A collection of clips, scripted for the finweek: Money Matters show which airs on CNBC Africa (DStv channel 410).
South Africa is in a challenging position, with low growth hovering around 2%-2.5% when it should be 5% and above. Exports are very important. If the economy is going to grow, there needs to be an increase in local trade, export trade and support for infrastructure, says Greg Nosworthy, head of Euler Hermes South Africa.
Treasury’s forecasts have downgraded significantly, from 4.5% in 2010 to the current level of 2%-2.5%, says Nazmeera Moola, economist and strategist at Investec Asset Management.
The country’s biggest problem is the lack of export earnings, explains Moola. Import expenditure exceeds export earnings. The bulk of GDP is generated by the services sector, not from exports, which has resulted in the current account deficit, she says. More exports are needed to reduce the deficit, says Ludovic Subran, chief economist at Euler Hermes.
There has been a downward trend in export prices since mid-2013, says Moola. Prices have come down by 40% in total. The collapse in oil prices offered some benefit, however this highlights that there is a problem with the items being exported.
The country has been exporting commodities for the past 50 years. In 1964, SA mainly exported farming goods. By 1994 this changed to commodities like gold, platinum and iron ore. Not enough manufactured goods are exported and this is due to the energy crisis. There is limited electricity supply for manufacturing plants, explains Moola. Electricity intensity in the manufacturing sector is down 30%.
Comparing SA to other African countries, Nigeria’s economy has evolved from a soft commodity exports like crude and petroleum in 1962, to purely oil in 2012. Kenya has a more diversified economy. Besides commodities, it exports manufactured goods like clothing and cleaning materials, says Moola.
Other diversified economies like Ethiopia, Zambia and Mozambique are faring well. Given the commodity bust, countries built on commodities like Angola and Nigeria are having a hard time, with less investment and infrastructure spend, says Subran.
SA is a mixed case. It is a diversified economy, but commodities are a big market mover for GDP. There is potential for services and manufacturing sectors to contribute more to GDP, says Subran.
It’s quite a massive investment but they’re cutting the middle man and they’re making huge labour opportunity for thousands of individuals.
There should be more investment in the manufacturing sector. “You have commodities, you have the people who work, you need to industrialise the country,” says Subran. There needs to be a “game changer”. SA has the skills and commodities to develop entire industries downstream, this will equip the middle class through the “rebirth” of the manufacturing sector, he explains. This means developing the extraction and refining processes. “Why export to China to reimport to South Africa?”
This year Indonesia banned the export of raw nickel to China. The refining will take place in Indonesia and then materials will be exported. “It’s quite a massive investment but they’re cutting the middle man and they’re making huge labour opportunity for thousands of individuals,” says Subran. He admits this is not easy and private investment is necessary.
Countries move too fast from a commodity-based economy to a service-based economy. This only works in small countries where there are fewer people to feed and employ. Industrial revolutions are major job providers and they structure the private sector, says Subran.
Ways to Move SA Forward
Ralph Mupita, CEO of Old Mutual Emerging Markets highlights three options to take to move the SA forward.
1. Convert the trust deficit in the country to a trust surplus.
“South Africa is a very unequal society,” says Mupita. The trust deficit emanates from inequality. Government, businesses and the labour sector should engage to solve the problem by promoting minimum wage and improving productivity levels. SA is the fifth-most unequal society in the world, according to the Taylor Commission Report. Moola says that the high inequality does not mean that there has been no progress in alleviating poverty. There have been improvements in education, health and living standards.
2. Implementation of the NDP
“It is not a perfect plan, but no plan ever is,” says Mupita. It is still capable of creating economic growth, dealing with challenges of unemployment and inequality to achieve the 2030 goals. Aspects of the NDP that should be prioritised include resolving the energy crisis, which calls for investment by the private sector. The model in China should be adopted where power generation is handled by the private sector and distribution is handled by the public sector.
Says Subran: “The electricity problems need to be solved stat, it could be a massive disincentive for future investors.” The infrastructure deficit should also be addressed. The private sector should invest long-term capital projects that generate returns to overcome growth challenges.
Mupita says: “Private sector investment will alleviate government’s burden to try and fund everything.”
Lastly, the education system should of good quality and be affordable for accessibility. More people should graduate from the school system with the right skills relevant for the future, which will be digital- and technology-based, says Mupita.
Adds Moola: “If we don’t solve education, we will not solve the other problems that we want to.”
3. Play a meaningful role in the economic integration in the rest of the continent
Intra-Africa trade is lower than it should be and SA needs to play an active role in the effective integration in the SADC region. East Africa’s integration works best in terms of regional business integration. However there is not enough economic interdependency in SADC, says Mupita.
SA is isolated form other markets, which is why it needs to engage with neighbouring countries, and ultimately expand trade across the continent, says Moola.
Subran adds that a lot can happen out of SA, it can be used a springboard to develop the rest of the continent, in turn fostering development in the country too.
This article was featured on Finweek.com
Despite slow economic growth in South Africa and reduced contributions from investment markets due to lower performance, emerging markets in Africa offer growth potential for the insurance industry. This is seen as more European insurers gravitate towards the continent, says Victor Muguto, Long term insurance leader PwC South Africa.
Rapid urbanisation across Africa at 4% per annum means there will be larger cities and infrastructure that call for more insurable assets and more insurable lives, says Muguto. The African insurance market accounts for 2% of the world’s market; Africa’s share of the life market is 1.9% and the non-life market is 1.1%. Africa’s premium contribution is US$72bn out of the world’s US$2tr.
Growth in Africa’s industry over the past few years was heavily reliant on the life insurance market. The life market is significantly bigger than the non-life market. “There is a lot more potential for non-life growth to be a lot more significant than the life market,” says Muguto. Premiums in Africa recorded for 2013 come to US$50bn for the life market and US$22bn for the non-life market.
South Africa’s life market is a major contributor to the continent’s levels. About US$54bn of premiums come from South Africa out of Africa’s US$72bn, says Muguto. Nigeria lags behind South Africa with a contribution of US$1.86bn despite it having the largest population in Africa. Kenya follows closely with a contribution of US$1.5bn.
Considering the level of premiums as a percentage of GDP, South Africa spends about 15.4% of GDP on insurance, indicating a “mature market”, says Muguto. South Africa is ranked second in the world in terms of insurance penetration, where developed markets have 12% of premiums account for GDP, he explains. Nigeria only contributes 0.6%, an immature market despite its economic strength and population size.
Regulators in African countries need to do more to educate citizens and change insurance culture. Most of insurance cover is offshore. Local retention should be encouraged, says Muguto. Economies need to be growing at 6% per annum in conjunction with development and economic stability, to ensure insurance growth for the future.
Long-term insurance sector
South Africa’s growth opportunities are dwindling with instability in the market attributed to labour disputes (in the mining sector) and high energy costs and power shortages, currency fluctuation and urban tolls amongst other reasons.
Investment markets remain volatile, says Dewald van den Berg, Insurance Technical Director at PwC South Africa. “Insurers had to deal with currency fluctuations and the rand depreciating,” he says. The bond market was volatile but discount rates didn’t really change year on year. “They [insurers] had to manage through all of that volatility.”
Considering investment markets, the JSE All Share Index closed 7.6% higher than in 2013. Long term insurers benefitted “quite handsomely” in that the average JSE level was 17% higher than in 2013, says van den Berg. The JSE All Bond Index produced a yield of 10%. “It’s not been too bad a year”. Results of long term insurers are “quite heavily geared” towards investment markets says van den Berg. Combined invested assets for long-term insurers grew by 10.4% from R1.77tr in 2013 to R1.95tr, according to the PwC report.
Insurers are also adjusting to changing regulations, such as Solvency Assessment Management (SAM), Retail Distribution Review (RDR), Protection of Personal Information act (POPI), Treating Customers Fairly (TCF) and binders and outsourcing arrangements.
Looking at the top five players in the long-term insurance market: Discovery, Liberty, MMI, Old Mutual and Sanlam, the combined group IFRS earnings came to R28.4bn. This is 17% higher than in 2013. These long-term insurers have consistently produced an average return on equity of 20%.
Return on average equity was at 21%. This follows a stable return over the last three years, with 20% in 2012 and 21% in 2013, says van den Berg. Value of new businesses grew by 12% as expected margins dropped from 3.1% to 2.9% in 2014. “There has been pretty strong growth in new business values,” says van den Berg.
The reasons for the reduced margins are attributed to the tough recurring premium business market, explains van den Berg. “The pressure on consumer disposable income value plays a role. There was also more single premium business in the past year, which has fairly low margins.”
Consistently insurers saw a positive mortality experience. “People are living longer than expected. A lot has to do with the effect of anti-retroviral treatment the government has rolled out. It has had a positive impact,” says van den Berg. In the past, insurers had higher margins to cover the risk of mortality to AIDS, he explains.
There was a R2.4bn gain in mortality. This means insurers paid out R2.4bn less than they expected in mortality claims. “It’s quite a significant change,” says van den Berg. Expenses saw a loss of R168m. By capitalising on the gain, there is a lot of profitability in reduced mortality in the future he says.
Insurers are looking at keeping customers for longer periods of time. In the case of Discovery, which charges age-rated premiums, it is important to keep policy holders because premiums increase over time and there are profits in years to come, says van den Berg. Insurers are focussing on giving value to customers. Insurers are focussing on providing fit-for-purpose products for clients while still striking a balance between doing what’s right for clients and what’s right for the business.
Short-term insurance sector:
Results of short-term insurers Mutual and Federal, OUTsurance, Santam and Zurich were collected. Short-term insurers experienced a difficult year in 2013, but there was strong performance by companies in 2014, says van den Berg.
The return on average equity was at 25%, this is an improvement from 16% in 2012 and 18% in 2013 due to reduced losses from catastrophe events, explains van den Berg. The only major catastrophe event recorded for 2014 was the earthquake in the Gauteng area, according to the PwC report.
As a result, the companies claims ratio has reduced by 5.2% from 68% to 63%. IFRS earnings increased by 23% to R3.1bn in 2014. Gross written premiums were up by 11% as insurers implemented selective rate increases. Margins rose by 3% over the past two years, from 4.6% in 2012 to 7.6% in 2014.
The sum of acquisition costs, expenses and claims as a percentage of earned premiums improved from 95% in 2013 to 92% in 2014. Insurers are looking for growth opportunities outside of South Africa. OUTsurance’s business in Australia Youi saw growth of 66% and the company was expanded to New Zealand.
Long-term life insurance is not a significant part of Africa’s business yet, says van den Berg. However the Value of New Business has increased by 7% since 2013.
According to the report, opportunities for insurers are greater in the rest of Africa than in developed markets and South Africa, given the higher investment returns and insurance margins. Relatively stable democracies, improved governance and economic growth make countries like Nigeria and Kenya attractive investment destinations. Sub-Saharan Africa has predicted GDP growth rates between 5-7%.
Trends enhancing growth include:
By 2050, Africa is expected to have an urban population of 56%. Africa will account for 24% of the world’s population. About 400m Africans will have migrated from rural areas to cities, with two in three people being urbanised. Initially those urbanising will move to informal settlements with the threat of communicable diseases due to poor water and sanitary infrastructure. As a result there will be increased infrastructure development programmes in East and West Africa, responding to growing demands for services in urban areas. This will lead to insurance growth in the continent due to increased insurable assets.
Demographic and social change
The emerging African middle class population will grow from 15m to 40m by 2030. Their increased spending power will impact the demand for insurance and savings products. Healthcare providers will need to increase services in terms of range and location, creating opportunities for health and insurance products. Africa however has high unemployment rates. Estimated youth unemployment is twice that of adults. However the fast economic growth may close the gap. With that, demand for life insurance and investment products like retirement savings may increase. The tech-savvy generation will create opportunities for quicker distribution channels for the industry.
Shifts in global economic power
Infrastructure development will make doing business in Africa easier. Only 30% of the African population has access to electricity. Economies are limited by the poor electricity supply. Infrastructure investment will be US$180bn by 2025. Economic growth is linked to industrialisation.
Climate change and resource scarcity
Natural resources have been the main source of economic growth. Africa holds one-third of global mine reserves, one-tenth of global oil reserves and produces two-thirds of the world’s diamonds. The falling oil price has impacted GDP growth negatively by 1%, GDP growth for 2015 will be 4%, this is the lowest since 1990. Non-oil sectors like construction and retail may step in to drive economic growth according to the IMF. Africa’s dependence on natural resources presents opportunities and challenges for insurers and investors. The impact of climate change, urbanisation and infrastructure development will increase greenhouse gas emissions. This will increase the chances of natural disasters and insurers may have to adapt products and services to respond to these risks.
Technology will impact future insurance distribution. About 70% of Africa’s population have mobile subscriptions. Insurers’ ability to customize previously generic insurance products for clients’ needs and to engage with them on a more personal level will help insurers grow.
Government policies, the legal and regulatory environment
Political and legal factors impact the insurance industry. Political risk constrains investment. Insurers need to overcome the difficulty of doing business in Africa. The World Bank’s rankings for ease of doing business show that 60 of the lowest ranked countries are in Africa. Financial service regulations have to be improved. Insurers may have to partner with existing local partners to overcome difficult business environments
This article was featured in Finweek magazine.
“The centre of gravity is shifting towards the developing world. The brightest spot on the economic map is Africa, and particularly Sub-Saharan Africa,” says Herman Warren, network director of the Economist Corporate Network Africa.
The 2015 African Business Outlook Survey, of over 200 executives, conducted by The Economist Corporate Network (ECN) shows that of the 20 fastest growing economies, nine of them are from Africa. The high growth in these markets is attracting foreign investment. In 2013 Foreign Direct Investment (FDI) flows rose to 4% or US$57bn, according to the ECN report.
The survey collected insight of country and regional business performance, explains Warren. The “critical mass” of respondents came from South Africa, Kenya, Nigeria and Angola. These markets make up the bulk of the Sub-Saharan Africa GDP, according to Warren.
By 2020, Nigeria will rise to economic prominence, and South Africa will decline even more, followed closely by Kenya which is growing at a faster rate than South Africa, says Warren. However, he says South Africa remains an important market.
Currently Sub-Saharan Africa generates 1.4% of global GDP, by 2019 this level will be at 4.5%, indicating rapid growth says Warren. This level is greater than the 4.3% average of Asia’s region.
In 2014, about 60% of respondents reported that more than 40% of revenue came from Africa. By 2020 most firms expect an increase in Africa’s source revenue. Currently, 18% of the respondents believe that Africa will source less than 5% of global revenue. By 2020 only 4% of respondents expect this to be true, indicating more optimism among multi-national companies becoming more prevalent in the region, according to the report.
From a market growth perspective, JJ van Dongen, CEO of Philips Africa says Africa’s GDP growth accelerates faster. Businesses should lay a foundation for growth in local markets. He suggests businesses and governments work together and discuss ways to harness opportunities. Philips has identified business opportunities in health and lifestyle for example. Ross McLean, President of Dow Sub-Saharan Africa says the science and technology company is focussed on bringing solutions and knowledge to African markets.
Robust growth in sales is expected from East, West and Southern African regions, says Warren. There is more optimism for investment in these regions than in North and Central Africa.
Investments in North and Central Africa will either stay the same or be reduced. About 55% of executives plan to increase investment in Southern Africa.
Garth Klintworth, head of trading at Absa Capital says infrastructure development in the East, West and Southern African regions are in the pipeline, although businesses are “bullish” about the continent as a whole. He says Kenya is one of the main economic drivers and a gateway for growth.
Operational challenges in the regions include corruption, bureaucracy, infrastructure deficits, the regulatory and legal environment, skills and the personal safety of local employees. The top rated challenge in East, West and Central Africa was corruption. In Southern Africa, five respondents ranked bureaucracy and skills shortages as the top challenge. Van Dongen adds that the regulatory and bureaucracy is not supportive of business and “hampers” the expansion of business opportunities.
Some of the risks executives identified for doing business in the continent include safety concerns. This is linked to crime in South Africa, the Boko Haram attacks in Nigeria and violent and geopolitical conflicts in Kenya, according to the report. However, McLean says there is great interest in Nigeria, despite the challenges the country faces. “The growth potential is great in Nigeria,” he says.
Poor infrastructure is another risk. According to the World Bank, Africa’s infrastructure deficits require US$93bn annually, this poses a drag on economic growth. Also, executives are challenged in finding suitable talent and keeping skilled employees.
Profitability in the region is broadly impacted by economic growth, says Warren. Other factors include technology adoption, the emerging middle class of consumers and FDI, according to the report. On the flipside, Warren says profitability is negatively impacted by political unrest, corruption, crime and labour costs. About 71% of executives indicated that corruption was their biggest concern.
McLean says standardised programmes need to be rolled out for businesses to comply with and due diligence processes must be conducted for anti-corruption. He adds that code of conducts should be placed and adhered to.
Local markets are growing in importance. Van Dongen suggests local teams be set up to research markets and develop relevant business models and innovations to meet needs. “We need key solutions that are African and scale it globally,” he says. McLean agrees in saying that businesses should take local solutions globally. It is important to raise local entrepreneurship to meet local needs of the African consumer. He adds that businesses need to bring in technology innovations relevant to fulfil market needs.
We live in a world of extremes.
So far, businesses have been running profitable operations that contribute to the growth and development of economies and societies. Warren says that businesses should take a long-term view on African opportunities and suggests agility and a localisation strategy are key for businesses to compete in markets. Despite the risks of the West, South and East Africa are regions, businesses displayed optimism at the economic prospects the continent holds.
Global outlook: A world of extremes
We live in a world of extremes. The 2015 global outlook survey of over 200 countries around the world indicates a projected global GDP growth of 3.6%. However, within the growth there is a lot of variation and risk, says Elizabeth Bramson-Boudreau, global director of ECN.
“We’re in the midst of a great separation of global economies. There are political uncertainties,” says Bramson-Boudreau. In a breakdown of the economic forecasts for 2015 in different parts of the world, she explains that despite the extremities, this is a world of “revolutions”.
Bramson-Boudreau says the oil surplus will remain. However, demand for oil is challenged. European economies are in a decline, resulting in a lower demand for oil. The rise in demand for oil, from emerging markets like India (for its agriculture sector) and Africa (driven by urbanisation and the automotive boom) will not be enough to offset the drop in demand from the developed world, she says.
The US may demand increased levels of oil, however its shale industry can meet some of its needs. The oil price is expected to settle at US$58 per barrel for 2015 but will rise to US$80-90 per barrel in the next five years. Top 10 net oil export countries will lose US$500bn in export earnings. “This is not ideal for the producing countries,” says Bramson-Boudreau.
The BRIC countries are encountering a “brick-wall” effect, says Bramson-Boudreau. This is because developing countries are growing at rates of rich countries instead of rates of developing countries. An economic reform needs to take place to combat the brick-wall effect.
According to Bramson-Boudreau, Brazil’s economy is in shambles and will shrink by 1% due to high inflation, rising interest rates, a weak currency and corruption scandals. Contrarily, India is on the rise with a GDP growth to 7% from 6.6%, this is brought on by the lower energy crisis. However reforms still need to be implemented in the country.
China is shifting towards a “new normal” and the economy is expected to grow by 7%. This is a lower level than was observed in the past three years, says Bramson-Boudreau. Since 2007, economic growth has risen by 78%. “This is the biggest increase of an economy of any note,” she says. Growth for 2019 is predicted to be at 5.6% as China is implementing structural changes, moving from an exports-led economy to serving the rising consumer demand of its own middle class. Further, Chinese investment in Africa will rise beyond extractive sectors to others like services and tourism.
Russia has been on a decline since before the sanctions, says Bramson-Boudreau. Household demand continues to be low. There is no innovation nor are there small business enterprises. “It’s a very much oil-based economy,” she says. With the falling oil price, government can’t do anything to stabilize the fall.
Europe is characterised by delayed, slow growth and political uncertainty. Its recovery since the 2008 economic crisis is stalling, says Bramson-Boudreau. There has been a failure in policy and the “bail-out” approach or Quantitative Easing introduced may have kept exports competitive, but there is still high debt and high unemployment.
The Greek exit from the European Union is unlikely, at a chance of 40%. The economy has shrunk by 30% since 2008, which is a strange observation in a “peace-time” situation says Bramson-Boudreau.
The UK’s economy will grow by 2.7%, says Bramson-Boudreau. Unemployment is at a 6-year low and the housing market is “healthy”, she says. There is a wealth effect in the country, however policies are unpredictable. This was seen in September 2014 when the Scottish independence vote appeared to be successful, she explains. There are more political voices than there were in the past, with increasing political factions in addition to the liberals and democrats.
The United States
The US is still recovering from its fiscal problems, but fundamentally it is a strong economy, says Bramson-Boudreau. Consumer confidence is at an 8-year high and the economic growth is “buoyant”. However, China has overtaken the US as the global driver of world economies.
The situation in the Gulf is “pretty dire” as Bramson-Boudreau describes it. The Middle East is risky for investment given the advancement of the Islamic State and the “spill-out effects”. The problem is that movements and activities in the Middle-East often have a global impact.
This article was featured in Finweek magazine.
Poor communications and hostile relations between employers and employees in the mining sector has led to the development of a workforce engagement solution by Deloitte Digital. The “notion” incorporates technology, content and a human aspect to facilitate effective two-way communications, says director Tim Bishop.
This workforce engagement offering is set to bring the workforce closer to the employer at a low cost, Bishop told Finweek. Besides communicating information to workers in a personalised way, workers have the opportunity to communicate back to the employer. “Workforce engagement turns rock driller 457, into Sipho. Age 27, father of two, a Pirates fan who wants to run a mine one day,” he says. Subsequently, the “evil employer” becomes an employer who cares about employees and wants to empower them and train them to achieve their career goals.
The content disseminated to miners is “functional” or work specific i.e. safety information, updates on power cuts at work or the areas in which they live, information about training certifications, information explaining wage slips. It includes questionnaires to survey how employers can make things better for workers. There is also a “human content” stream which offers lifestyle services. This includes incentives like airtime, vouchers and updates on their favourite soccer team for example.
Bishop says the offering is very iterative, changing daily to remain relevant. It gives workers access to information and messaging 24/7. It ultimately enables health, safety, career progression and a proper relationship between the worker, his employer and the greater goals of the company and his future.
All content and communications are made available via SMS, interactive USSD and mobi channels as miners have different mobile devices. Bishop says miners are incentivised to interact as content is beneficial to their careers, work environments and home lives. Additionally workers are compensated with airtime credits or zero rates for services.
Considering language barriers, Bishop assures that extensive research was conducted in the last year to determine preferred languages and literacy levels. The offering uses all sorts of languages and relevant colloquialisms to communicate messages, as opposed to sending “blanket messages” to an entire workforce.
To bring about a “trust” element, acting as a mediator between a big company and the workforce, personas or “like-minded human beings” as Bishop describes, will be introduced to interact with the multi-cultural workforce. These personas are relatable to employees, raising their concerns and challenges to employers and simultaneously make employees aware of career opportunities available.
The fact that their employer cares about them, they feel more like a person rather than a payroll number.
The mining sector is only an extreme example of a disintermediated workforce, says Bishop. Currently Deloitte Digital has three clients from different sectors. The offering can serve retail, construction and healthcare sectors too. Communications are transferred predominately on mobile devices. “In Africa, with regards to mobile distribution, every single worker has their own device,” he says.
This mix of content, human intellect, ethnography and technology is different to existing workforce engagement solutions in that it is Africa-focussed. Most tools aren’t compatible with devices, as they are often web-based and inaccessible to the African workforce. “None of the systems cater for the African worker,” says Bishop.
Bishop adds that it may be a challenge to implement changes based on worker feedback, given the economic and financial obstacles companies face. In these cases, employees should be informed about the progress to avoid false rumours spreading throughout an organisation. He says if workforce engagement in any way helps smooth labour unrest or ease wage negotiations, then it is a “bonus”.
One of the goals is to have everyone in the company, from the cleaner to the CEO pulling in the same direction. In industries where 96-97% of the workforce is in the field, it is important that they know who they’re working for, what the vision is and what options are available to them. “The fact that their employer cares about them, they feel more like a person rather than a payroll number. So the market for this is huge,” Bishop says.
*This article was featured in Finweek magazine.
Leaders of a Wits society received the Rising Star Award during the June Leadership Summit held at Port Elizabeth’s Nelson Mandela Metropolitan University.
The Wits student organisation, AIESEC (an acronym in French for the International Association of Students in Economic and Commercial Sciences) was recently recognised as a Local Chapter which is part of the greater international society. The Wits Chapter managed to fulfill the required number of exchanges and projects within the past year.
Ten students from Wits attended the five-day June Leadership Summit (JLS). AIESEC members from a number of different universities were “all united in one venue!” said Rosina Mabapa, 3rd year BA student, representing AIESEC media and communications.
The summit focused on the relevance of African talent and explored leadership in South Africa and within AIESEC, according to Onthatile Nataboge, 4th year BEd and president of AIESEC Wits.
Arthur Motolla, 1st year BA student, attended JLS for the first time. He said speakers stressed the importance of embracing Africa’s mosaic of cultures instead of striving for a unique African identity.
Opportunity lies with the disadvantaged. That is where opportunities lie for entrepreneurs. That is where you can expect the most amount of growth.
“Opportunity lies with the disadvantaged. That is where opportunities lie for entrepreneurs. That is where you can expect the most amount of growth,” he said as he reflected on the things he learnt.
“I am still overwhelmed by JLS,” exclaimed Duduetsang Mmeti, 2nd year LLb. She expressed how students were encouraged to contribute African solutions to African problems.
They had speakers, companies and organisations who shared their knowledge and entrepreneurs who spoke about “the greatness of being an entrepreneur and creating jobs for people and why it’s important for our economy,” said Mmeti.
Two Wits students participated in global internship programmes in Mozambique over the winter break.
Thato Moganedi, 3rd year BA Psychology and Media Studies, was keen on going to another Southern African Development Community (SADC) country. “In the aspects of travelling, I don’t want to go over the ocean instead of knowing my neighbours,” she said.
She joined AIESEC in the beginning of the year for the opportunities of cultural exchange. And to go, “beyond tolerating other cultures and accepting and embracing cultures”.
“The total experience was phenomenal … We learnt a lot about social relations and power relations and Africa as a whole,” she said.
She worked with VGV (A Portuguese abbreviation for Global Vision for Life), a children’s organisation and international organisation Orion which works with mentally disabled children. She plans to return there for work once she is finished with her degree
Ayanda Ndaba, 2nd year BA Law, went to an international high school and took up the opportunity to join AIESEC when she came to Wits in 2012. “It was an opportunity for me to be active on campus and to be active in something I like doing,” she said.
What I drew out the most from the experience was how you can be accepted… There was a girl who couldn’t speak a word of English but we managed to communicate.
While in Mozambique she worked on the Millenium Youth Development programme, which was placed in a NGO on the outskirts of Maputo. “We assisted with a community centre”.
They worked with 10-14 year olds and tutored them in English, Maths, Human Rights and personal hygiene, “things aligned to the Millenium Youth Development Goals,” she explained. They also collected donations for the centre.
“What I drew out the most from the experience was how you can be accepted… There was a girl who couldn’t speak a word of English but we managed to communicate.” She is keen on applying what she learnt to non-profit organisations in South Africa.
AIESEC will host a meeting on August 8 to discuss events planned for the rest of the year and internships during December. Students interested in finding out more about AIESEC are welcome to join the meeting.
This article was featured on the Wits Vuvuzela
By Lameez Omarjee and Tracey Ruff
In an effort to help improve and retain the level of specialised skills in the country, Wits University will be offering petroleum, oil and gas engineering as a third year specialisation option for chemical engineering students, as of next year.
This programme will be the first of its kind in South Africa and is aimed at meeting the needs of a growing demand for expertise in the hydrocarbon (petroleum, oil and gas) industry, especially with the recent discoveries of oil on the coast of South Africa.
Unfortunately, exorbitant amounts of money are spent on bringing in experts from abroad to work in the industry, especially in maintaining refineries in Africa which are getting old.
“The government brings expertise from overseas which (sic) they pay heavily, because we don’t have the skills in the country,” explained Professor Sunny Iyuke, head of school of chemical and metallurgical engineering at Wits.
According to Iyuke, there is a “big gap” in South Africa with “the skills to maintain the refineries” being largely absent. He believes South Africa has a “smart youth, which can be trained to attain these skills”.
Bridging the gap
Iyuke explained to Wits Vuvuzela that this is not a new degree, as “petroleum engineering is a component of chemical engineering”.
Wits currently offers a Master of Sciences (MSc) degree where students can specialise in petroleum, oil and gas engineering, but the plan is to introduce this training at an undergraduate level as a third year BSc specialisation.
During the first two years of undergraduate level, chemical engineering students will learn the basic principles of chemical engineering and in third year, they will have the option of taking petroleum engineering as an elective where they will apply their knowledge in courses like drilling, reservoir engineering (to understand how oil behaves underground) and lab work (working with safe amounts of crude oil).
The South African Petroleum Industries Association’s (SAPIA) board of governors is happy with the MSc program currently available at Wits, but it has been discovered that there is a gap in knowledge about petroleum engineering in postgraduate students.
According to Iyuke, “It is better that [students] have a background knowledge at undergraduate level [and] that is why we [Wits] are introducing this [programme] for our graduates to have that basis and background of petroleum engineering”.
With this initiative, Iyuke believes “our own people will develop others” instead of losing money by paying overseas experts.
Many students have responded positively to the plans.
Neo Khesa , 4th year chemical engineering said, “introducing petroleum and gas engineering is great because naturally it helps the country as it makes it cheaper to source skills from within the country than get them from abroad”.
“I want to go into the petroleum industry and I would have opted to do this course from second year if I had the option. It was the main reason I did chemical engineering in the first place,” added Khesa.
Fortune Mngomezulu, 1st year chemical engineering, is keen on going in this industry because “there’s a lot of money involved”.
We need to train Africans to solve African problems, because we will better understand them.
However, some students expressed their reservations about the idea, with Mohammed Sayanvala, 4th year chemical engineering saying, “I would prefer that South African students join the rest of the world in innovating with cleaner technology … We invite big companies from other countries to take advantage of our resources and none of it comes back to Africa. We need innovative, cleaner, greener and freer technology and courses to be introduced”.
Phutheo Magada, 3rd year chemical engineering, was concerned about whether there would be jobs available in the field. But Iyuke reassured him, “It [the petroleum] is a huge industry, if you don’t have a job here, you can always get one somewhere else, like Mozambique.”
Desmond Fiawoyife, PhD in metallurgical engineering, believes the offering of this programme at an undergraduate level is a good idea. “It’s a nice programme, because when you look at Africa, we have a lot of oil that has been discovered, especially in West Africa. We need to train Africans to solve African problems, because we will better understand them. We have a new dawn now. The days of getting expertise from abroad are over.”
Fiawoyife believes Wits’ plan to introduce the oil and gas programme is a step in the right direction and other universities will follow suit.
This article was featured in the Wits Vuvuzela