Saturday, November 30, 2013

Strikes continue as labour's Oliphant emerges

Sapa, AFP
Labour Minister Mildred Oliphant has called for a swift end to strikes over wage increases, saying talks need not always result in industrial action.
Labour Minister Mildred Oliphant. (David Harrison, M&G)
Wage negotiations needed to take place in good faith and as swiftly as possible to ensure the productivity of the South African economy was not adversely affected, Labour Minister Mildred Oliphant said on Thursday.

"Wage negotiations should not necessarily result in a strikes," the minister said in a statement.
"Even when a strike is called, at the end of the day the parties have to find a way resolving the outstanding matters around the table."

South Africa has nationwide strikes in the gold mining, automobile, airline and construction sectors.
"To all negotiators, I know that you are busy with the negotiations. I wish that you will find one another sooner rather than later and come to the agreement as swiftly as possible," said Oliphant.
"We are still reeling from the world economic meltdown and we need to get the country working as smoothly as possible to be able to get the economy to create the jobs we so desperately need."
ANC deputy president Cyril Ramaphosa also urged the unions and operators "to spare no moment, no time, no energy ... and find a solution to the strike" on Wednesday.

"Strikes are always resolved at the end of the day, the longer they take, the more it creates problems for all those involved," Ramaphosa told Agence France-Presse.

Unions to negotiate
South African unions and gold producers appeared ready to compromise on wage negotiations on Wednesday, as a mining strike took its toll on one of the country's key industries.
The National Union of Mineworkers (NUM), which represents around two thirds of the miners, hinted it might lower its demands, while two small gold producers reached a deal with their workers.
Evander Gold Mine and Village Main Reef agreed to increases of between 7.5 and 8% for around 5 000 affected workers, a development the gold producers' chief negotiator Elize Strydom described as encouraging.

The NUM, which has been demanding a 60% pay hike, indicated there was room for manoeuvre, but denied media reports it could go as low as 10%. Employers are offering 6.5%.
"The NUM has not settled for a 10% [rise]. That is not true, our demand stands, but we are open to negotiations," spokesperson Lesiba Seshoka said.

"We are still at a [wage] increase of R2 300 for surface miners, and R3 000 for underground miners," he said.

Surface workers currently earn R4 700 per month and underground workers earn R5 000.

Key industry
Seven gold mine producers employing about 107 000 workers have been affected by the strike, launched after central bargaining talks collapsed last week.

Gold is a key industry for South Africa, bringing in around 10% of export earnings and accounting for 3% of Africa's largest economy. The industry employs around 140 000 workers.

The gold sector stands to lose 761kgs in production each day, worth around $34-million as a result of work stoppages, gold industry spokesperson Charmane Russell said.

No violence was reported, but production at mining giants such as Harmony Gold was severely affected by the stoppage, while Anglo Gold Ashanti reported significant to severe impact, according to the Chamber of Mines.

The NUM's rival, the Association of Mineworkers and Construction Union (Amcu) which has slightly over 20% of the membership in the affected gold mines, will meet at the weekend to decide on demands to put forward.
"All that Amcu will demand is a living wage," its leader Joseph Mathunjwa said.

Engaging with unions
Harmony's chief executive Graham Briggs pledged to "continue to engage with all the unions to reach a wage settlement and to curtail the strike".

Stoppages in the mining sector have become a frequent occurrence during annual wage negotiations, but this year they come amid sluggish growth and rampant unemployment.
South Africa was for decades the world's largest gold producer, but its share of production has shrunk from 68% in 1970 to 6% of the world total last year.

Falling gold prices, a declining grade of ore and some of the world's deepest mines are all factors that have constrained gold firms' profits.

In part because of strikes, gold production last year fell by 12.4% to 167.2 tonnes – its lowest level in over a century – and cost the economy half a billion dollars.

But workers insist their dramatic pay demands are justified after a history of cheap black labour built the continent's most sophisticated economy.

Satawu strike
Meanwhile, a strike by South African Airways (SAA) technical staff affiliated to the South African Transport and Allied Workers' Union (Satawu) continued on Wednesday.
"We and the employers have not found each other on the matter relating to increases," Satawu general secretary Zenzo Mahlangu said.

The Commission for Conciliation, Mediation, and Arbitration informed him that it was once again willing to facilitate talks between the two sides.

"Both parties, however, have to consent to the process. So we need to wait and hear what the employer says ... I am hopeful that the talks will be held tomorrow [Thursday]," said Mahlangu.
SAA spokesperson Tlali Tlali said they were waiting for Satawu to come back to them.
"It is up to the trade union to consider the options at its disposal. Those options do not rule out a possibility of coming back to the table with a revised position," said Tlali.
Satawu has rejected the 6.5% SAA offered while Solidarity and the Aviation Union of South Africa (Ausa) have accepted the deal.

Tlali said the absence of Satawu's workers from duty had had minimal effect on the airline. He said other than a few delays, operations were running smoothly. Workers who had still not reported for duty would face pay cuts.

"Absolutely ... we are working on a no-work no-pay basis," said Tlali. Wednesday marked the 10th day of the strike.

Numsa strike
Workers in the automobile sector have been on strike for three weeks. Employers offered a 10% wage increase, which the union has rejected.

The seven major vehicle manufacturing plants affected by the strike are: BMW, Ford, General Motors, Mercedes-Benz, Nissan, Toyota, and Volkswagen.

National Union of Metalworkers of South Africa (Numsa) leaders held a special national executive committee meeting on Wednesday afternoon.

The union would report back soon on the outcome of the meeting, said Numsa spokesperson Castro Ngobese.

"We will issue a statement later today or early tomorrow [Thursday] morning," he said.
Meanwhile, a march by Numsa members in KwaZulu-Natal, scheduled to take place on Thursday, has been put on hold.

Around 5 000 workers were to have marched in Durban, said Numsa KwaZulu-Natal chairperson Basil Cele.

"Workers are hereby advised to go to their plants to receive a report on the outcomes of the special national executive committee," he said.

"The president of Numsa, comrade Cedric Gina, will be present to address and communicate the outcomes of the [meeting]," he said. – Sapa, AFP

Petrol attendant strike stretches into ninth day

The strike in the petrol and motor retail industry has continued into its ninth day after talks to resolve it collapsed.
The union has demanded a R30 an hour across the board increase by 2016. (Gallo)
National Union of Metalworkers of SA (Numsa) spokesperson Castro Ngobese said on Tuesday that negotiations with employers had yielded no results by Monday evening.
"The talks collapsed last night. The strike is continuing," he said.

Employers' organisation the Retail Motor Industry Organisation (RMI) chief executive Jakkie Olivier said no agreement was reached in the negotiations on Monday night.
The talks would not resume on Tuesday, he said.

The union has demanded a R30 an hour across the board increase by 2016 on actual rates of pay in all sectors, and divisions for workers earning above R6 000 a month.
Petrol attendants and car repair workers embarked on the nationwide strike last Monday.

A petrol attendant in New Germany, KwaZulu-Natal, was seriously injured on Tuesday morning in an altercation said to be related to the strike, paramedics said.

"The man, who is believed to have been working in plain clothes, is believed to have been involved in an altercation with an unknown party," ER24 spokesperson Vanessa Jackson said.
Eye witnesses said the assault could have been linked to the Numsa strike, she said.
The man was taken to hospital with a serious head injury.

Police could not immediately be reached for verification of the incident.
Numsa KwaZulu-Natal regional secretary Mbuso Ngubane said he could not comment on the New Germany assault, as he had not heard about it.

On Thursday he said the union had rejected a revised wage offer of 7.5%. Numsa has demanded a double-digit percentage increase. – Sapa

South Africa's economic growth slows to four-year low

Rene Vollgraaff, Amogelang Mbatha
South Africa's GDP growth has been only 0.7% in the third quarter of 2013, the slowest pace in more than four years.
Strikes in the automotive sector contributed to lower GDP growth in the third quarter of 2013. (Gallo)
South Africa’s economy, the biggest on the continent, grew at the slowest pace in more than four years in the third quarter as labour strikes weighed on output.

Gross domestic product rose an annualised 0.7% compared with a revised 3.2% in the three months through June, Statistics South Africa said in a report released in Johannesburg today. The median estimate of 19 economists in a Bloomberg survey was 1%.

Strikes by workers at carmakers in the third quarter curbed output from an industry that accounts for almost 10% of the economy.

The Reserve Bank last week cut its 2013 economic growth forecast to 1.9% from 2%, and kept the benchmark repurchase rate at the lowest level in more than three decades to help support consumer spending.

Sluggish growth
Growth has been sluggish "largely due to strike activity and its impact on manufacturing production," Johann Els, an economist at Old Mutual said before the data was released.

"We are not overly optimistic about a rebound in the fourth quarter’s GDP growth despite manufacturing production normalising after a disrupted third quarter."

Consumer and business confidence in Africa’s largest economy remained close to record-low levels in the fourth quarter.

While the economy is forecast to grow at the slowest pace since a 2009 recession this year, the Reserve Bank said there is no room for cutting interest rates as further rand weakness may fuel inflation.

The currency’s 16% slide this year against the dollar is the most of 16 major currencies tracked by Bloomberg. – Bloomberg

Turkcell regroups, goes after MTN in SA after US setback

Lisa Steyn
Communications and technology company seeks justice in South Africa.
Turkcell is seeking justice in a South African court after failng in the US. (AFP)
A change in the jurisdiction laws of the United States saw Turkcell, the communications and technology company, drop a case of alleged bribery and corruption against MTN — only to turn its attention to the South African courts, where this week it filed an action seeking $4.2-billion in damages.

The Turkish company was awarded Iran's first private global system for mobile communications (GSM) licence in 2004 but claimed it was unlawfully prevented from receiving the licence and then Iran entered into a licence agreement with the South African telecoms giant MTN.
"Information received by Turkcell indicates that our company's exclusion and the signing of the licence agreement with MTN was a consequence of MTN's illegal acts, including bribery and corruption, in 2004 and 2005," the company said in a recent statement.

Turkey's largest mobile phone company believed its case stood the best chance in the US courts and was banking on the Alien Tort Statute, which in effect allows foreign citizens to seek remedies in the US courts and states: "The [US] district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States."
However, this was typically interpreted for use in cases involving human rights violations committed outside the US and whether it could be applied to bribery was debated when Turkcell filed its original lawsuit.

No joy in the US
Although a judgment was never made on Turkcell's case, the outcome of another saw the Turkish company realise it would find no joy in the US.
A case before the US Supreme Court, which concerned a claim by Esther Kiobel and other Nigerians that Royal Dutch Shell Petroleum aided and abetted Nigerian government abuses in the 1990s, was brought under the statute but dismissed on April 17 this year.

"The ruling effectively blocks other lawsuits against foreign multinationals for human rights abuse that have occurred overseas from being brought in a US court," reported at the time.
In May, Turkcell withdrew its US lawsuit but this week filed another lawsuit in South Africa suing for the same amount.

In the summons, it estimates it lost out on an estimated $31.6-billion in revenue over 15 years had it established and operated a cellular network in Iran.

"A change in the jurisdiction laws of the United States resulted in Turkcell's withdrawal of its lawsuit without prejudice at that time and the company maintains its position regarding the merit of the case," Turkcell said.

Legal merit
"The filing of the lawsuit in South Africa is in continuation of the legal process that was initiated in US courts."

In a statement, the MTN group said that it had noted reports that Turkcell has refiled its lawsuit against MTN in the Johannesburg high court but could not say anything more as it had not received or viewed the court papers.

"Although we don't have details of the case, MTN continues to believe that there is no legal merit to Turkcell's claim," the group said.

Turkcell's claim to the US court was supported by sworn testimony from MTN's own director of Iran operations, Chris Kilowan, detailing MTN's corruption and bribery.
However, the MTN board commissioned Lord Hoffmann to lead an independent investigation of Turkcell's allegations and, in Feb­ruary this year, MTN reported the committee had determined that the allegations were without foundation.

Turkcell regroups, goes after MTN in SA after US setback

Lisa Steyn
Communications and technology company seeks justice in South Africa.
Turkcell is seeking justice in a South African court after failng in the US. (AFP)
A change in the jurisdiction laws of the United States saw Turkcell, the communications and technology company, drop a case of alleged bribery and corruption against MTN — only to turn its attention to the South African courts, where this week it filed an action seeking $4.2-billion in damages.

The Turkish company was awarded Iran's first private global system for mobile communications (GSM) licence in 2004 but claimed it was unlawfully prevented from receiving the licence and then Iran entered into a licence agreement with the South African telecoms giant MTN.
"Information received by Turkcell indicates that our company's exclusion and the signing of the licence agreement with MTN was a consequence of MTN's illegal acts, including bribery and corruption, in 2004 and 2005," the company said in a recent statement.

Turkey's largest mobile phone company believed its case stood the best chance in the US courts and was banking on the Alien Tort Statute, which in effect allows foreign citizens to seek remedies in the US courts and states: "The [US] district courts shall have original jurisdiction of any civil action by an alien for a tort only, committed in violation of the law of nations or a treaty of the United States."
However, this was typically interpreted for use in cases involving human rights violations committed outside the US and whether it could be applied to bribery was debated when Turkcell filed its original lawsuit.

No joy in the US
Although a judgment was never made on Turkcell's case, the outcome of another saw the Turkish company realise it would find no joy in the US.
A case before the US Supreme Court, which concerned a claim by Esther Kiobel and other Nigerians that Royal Dutch Shell Petroleum aided and abetted Nigerian government abuses in the 1990s, was brought under the statute but dismissed on April 17 this year.

"The ruling effectively blocks other lawsuits against foreign multinationals for human rights abuse that have occurred overseas from being brought in a US court," reported at the time.
In May, Turkcell withdrew its US lawsuit but this week filed another lawsuit in South Africa suing for the same amount.

In the summons, it estimates it lost out on an estimated $31.6-billion in revenue over 15 years had it established and operated a cellular network in Iran.

"A change in the jurisdiction laws of the United States resulted in Turkcell's withdrawal of its lawsuit without prejudice at that time and the company maintains its position regarding the merit of the case," Turkcell said.

Legal merit
"The filing of the lawsuit in South Africa is in continuation of the legal process that was initiated in US courts."

In a statement, the MTN group said that it had noted reports that Turkcell has refiled its lawsuit against MTN in the Johannesburg high court but could not say anything more as it had not received or viewed the court papers.

"Although we don't have details of the case, MTN continues to believe that there is no legal merit to Turkcell's claim," the group said.

Turkcell's claim to the US court was supported by sworn testimony from MTN's own director of Iran operations, Chris Kilowan, detailing MTN's corruption and bribery.
However, the MTN board commissioned Lord Hoffmann to lead an independent investigation of Turkcell's allegations and, in Feb­ruary this year, MTN reported the committee had determined that the allegations were without foundation.

South Africa’s poor performance in entrepreneurship events

Stephen Timm
Experts believe that South Africans have failed to come together to promote entrepreneurship on a national scale.
An entrepreneurship sub-committee on the Human Resources Development Council reports to Deputy President Kgalema Motlanthe. (Oupa Nkosi, M&G)
Earlier this month, between November 18 and 24, South Africa and 137 other countries took part in Global Entrepreneurship Week (GEW), an initiative aimed at getting more people to talk about entrepreneurship.

The initiative was started by US think-tank the Kaufmann Foundation in 2008 and last year more than 7.4-million people across the world took part in more than 19 600 workshops, competitions, seminars and exhibitions run by 7 609 organisations.

However, South Africa continues to have one of the most poorly attended GEWs in the world.
Although the number of participants in GEW events in the country peaked at 11 620 in 2011, last year 2 309 people attended 16 events and workshops hosted by 29 organisations.
This is far behind the 1.6-million participants that Brazil attracted last year, or even the 199 000 by the small island state of Barbados.

This year in South Africa, only a handful of organisations hosted events during the week, going on the number of events publicised on the official GEW website Notably missing were the names of large companies and that of the government’s small business organisation, the Small Enterprise Development Agency (Seda), whose staff had only taken part in events hosted by other institutions, Seda spokesman Marius de Villiers said.

In some cases a number of other organisations ran events during GEW that were not included on the GEW site or branded with the event’s logo — and in so doing minimised the impact the event could have had.

A campaign of this magnitude is necessary because far too few South Africans see being an entrepreneur as a viable career option.

Only 14% of Africans intend to start a business in the next three years, according to the 2012 Global Entrepreneurship Monitor (Gem) report — compared to 43% of Chileans, 36% of Brazilians, 20% of Chinese and 19% of Thais.

Media support
GEW is hosted locally by Endeavor South Africa, the sister organisation of Endeavor Brazil, which hosts the event in Brazil.

Managing director of Endeavor South Africa Catherine Townshend admitted that the event did not have the impact it could have had in South Africa, but she said the organisation was limited by its small budget, which is drawn from donations from its board members and a small fee that its member companies pay.

Townshend said support from corporates and the media is also not that forthcoming.
A number of years ago Endeavor South Africa’s former managing director, Malik Fal, complained that media groups did not want to devote space in their publications to cover entrepreneurship that week.

Fal said this month that Endeavor Brazil had been assisted by newspapers, which offered free space in their publications and television channels that offered free time, while designers and an advertising agency had pitched in free of charge.

In contrast, the media in South Africa gives the week little attention, he said.
Endeavor Brazil has already won four awards from the Kaufmann Foundation, including those for the best host country and those for the highest number of participants.

Since its launch in Brazil in 2008, the number of participants has catapulted from 466 000 to more than 1.6-million last year as well as from 168 to 553 partner organisations.

Last year in Brazil newspapers, websites and magazines carried 10.8-million reals (R48.4-million) worth of media coverage in Brazil during the week, according to Endeavor Brazil’s 2012 GEW impact report.

The report revealed that 80% of participants in Brazil were inspired to become an entrepreneur after attending events or workshops during the week, while about a fifth said they would start a new business.

No collaboration
Fal said the key difference between Brazil and South Africa is that there is more commitment from Brazil on the role that entrepreneurship can play in transforming society.
“South African society is very divided so there is not real sense of national unity,” said Fal, who added that organisations here are too self-centred or took the view that “this is not my problem or kind of thing”

Other national campaigns to promote entrepreneurship have never really had success.
A plan three years ago by the government’s former small business agency, Khula, to partner with Business Unity South Africa (Busa) to launch an entrepreneurship campaign with struggle stalwart Andrew Mlangeni as its patron, came to nought.

South Africans have even battled to work together to promote entrepreneurship on a local level —evident by the City of Cape Town’s struggle to get its Cape Town Activa initiative up and running.
The initiative is modelled on a similar one in Barcelona, Spain and aims to provide an ecosystem of support for the job seeker and the entrepreneur by helping to link those from the city with relevant organisations.

Earlier this month in a speech during GEW Zenariah Barends, the organisation’s programme manager, admitted that, two years later, it was difficult to get organisations to work together.
“Yes, there are collaborations between a few organisations, but it is widely acknowledged that for the most part, the organisations operate in isolation of each other, consciously implementing their particular mandate, their specific targets and less attention is paid to the need for collaboration on the ground,” she said.

Education initiatives
Even one of the country’s most sustained entrepreneurship programmes — courses run by Junior Achievement South Africa for school learners — has had limited success. The organisation has been active in South Africa for 33 years, yet despite this it reaches about 5 000 school learners a year.
Last year its figures were inflated by the addition of 14 000 learners who took part in a sponsored programme on environmental entrepreneurship — pushing the organisation’s reach to 19 441.

Managing director of Junior Achievement SA Linda McClure said because the organisation is a non-profit, its reach is limited by the amount available in funding. A big challenge, she said, is the quality of the education system, adding that it was often difficult to work with some schools that were near dysfunctional because of poor leadership.

Entrepreneurship is hardly taught in schools in South Africa. But Taddy Blecher, who chairs an entrepreneurship sub-committee on the Human Resources Development Council that reports to Deputy President Kgalema Motlanthe, pointed to a pilot being carried out by the International Labour Organisation and the department 0f basic education in 63 schools in the Free State to add entrepreneurship to grade 10 studies.

Primestars Marketing, which initiated the bring a girl child to work campaign, will together with the department also run a one-day start-up awards programme aimed at learners from disadvantaged communities.

Primestars Marketing’s Martin Sweet said a date for the day has not been set yet. Added to this, Seda, in partnership with the department, is also running an entrepreneurship in schools programme, which includes a business competition and is aimed at grade eight to 12 teachers and learners.

Enabling business environment
Blecher, a director of the Maharishi Institute, which helped set up the Branson Centre of Entrepreneurship in South Africa, said his sub-committee is working with the department of trade and industry on a number of initiatives to boost the small business sector.

He said that while South Africa had hundreds of entrepreneurship initiatives, what it lacks is integration and the ability to scale up some of these initiatives.

He surmised that GEW in South Africa had a limited impact because it was the time of the year when school learners and university students were writing exams.

“I’m certainly seeing that there are so many individuals — people who are passionate about getting it (entrepreneurship support) right,” said Blecher, who said the corporate sector had shown “amazing” support.

But Allon Raiz, chief executive of business support organisation Raizcorp, isn’t convinced that a mass entrepreneurship campaign is necessarily the way to go.

The risk, he said, is that such a mass campaign will attract too many of the wrong kinds of people — those without the requisite characteristics needed to start up and run their own business.
Too many will then start ordinary “me too” businesses with little to differentiate themselves from their competition.

When they fail to get funding they will simply blame the funders, creating unnecessary negative perceptions of funders, he said.

He said instead of trying to get more people to run their own business, the government should make it easier for entrepreneurs to flourish, by creating a more enabling business environment.

Giving a voice to small businesses

Small businesses could be helping to create tens of thousands of new jobs, but a highly concentrated economy, a poorly skilled workforce, stringent red tape, a high failure rate and a lack of an entrepreneurship culture are all stymying the sector’s performance, say experts.

Small and micro enterprises contribute between 27% and 34% of the country’s gross domestic product (GDP), according to the department of trade and industry’s Annual Review of Small Business 2006 to 2008.

This puts the sector’s contribution to the economy at about the same size as that of Malaysia (32%), but higher than both Chile and Brazil at 20% of GDP.

Yet, South African small businesses are faced with one of the highest failure rates in the world – as high as 70% fail in their first year, the Minister of Trade and Industry Rob Davies said in May.

In Brazil, figures in 2009 from the country’s small business support agency, Sebrae, show that just 24% of businesses closed after two years, while Organisation for Economic Co-operation and Development (OECD)’s 2009 data show that 50% of Dutch firms close after two years and 44% New Zealand firms.

The high failure rate may also explain why South Africa hasn’t been that successful in getting small businesses to drive job creation.

A research paper published in January by Andrew Kerr, Martin Wittenberg and Jairo Arrow for the Southern African Labour and Development Research Unit (Saldru), titled “Job Creation and Destruction in South Africa”, found that big firms create more net jobs in South Africa than small firms do, largely because of the high attrition rate of small businesses.

The authors found that in the period between 2005 and 2011 the category of smallest firms contributed about 75 000 jobs to yearly gross job creation, but around 110 000 jobs to yearly gross job destruction, a net loss of 35 000.

The largest firms contributed about 60 000 jobs to gross job creation on average a year, but only 37 000 to gross job destruction.

One reason why so many small firms fail may be that it’s difficult to operate in South Africa’s marketplace, which remains highly concentrated.

Small business researcher and policy analyst Septi Bukula of Osiba Research believes the concentrated nature of the South African economy is one of the biggest reasons why South Africa doesn’t have a stronger small business sector.

He said the economy is dominated by large companies, which made it very difficult for entrepreneurs to enter any business sector and also contributed to the low number of perceived business opportunities among South Africans, as revealed in the 2012 Gem report.

Only 35% of South Africans believe there are business opportunities in the country, compared to 52% in Brazil, 65% in Chile and 82% Nigeria.

Bukula believes protection from cheap imports in the form of subsidies for local companies and tariff barriers often protect large companies, with the result that these firms shift their attention to taking on small businesses, which are then often the victim of such competition.

What is needed was a combination of strong anti-competitive policies and stronger supply-chain linkages to promote a more open economy, he said.

Added to this Bukula said South Africa did not create the right incentives for its citizens to view entrepreneurship as a viable career option.

Malik Fal, the managing director of the Omidyar Network Africa, which promotes and funds high-impact entrepreneurs, said Omidyar’s Accelerating Entrepreneurship in Africa survey released in April reveals that South Africa’s small businesses are held back by three main challenges: business regulations, access to a skilled workforce and access to finance.

The report, which surveyed about 1 200 respondents in six African countries, also revealed that South African small businesses fared worse in these areas than those of other African countries.

Fal pointed out that the limited number of talented and skilled workers in South Africa means that small businesses often struggle to scale up.

He singled out one finding from the report, that 80% of South Africans find it difficult to source someone who can manage a small business.

Fal said that although the government had the best intentions to assist small businesses, all too often it introduced regulations that might be easy for big companies to adhere to, but which compounded the amount of red tape smaller firms are faced with.

Added to this, exemptions from regulations were often aimed more at micro firms than small businesses. He said the survey revealed that South Africa has one of the widest range of options for business owners when it comes to financing their business — everything from bank loans to venture capital — but that in many cases it remains difficult to obtain finance, particularly as many entrepreneurs don’t understand how to access it.

Government support for the sector has also had limited success, arguably because of the absence of clear and consistent statistics on the sector.

No one really knows how many small businesses the country has with estimates varying between two and six million, because unlike other emerging countries South Africa does not run a regular business census.

Without clear statistics noted Bukula, it was difficult for the government to develop good robust policy to support the small business sector.

Small business support
The government isn’t able to set concrete targets to assist the sector — for instance on areas such as the percentage of exports undertaken by small firms or the percentage of finance that banks are lending to small businesses — which Malaysia was able to do in their SME Masterplan, released last year.

The department of trade and industry has, however, been working on the idea of whether to hold a regular small business census — as is done in Malaysia and India — or a longitudinal study. However it is uncertain when the first such study or census will be held.

Yet with all the challenges the sector faces, one would think small businesses should be lobbying the government and policymakers for support – but instead the voice of small business is hardly heard.
Carl Lotter of the South Africa Small and Medium Enterprises Federation (Sasmef) — which he and others set up in 2011 to lobby for more small business support from the government and corporates — said small business representation is fractured and that there was no voice from the sector at policy level.

Most business chambers represent the voice of big business. Those few that exist are either small local business chambers with little impact on policy or turn out to be more like marketing associations.

Added to this a council of backroom advisors — the National Small Business Advisory Council — was set up in 2006 to advise the minister of trade and industry on small business.
The council has never released minutes of meetings and has been criticised by many in the sector as ineffective.

The small business sector could play an important part in creating the millions of jobs South Africa needs, but instead it remains hobbled by these and other numerous challenges, denying the country the chance to fight unemployment effectively.

This feature has been made possible by the Mail & Guardian’s advertisers. It was sourced independently by the M&G’s supplements editorial team

SA's tax ranking improves on back of e-filing

 Chantelle Benjamin
e-filing system and the abolishment of secondary tax on companies produce positive results.
Tax-paying ranking has improved over the past two years as a result of the success of the e-filing system. (Oupa Nkosi, M&G)

South Africa's tax-paying ranking has improved over the past two years as a result of the success of the e-filing system and the abolishment of secondary tax on companies.

Charles de Wet, a tax partner at PwC, said the improvement is owed largely to a reduction in the number of payments made by small and medium companies and the scrapping of secondary tax in favour of a dividends tax, levied on share­holders. These have helped to reduce the total tax rate.
A report by PwC, Paying Taxes 2014, looked into the tax regimes of 189 countries and found that, on average, small to medium businesses in South Africa make only seven tax payments during a financial year.

This is compared with the more cumbersome statistic of 36 tax payments a year recorded by the rest of the continent — and is a positive sign for a country looking to grow its small business sector.
De Wet said it is not likely that the number of payments will drop further; in fact, there will probably be more payments as the South African Revenue Service (Sars) has introduced new measures that are likely to increase the compliance burden on taxpayers.

"It's unlikely that we will see the number of tax payments improving further; if anything, we expect them to go up in the future," he said.

Experts are concerned
According to the report, South Africa saw a significant reduction in the total tax rate in 2012 — a broad measure of all business taxes — from 33.3% to 30.1%, which saw it placed 53rd out of more than 180 countries.

But tax experts who conducted the research, such as De Wet and PwC tax technical partner Kyle Mandy, are concerned about whether South Africa will be able to maintain these gains.
Mandy said that South Africa's improved ranking on tax payments, climbing from 32nd place to 11th in the study, is "largely due to the success of e-filing and the way in which returns are filed, as well as the reduction in the total tax rate. The ranking change is not the result of tax reform," he said.
Paul de Chalain of PwC South Africa said in the report that the trend, which had seen the time taken to comply with tax obligations decreasing steadily thanks to e-filing, could be eroded in the future because of a number of new measures introduced by Sars.

These include the introduction of a new corporate income tax return in 2013 with enhanced disclosure requirements; a supplementary income tax return whereby companies may be required to reconcile accounting profits, payroll taxes and indirect taxes; and "onerous" compliance requirements, along with a new dividends tax.

He also pointed to the withholding of tax on interest paid to nonresidents that is to be reduced in 2015, the reform of transfer pricing, as well as the renegotiation of tax treaties and the negotiation of bilateral and multilateral mutual assistance and exchange information agreements.

Pressure on tax revenues
"In addition, many corporates report a marked increase in Sars inquiry and audit activity," he said.
However, De Chalain said South Africa is not the only country to implement such measures in a bid to protect its tax base. It is an indication of the "pressure that tax revenues are under", he said.
De Wet said South Africa's overall tax rate of 30.1% compares favourably with the world average of 43% and Africa's 52.9%.

The fact that it takes 200 hours for a company to complete and file its tax return, against a global average of 268 hours, is impressive, he said.
The only other African countries that use electronic filing are Mauritius, Tunisia, Kenya, Rwanda, Madagascar and Uganda.

De Wet said corporate taxes are higher than the global average and that the government should consider increasing VAT, which, at 14%, is way below global rates, to reduce the taxes on companies.
"A  1% increase would mean an additional R15‑billion," he said

Homes at the heart of land reform

 Lisa Steyn
A pilot project paves the way for the transfer of title deeds to millions of residents.
Security at last: Elizabeth and Thomas Molobeng, with Nyakallo and Babalo in their homes in Tumahole. (Madelene Cronjé, M&G)
You may not know it, but a revolution began in the Free State's sleepy Ngwathe municipality on October 22 this year. And Likeleli Susan Molalogi, a pensioner living in the Tumahole settlement outside Parys, is one of the first participants.
She has lived in the area her whole life but moved from her family home to municipal land in 1982, where she built a shack.

With what she could spare from her income as a cashier at Shoprite, the single mother built a five-roomed house of brick and mortar, "little bit by little bit", over the years — despite never owning the property.

But, last month, that changed and Molalogi received the title deeds to the land she has called home for more than 30 years.

She is one of 100 people who recently received full property rights — 100 years after the 1913 Land Act was passed — through the Ngwathe Land Reform Project.

The Act prevented black South Africans from owning land, even in the so-called homelands, and the majority continue to live on government land under leasehold agreements.

Leasing under apartheid legislation

Under apartheid legislation, property, often in the townships, was leased for up to 99 years. Occupancy certificates that allow people to live on municipal land are also commonplace.
The households were part of a pilot property reform project, initiated by the Free Market Foundation in conjunction with First National Bank, which funded the first 100 title deeds, as well as the Law Review Project, Ernst & Young, the law firm Routledge Modise, the Ngwathe municipality and the Free State province.

The project aims to oversee the transfer of 30 000 property rights over the next few years and the Ngwathe municipality has resolved to become the first urban area in which all land will be privately held under full freehold title, which gives owners the full right to alter or trade their property as they wish.

Jeanette Mpondo, who handled the administration for the first 100 title deeds, said the prices for those properties varied widely from R30 000 for an empty stand up to R200 000 for an established formal house.

The Free Market Foundation's executive director, Leon Louw, said a lack of title deeds is not unusual in developing countries.

"The land which South Africans occupy but do not own is dead capital. You can't let it and you can't sell it," Louw said.

"Nationalising" the land
"We talk about land restitution being reformed and redistributed. [But] land is not being redistributed — it's being nationalised; it is being occupied by black people on government land. We are saying, give the land to people who are occupying it; let them own it."

Property rights are widely considered the key to economic security and wealth creation, and replicating the Ngwathe project could have a significant impact on the country.
But exactly how many black South Africans have established homes on land they do not own is not known.

"No one has any idea," Louw said. "It seems as if there are informed people making informed guesses that there are between five- and 10-million pieces of land and households that exist … Redistributing 10 000 white commercial lands into black hands will have no material effect. [Projects such as Ngwathe] will make a true difference."

Converting local government land to freehold ownership will also widen the tax base as paying rates and taxes comes with owning a property.

The foundation approached the Ngwathe council in 2011 to help it to convert its land to full ownership, to which the municipality agreed.

Property rights
The project aimed to get property rights extended to wide range of properties, from shacks to formal houses, including RDP housing, in a bid to do away with pre-emptive clauses that prevented owners from selling their RDP properties for the first eight years of occupancy.

Even among those living in Ngwathe, there is a belief that title deeds could be wasted on some who will rack up loans against their property or sell it and squander the money.

But according to Louw, one effect of land ownership is that the deed holders tend to invest in their property.

"In Brazil [where property rights were extended to those living in one informal settlement], people started going home with a bottle of paint instead of a bottle of brandy."

And in Ngwathe property owners are already planning upgrades. Although she is in her 60s, the house-proud Molalogi is preoccupied with extending her house.

"Still, in front here, I am not finished," she said, referring to the cement slabs lying outside the house, which will become part of a lounge. She shudders at the thought of taking out a loan against her property and selling is simply not an option.

From shack to brick house
"No, I can't," she said. "It's my life. Money is not your life. Money is just money. What about my family? Where will they live?"

Elizabeth and Thomas Molobeng also recently became the official owners of their house in Tumahole, where they first set up a shack in 1990.

Over the years it has been transformed into a three-bedroomed brick house. They are already planning alterations, such as a wall and paving around the property as well as a double garage, even though they do not have a car.

"We also want to tile the roof," Elizabeth said, pointing to the rusted corrugated iron roof that has been in use since the 1970s and came from Thomas's parents' house.
Most of all, the Molobengs are satisfied to know they have the title deeds.
"I know this is my own," Elizabeth said, her hand on her chest.

Creating wealth by helping people
With the recent death of their daugh­ter, they are also the caretakers of two young children, Babalo, who is six, and Nyakallo, who is seven months old.

Thomas seemed open to the idea of taking out a loan against the house should the need arise.
According to Marius Marais, head of affordable housing at FNB, the bank's intention is to create wealth by helping people to use their properties as security.

"These homeowners now have a key asset that they can use when approaching banks. We truly believe that home ownership is key to wealth creation and economic empowerment. It is only through tradeable title deeds that these homeowners can reap the benefits of legally owning and occupying their homes," Marais said.

Molalogi and the Molobengs are some of the more fortunate applicants. It took almost three years to get the first 100 done and the 500 outstanding cases have encountered a number of hurdles. In law, the process is very complicated and costly. Legally, it's a nightmare, Louw said.

"But that is what South Africa faces. It is a monstrous undertaking, but we can't say apartheid is over until the job is done."

Getting around red tape
Hein Duvenhage, a conveyancer at Glover & Associates, the transferring attorneys that took on the transfer of 92 of the title deeds, said that, of all those outstanding, only 25% can continue without complications.

To help other municipalities to roll out a similar initiative, Duven­hage compiled a guide for the foundation, which details what red tape can be expected and how to get around it.
Critically, the local authority must be willing to give up its land in order to implement the conversion from leasehold to freehold.

"As far as we know, there is a lot of ambivalence about this," Louw said. "Mostly councils don't want to lose control — if you control where people live, you control people."

Tribal land presents a similar if not more difficult challenge. "That kind of problem with the occupancy certificates would be a problem, which is much more prevalent in rural areas," Kerwin Lebone, a researcher at the Institute of Race Relations, said.

"In our opinion, [the institute] felt the government was pandering to traditional chiefs, which is an important constituency for them."

Lebone said traditional chiefs hold land in trust and will not give it up easily. But, he said, the government has made large strides to reverse land disempowerment.

After 1994, for example, it sold four-bedroomed council houses in Soweto to the occupants for a total discounted amount of R3-billion when the accumulated value was estimated to be R24-billion.
But the problem of property rights has manifested itself even when it comes to new buildings: an estimated 48% of three million RDP houses had not been registered or transferred into the recipients' names by the end of 2010.

Land reform 101

From its experience in converting 100 properties to full freehold title in the Ngwathe Land Reform Project, conveyancers Glover and Associates have compiled a "how-to manual" for local governments wanting to convert land under their control.

Established townships have varying title deed conditions. But importantly, land earmarked for conversion to freehold title needs to be properly planned and surveyed, a challenge considering that informal settlements have often not been subject to such a process.

According to Andres Sepp, the acting registrar of deeds at the office of the chief registrar of deeds, the state must have the property surveyed and take up a registered state title deed, and can then transfer it as it wishes.

Kerwin Lebone, a researcher at the South African Institute for Race Relations, said there have been cases of engineers refusing to certify land that was not safe even though people had settled on it, such as on a flood line.

In such a cases, the manual says residents should be relocated, as soon as resources permit, to properties where they can obtain full title.

The most prevalent challenge is arrears rent, rates and other municipal charges, dating back to the rent boycotts of the 1970s.

The municipality is prohibited from simply writing off the debt. So, in the case of the Ngwathe project, the amounts owed were instead delinked from the land and converted into civil debt, to which the transferees agreed. This enabled the council to issue the rates clearance certificates required for the transfer.

The transactions are also exempt from transfer duty, but this requires a certificate from the South African Revenue Service and the matter is complicated when transferees are not registered for income tax.

Dispute resolution is also integral as there may be various claimants. In the case of a deceased occupant leaving the property to their family, there is also uncertainty about whether to register the property as individually or jointly owned.

Cheated clients to nail construction firms

 Thalia Holmes
A total of 15 construction companies found guilty of collusion by the competition authorities.
FNB Stadium was one of the projects where evidence of collusion was shown. (Oupa Nkosi, M&G)
The City of Cape Town and the South African National Roads Agency (Sanral) could be the first claimants to wage battle against the 15 construction companies found guilty of collusion by the competition authorities in June this year.
This week the Competition Trib­un­al issued the first four certificates to be used in civil claims against the companies that admitted to rigging bids in large construction projects, including the stadiums built for the 2010 soccer World Cup.

Cape Town received the certificates, which outline the tribunal's findings against — and the admission of liability of — the construction companies Aveng, Stefanutti Stocks and Wilson Bayly Holmes-Ovcon (WBHO), the Competition Comm­ission confirmed on Wed­nesday.

Meanwhile, the tribunal is preparing another 35 certificates at the behest of Sanral, which will claim damages from companies that inflated road-building tenders around 2006. Sun International said that it would also consider legal action.

"Certainly, as a principle, if there were evidence that collusion had taken place, we would consider and explore taking legal recourse," said Michael Farr, group general manager of brands and communications at Sun International.

The commission said it had also received inquiries from other organisations.

Calculation a "complicated procedure"
Sanral spokesperson Vusi Mona said that the roads agency had not yet determined the total cost of the claims to be made. To calculate them was a "complicated procedure" that was being carried out by its engineers and lawyers, he said.

The collusion affected a wide range of clients, including municipalities, state-owned companies and mining corporations.

They include the cities of Johannesburg and Cape Town, Volks­wagen, the National Ports Authority, Sasko, Sasol, PPC, Anglo American Platinum, De Beers, Xstrata, Sie­mens, Lonmin, Airports Com­pany South Africa, Nampak, Sun Inter­national, Mozal, Impala Platinum, Skorpion, Gold Fields, Mondi, Sappi, Toyota, Unilever, the East Rand Water Care Company and the University of Cape Town.

Trudi Makhaya, deputy commissioner of the commission, said that companies affected by the collusion could pursue two possible avenues.

Firstly, a client could institute a civil claim. A successful plaintiff would be "compensated for harm caused by anticompetitive conduct", she said.

The total cost of the tenders implicated in the collusion is R47-billion.

Pursuing criminal charges
Claimants would be required to determine the amount to which collusion affected their individual projects and file for damages accordingly.

The second option, said Makhaya, would be to pursue criminal charges.
"In these cases, crime would be characterised as corruption or fraud. The person is prosecuted in their individual capacity."

The trade union federation Cosatu is taking this line, calling for the decision-makers responsible to be jailed rather than fined.

The union opened a criminal case against the companies with the Hawks this week.
"We are not claiming money but demanding that they be sent to prison," the Cosatu Gauteng provincial secretary Dumisani Dakile said.

Cosatu to press charges
Cosatu will be pressing charges against all 15 companies.
However, even the most determined of victims will find it difficult to litigate against Group Five, one of the major players implicated in the scandal.

The listed company, which has a market capitalisation of R4.48-billion, won leniency on 25 projects by being the first among those faulted to volunteer information.
It now refuses to acknowledge liability formally. But the commission remains determined to see Group Five face punishment.

"If no settlement is reached, the commission will prosecute Group Five for projects which it has been implicated in by other firms," it said last week.

First African microfinance week to be held in Arusha next month

African Microfinance Transparency (AMT)
Tanzania will be hosting the first African microfinance week scheduled for next month in Arusha Region, organisers have said.

According to African Microfinance Transparency (AMT), one of the organisers, the forum slated for December 2nd to 6 will bring various stakeholders including members of Tanzania Microfinance Institutions (TAMFI), ministers, economists and high ranking officials.

The association said in a statement that the conference will be a good opportunity to reflect on the development of the sector as well as exchange information on microfinance practices in Africa.

According to the statement the theme for the event will be: “Regulation of the African Microfinance Sector: 20 Years on From a Practitioner’s Perspective.”

The African regional microfinance network associations comprises three major groups namely African microfinance network (AFMIN), AMT and Microfinance African Institutions network (MAIN) with the support of Appui Au Development Autonome (ADA-Luxemborg). This exciting project aims at becoming the pinnacle of annual African microfinance events organized by practitioners for practitioners.

High profile experts, researchers, specialists and practitioners will be selected to prepare papers on the general theme and proposed sub themes.
A scientific committee and experts group have been put in place to review and select the proposals.

Initially, the African Microfinance Week was conceived as a way to improve synergies between the regional networks and further increase efficiency of actions and resources by reducing the number of separate events that shared members must attend over the course of the year.

The latter half of the year is always busy in terms of the number of events organised within the microfinance sector around the globe and microfinance actors are heavily burdened with travel and time spent away from their institutions.
The regional African networks share a large number of members for whom they each organise an annual meeting of members.  

Government pledges 300 million in aid to aspiring water development managers

Prof Jumanne Maghembe, Water Minister
The government has pledged 300m/- per year to cover the fees for students who failed to secure sponsorships at Water Development and Management Institute (WDMI).

The effort is geared towards generating many graduates who will conduct research and provide consultancy services for integrated development and management of water resources in the country.

Speaking at the 5th graduation ceremony held in Dar es Salaam at the weekend, Water Minister Prof Jumanne Maghembe said funding for the students will start in the 2013/2014 financial year.

Prof Magembe also said that starting this year, the government will establish a fund which will be added to the ministry’s budget so as to ensure that more than 300 students benefit per year.

He promised that he would collaborate with the WDMI to ensure that students who study at the institute receive quality education.

“The ministry will be sure to collaborate with the WDMI so that students who are not selected for sponsorship get the funds to acquire water development and management studies at the institute,” he said.

He added: “The government will always monitor the institute to ensure that students pursuing their studies there receive quality education so they can later stimulate our country’s economic growth.”

The Don asked the WDMI to use qualified professionals who have completed their studies to conduct research in the water sector so as to identify the problems and be able to rectify them.

For his part, WDMI Board Chairman told the minister that about 144 students graduated in diploma in various courses.

“Our vision is to be centre of excellence for providing technical education and training, conducting research and providing consultancy services for integrated development and management of water resources in Africa,” he said.

Formerly known as Water Resources Institute (WRI), WDMI was established in 1974 as a unit in the Ministry of Water and Energy to meet the needs of middle-level water technicians under the former National massive 20-years Rural Water Supply Programme (1971-1991).

In 1980 the name of the Institute was changed to Rwegarulila Water Resources Institute (RWRI).

The aim of Water Development and Management Institute is to develop and provide expertise required in the water sector through training, consultancy, and research under the policy guidelines of the Ministry of Water.

RWRI invite all prospective students from Tanzania, East Africa, Nile Riparian Countries, SADC countries, other countries in Africa and beyond to apply for admission to studies (long- and short-term) in any of the fields and educational level shown in this prospectus.  

DHL and Engen announce major African retail partnership

DHL Express
DHL Express, the world’s leading international express services provider and Engen, Africa’s leading multinational fuel retailer and provider of convenience services, have signed a retail partnership, in a bid to provide customers with better access to global express services.

A consumer looking to send documents or parcels overseas can simply walk into an Engen service station to send their shipment, ensuring greater convenience and accessibility to the powerful global network which DHL offers. This includes all domestic and international shipments to major centres across over 220 countries and territories worldwide.

A statement issued in Dar es Salaam yesterday said the project, which will pilot at four Engen service stations in the Namibian capital Windhoek, will then be rolled out in phases.

Botswana, Ghana, the Democratic Republic of Congo, Kenya and Tanzania are earmarked for the second phase, it added.

Consumers will also be able to take advantage of DHL’s new product offering, Express Easy, at the Engen outlets. Express Easy provides an easy way to send documents or parcels, as consumers can choose an envelope or one of seven box sizes and enjoy a fixed price for that size, rather than paying a rate based on the weight of the parcel.

Consumers are simply able to pick their box, pay the fixed rate and send their document or parcel to any of DHL’s global destinations.

Sumesh Rahavendra, Head of Marketing for DHL Express Sub-Saharan Africa, welcoming the news, said that it would have a great impact on consumers across the continent.

“The express logistics industry, and specifically retail services for consumers and small and medium enterprises, are becoming hugely important in Africa.

For us to give better service for this market and open up global opportunities for students, small business owners and general consumers, we needed to both increase access to our express products but, simultaneously, make it easier and more affordable to use them.

Engen is therefore an obvious partner for us – they are not only a solid African business but have an extensive retail network across the continent, which can benefit consumers. ”

“As one of Africa’s leading energy companies, we consistently look for ways to deliver on our brand promise of ‘With us you are Number One’,” said Nangula Hamunyela, Managing Director of Engen in Namibia. “Partnering with DHL means that we can extend our capabilities and give our valued customers the access and affordability around express services that they need.”

The Namibian pilot includes four sites – Jan Jonker, Bonsmara, Eureka and Klingenberg.  

2,000 slums to be transformed into classy, affordable housing projects

UN Habitat
More than 2,000 slum dwellers countrywide will be uplifted through development of bankable projects that promote affordable housing for low income earners by the year 2015.

According to the Tanzania Financial Services for Underserved Settlements (TAFSUS), the overall project value of USD3.58m is aimed at slums and settlements upgrading.

The decision was taken following the commitment of the government to formally recognise informal settlements and pledge to support the upgrading of such areas leading to better human settlements in the country.

TAFSUS is supported by the Slum Upgrading Facility (SUF) of UN Habitat; it aims to uplift the living standards of slum dwellers through the development of bankable projects that promote affordable housing for low- income household.

A statement issued to this paper on Tuesday said SUF operates under the premise that informal settlements can be upgraded successfully when the existing settlement dwellers are involved in the planning and designing of upgrading projects.

Further, it said TAFSUS is to work with various local actors to make informal settlements upgrading projects “bankable” – that is, attractive to retail banks, property developers, housing finance institutions, service providers, micro-finance institutions, and utility companies.

TAFSUS is designed to offer technical support for upgrading projects development and credit enhancement, most commonly in the form of guarantees to support housing and infrastructure improvement for the poor.

It seeks to finance projects with a combination of community savings, central and local government subsidies, and local domestic commercial bank lending.

Similar SUF projects are being piloted in Ghana, Indonesia and Sri Lanka, where various approaches are being tested to support the purpose of financing upgrading of underserved settlements using domestic commercial finance.

The work of TAFSUS fits under the Cluster II of NSGRP8 –the improvement of quality of life and social well being in particular goal number 4 and five which emphasize on increasing access to affordable clean and safe water; sanitation and hygiene and develop decent human settlement while sustaining environmental quality.

The organisation’s work is to contribute to the financing of NSGRP II mainly by capitalising the public private partnerships, particularly in the provision of social services through credit enhancement.

TAFSUS grew from the work of the Slum Upgrading Facility that has had a presence in Tanzania since 2004, with a mission of developing innovative financial mechanisms for slums and settlements upgrading projects.

Opening the international conference on growing housing opportunities in Africa held in Dar es Salaam last year, the deputy Minister for Lands, Housing and Human Settlements, Goodluck ole Medeye was quoted as saying the government has started to review all restrictive laws for land to enable more people access it and build low cost houses.

He said the government intends to do away with all cumbersome procedures facing wananchi so as to acquire land or own houses.

According to him, establishment of Tanzania Mortgage Refinance Company (TMRC) is a clear example that people would access loans from commercial banks for the building of low cost houses.

He said Tanzania is committed to unlock housing problems which face many people in urban and rural areas.

He urged investors to consider investing in low cost houses to enable more people own and repay the loans within a short period of time. 

Banks fail to recover 40 pct of loans given to individuals

Bank of Tanzania (BoT)
Almost 40 percent of all loans extended to various individuals by commercial banks in past years have not been recovered due to lack of reliable information of defaulters, a renowned debt collection expert has said.

Speaking to The Guardian over the phone yesterday, Joseph Mambia said most of the loan takers don’t exist, died or have shifted from their original areas, making it difficult for commercial banks to recover their outstanding debts.

“We have been collecting debts on behalf of various commercial banks in Tanzania, the major challenge we’re facing is lack of reliable data of borrowers,” he said.
Mambia who is the Managing Director of Harvest Tanzania said there are some dishonest borrowers who did not provide actual information, making it difficult for the banks to recover their money.

He urged the government to engage locals in the newly established Credit Reference Bureau (CRB) which would help trace information of various borrowers.

“We all understand that the CRB has started operation, it could be much better if we are included in the bureau because we understand our country much better than foreigners,” he stated.

He also cautioned banks and financial institutions which have launched crackdown on loan defaulters to conduct the campaign more carefully as it might put them at a bigger risk.

Nowadays, there is an increasing number of banks demanding that loan defaulting customers, especially former employees, repay the money borrowed some years back.
“These banks have been using various ways to get back the borrowed money from their customers,” he said.

One of the most common methods used is the announcement of account holders and their pictures on various media, particularly newspapers.

“This is not a recommendable method, since the law does not allow them to do so. Also, there is danger that the banks will be at risk of losing since they might not have detailed information regarding the loan defaulters,” he said.
He urged commercial banks intending to recover their loaned money to employ debt collectors instead.

Financial experts say, once it becomes operational, the bureau would alleviate or minimize the problem of unpaid loans for a long time.

It is expected that the CRB which is under Bank of Tanzania (BoT) would support commercial banks to establish whether debtors are creditworthy, a move that is also expected to curb loan defaulting. 

Tanexa to govt: Formulate export policy

Tanzania Exporters Association (Tanexa)
The Tanzania Exporters Association (Tanexa) has called on the government to come up with an export policy that would enable them conduct their businesses more independently.

Speaking to this paper in an interview on Wednesday, the association Chairman, Isaac Dallushi, said lack of an export policy has hindered their development.

“We urge the government through Ministry of Industry and Trade to come up with an export policy that would enable us do our business more smoothly,” he said.

He said the current export strategy which was established in 1993 is outdated and needs major overhaul so that it can benefit all parties.

“Instead of insisting on export strategy, let us come up with complete export policy which would help transform the industry and its stakeholders,” he added.
Dallushi said, recently, the association convened a meeting and invited the Minister for Industry and Trade Dr Abdallah Kigoda whom they informed about various developments.

He said the meeting also passed an interim two year strategy 2013-2015 which would help fast track industry’s development.

Further, the meeting agreed to register the association under the Business Registration and Licensing Agency (Brela) instead of the Ministry of Home Affairs.
“We started the process to register our association under Brela, the move will make us become more business oriented rather than ordinary organisation,” he stated.

Two years ago, the association conducted a study in different regions on problems encountered by exporters of agricultural goods.

According to the study, most exporters were not satisfied with the entire process of obtaining permits because it takes a long time and heavy cost.

Opening the workshop for Tanexa last year, the Chief Agricultural Officer from the Ministry of Agriculture, Food, Security and Cooperatives, Adah Mwasha, said the government is determined to take corrective measures to ensure that exporting within the East African Community and the Southern African Development Community is affordable and fast.

“The government is eager to increase exports so as to boost foreign exchange, so it is striving to take some corrective measures to ensure that exporting within the regions is affordable and fast,” she said.

She, however, said that export permits were issued basically to ensure food self-sufficiency for the people in the country and to protect domestic food processing industries so that exports were of value-added products.

Mwasha said the importance of issuing export permits could not be overemphasized as it was necessary to ensure that they were not prohibitive in the export process.

There have been several measures taken by the government to eliminate non-tariff barriers, such as efforts to improve the business environment and adopting EAC/SADC mechanism for reporting. 

Zanzibar tourism development partners hunt for Gulf market

Grassroots Traveller
Development partners of tourism sector in Zanzibar are discussing new ways to control and utilise effectively the market in the Gulf region.

The initiative is aimed at curbing the drop in number of tourists from the European region.

Hafsa Mbamba, the founder and Managing Director of Grassroots Traveller, is leading the development partners in long journey to exploit the huge potential market in the Gulf.

The development partners convened the first international forum in Zanzibar that brought together government officials and other stakeholders in the sector.

Among the developing partners were Grassroots Traveller, Prospective Learning and Chartable Company, Jahazi Festivals, Zanzibar for Tourist Investors, Recovery Community Zanzibar, Fermanders Tours and Safari, Zato, Kawa Training Centre, Sustainable East Africa and Inaya Zanzibar firm.

Hafsa Mbamba said the secret behind the initiative was to promote Zanzibar to become sustainable touristic destination in the whole seasons.

She said the initiative would create awareness to government and the public on the future of Zanzibar as a sustainable tourism destination.

The move is also aimed at sensitizing tourism stakeholders to make changes in the sector, for it is the backbone of Zanzibar’s economy.

Speaking during the forum, representative of the Zanzibar Commission of Tourism Ilyas Nassor admitted that the number of visits from Europe to Zanzibar was falling tremendously.

He also pointed that there was potential tourism market for Zanzibar in the Gulf region.  

Employment crucial for successful people living with HIV/AIDS

Dr counsels a HIV patient
It has been revealed that people living with HIV who are employed are almost 40 per cent more likely to stick to HIV treatment than those without a job.

According to a new International Labour Organisation (ILO)’s study released yesterday ahead of World AIDS Day, and made available to the Guardian, the impact of employment on HIV treatment adherence analyses the findings of 23 studies on the relationship between employment and HIV treatment, and covers more than 6,500 people living with HIV.

The analysis was supplemented by a series of surveys and telephone interviews carried out by the ILO.

The study found evidence that people living with HIV maintain treatment more successfully when they have a job than when they do not. This is mainly because they have regular financial means to pay for related health services, medications and support, and to afford sufficient food.

“While access to treatment has increased dramatically in recent years, ensuring that people living with HIV are able to keep to treatment regimens remains a challenge. It is clear from the report that employment, and the role of the workplace more broadly, are vital to meeting the goal of treatment for 15 million people living with HIV by 2015,” said Alice Ou√©draogo, Chief of ILO AIDS.

The impact of unemployment
The report includes findings from low, middle and high-income countries in Africa, Asia and North America. It found that unemployment, particularly in low and middle-income countries, affects people’s ability to afford treatment, which can lead to interruptions, low viral suppression and ultimately treatment failure.

Joblessness may also result in depression, and in behaviours and situations that have been shown to be factors in non-adherence, including low self-care, substance abuse and homelessness. In some cases it could lead to criminal activity that results in imprisonment.

Women are more likely to have access to anti-retroviral therapy (ART) in most regions of the world, especially those areas with high HIV prevalence. As a result treatment adherence is stronger overall for females.

However, employment is a key factor in helping men keep to treatment regimens as they experience better financial and food security and may have access to ART services at their workplace.

People living with HIV who are in informal work tend to experience difficulties keeping to treatment regimens. A woman living with HIV interviewed for the study said: “Workers in the informal sector or in small and medium size companies with no insurance or health policy are less likely to adhere to ART because the salary is not high enough or is paid on an irregular basis.”

In certain countries such as the USA, where safety nets are in place to provide people living with HIV with access to a disability grant, the impact of unemployment on treatment adherence is less severe.

But stigma was found to affect those with jobs, with some people not revealing their HIV status because of fear of stigmatization and therefore not accessing ART, while others miss doses because they are concerned colleagues will see them taking treatment at work.

Ensuring more people have access to treatment
Currently, only 34 per cent of the more than 28 million people who are eligible for treatment in low and middle-income countries are accessing it, according to the latest figures from the World Health Organization. Furthermore, UNAIDS estimates that around half of all people living with HIV globally do not know their status, and therefore are not accessing treatment.

The ILO and UNAIDS have combined efforts to increase the number of workers who know their HIV status and can access HIV treatment if needed, through a voluntary counselling and testing at work (VCT@WORK) initiative.

The partnership aims to reach five million working women and men with voluntary and confidential HIV counselling and testing by 2015, and ensure that people who test positive are referred to HIV services for care, support and treatment if needed.

Progress has been made: 1.6 million people started HIV treatment for the first time in 2012 – the highest figure ever recorded for a single year.

Helping those with HIV maintain anti-retroviral therapy
The report makes several specific recommendations to help improve ART adherence, including: prioritizing actions that promote the economic independence of people living with HIV.

Improving national efforts to develop new anti-discrimination policies and enforcing existing anti-discrimination laws in the workplace.
Offering direct incentives to keep up ART, including food distribution and economic incentives.

Expanding opening hours of health facilities offering ART to ensure wider access.
The adoption of measures by employers to provide flexibility for people living with HIV who may need to change their work arrangements. This includes time off to visit health facilities to receive medication and support to help adhere to treatment.

Strengthening of health systems by Governments, including the provision of training and retention measures to benefit health workers and ensure sustainability of treatment delivery.

Ensuring that social protection schemes are sensitive to the needs of people living with HIV and provide them with the necessary support to remain on treatment.  

Soda ash plant in Lake Natron gets major blow

Lake Natron
The proposed soda ash mining project at Lake Natron has suffered another major setback after a new scientific study shows that such an activity would “almost certainly” wipe out the Lesser Flamingo population. 

The study also shows that 90 per cent of the lake is an important habitat for the survival of flamingo.  Lesser Flamingos also breed occasionally when conditions are right and this is difficult to predict and monitor.

Conducted over the last eight months on behalf of the Tanzania's National Development Corporation, the study reveals that the breeding hotspots are to the north, eastern and southern lagoons of the lake. 

Unfortunately, the “resource” that NDC proposes to mine sits squarely over these hotspots. “After hatching, the chicks, accompanied by adults, criss-cross the lake in search of fresh water, which is available from the many springs that dot the lake fringes.

“Access to fresh water is critical because this removes excess soda from the feathers, which would otherwise cause death,” says Marc Baker of Ecological Initiatives in Arusha last week.  The study was accomplished by using , among other things, low-flying drone helicopter.

Lake Natron in northern Tanzania is the most important breeding site for Lesser Flamingos in the world.  Eastern Africa has between 1.5 and  2.5 million Lesser Flamingos --  representing 75 per cent of the global population -- and most of them are hatched at Lake Natron. 

Since 2006, the Government of Tanzania has maintained a keen interest in mining soda ash at Lake Natron.  However, local communities and  environmental lobby groups in Tanzania and beyond have cautioned against the move, citing serious environmental, ecological and socio-economic impacts.

 BirdLife International, the Lake Natron Consultative Group and the Royal Society for the Protection of Birds have led a campaign against the proposal.  Tata Chemical Industries of India which initially put forward the soda ash proposal withdrew in 2008.

A recent economic study showed soda ash mining would lead to economic losses of up to $492 million in 50 years while tourism and livelihoods support would provide benefits of up to $1.57 billion.

Lebaraka Laizer, a local resident of Lake Natron said: “The authorities have refused to listen to the voice of local communities, who object to soda ash mining.”
 “We rejected it because it will damage tourism and pastoralism which are our lifeline. It should not be allowed,” he added.

The new study further shows that earlier plans to mine soda ash using brine (concentrated salty water) is not workable since the lake comprises of a set of separate lagoons.

“Excavating the hard material during the dry season poses a serious challenge because it is difficult to tell when flamingos will breed,” Marc argues.

“Evidence has now converged … economic studies have shown soda ash mining is not a viable option. Ecology, hydrology and technical considerations now confirm the same,” said Ken Mwathe, Policy and Advocacy Programme Coordinator at BirdLife International.

“The Government of Tanzania should respect this evidence and drop soda ash mining,” he cautions.

In January this year, the media reported that six foreign firms placed bids to set up the controversial soda ash plant on the shores of Tanzania’s Lake Natron.

According to the National Development Corporation (NDC), the firms were seeking to set up the $500m factory to exploit a million metric tonnes of soda ash annually. Lake Natron and Engaruka areas, nearly 220km from Arusha, have reserves of at least 4.7 billion cubic litres of soda ash.

Lake Natron is the nesting ground for one-third of the world’s Lesser Flamingo population. It lies on the western side of the Serengeti ecosystem and has for years been proposed as a site for soda ash mining.

The plan was initially rejected on environmental grounds, but it has since resurfaced.