Classic Business

As the country looks for growth engines in the wake of the Covid 19 cataclysm we often talk of infrastructure as the major lever we have to pull. But another industry is flying quietly under the radar and could offer some more hope in a country desperately searching for small economic miracles. Busines process outsourcing. The name doesn’t conjure the same sexy images of Roosevelt’s New Deal but in a recent McKinsey report the consulting firm noted that South Africa has been voted the second most attractive Business Process Outsourcing (BPO) location in the world for three years in a row, based on its reputation as a reliable, cost effective, and high-quality destination for outsourced business services. Michael Avery speaks to Ambassador Sadick Jaffer, of Invest SA, the government department responsible for investment promotion; part of the Department of Trade Industry and Competition (the dtic); Tanya Cohen, coordinator for the Public Private Growth Initiative (PPGI); & Andy Searle, CEO of BPESA, the industry body for the Global Business Services Sector in South Africa; about an industry that is growing at 26% per annum during a depression.

Bianca Lima-Boekhoud, group head of transformation at Blue Label Telecoms

Sizwe Nxedlana, CEO of FNB Wealth and Investments, & Ashburton

Cobie Legrange, co-founder of Rexsolom Invest

Amnesty International’s recent report, Broken and Unequal: The state of education in South Africa, points out that South Africa is still failing too many of its youth when it comes to education. But the question remains, have we made progress in widening access to education while forgetting that access and quality are two vastly different things? Grant Bodley, chief executive of Dimension Data, shares his ideas to help radically change education with Michael Avery.

The one thing that seems most likely to emerge from this pandemic is that it will unleash a wave of Creative destruction that can best be described as the dismantling of long-standing practices in order to make way for innovation. Creative destruction was first coined by Austrian economist Joseph Schumpeter in 1942. Schumpeter describes creative destruction as innovations in the manufacturing process that increase productivity, but the term has been adopted for use in many other contexts.

What does this mean for your investment strategy? Chris Potgieter, Managing Director: Old Mutual Wealth Private Client Securities, shares his hot sectors ripe for creative destruction.

Public sector workers downed tools and stayed at home to protest against the government’s failure to implement wage increases on Wednesday. Union leaders in three of the largest federations, Cosatu, Fedusa and the National Council of Trade Unions have been on a collision course with the government after it backed out of a pay hike deal following finance minister Tito Mboweni’s huge budget cuts to contain rising government debt and a ballooning budget deficit. We need to dispel the general idea, propagated by the public sector unions, that the public sector are poorly paid. Stats SA data going back ten years shows that the public sector wages lie above the private sector, and if you look at the slope of the curves, it shows that the public sector enjoys greater increases, and also, the rate of change is less than that in the private sector – in other words, the public sector increases in pay are greater than the private sector, as well as the fact that the public sector are more resistant to market conditions. If you factor in productivity, which is diabolical, one recalls Churchill’s words, when he said “never in the field of human work has so much been earned by so many for doing bugger all”. Michael Avery asks Mathew Parks, Parliamentary leader for Cosatu, to explain how crippling the economy stimulates growth and creates jobs.

Wayne McCurrie, portfolio manager, FNB Wealth and Investments & Martin Harris, premium clients manager at IGSA

In 2020, the total market cap of JSE listed mining companies increased to R1,28 trillion from R840 billion. A R439 billion or 52%, YOY, increase from 2019, largely attributed to the increase in market capitalisation of companies within the gold and PGM sectors. This is one of the key highlights from PwC’s 12th edition SA Mine, a series of publications that highlights trends in the South African mining industry released by PwC today.

Michael Avery speaks to Eskom CEO Andre de Ruyter and Andries Rossouw, PwC's Africa Energy, Utilities and Resources leader, about the role Eskom plays in the mining sector, progress being made to recover outstanding debts, solving the balance sheet crisis, rooting out corruption and restoring some level of operating efficiency.

Moeketsi Marumo, associate director Cova Advisory