Share this
Twitter
Digg
Del.icio.us
Yahoo
Technorati
Googlize this
Facebook
Hear this text
Print
E-mail
Tags
Growing black economic participation At the helm of the dynamic National Empowerment Fund (NEF) is Philisiwe Buthelezi. This woman of many talents explains, “It has been five years since I accepted the privilege to discharge my patriotic duty in the service of the National Empowerment Fund, and it has been especially rewarding during this period, working with an accomplished Board, a consummate Executive and first-rate staff, indeed to be part of the refinement and implementation of a strategy that is set to catapult the organisation to world-class excellence.
“Testimony to the organisation’s innovation is in the ongoing development of unique and creative solutions to further the strategy crafted in support of the mandate of the NEF, which is to bridge the divide in advancing sustainable black economic participation.”
As an empowerment agency of the Department of Trade and Industry (dti), the NEF was established in 1998 through an Act of Parliament. The mandate of the NEF enjoins it to facilitate and promote black economic participation. The two-pronged mandate is executed by providing financial and non-financial support to black-empowered businesses and entrepreneurs on the one hand, and to promote a culture of savings and investment among black people.
In its three core areas of work, namely Fund Management, Asset Management and Strategic Projects, the NEF has continued to be a leader and has achieved great results and success.
The NEF has embarked upon a unique and historic journey since operational inception in 2004. As a catalyst for broad-based black economic empowerment (BBBEE), the NEF was capitalised by the government in 2004. This capitalisation was achieved through the transfer of equity stakes in state-owned enterprises and by means of an additional funding commitment of R2 billion.
Buthelezi is determined to make a difference and to leave a telling mark in the world of black business. In 2005, she embarked upon a historical journey with the NEF. As she remarks, “Before I joined this unique organisation, it had only disbursed R25 million to 11 black-empowered companies. I knew that the opportunity had presented itself, and I had to make a difference.”
One of the many success stories of the NEF is that to date, the organisation has approved 214 BEE transactions amounting to R1.617bn. This remarkable achievement has been made possible by sheer dedication and hard work from both the chief executive officer and her team.
Drawing on Buthelezi’s consummate knowledge of finance and economics, the NEF accelerated its interventions by approving R685m in the past financial year. Although the global economic crisis presented many challenges for organisations, the NEF was still able to disburse R506m during this period.
One of the key challenges for South Africa as a nation continues to be high unemployment and skill shortages, and the NEF continues to work closely with the government in this regard. Within this realm, the NEF has been able to create a total of 17 203 jobs as a direct consequence of the NEF funding since 2004.
Buthelezi‘s training and leadership acumen have proven invaluable in the NEF’s resolve to grow the empowerment dividend. “Fifty-two percent of the portfolio by value has been disbursed to buy equity in white-owned businesses on behalf of black entrepreneurs; and 84% of the portfolio by number has been disbursed to black entrepreneurs starting up or expanding their own business; and lastly, 61% of the NEF-funded portfolio is invested in male-owned entities, with 39% invested in female-owned enterprises,” explains the CEO.
The correction of past injustices is evident as the NEF continues to promote black participation across all sectors of the South African economy, as illustrated below.
“As the CEO of the NEF, I am passionate about ensuring that the NEF’s products and services reach the length and breadth of the country. This is not only important for our economy but for South Africans as a nation. This will assist in bridging the divide, ensuring black participation within the economy and promoting the necessity of saving,” says Buthelezi.
As depicted in the CEO’s statement of the previous year’s Annual Report, the Roundtable strategy was adopted, which entailed close co-operation with provincial governments, local development funding institutions, entrepreneurs and media, among other stakeholders, for the purpose of maximising the NEF’s reach to all provinces. The necessity to engage individuals was found to be immensely valuable.
In order to remain constant in this ever changing environment, the NEF aims to bridge the economic divide by striving to address certain market failures that include:
• Poor quality of business plans and lack of accurate and reliable financial information from applicants;
• Limited management skills, including financial, marketing and technical expertise among entrepreneurs;
• Strong competition from established businesses with entrenched market dominance;
• Lower bargaining power;
• Limited own capital by black entrepreneurs; and
• Lack of access to international markets.
In line with the market failures identified by the NEF, one of the many constraints facing black business is the formation and consolidation of top-quality business plans. An investigation revealed the lack of accurate and reliable information due to the limited ‘know-how’ of applicants. In response to this need, the NEF created and developed a tool to assist applicants in this regard. A comprehensive online Business Plan tool was launched to assist applicants.
Buthelezi comments, “The tool is designed to assist applicants in initiating, improving and refining the quality of their business plans, including completion of financial projections through a step-by-step question and answer process. This is one of the many initiatives and solutions that are offered by the NEF to ensure that the process is user friendly and accessible.
“This business planner tool is available to the public free of charge and can be accessed on the NEF’s website, www.nefcorp.co.za.
“By continuously researching the needs of both the market and applicants, the NEF is able to stay ahead and be relevant in these times of change,” she adds.
The NEF is actively engaged in providing strategic advice and support through its Post-Investment Business Unit to its clients. This is initiated and supported by monitoring the performance of its growing number of investees for risk, and provides ongoing business support when required.
At the heart of this initiative is the concept of mentorship and business coaching to its existing clients. The NEF is committed to providing ongoing learning and support to its clients. This facility is offered by a range of experts in various domains of business and industry.
As stated by the CEO, “The NEF has invested R4m in the development of a Mentorship Panel. These mentors and coaches are deployed across the country and possess a wide spectrum of business expertise, which proved invaluable to NEF investees at the height of the global economic downturn. As an organisation, we are at the cutting edge of offering innovative solutions to key sectors of the economy.”
As she begins to ponder, Buthelezi is quick to describe one of her many achievements, which is the need to create a culture of saving and investment among black people. “Not only as a CEO, but as a South African, I was privileged to be actively involved in the conception, creation and launch of a phenomenal project called the Asonge Share Scheme,” she says.
As a firm believer in empowering her employees, this initiative was christened “Asonge” by a staff member, which is isiZulu for “let us save”. This memorable event was witnessed by many leaders in the government, the public service and the private sector.
Buthelezi says, “The NEF Asonge Share Scheme will be remembered for the milestone which it is, having been oversubscribed by 13% by attracting more than 86 000 applications, 39% of whom comprised women investors in an offer that allocated over 12 million shares valued, at the time, at more than R1.3 billion. It was a remarkable and historic milestone.”
This initiative has assisted the NEF in the collation and sourcing of statistical data in respect of investment dynamics and imperatives by black investment groups. In the future, this statistical data will inform future share offers which will continue to promote a culture of saving and investment among black people.
Another groundbreaking achievement for the NEF included the organisation playing a key role as a strategic adviser to Sasol on its first Black Public Offer in 2008. The CEO smiles and utters, “This proved to be confirmation that the NEF was truly an authority and market leader on Black Public Retail Offers.”
“As a nation, South Africans are not good savers,” says Buthelezi. In order to drive the concept of saving and investment, creating awareness is fundamental to its success. If this initiative is supported by clear and accessible savings and investment products, South Africans will be able to move from second economy participation to first economy participation.
To facilitate the process, the NEF has introduced a national investor education campaign on equities and savings. “This campaign will result in 74 workshops nationwide where members of the public, and in particular grassroots communities in the townships and villages of our land, will be encouraged to save and to invest”, she says. The proof is in the pudding – the NEF is continuously striving to change the lives of South Africans as they embark upon these awareness and educational campaigns.
As the interview progresses, Buthelezi becomes increasingly excited about that which has been accomplished and other fundamentals she can share with the general public. A project recently embarked upon is the Strategic Projects Fund (SPF). This was established with a specific mandate to increase the participation of black people (BBBEE) in early stage projects that are aligned to the government’s priority economic sectors, namely: Tourism, Mining, Minerals Beneficiation, Agri-processing, Renewable Energy, Business Process Outsourcing, and Infrastructural Projects.
“This initiative offers many opportunities and will enable the NEF to be a forerunner in: expansion and creation of new industrial and manufacturing capacity of South Africa; investment in economically depressed areas or poverty nodes as per government definition; warehouse equity for the future benefit of BBBEE in national strategic projects and increase the participation of the BBBEE in these projects; increase export earning potential of South Africa; and reduce the dependency of South Africa on imports,” says the CEO.
If we are to prosper as a nation, we need to embrace these opportunities and make a difference to both the economy and the community, she adds.
The Strategic Project Fund is an exciting venture and includes approved projects such as:
• Thin Film Solar Technology (Pty) Ltd: A R1.2-billion solar panel manufacturing plant which is under construction and is expected to be complete in 2012. This project has received much media attention and has taken a lead within the renewable energy space.
• Renu Energy (Pty) Ltd: A R100-million biomass manufacturing plant which has finished construction and is starting to ramp up production over the next 12 months to full capacity.
• Rare Metals Industries (Pty) Ltd: A R10-billion world-first integrated titanium, zirconium and magnesium pure metals refinery plant in Saldanha on a bilateral and partnership agreement with Russian and American institutions.
• Cape Town Sky Tower or “Cape Eye” Project: A R100-million sky tower to be located at the V&A Waterfront through a joint venture with Tourvest and partnership with Dubai World.
• Nkomazi Plastics Chemicals (Pty) Ltd: A R40-million plastics chemicals technology in which SPF on a joint venture basis with Innovation Fund and angel investors, together with industry technical specialists, have concluded a favourable pre-feasibility study to commercialise the new leading technology.
In order to reflect on the current BBBEE progress, problems and prospects in the future, the NEF hosted a historic seminar which convened on 24 May 2010. “This seminar was constructed for stakeholders to examine what progress has been made and what obstacles still remain in building a just and inclusive South African economy,” says Buthelezi.
This seminar was attended by the Minister of Trade and Industry Dr Rob Davies, the treasurer-general of the ANC Dr Mathews Phosa, executive chairperson of Shanduka Cyril Ramaphosa, and BBBEE Advisory Council member Sandile Zungu; as well as Phuti Malabie, Suzanne Ackerman-Berman, Gill Saunders, Nonkqubela Maliza, leaders in the government, business and the civil society.
As stated by the CEO, “the aim was to address some of the unintended negative consequences of BBBEE. Ultimately, the dialogue aimed to accelerate progress by further informing effective models of economic empowerment and amplifying best practice.”
The idea behind this seminar, which was named NEF BBBEE Vision 2020, is to identify best practice that will develop and inform the country’s quest in growing and nurturing black economic participation leading up to 2020. “Our economy cannot grow to its full potential unless we enable the majority of the population unfettered access to its opportunities and resources. We need constructive dialogue to assess our progress to date, analyse what has not worked and map the way forward to 2020,’’ says Buthelezi.
In order to lay the future foundations of the BBBEE programme, the seminar has assessed the original targets set, analysed the ever changing BBBEE landscape within the South African context, and will ultimately seek to address any shortcomings of policy. This has given both business and the government a platform to show their commitment to the drive for a more effective equitable economy.
This seminar has set important groundbreaking scrutiny into a critical developmental intervention, BBBEE, and as described by the CEO, “the NEF hopes that the seminar has provided all South Africa’s economic players with an opportunity for an honest dialogue that will help pinpoint where we are, where we want to be and what is required to take us there.”
The NEF will produce a comprehensive post-seminar report which will be presented to the dti and the BBBEE Advisory Council, among other stakeholders, for reflection and planning.
This phenomenal woman of many talents has a wealth of knowledge to share. Buthelezi’s unparalleled commitment to transforming the South African economy shows her strategic ability to tackle any challenges presented, to forge the necessary relationships required, and finally to streamline process and policy and lead the NEF into a new frontier.
