Fri. Sep 25th, 2020

SA companies can reap better African rewards while making a difference

human rights day south africaSouth African companies stand a chance to try again and drive the growing goodwill into win-win project opportunities around the continent.

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Following the end of apartheid, just over twenty years ago, African and world markets began to open-up to South African businesses, sports teams and a plethora of other formations that had largely been denied free pass because of South Africa’s past racial policies.

Many South African companies saw the opportunities and jumped onto them, grew their African footprint and achieved a mixed bag of successes and failures.

Retail brands such as PnP, Checkers, Spar and, later on, Woolworths did very well in some markets and not so well in others. There have also been some withdrawals from some of the markets for reasons that range from inadequate market preparedness, cultural clash, red tape that resulted in unreasonable delays in moving products into certain markets, to unreasonably high localization costs.

In the early days, there was much excitement about South Africa; but there was also fear by companies from some of the European countries that had been dominating African markets for decades.

The proximity of the Mandela-led South Africa and the fact that it was an African country made some fear that South African companies would have an unfair competitive advantage over them. The overall sentiment vis-à-vis Mandela’s South Africa in the rest of the African continent was characterized by excited anticipation.  

Over time, the sentiment grew, mostly through anecdotal accounts, that South Africans went into the rest of the continent with a bit of an attitude; one that looked down on locals and left the impression that South Africans had a “big brother” style arrogance that left bitter tastes in many mouths.

South African companies learned the hard way from those experiences, resulting in some of them withdrawing from several African markets. Those that stayed, including the ones that ventured into the region in more recent years, have learned to appreciate the need for inclusive gains, also referred to as win-win outcomes.

So, despite the past decade of a devastating state capture economy here at home, a number of South African companies, armed with a warmer, collaborative, attitude, quietly went into the region and the rest of the continent on a drive to create lasting relationships that are underpinned by the need to generate shared benefits by leaving real developmental gains behind.

Such companies have clearly realized that the era of going in to extract value to be taken away without leaving anything behind is fast receding.  

Playing for sustainability

STAG African, is one such company. The South African founders of this company saw an opportunity – both in South Africa and the region – in meeting a gaping need; the development of modern, user-friendly student residents that went beyond serving as mere sleeping quarters.

In the words of John Schooling, one of the company owners:

“Our journey actually began right here, at home, where we used to own a large piece of land that happened to be located a short distance from the Cape Pensinsula University of Technology (CPUT), in District Six, that was developed for student housing for the university. Further research into the market revealed that a shortfall of 250 000 beds existed in SA and at current or a total investment at then cost per bed of between R 55 and R 60 billion.”

Following initial research in South Africa, Stag conducted further research into the SADC and found that the situation was even worse than in SA and that the total market was in excess of 500 000 beds in the region. It was government red tape surrounding the delivery of student housing in South Africa that drove Stag to look into the rest of Africa.

Armed with initial research in South Africa and the region, Stag sought to establish why Africa was struggling to compete in an increasingly digitalized and educated world.

According to Schooling, research indicated that on average less than 5% of the Sub-Sahara population had some form of tertiary education, compared to Europe, USA, Canada, South Korea and Japan, which had a ratio of between 25% and 35%.

“We believe that that it is only through education that will Africa be able to compete at par with others, around the world. It is also only through education that solutions to global warming will be found and sustainably implemented to benefit both the earth and local populations. People are often less likely to support anything that doesn’t generate gains for them; that is a normal human attitude all over the world.”

As the least developed continent, Africa has the opportunity to develop at the same time as the rest of the world and to play its part in saving the planet if the right things are done.

Driven by its principles of Community, Sustainability, Innovation, Job Creation, Flexibility, Technology, Transformation, and Affordability, proudly South African Stag has gone on to conceptualise and build the Nkosi Johnson Student Residence at the Stellenbosch University Faculty of HEALTH Science and Medicine, as well as other state-of-the-art student residences in South Africa and Malawi, at the center of which is the drive to create working student communities where residents enjoy environmentally friendly communal and private living and learning spaces:

“Affordability is also a key consideration”, Schooling explained further, “Neither the students nor many of our university clients and countries in Africa can afford the true cost of supplying world-class student accommodation.

In fact, the students can in most cases not even afford the operating cost of supplying a greenfield bed, let alone the capital costs. It is thanks to international funding partners that we have been able to deliver the quality we have. No other company we know of has been able to deliver real green alternatives to world-class student accommodation in Africa.”

South Africa hoping to emerge again as a leader

With South Africa hoping to emerge again as a leader in the region, the rest of the continent and the world, following Ramaphosa’s election, South African companies stand a chance to try again and drive the growing goodwill into win-win project opportunities around the continent.

They should go into Africa not to escape a worsening social and racial climate back home; they should do so as ambassadors of a country that has learned from the grave errors of the past decade and that is determined to show others that a turn-around is possible.

The Ramaphosa-led South Africa must also play
its part in breaking down barriers to trade on the continent by partnering with
South African companies that are keen to act as torchbearers for South African savoir-faire, driven by hunger for
lasting trade relations with others around the continent.

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