day. But actually that manages battling
too because they're not being managed effectively either.

Speaker 14 (49:46):
That's exactly right.

Speaker 13 (49:47):
And again it comes to the lack of exposure and
the flattening of the structures because you know, as much
as we want to call kind of like the old
school way of doing things bureaucratic or you know, there
were too many barriers to entry or people used to about, oh,
well this is the way we do things around here,
and this is the way it's always been done. There
was a certain learning capability that was built into that structure,
and new structures haven't accommodated or compensated for what is

(50:10):
missing there.

Speaker 14 (50:11):
Yet.

Speaker 3 (50:13):
I wonder if this is just how things are going
to be and it's not going to change because the
push for efficiencies is relentless. I wonder also that even
though Joebergs traffic will tell you that more and more
people are spending more and more time in the office,
in the end, it's just not going to be like that,
and so management isn't going to really get better.

Speaker 13 (50:36):
I mean, I think they're probably ways that they could.
And just you know, to pick up on your point
about efficiencies, and you know you mentioned AI and automation earlier,
I think you know the risk there is that AI
and automation take over the coordination part of work, and
this drive or efficiency is really unintentionally stripping out some
of the work which managers used to learn about how

(50:59):
organizations together, how they function, and how to get the
best out of their team. And you know that coordination
work for scheduling, the checking, the routing of information. We
dismiss it as low value, but it's there where people
learn prioritizations. I think in order to make the new
system work, we need to find ways that build that
decision making back in without sacrificing on the efficiency and

(51:20):
also appreciate that automation compresses time yes, we want decisions
to happen faster, but we also need to appreciate that
it also means that tolerance and room for error decreases,
which is wonderful for execution, but future leaders, they're not
getting the chance to make mistakes, to make mistakes, learn
from them, and then correct them.

Speaker 3 (51:39):
People will talk about, oh, well, we could change the
culture of this organization, we can change the organizational values.
None of them are talking about let's spend more money
on more managers spending more time with their workers and
watching each other.

Speaker 8 (51:53):
Yeah.

Speaker 14 (51:53):
Absolutely.

Speaker 13 (51:54):
I think when companies think about cultural interventions they think
about the symbolic workshops and the pretty websites. But that's
not how you sustain good culture, Like you say, it's
building in more managerial capability, and it's sustained by those
everyday managerial decisions like how the feedback is given, how
the conflict is handled, and that consistency over time, so

(52:15):
that the decisions were consistent And rather than letting people
become avoidant or overly procedural and policy driven, do you
have you start to build faith and strong culture in
the way your possesses run.

Speaker 3 (52:27):
Avitha, thanks very much, indeed, at than I do is
the managing director for Africa at jack Hammer Global. Your
experience of being managed at the moment oh seven two
seven two one seven o two is something changed nineteen
minutes after seven.

Speaker 2 (52:41):
The money show consumer Naga.

Speaker 3 (52:45):
Well, as you know our consumer ninja, your consumer ninja,
excuse me is Wendy Nola. And one of the things
that you've got to do so often, and there's actually
quite difficult to fix, is when you find you've been
paying for premiums or subscriptions or a fee for some
thing that not only do you not use, you don't remember,
or the phone that was ensured as no more or

(53:06):
whatever it is. This seems to happen all the time, Wen,
do you know THEO good evening. I mean, so many
people come to me with stories about this. I can't imagine.
Your inbox must be full of it. You've got a
particular story to highlight something particular happened.

Speaker 14 (53:20):
Here, Yes, Hi, Stephen. Indeed, this is a regular feature
in my inbox and it speaks to in the main
people not reading their bank stapers carefully. So Sharen wrote
to me a couple of weeks ago about her experience
with short term insurance company First for Women, which was
part of the Telly Show group. She took out a
policy on her car in May twenty twen sore we

(53:41):
going back fifteen years or worst than or sixteen years.
Two years later, she called First for a Woman and
notified them that she wished to cancel her policy. She
said in that call, I gave my addie number to
the consultant, and I assume that all the products under
the policy number would be canceled because that all fell
under the same number. Right for her, it was a

(54:02):
packaged deal. But they canceled the main car policy but
not the others which fell under the same policy number.

Speaker 3 (54:09):
So they didn't do what they were supposed to do.
What were the others? I mean, clearly they came to
some money.

Speaker 14 (54:16):
Yeah, so yes, the thing. Two months after she took
out that initial insurance policy for her car, she got
an upsell call and other than an agent called her
an existing customer and sold her add ons, which were
three Acid Pole Protection plan, which is funeral cover. Everybody
and their dog are selling funial cover, personal accident cover,

(54:37):
and scratch in tent cover. Industry refers to them as
that's value added products to my mo and its value,
mostly for the company. But never mind, that's another story.
So when she made that call in twenty twelve, she
said she wanted to cancel the policy, and she thought, well,
that that's everything's canceled. But you can guess for now

(55:02):
the others were not canceled because she didn't specifically mention
wanting to cancel them, and important to head in Jamahmad,
the agent didn't specifically ask her about them. We just said, right,
I'm canceling your policy. End off.

Speaker 3 (55:15):
So how long did all of this go on for?
I mean, how long was she paying money out?

Speaker 14 (55:19):
Thirteen years? Noah, Yeah, she paid more than sixty two
thousand policies and of course because she didn't know about them,
she didn't make a single claim. So that was a
nice clean sixty two thousand rand for the company.

Speaker 2 (55:36):
Wow.

Speaker 3 (55:37):
So now you knock on their door and you say mm,
sixty two thousand rand and I imagine they say no.

Speaker 14 (55:45):
Well they didn't exrectly say a total no. They said yes, okay,
we will pay you some back, but only for three years.
Premiums because of description right and companies to use that,
but because the premims had increased quite a lot over
those thirteen years. They paid her back for the last

(56:06):
three years a little over twenty five thousand grand, which
was about forty percent of the total that she'd paid
that sixty two K. Sure, So yeah, I took up
her case of First Woman because I took her point
that because the add ons fell under the same policy number,
the whole lot should have been canceled. And there she
specifically said, listen, I'm only canceling the car one, please

(56:29):
keep the others alive. There should have been some discussion
around that, to my.

Speaker 3 (56:33):
Mind, But who remembers a conversation with a call agent
thirteen years ago. But the agent should have I mean
when she when she called to cancel, the agent clearly
didn't mention the I'm sure there's a way they trained
not to nudge, nudge, wink wink, you know, no one
say anything, but was basically didn't mention the others.

Speaker 14 (56:51):
No, didn't mention the other So obviously there was the
main thing that I brought up with First Woman and
their head Schonevan Vainhurt said she began by saying they
look they those other those add ons would stand alone.
They had separate contracts, separate teasegencies. She got sms's emails
rather sent to her about policy manuals every year, so

(57:12):
she missed those. She missed the debit orders on her
bank account. But as for the lack of mentioning, she says,
due to system limitations at the time, our consultants handling
vehicle and home policies could not view and did not
have access to any map policies. They were administered by
a separate part of our business. And yeah, and they're

(57:34):
saying she didn't mention them, so whatever, whatever. We've now
moved to a central platform, says First Woman, and the
agents can now have alistic view of our and we'll we'll.

Speaker 3 (57:45):
Just take the money as the consequence.

Speaker 14 (57:47):
Yeah, and we'll give you back three years if you know,
just down the line. So so yeah, she finally did
Sarine realize when she saw one of those emails sent
by First Woman, which was in September last Yeah, and
then this discussion about pay me to show me the
money began.

Speaker 3 (58:07):
So she wasn't asked about the add on policies when
she called I mean, and hard for her to prove,
hard for them to prove that she didn't. I wouldn't
be surprised. I would be surprised if she's the only
person in this position.

Speaker 14 (58:21):
Yes, absolutely, especially I mean, I'm unfortunate that most people
don't go through their bank statements line by line every month.
And this is a big takeout from this discussion, I
like to think. But yes, I'm pretty sure that there
are others sitting with policies that don't know about could
never claim. So that's it to have a quick look

(58:41):
at that. And for me, the other thing that that
sort of got under my skin a bit was I said,
how did she come to get these extras?

Speaker 15 (58:49):
Oh?

Speaker 14 (58:49):
Yes, two months after she took the initial the main
the car policy, she got a call, one of those
upse calls. Yeah, and then they sold it to her,
you know, So it just I just yeah, it's was unfortunate,
but she got twenty five K back. And y'all just
go and have a look at your bank statements. You
might have added on that you're playing for every month
and have no idea about it.

Speaker 3 (59:10):
Yeah, And I mean it's very difficult to get historic
money back, but you really don't want to lose any
more money. I mean, that's one of the reasons you've
got to do it. And I can hear we're on
Ingram in my brain as I say this that you've
got to play such close attention to your own personal
bank account and where the money is actually going.

Speaker 14 (59:26):
Yeah, because no one else is going to.

Speaker 3 (59:29):
Indeed, Wendy Nola, thank you very much. Indeed you'll consumer
Ninja on the Money Show. Just go and have a
look at the beginning of each month, you know, just
sit down, spend an hour. It's a pain in the neck,
but go and do the homework. You'll be amazed at
what you find. Wendy, thank you very much.

Speaker 2 (59:43):
Indeed, The Money Show Shape Shift is.

Speaker 3 (59:46):
Twenty two minutes to eight now the time. Well, I'm
sure you know how competitive the local coffee market has become.
You can get coffee from so many places. But one
of the biggest names in global coffee and in coffee
now inside Africa is Starbucks. It's a brand with a
huge reach, serves thousands of people in South Africa every day.
And Starbucks South Africa is in fact owned by the

(01:00:10):
Rant Capital Collection. Their CEO is your shape Shifter. Tonight
spends a lot of time in the States, but he
is originally South African. I'm hoping he still calls themselves
South African Adrian Mazie. Adrian, good evening to you and
thanks so much for taking the time to speak to
us tonight. I know you've got a lot on your plate,
so thank you.

Speaker 9 (01:00:28):
A pleasure.

Speaker 15 (01:00:28):
Good evening, Stephen. Of course some boys will be South Africa.
There's no one doing that.

Speaker 3 (01:00:33):
Do you know what a Springbok jersey is? And how
often do you wear it? That's all we need to know,
you'd every time we play excellent. You took over the
license for Starbucks here. It was twenty nineteen. I mean
things were a little different back then. It wasn't doing
quite so well. Why were you so keen? I mean,
did you spot an opportunity? Did you think, actually there's

(01:00:54):
a way to make money out of us?

Speaker 15 (01:00:57):
Yeah, you know, that's actually I like to inverte that question.
The brand was doing very well back then. The brand
that was associated with the prior owner that company got
itself into trouble, and that was Taste Holdings, but the
brand itself. The thirteen stores we bought in twenty nineteen
were flagship, beautiful stores, some of the most beautiful in
the world, and they had great sales. What I saw
in it was potential and an opportunity to get something

(01:01:20):
that we could grow and build a dream around for
South Africa and in South Africa, and that's when we
stepped in.

Speaker 3 (01:01:26):
At the time, obviously with Taste, there was a lot
of things you had to sort out and you did
all of that. Did you feel that there were many
changes you need to make to the Starbucks brand there?
Look the feel of going into a Starbucks in South Africa,
I mean in South Africa, as you know, we like
to think we're very different to everyone else, and we
aren't always, But were there things you felt you needed

(01:01:49):
to change about the feeling of walking into one?

Speaker 15 (01:01:54):
You know, they did a great job Tase Holdings to
building these beautiful flagship stores that set the brand up
for success, and they what they didn't have and what
they needed was time to build a diversityfied portfolio that
could sustain whatever variable came over time. And we got
hit right within two months of earning the business with Covid,
and that dramatically increased any need to diversify and the

(01:02:14):
learning lesson there was we needed smaller stores in locations
outside of malls, inside of grocery stores, etc. And that's
what they needed and it required a longer view or
longer a larger balance sheet for them to get there.
So they set up nicely pus success and we picked
it up from there. And then we expanded. And that
was the primary change we did, was getting, you know,

(01:02:35):
getting outside of just simply being the primary malls, being
more of an habitual brand than a destination.

Speaker 9 (01:02:41):
And we're sort of grown along the way doing that.

Speaker 3 (01:02:43):
I mean, I've had to ask so many shape shifts
what their COVID experience was like for a coffee shop
like yours. I mean, your first thought must have been
this is going to be brutal, and yet you came
out of it quite nicely. It seems.

Speaker 15 (01:02:57):
Yeah, we were lucky, we were capitalize the business, and
so we leant forward.

Speaker 9 (01:03:02):
We had no choice. We were in and there was
no chance to pull out.

Speaker 15 (01:03:06):
And I said, listen, let's see how let's grab land
while we can. So while the tide was out, we
dove in. And when the first year, the first eighteen
months when COVID started, we built thirty three stores from
a base of thirteen that had been built over five years.
It was quite a rapid expansion and that gave us
a lot of market share gave us scale that we
desperately needed for a brand of the size and for

(01:03:26):
an international brand with the quality that is a Starbucks.
You do require a significant amount of overhead, and that
overhead has to get funded one way or the other.

Speaker 9 (01:03:34):
And if you aren't using somebody else's money, you need
to be.

Speaker 15 (01:03:36):
You need a bunch of stores to generate the cash
flow to do that, and the scale helped us not
only cover that overhead, but get a seat at the
table with our suppliers and all stakeholders who involved in
the business.

Speaker 9 (01:03:48):
So that was the key.

Speaker 3 (01:03:50):
I mean, coffee can sound simple, but I know it's not.
I mean, I'm a relatively simple coffee drinker. I'll have
an Americano with a touch of milk, please, And if
you don't have the milk, that's fine. But some people,
I mean, it can be incredibly complicated. And I read
I think there's something like eighty thousand combinations of drinks
that you can get at the Starbucks in South Africa.
I wasn't sure if i'd read that right. Frankly, does

(01:04:12):
that make it difficult to sort of manage? I mean,
you have to make sure you have everything you need
at every branch and you don't want to have too
much of it in any one place either.

Speaker 15 (01:04:21):
Yeah, at Risk have been been called out on this.
I think it's one of the most complex businesses to run.
The number of line items we have to procure, most
of them are imported, ensure the stock levels are correct, training, etc.

Speaker 9 (01:04:34):
Is complex.

Speaker 15 (01:04:35):
Now you've got to also explain that to the customer
on the other side, the combination does actually amount to
something like eighty thousand whatever a variation you have. And
when I look at businesses other business today, this has
been a great learning ground or for us to learn
how to run a supply chain. We're primarily a limit
logistics business and a front end hospitality business today. It
is a lot that goes into it, and it's months

(01:04:56):
and months of planning. My procurement team, O logistics team
are outside of the front the frontline employees that are
serving the customer the central part of our organization.

Speaker 3 (01:05:09):
It's so interesting. I mean, I sometimes wonder if if
a coffee chain might just make a lot more money
by just being a bit simpler. Yes, you can have
a cappuccino, but not a half whatever. And yes, I
also know that over time, I mean coffee drinkers are
becoming like tea drinkers. They become quite finicky.

Speaker 9 (01:05:27):
Yeah, you know, the core poor coffee offerings.

Speaker 15 (01:05:32):
You sort of can't differentiate yourself, and you do need
labor's expensive, rents expensive, and yeah, you could simplify your business,
but you're not going to have much in top line
because only so many cofeees a person could drink per day.
So how do you attract a broader, broader audience or
customer base. And you need to grow and develop as
your menu needs to change, as the market changes and
the answers of the day certainly don't drink the coffee

(01:05:53):
that you and I may be drinking, or it's cold
called it's called brew and iced teas and every variation
of preppaccino, and that keeps changing. And the innovation part
that Starbucks are so good at is really differentiated for us.

Speaker 9 (01:06:07):
So our revenue is generally far higher than any of.

Speaker 15 (01:06:09):
The coffee competitors that you may reference that they've been
brilliant at what they do, but we've got the cloud
of a very very large machine behind us that can
innovate and stay in touch with what's going on in
the market at a lot larger scale and at a
quality that's pretty hard for others to replicate, given the
the justic function that's required to procure this and all
these ingredients around the world, meeting global standards that are

(01:06:32):
on par with the Starbucks.

Speaker 3 (01:06:35):
It's been interesting. I mean, there's a big Routers report
a couple of weeks ago about some of the major
problems for Starbucks in the US with their supply chains.
No milk at some stores, not enough food that others,
too much food in some places. I mean, I know
you won't necessarily want to comment on the parent company,
but one of the things that I thought was interesting
was it seemed in the US is a very different

(01:06:55):
market to US, much much bigger that they basically had
too many souliers and they should have had sort of
a fewer bigger supplies. Are their lessens and what's happening
there for here. I've never heard of a supply problem
at Starbucks in South Africa, I have to say, so,
I don't know if we're much easier or if you've
just kind of got it down pattern some way.

Speaker 15 (01:07:17):
I'd love to say that would be true, but I
tell you, Stephen, we spend night and day trying to
figure out how to get that product through the through
the ports in on time, making sure it doesn't expire.
It's twelve weeks on the ocean. It's not an easy one,
but it's fundamental to our business. A lot of capital's
tied up in your supply chain. You've got to get
it right. You've got to be consistent. And we've got
a very very big country. The rest of the world
and including the people we report into, don't realize how

(01:07:40):
big South Africa is, and logistics between getting tough from
Durban tol Tank, from kW teng down to Cape Town,
it's a big effort. And yes, supplier supply relationships are
key and over concentration into a single supply is very
dangerous for your business.

Speaker 9 (01:07:54):
So you also have to think about diversitifying there and.

Speaker 15 (01:07:58):
Making sure you're not like I said, not making so
you're not too small, because if you're too small and
they decide to turn turn the key on you, you
can really get yourself into trouble. Fortunately, most of our
product comes comes from the parent company. That does mean
we've got a lot of a lot of our capital
sitting on the ocean, but dated the procurement and then
we procure from them. We have demand planning side that

(01:08:18):
we have to get right, and that's making sure in
South Africa, given the variability in the various towns, that
we've got the supply right because we're thinking six to
nine months out every time we place an order.

Speaker 3 (01:08:30):
So the business of running a coffee shop right star back.
So I mean there's some people who I'm sure go
to you once or twice a day and they will
literally go. They'll have their branch, they will probably know
I hope they'll know the barista. They will just want
they order. They might want two or three for the
rest of the office. And if they go. There are
plenty of other people, and I'm guilty of this from

(01:08:51):
time to time, who'll go into a coffee shop, have
one drink that linger for hours, be meet. I mean,
you know, sometimes you can go into a coffee shop
and to this in, that person, in this person and
that person and is great, but you're not making much
money out of me. How do you sort of make
money when people do linger and you want them to
linger in a way, but you also don't want them to,

(01:09:13):
you know, use all of your electricity charging their laptop.

Speaker 9 (01:09:18):
Yeah, look, I take a long view on that.

Speaker 15 (01:09:21):
I think the more time people can spend in US store,
become familiar with it, love the brand, love the product.
I think for the long term that boats very well
with us. We're privately owned business. It's me and the
fear of my friends that I've got to know me
over time as either somebody who.

Speaker 9 (01:09:35):
Cycled or worked and wherever I've been.

Speaker 15 (01:09:37):
We've got to make make this thing work, and I
think building a report and connection with the customer is
more important. I never like going into a restaurant and
to feel rushed, and I know why they need this
seat to turn over, but I don't think that builds
longevity and loyalty with your customer. And so yes, I
recognize any Stockbucks you go into, in particular the one
in Rosebank or sitting in Cpoint here there's a playful

(01:09:58):
a lot of people sitting using electricity and spending time there.

Speaker 9 (01:10:01):
But I actually don't mind.

Speaker 15 (01:10:02):
It at all because over the time of time they
will become long term customers and that's the ultimate goal.

Speaker 3 (01:10:07):
Adrian Maizie is your shape shifter. This evening's with us
until eight o' plenty more to comitt eleven minutes Nate.

Speaker 11 (01:10:15):
The Money Show Stephen Curtis is brought to you by
Absolve Corporate and Investment Banking, balancing economic growth with ecosystems.
That's how they've invested in your story.

Speaker 2 (01:10:27):
The Money Show.

Speaker 3 (01:10:29):
Shape Shifters the CEO of Rand Capital Coffee Adrian Maizie
or Shape Shifter tonight. They hold the Starbucks license in
South Africa, Adrian, who's spoken a lot about coffee, and
I have many more questions. I do want to ask
a question or two about you, if I may, Because
you grew up in Pretoria. You went to the same
school as what was that guy's name? I'm sure you
get asked that all the time.

Speaker 9 (01:10:51):
Yeah, I heard he went to my school.

Speaker 3 (01:10:53):
Well, I mean, obviously my fault for noticing there, Elon Mask.
Then you went to the US and you actually went
there rate to play tennis? Was that a scholarship? I mean,
I mean that must have been quite an experience. You
would have gone on your own to play a particular sports,
and you must have done very well at it.

Speaker 15 (01:11:12):
Yeah, I'm the nineteen ninety two Turkish tennis champion and
from there I.

Speaker 9 (01:11:18):
That was my height of my career.

Speaker 15 (01:11:19):
And then I got a scholarship to go to the
University of Nebraska, where I spent three years playing Division
one tennis.

Speaker 9 (01:11:25):
We were the nineteen ninety six Division eight champions.

Speaker 15 (01:11:28):
I was in doubles at number one doubles, and then
I quit and then I went to work for Cooper's
librand de Lloyte Intuition private equity hedge fund, and that
was the end of my tennis career.

Speaker 9 (01:11:37):
But it was it's to what I am to the
court to this day. It's how I identify.

Speaker 3 (01:11:45):
I mean, the idea of going to another bigger country.
It wasn't like now where you could WhatsApp your parents,
you know, where you could you know, be on the
phone to them every day. I mean, it was a
very different time, the sort of early nineties. What was
that experience. I mean, you must have learned a huge amount.
You'd ever had no one else to rely on?

Speaker 15 (01:12:05):
Yeah, you know, And when I talked to my kids, it's,
you know, the story about how hard we had it
as children and compared to how they are today. But
I left on the second of January ninete ninety three,
went to what is twenty below zero. No connection with
No Francis was pre apartheid, end of apartheid, right, So
it wasn't exactly a large connection to United States. No Internet,

(01:12:26):
no longer distance calling, no WhatsApp. I used to send
videos to my mother on a VCR reporter that I
at one point bought, and that came later years, but
otherwise it was postcards. It was very difficult. That had
no network, and I think I went there with eight
hundred rand and everything I earned today comes from that
eight hundred rand, which by the way, I spent the
first week I got there, but different conversation, but yeah,

(01:12:49):
it I had to form relationships. I couldn't get a
job like I could year or anywhere. Like I watched
kids that they get jobs in America and their parents
help them get jobs. I get people coming to me
asking me to I'll place them. I don't know which
university to go to. I got three offers to go
to different schools. I had no idea what the difference
is between one or the other. And it wasn't like
I could just look it up on the inter let

(01:13:09):
alone on CHEGBT. So it was me and my own
but I figured it out and it probably made me
what I am today. I was eighteen years old, and
I had to make friends and figure out how to
just get a driver's license, how to even figure out
where classrooms were. So were all old enough to know
what that was like. But it certainly made me grow
up very quickly.

Speaker 3 (01:13:29):
Was there a drive that you had? I mean you
went to Coopers in librnders you say, then you went
from you know, from one business to another business, and
you clearly learned a lot from some of the people
you saw. But you clearly they saw something in you too. Obviously.

Speaker 15 (01:13:43):
Yeah, I don't know what they saw on me a
different perspective, but I've always been highly ambitious, but ambitious
from it in security perspective. I always have high desire
to grow up and be something in somebody someday, and
I'm still trying to do that. And I've always tried
to excel at what I do. And I knew that
by giving my best every day, I'd be better the
next day, if that makes sense, and certainly putting my

(01:14:05):
best foot forward, I would impress somebody along the way.
And I'd always thought to be friends with older individuals
who are more experienced, and I learned from them. And
it probably was also because of one of the youngest.

Speaker 9 (01:14:13):
In my classes.

Speaker 15 (01:14:14):
Even at primary school, at spring Gold Primary or Boys,
I was a year younger than most folks, and so
I was surrounded by people with more experience and it
sort of stuck with me.

Speaker 9 (01:14:22):
All my life.

Speaker 15 (01:14:23):
I'm now getting to a stage where I turned out
to be the oldest in the crowd, which is quite weird.
But I did that and I think that helped me
and a lot of people open doors for me. It
didn't come on my own. Maybe I earned it, but
you couldn't get there on your own.

Speaker 3 (01:14:35):
H I mean, there's so much truth. Is there a
particular philosophy or sort of writer that's maybe influenced you?
Raad somewhere, Anne Ran perhaps, I mean she influences She's
influenced quite a few generations of people. I mean, would
she be one? Would they be others?

Speaker 4 (01:14:55):
Yeah?

Speaker 9 (01:14:55):
And Ran without a doubt. And Rand group is named
after Oran.

Speaker 15 (01:14:58):
Capital is named after Random Atlas Shrugged fountain Head. But
my former boss, Eddie Lampert is the one who sort
of indoctrinated me into that.

Speaker 9 (01:15:08):
Yeah.

Speaker 15 (01:15:10):
Elan inspires the heck out of me, and I sit
and watch his work ethic and his desire and drive,
and that's somebody I'll look up to.

Speaker 9 (01:15:17):
Now that's not an author. Ban Anne Rand has been
certainly the.

Speaker 15 (01:15:20):
Most influential in my life and elan at the moment
that someone inspires me to be better and get up
and do something, and it's sort of highlighting at this
point I'm turning fifty two. Short is how much time
we have left and how much time you have to
be productive and get things done.

Speaker 9 (01:15:36):
So I'm trying to ramp.

Speaker 15 (01:15:37):
Up my work ethic and hopefully I'll get enough done
in my lifespan that I can accomplish something.

Speaker 3 (01:15:42):
No, well, I think many people would have said you've
done that. The coffee industry in the longer term, I
mean twenty years time. Do you have any idea of
what a coffee shop might be like? I mean, let
me try stab at it first. I think certain things. Firstly,
I think people will be there because they'll want to
be there. They'll want to socialize. I don't think that
goes away COVID whatever. I think that people will still

(01:16:06):
also want a good product, so they'll want coffee or
something like it. The cold of drinks you refer to
the propertinas whatever they're called. Then would that be somewhere
near the mark.

Speaker 9 (01:16:17):
Yeah, I think that's right. I think you have a
mixed bag.

Speaker 15 (01:16:19):
So for myself, I'm an individual who wants the same
thing every day, walk in, walk out. I don't really
want to interact with anybody. So in the US, I'll
use the mobile order and pay app, which I love.
I go in, I order while I'm in the car,
and which, by the way, my testa drives itself and
it departs itself, and I walk in a walk out
and goes and so that works well for me. For
the everybody else who wants to socialize, who wants to

(01:16:41):
interact with the barista, then there's going to be a
place for that, and I don't think that's going to
go away.

Speaker 9 (01:16:46):
But for a guy like myself, I'm not an explorer.

Speaker 15 (01:16:50):
I there's going to be human alays be behind the
serving a coffee if anything, is just gonna be automatic
and you take it. But I certainly don't want a
ending machine. So that is a fundamentalerence. So we both
can probably relate to that. So I think you'll see
a big spad bag, and you do need place to
sit and work and think through things. So the traditional
coffee shop that third place will be there as will

(01:17:11):
be a more efficient way of acquiring your coffee consistently,
because that's also very key, right, It's very difficult to
deliver consistent coffee at a national or international scale, and
somebody's going to have to do that, and generally that's
probably going to.

Speaker 3 (01:17:24):
Be a machine. Adrian. There's a running joke on the
segment of the show every week, which is that I
usually ask the people who the person who's the shape shift,
what do they do for fun? And I usually say,
you're not allowed to say jogging and spending time with
your family, because so many people give me that answer.
The problem is that in your case, you've done the
Iron Man. What is it twenty times that I don't

(01:17:45):
think I'm allowed to say you can't say jogging.

Speaker 15 (01:17:48):
Yeah, so twenty two Iron Men, three Comrades and one
kpe Epic. But really, for fun for me is cycling
that allows me to clear my mind and a lot
of thinking. Listen to books on tapes or pot course,
listen to CNBC, listen to your show, whatever it is
that gets me going. But if I don't do that,
I don't recharge. And I think anybody that knows me
knows that my exercise routine is just sort of care

(01:18:11):
to my being. And I started as a youngster in
high school year Viretoria, whereas trying to be a better athlete,
and it just became part of my everyday lifestyle and
it is something I do every single day, whether I'm
cycling or going to the gym. I was at the
Virgin Actor this morning, at the Solid District, and I'll
go there again tomorrow no matter how I'm feeling.

Speaker 3 (01:18:28):
I mean, I sort of love cycling myself. The scenery changes,
I mean, that's what makes it so important.

Speaker 15 (01:18:35):
It's fantastic and their largest part of my investor base
are my cycling friends. And once a year we go
into Europe or somewhere around the world and I've seen
such amazing places and met some of the greatest cyclists
of all time through this and they themselves I was
as inspiring as Eline is.

Speaker 3 (01:18:49):
So I love it, Adrian. I've really enjoyed the last
half hour it's flown by. I will probably think of
you tomorrow when I have my morning coffee. I won't
say where I get it from, but thank you so
much for you this evening. I really do appreciated. Adrian
Maizie is the CEO of Rand Capital Coffee, the owner
of Starbucks in South Africa and your shape Shift.

Speaker 11 (01:19:09):
Tonight, The Money Show, Stephen Crutchers, is brought to you
by ABSO Corporate and Investment Banking. Balancing economic growth with ecosystems.
That's how they've invested in your story.

Speaker 3 (01:19:24):
Well, lots of drama in US markets. I'm afraid the
dar Jones is up point two too, but the Nasdaq
is down two percent at the moment. Still issues around
software shares in particular, and the S and P five
hundred down point eight eight. Will be back tomorrow. Good evening,
it's eight o'clock

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.css-14f5ked{margin:0;word-break:break-word;display:-webkit-box;-webkit-box-orient:vertical;box-orient:vertical;-webkit-line-clamp:2;overflow:hidden;}South Africa joins Afreximbank and AGOA extension buys time for exporters amid uncertainty

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Betrayal Season 5

All Episodes

South Africa joins Afreximbank and AGOA extension buys time for exporters amid uncertainty

Stuff You Should Know