Many entrepreneurs approach our firm, a specialist firm on assisting entrepreneurs entering Africa, to assist them in obtaining their big dreams in Africa. They all have eagerly wagging tails and eyes that glow like a wild buck in a spotlight. However, sometimes we feel like the evil dream dashers when we find an opportunity of a lifetime to be nothing more than an opportunity to shorten your lifetime.
A key fact to remember is that large corporate companies are attacking Africa like wild dogs with rabies, they are setting up shops and offices quicker than what we can comprehend.Who can blame them? With Europe’s head in the toilet and the US avoiding the enema that has to come Africa with an Annual GDP per Capita rumoured to be higher than that of India and a fast emerging middle class in excess of 400 Million has opportunities a plenty for the astute business man. However gone are the days of buying a product at your local store and selling at twice the price in Africa, at least as a sustainable business.
Yes we have clients making so much money from their African operation that buckets are too small for them to use, they had to switch over to the proverbial shovel and wheelbarrow system. However many fail and do so on a spectacular scale. Why then? Ignorance, greed and unwillingness? People believe Africa’s citizenship to be uneducated idiots walking around with pockets full of cash and that Africa is a cheap market to do business in. The truth cannot be more removed from this piece of fiction. Africa’s people are becoming more and more sophisticated daily and flights, accommodation etc is everything but cheap. Africa wants products and services that add value to their businesses and lives at reasonable rates and there are opposition companies in virtually every African country you go to. Greed or quick buck syndrome is also a big business killer with many entrepreneurs entering the market thinking they can go into a country make a fortune and retire in short space of time by selling at ridiculously high margins or acquiring assets, like land, at cheap rates. No true cost of delivery, market study or cost of developing the asset is taken into consideration. In Mozambique farmers flocked to large tracks of land that was virtually free, but they never looked at the massive lack of resources, spares and so forth . Normal business logic still prevails you have to tackle the pain before you can gain anything in business. You need to develop a business plan and make sure your facts are correct. You must be willing to commit to the country you work in and be willing to spend a lot of ”school fees”, time and sweat in learning how to do business the African way.
Business opportunities in Africa are in abundance, solid business strategies will be rewarded, it is truly that land of milk and money. That said, milk can go sour quickly if not taken care of in the proper way and honey can be sticky even if held in vast amounts. When obtaining advise it tends to more prudent to ask what not to do in Africa than on what to do in Africa. Also choose your partners wisely before that glow in your eye is in fact the light held to you by a hunter.
Wednesday, November 2, 2011
Monday, October 31, 2011
Regret - ETA one day to late
My household is one in a constant battle for time. Time to sit down and relax, time to spend together and the last couple of weeks time to cook a plate of food during the week. I am sure that my family is not the only one bogged down by life and its crazy calendar. However this article is not aimed to be about me, just to bring into context the huge enjoyment when I for the first time in ages was able to watch Carte Blanche. What I saw was, in one simple term, WOW?
Story number two was about yet another pyramid scheme, no it was not run from spectacular offices in Sandton, but rather a small Karoo town Grahamstown. When one conjures mental pictures of this little town, or any small town for that matter, the last thing one expects is a master conman that was able to, allegedly, defraud pensioners, the disabled and widows out of R 60 Million. One is more likely to have mental pictures of dorper sheep happily grazing, no traffic jams and banks without long boring ques. But the truth is life has again achieved in giving us a solid jolt in our system.
I recently read an Afrikaans article by a colleague of mine “Spyt kom altyd te laat” (Regret always comes to late), and in viewing this Carte Blanche expose I clearly saw what was meant by this article and our nation’s ability to be gullible on a scale that one expects in fantasy novels. Why is it that we as a people trust glossy brochures, flashy vehicle’s and big houses blindly? Why is it that we are more than happy to part with our hard earned money on a simple meeting with a friendly face? Why do we never conduct due diligence's? Last question: Why are we totally utterly shocked when we lost our money, when our investment strategy characteristics have more in common with a gambling bug than sound investing?
I think it is actually a simple thing that motivates us. We read about people like Bill Gates, The Facebook dude, Steve Jobs (Apple) and our own Mark Shuttleworth. These are all people that have become sinfully rich in what is perceived to be an incredibly short time. What do all of these people have in common? They are innovators! They were 10 steps ahead of the curve and saw a future that most of us did not even imagine, the innovative thinking created them a stupendous amount of wealth. In contrast most of us are not innovators, we are mere mortals. Our desire is merely that life would throw us an opportunity, we merely want in. We would be more than happy to have just put R 10,000 in the initial Microsoft Shares and to just GET IN.
Therefore we get extremely excited when a “clever and passionate” entrepreneur arrives at our normal homes offering us an In. We get blinded by massive profits, success stories and being the envy of our friends earning massive dividends from no work effort at all.
I am not advocating pessimism, please do not misunderstand me, but I am advocating logic. Both in this new scheme and the Sharemax debacle one very logical question was clearly not asked. How can you develop property and afford to make monthly interest payments. How can you build something, expenses only and still have an income to pay investors? Sanity should always prevail.
The other item that was shocking to me was that the simplest of deed searches showed that the brochure lied, the brochure stated that the property was owned by Amatenda, the deed search showed differently. So the second question should be, why do we never ask for external advice. Is it because we fear the result? Is it because we regard the marketer sitting in our lounge as an advisor? For a simple R 2000-00 a decent investigator could have done a deed search and found that the whole Amatenda document was a scam, would you not rather “loose” R 2,000-00 or face financial destruction and emotional epidurals.
In conclusion and the words of Gareth Cliff. “No one wants a job, most people hate their jobs. We just want the money”. We sometimes act like sheep calmly walking to an abattoir of financial slaughter, just because we do not want to insult the promoter of a scheme. No true, honest business man minds having a due diligence done on them, so the one that you insult by asking the questions should be the one you should run from.
Story number two was about yet another pyramid scheme, no it was not run from spectacular offices in Sandton, but rather a small Karoo town Grahamstown. When one conjures mental pictures of this little town, or any small town for that matter, the last thing one expects is a master conman that was able to, allegedly, defraud pensioners, the disabled and widows out of R 60 Million. One is more likely to have mental pictures of dorper sheep happily grazing, no traffic jams and banks without long boring ques. But the truth is life has again achieved in giving us a solid jolt in our system.
I recently read an Afrikaans article by a colleague of mine “Spyt kom altyd te laat” (Regret always comes to late), and in viewing this Carte Blanche expose I clearly saw what was meant by this article and our nation’s ability to be gullible on a scale that one expects in fantasy novels. Why is it that we as a people trust glossy brochures, flashy vehicle’s and big houses blindly? Why is it that we are more than happy to part with our hard earned money on a simple meeting with a friendly face? Why do we never conduct due diligence's? Last question: Why are we totally utterly shocked when we lost our money, when our investment strategy characteristics have more in common with a gambling bug than sound investing?
I think it is actually a simple thing that motivates us. We read about people like Bill Gates, The Facebook dude, Steve Jobs (Apple) and our own Mark Shuttleworth. These are all people that have become sinfully rich in what is perceived to be an incredibly short time. What do all of these people have in common? They are innovators! They were 10 steps ahead of the curve and saw a future that most of us did not even imagine, the innovative thinking created them a stupendous amount of wealth. In contrast most of us are not innovators, we are mere mortals. Our desire is merely that life would throw us an opportunity, we merely want in. We would be more than happy to have just put R 10,000 in the initial Microsoft Shares and to just GET IN.
Therefore we get extremely excited when a “clever and passionate” entrepreneur arrives at our normal homes offering us an In. We get blinded by massive profits, success stories and being the envy of our friends earning massive dividends from no work effort at all.
I am not advocating pessimism, please do not misunderstand me, but I am advocating logic. Both in this new scheme and the Sharemax debacle one very logical question was clearly not asked. How can you develop property and afford to make monthly interest payments. How can you build something, expenses only and still have an income to pay investors? Sanity should always prevail.
The other item that was shocking to me was that the simplest of deed searches showed that the brochure lied, the brochure stated that the property was owned by Amatenda, the deed search showed differently. So the second question should be, why do we never ask for external advice. Is it because we fear the result? Is it because we regard the marketer sitting in our lounge as an advisor? For a simple R 2000-00 a decent investigator could have done a deed search and found that the whole Amatenda document was a scam, would you not rather “loose” R 2,000-00 or face financial destruction and emotional epidurals.
In conclusion and the words of Gareth Cliff. “No one wants a job, most people hate their jobs. We just want the money”. We sometimes act like sheep calmly walking to an abattoir of financial slaughter, just because we do not want to insult the promoter of a scheme. No true, honest business man minds having a due diligence done on them, so the one that you insult by asking the questions should be the one you should run from.
Monday, October 24, 2011
How confident are our professionals
PPS, a South African insurer focused on the graduate and post graduate market recently released their confidence survey conducted with about 3000 of their members. This survey is aimed at showing the levels of confidence that graduate professionals, ie. Doctors, Lawyers, Accountants and Engineers have in South Africa and its economy.
84% remain confident about staying/living in South Africa. According to this report the successful hosting of the world cup, the sovereign debt crisis in Europe and the massive skills shortage in SA are the massive contributors.
In contrast 56% of graduate professionals are confident about SA's economic outlook over the next 12months, down from 64%. Also down from 64% to 56% is the confidence in the local equities market. With only 59% believing that the Rand will strengthen over the next 12 months against other major currencies.
There is also a clear indication that professionals do not believe the worst of South Africa's economic times are over with only 45% of respondents believing the worst has hit us and 71% believing a double dip is on the way.
Government's ability to address unemployment is also a major concern with only 29% of professionals believing that it has the capacity to bring change in this important facet of our economy.
The massive hurdles in the SA economy are Crime, Health care and Education, and here professionals are clearly not very confident.On health services sentiment under graduates was low with only 46% believing that health service provision will be better under the NHS system. Only 45% believe crime rates will drop over the next five years and 48% expected better education levels over the next 5 years. The very interesting statistic that came across as that 89% of the top earners in SA are worried about the sharp escalation in costs of education.
In conclusion. One can extract that there is optimism about South Africa, its people and the private sector's ability to grow under tough circumstances, however the ability of government to address critical issues in our economy does not bolster much confidence.
84% remain confident about staying/living in South Africa. According to this report the successful hosting of the world cup, the sovereign debt crisis in Europe and the massive skills shortage in SA are the massive contributors.
In contrast 56% of graduate professionals are confident about SA's economic outlook over the next 12months, down from 64%. Also down from 64% to 56% is the confidence in the local equities market. With only 59% believing that the Rand will strengthen over the next 12 months against other major currencies.
There is also a clear indication that professionals do not believe the worst of South Africa's economic times are over with only 45% of respondents believing the worst has hit us and 71% believing a double dip is on the way.
Government's ability to address unemployment is also a major concern with only 29% of professionals believing that it has the capacity to bring change in this important facet of our economy.
The massive hurdles in the SA economy are Crime, Health care and Education, and here professionals are clearly not very confident.On health services sentiment under graduates was low with only 46% believing that health service provision will be better under the NHS system. Only 45% believe crime rates will drop over the next five years and 48% expected better education levels over the next 5 years. The very interesting statistic that came across as that 89% of the top earners in SA are worried about the sharp escalation in costs of education.
In conclusion. One can extract that there is optimism about South Africa, its people and the private sector's ability to grow under tough circumstances, however the ability of government to address critical issues in our economy does not bolster much confidence.
Wednesday, September 28, 2011
Today we great a giant good bye - Oom Willem Nel
It is with great sorrow, unbelievable pain and an excruciating sore heart that I and the world great a true icon.
"Oom Willem" was not only a role model, icon and a personal hero to me but more importantly he was Father figure.
"Oom Willem" you will be missed! We will always carry and cherish YOU in our hearts and remember you for the person you truly were. You are with your Father now and we thank and honour him for the opportunity to have been part of Your life.
Rest in utter and total peace, you deserve it !!!
With Love,
John Fogwell
"Oom Willem" was not only a role model, icon and a personal hero to me but more importantly he was Father figure.
"Oom Willem" you will be missed! We will always carry and cherish YOU in our hearts and remember you for the person you truly were. You are with your Father now and we thank and honour him for the opportunity to have been part of Your life.
Rest in utter and total peace, you deserve it !!!
With Love,
John Fogwell
Monday, January 10, 2011
Saturday, December 25, 2010
Necessary "Evil"
In an article posted in the New Age Newspaper on the 14th of December 2010 unions are purported to seek a total ban on Labour Brokers in South Africa and that the demands are building in strength and momentum. So much so it has been dubbed “The Mother of all Battles”. The method to be used by the Unions is the demand for Section 189 of the Labour Relations Act to be repealed. This section directly deals with temporary employment. Although one does have empathy for the plight of the Unions, in the article they specifically mention Labour Broker’s unwillingness to do salary deductions for unions, and the so-called extorted workers one has to review the impact that such critical changes will have in the job creation front.
One has to understand that life has to occur in balance. Once the one side of the scale is packed to heavy life responds by acting “aggressively” to balance the scale. A typical example of how life and people in South Africa has responded to heavy handed government intervention is in the illegal cigarette market which, at least according to British American Tobacco’s advertising campaign, is spiraling out of control and has suddenly become the largest funder of other more violent and “less profitable” crimes like robbery, gun running and drugs. Is the assumption that this is like a gateway crime.
We cannot at all be surprised by the growth of this “market segment”, as approximately 50% of cigarette turnover (not profit) is passed on to government in the form of exorbitant sin taxes. These excessive taxes make it virtually impossible for competitors to enter into the market with cheaper alternatives, without breaking the law. Therefore heavy handed government involvement has created an economy conducive to trading, smuggling and selling illegal cigarettes whilst protecting and building a monopoly state in this R 25 Billion per annum industry.
Indulging me to use the above as an example, one has to ponder if such over protectionism in the labour market will have a positive or negative effect and what the direct effect will be on job creation. All our major job creation industries are currently shedding jobs at a massive scale. In Novembers figures an approximate 18,000 jobs was shed in the formal industry(Banking and Manufacturing the largest culprits). However agency work or labour brokering (governed by Section 189) has been creating jobs at a rate of 5%+ per annum. Is this not already a sign that an over regulated environment is creating opportunities for business men in South Africa? Is it not proof that additional regulation may, as in the cigarette industry, cause a form of illegal labour operations? Before you laugh out loud, be prudent in considering the fact that the Mafia controlled US Cities and even states, due to the ”ownership” of unions.
It cannot be ignored that about 7% of South Africa’s workforce is currently employed in the Labour Brokering environment and that this amount is only set to grow, if left to operate. However if this industry is going to be declared illegal would the Private Sector, in reality, absorb these employees? What would business to do repair the scales of balance? Another point that is prudent to investigate is true and honest temporary employment. If Project Management, the agricultural industry or contract based businesses are not going to be allowed to align their staffing strategy with their actual demands, which by default varies from time to time, it may very well cause these industries immense damage and, at least in my mind, cause these industries to seek alternatives to employing people. Items like mechanization, automation and technology deployment would become the leading factor in business success and not staff deployment and training. This does not show a rosy picture for the blue collar worker the union is so set to protect, or at least protect salary deductions from.
In conclusion, it should be considered whether the “evil” of labour brokering is not a “necessary evil” to stimulate our economy’s most dire demand, job creation. Maybe better and focused regulation of temporary workers and labour brokers would be a more viable option. Maybe more emphasis on training and social investment by these firms may protect our economy from the short term damage of job losses, whilst encouraging future growth for our unemployment figures.
One has to understand that life has to occur in balance. Once the one side of the scale is packed to heavy life responds by acting “aggressively” to balance the scale. A typical example of how life and people in South Africa has responded to heavy handed government intervention is in the illegal cigarette market which, at least according to British American Tobacco’s advertising campaign, is spiraling out of control and has suddenly become the largest funder of other more violent and “less profitable” crimes like robbery, gun running and drugs. Is the assumption that this is like a gateway crime.
We cannot at all be surprised by the growth of this “market segment”, as approximately 50% of cigarette turnover (not profit) is passed on to government in the form of exorbitant sin taxes. These excessive taxes make it virtually impossible for competitors to enter into the market with cheaper alternatives, without breaking the law. Therefore heavy handed government involvement has created an economy conducive to trading, smuggling and selling illegal cigarettes whilst protecting and building a monopoly state in this R 25 Billion per annum industry.
Indulging me to use the above as an example, one has to ponder if such over protectionism in the labour market will have a positive or negative effect and what the direct effect will be on job creation. All our major job creation industries are currently shedding jobs at a massive scale. In Novembers figures an approximate 18,000 jobs was shed in the formal industry(Banking and Manufacturing the largest culprits). However agency work or labour brokering (governed by Section 189) has been creating jobs at a rate of 5%+ per annum. Is this not already a sign that an over regulated environment is creating opportunities for business men in South Africa? Is it not proof that additional regulation may, as in the cigarette industry, cause a form of illegal labour operations? Before you laugh out loud, be prudent in considering the fact that the Mafia controlled US Cities and even states, due to the ”ownership” of unions.
It cannot be ignored that about 7% of South Africa’s workforce is currently employed in the Labour Brokering environment and that this amount is only set to grow, if left to operate. However if this industry is going to be declared illegal would the Private Sector, in reality, absorb these employees? What would business to do repair the scales of balance? Another point that is prudent to investigate is true and honest temporary employment. If Project Management, the agricultural industry or contract based businesses are not going to be allowed to align their staffing strategy with their actual demands, which by default varies from time to time, it may very well cause these industries immense damage and, at least in my mind, cause these industries to seek alternatives to employing people. Items like mechanization, automation and technology deployment would become the leading factor in business success and not staff deployment and training. This does not show a rosy picture for the blue collar worker the union is so set to protect, or at least protect salary deductions from.
In conclusion, it should be considered whether the “evil” of labour brokering is not a “necessary evil” to stimulate our economy’s most dire demand, job creation. Maybe better and focused regulation of temporary workers and labour brokers would be a more viable option. Maybe more emphasis on training and social investment by these firms may protect our economy from the short term damage of job losses, whilst encouraging future growth for our unemployment figures.
Tuesday, July 13, 2010
My sincere condolences to Uganda and its people
I would like to extent my sincere condeliences and best wishes to all people affected by the bomb blasts in Kampala.
May we soon live in a world with humanity, honour and compassion where outrageous acts like these do not have any place in the world anymore.
My thoughts and prayers are with all those that have lost family and friends and may prayer is that the peacefull and loving nature of the Ugandan people remain intact as an example to the rest of the world.
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