Category Archives: Business

  • 1

Investment boycott is perverse

Following the halting of lending to six state-owned enterprises (SOEs) by Futuregrowth, there has been increasing calls for an investment boycott or even a tax strike in SA. I believe such steps would be perverse, considering the fact that even during the worst days of Apartheid, no such steps were implemented by SA firms or taxpayers. An investment boycott or tax strike would be very damaging to the SA economy and risks fuelling the flames of division within our country even further.

The aim of an investment boycott or tax strike would be to force the government to take a number of steps supported by some opposition parties and some sections within big business. These steps would likely include the cessation of the actions against Pravin Gordhan, the halt of the nuclear project, increased oversight of SOEs, seriously addressing corruption and probably the resignation of President Jacob Zuma.

In my opinion, an investment boycott or tax strike would represent the nuclear option for SA, which would be very damaging to our economy and to our most vulnerable citizens. It could limit the government’s ability to deliver on its promises: including the National Development Plan; it could put pressure on infrastructural spend; and could even limit its ability to fund budget increases, which could put pressure on areas such as education, health, etc. In addition, it could damage the country’s reputation if it were to lead to a reduced ability by the country to finance its debt. If we are looking for a credit rating downgrade, an investment boycott or tax strike would go a long way to achieving it.

In addition to the damage that such actions could cause to our economy and reputation, it also is not guaranteed to succeed. Even overwhelming participation in such actions (which would be needed, but is unlikely, in my opinion), may lead to the opposite reaction from the ruling party than is desired. It is much more likely to unify the ANC and cause it to close ranks. If this were to occur, the pain experienced by our country would be extensive and long-term.

In addition to the economic and reputational damage that an investment boycott or tax strike could cause, it could also be very harmful to the social fabric and our desire for unity and equity. It would serve to flame the fires of the “white capital” narrative that is increasingly being bandied around in our country and is creating increasing divisiveness. And it would be correct to do so. The plain truth is that the same people and institutions who are calling for an investment boycott or a tax strike, were silent on these topics during Apartheid.

There is no doubt that international sanctions against the National Party played a meaningful role in leading to the demise of Apartheid. However, it was never supported by SA business or by SA opposition parties. Not even the Progressive Federal Party (PFP) who was the precursor to the DA supported these actions. No large SA corporates became involved in sanctions and none of them came even close to an investment boycott. This was despite significant human rights abuses and disenfranchisement perpetrated by the Nationalist government. There was also no real talk of a tax strike by South Africans.

We can see the lack of action by SA big business, opposition parties and white citizens in the 1980s and before as complicity. We can choose to believe that they were happy to live under Apartheid and for many, I am sure this is true. However, we must not under-estimate the impact that fear could have had on inaction. An investment boycott or tax strike by SA big business and white citizens would likely have led to a substantial crackdown by the NP government, which was too ghastly to contemplate by many. And here is the rub. We lived in a police state during the 1980s, under an almost constant state of emergency. We lived in a country that was not free, even for the beneficiaries of the system. That has changed.

Say what you will about recent actions by the ruling party, about corruption, about lack of accountability, about our President being seemingly untouchable, we still live in a free and democratic country. If you have any doubts about this, go and have a look at what newspapers write every single day about the government and the ANC, without fear or serious reprisal. Go and have a look at what people have to say on social media and how many of them are arrested for it. Gone are the days when you had to watch what you say, who you interact with, who you gather with, who you protest against. Gone are the late night knocks on your front door, the arrests, the detention without trial, the “suicides” of those in custody. If you are still not convinced, go and have a look at who governs Tshwane, Johannesburg and Nelson Mandela Bay metros. If we were not substantially free in this country, if we did not have a vibrant democracy, this would never ever have happened.

In addition, go and have a look at what ANC loyalists and previous leaders have to say about the SARS wars, about Nkandla, about the constitutional court ruling and about electoral losses. The vast majority of South Africans and leaders on both sides of the aisle can see what is going wrong with our country and are adamant to make it better. The majority of people are on the right side of history and we will see positive changes in the near term. I am confident and optimistic.

However, if you want to divide people, if you want the racism card to be played more often, if you want the “white capital” narrative to grow, if you want to devastate the economy, if you want to hurt the most vulnerable and if you want to damage the country’s reputation, then you must support an investment boycott or a tax strike. I seriously hope that this is not what you want.

I therefore call on opposition parties to speak out against these voices looking to damage our country. Refer back to your and your predecessors’ arguments against sanctions in the 1980s. I call on big business to distance themselves from these moves. Remember what side of the argument you were on during Apartheid and consider what this could do to the economy. I call on ordinary South Africans to be patient. We are moving in the right direction and forces for change are gathering momentum. Trust that the hard-won democratic process allows for your voice to be heard.

Are you a supporter of an investment boycott or tax strike and why? Are you not concerned about the negative impact this could have on the economy and ordinary South Africans? Would this risk the hard-won unity that is developing in SA? Would it not add fuel to the “white capital” narrative and racism allegations? Should you not have the same approach as when you were against sanctions in the 1980s? I would love to hear your feedback.

In the mean time, keep your talking straight!

#InvestmentBoycott #TaxStrike #Futuregrowth #SARSWars #Sanctions

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man

Photo by twicepix


  • 3

Why are you willing to work for free?

If you have recently been recruited by a multi level marketing (MLM) company to sell beauty products, funeral policies or something else, you are likely in a worse financial position than you were before. You may have had to pay some joining fee or bought some product. In addition, you are not making any income yet right? Unless you are very good at recruiting more people and only if you put in many hours of work, will you see the money coming in. The question is why are you willing to work for free?

At the outset let me say this, MLM companies are legal and are not pyramid schemes in the traditional sense. However, they do depend for their existence on aggressive growth in membership and those that have entered last do the bulk of the selling while those that came in before you make all the money. The bottom layer of a MLM company typically works for free. They spend hours attending meetings where most of the time is not spent talking about the product, but rather about how to recruit more people and about how rich they can get. They commit large amounts of their time contacting their friends, family and community to try and get them involved. If they are good enough, they start setting up their own meetings, taking even more of their time. Eventually, they may start making money. Many never do. They work for free.

The key difference between a traditional pyramid (or Ponzi) scheme and an MLM company is that with the former, the entire value chain is run on a pyramid basis. This means that the entire contribution of new members is used to fund the proceeds of previous members. When the pyramid breaks down, the last entrants lose everything. These schemes are also set up with very high returns, so they require very fast growth in membership to be sustained and therefore run out of road very quickly. They are bad news (see my recent piece).

In the case of MLM companies (like Amway, Avon, etc.) even the last entrants to the scheme will receive a product, although the product will be worth less than what they spend to purchase it. A product will be chosen and say it costs 50c to manufacture and 100c to buy. The amount that is used in the MLM portion is the 50c. Traditional companies will spend huge amounts on advertising and marketing (thereby utilising the 50c) and the final consumer, no matter who they are will be treated similarly – they walk into a shop and pay 100c for a product that took 50c to produce. Think of soft drinks that are really only sugar water, but you are willing to pay for. The stronger the brand, the more you will be willing to pay. The more the advertising spend, sponsorships, etc., the stronger the brand and the higher the price point. Key though is that all consumers are treated similarly.

An MLM company will spend the 50c difference between price and cost to pay its consumers to market and distribute the product. The key difference here is that depending on where you fall in the multi-level hierarchy, you will either pay much less for the ultimate product or make money out of selling the product. Because of the promise of great wealth if you are able to recruit levels below you to market the product, consumers are willing in essence to work for free to distribute the product in the hopes that eventually they will move up the list where the product becomes cheaper or eventually they make money. The reality is that the vast majority of people selling these products (attending meetings, speaking to their friends and family, setting up meetings etc.) will be doing this for free. They are committing their time to the people above them in the hierarchy and to the ultimate company manufacturing the product without any remuneration. There is only the promise of future remuneration, which the vast majority will never see.

In the case of a typical funeral insurance product for instance, the final claims ratio (claims to premium paid) is maybe 40% – 50% (sometimes lower). The rest of the money is spent to cover administration costs, marketing costs and commissions. The broker or agent that does all the hard work of contacting leads, phoning clients, walking the streets and having face-to-face meetings with clients, receives the commission. They are remunerated for the work that they do. The people doing the work are the people getting paid.

Insurance MLM companies use a different mechanism to reward the people that distribute the product. The people higher up the distribution hierarchy get the bulk of the money (what would be marketing and commission in other companies) whilst doing much less actual selling than a normal broker or agent would do. The people that are doing most of the work are lower down the food chain and the bulk of them are working for free (or at least receiving way less than they would receive if they were a broker or agent selling insurance). The only reason they are willing to work for free (or for peanuts) is because of the promise of one day being higher up the hierarchy and having other people below them working for free (or peanuts) to sell the product (while they make the money).

The same is true of a company that distributes beauty or other products on this basis. If you are a representative (rep) of a traditional company selling a product, you will either receive a fixed salary or, more typically, a commission based on your sales. You are therefore paid for the work you put in (and the sales you generate). In an MLM company, most of the commission for selling products is paid to those higher up the hierarchy (those that were recruited before you) who do less of the work, while those recruited last, who do much of the selling, are working for free or for very little.

There is also the additional argument that there could be leakage in a MLM company because so much time and effort is spent on discussing the potential riches to be earned and how to earn those riches rather than spending that time to talk about the product and the brand. Theoretically, MLM products should therefore be more expensive than normally distributed product. However, because people are willing to work for free, the ultimate value for money for the final consumer (who does not get involved in the hype, but simply buys the product) is therefore often comparable to buying the product in the normal way. As a result, MLM companies can be sustained for decades (or indefinitely) without the system breaking down. As long as people are willing to work for free in exchange for the promise of wealth, the model continues.

MLM companies are not illegal and they may not even be considered unethical by many. However, they do depend on people who may not really understand the process, who over-estimate their ability to recruit others, or are desperate. These people (knowingly or not) are willing to commit large amounts of their time, time which could be spent more productively to build an alternative career (or to improve themselves through study). These people are willing to work for free. There is one way in which MLM companies are similar to pyramid schemes: they both are dependent on other people, people who enter after you, sacrificing their money or time so that you can make money or even get rich.

Are you involved with an MLM company, selling beauty products, funeral insurance or other products? Do you realise that you are working for free and may be one of the majority who will always work for free (or peanuts)? Do you realise that you will only make money or get rich from an MLM company if there are others (recruited after you) who are willing to work for free (or for peanuts)? Does this concern you or don’t you care? I would love to see your opinion.

In the mean time, keep your talking straight!

 

#MLMCompanies #PyramidSchemes

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


  • 1

Why are unions against pension tax changes?

Over the past months, there has been a great deal of discussion on new pension tax laws and their impact on provident funds. So vehement were the objections from unions (especially Cosatu) that the implementation date has been changed from 1 March 2016 to 1 March 2018. Why are unions so against this act? Could it be that at least in part, it will make it more difficult for protracted strikes to occur, reducing the bargaining position of unions?

The new Tax Amendment Act and will have a particular impact on provident funds, allowing for their treatment to be more in line with pension funds. As a result, upon retirement, a member will only be allowed to take one third of their pension as a lump sum and will have to buy an annuity (a stream of income from retirement to ultimate death) with the rest; and upon resignation, an employee’s contributions to their fund will be subject to tax (where provident funds withdrawals were tax free before). The changes will not impact any historic contributions to provident funds and will only affect future contributions.

The clear motivation behind these changes is to create an environment where workers save more for retirement and are less of a burden on the state in their old age. This is a worldwide phenomenon and imperative. With people living longer and longer, governments want to ensure that their citizens are able to look after themselves.

The problem in SA is that we have high unemployment and that employees who lose their jobs are often not able to find new employment readily and tend to dip into their pension and provident savings to survive. Many retirees also tend to withdraw their entire benefits to look after their extended families, due to low employment levels. The net result of this is that these people, even though they spend many years being gainfully employed and contributing to pension and provident funds, do not have sufficient savings in their old age to survive. As a result, they become a burden on the state.

In most countries with developed pension systems, laws surrounding retirement and early withdrawal are very strict, with either no early access to pensions or a high pension tax. Workers are actively encouraged to preserve their pensions upon early withdrawal (to save them for retirement and not to use them for spending) and to annuitise (buy a monthly income stream from retirement date to ultimate death) upon retirement.

Unions (Cosatu) appear to be very concerned about preservation being actively encouraged in SA. In response to the new Tax Amendment Act, Cosatu claimed that the Act “had introduced the issue of preservation through the back door”. According to them, “preservation cannot and will not be implemented outside the Comprehensive Social Security & Retirement reform”. Why are Cosatu so against preservation?

The main argument presented by the federation is that we suffer from a “current environment of high and stubborn unemployment and poverty in our society without a clear social security system in place.”. They intimate that it is important that workers receive a “lump sum payment upon retrenchment, change of employment or retirement” to allow them to survive financially. However, they concede that “in the long-term the cash runs out, leaving the worker to lead the rest of their life in poverty.”.

Cosatu therefore appears to be very concerned about people who cease to be workers, join the ranks of the retired or unemployed and stop being members of their unions. Fair enough and very altruistic, but could there be another reason for their aversion to preservation that may not be so altruistic?

SA has been suffering from protracted strikes for many years and more often than not, unions are able to extract healthy benefit increases from employers. The longer the strikes last, the more concessions unions appear to be able to extract from employers. If striking workers were to become strike-weary early on in the process, there may be a distinct risk that fewer concessions would be obtained. In the current environment without preservation actively encouraged, striking workers can at least look forward to cashing in their pensions if their actions result in dismissals or retrenchments. This reduces the risk of continuing with a protracted strike. If workers were forced to preserve their pensions upon retrenchment or dismissal, they might be less inclined to continue with a protracted strike and may be more willing to settle early with employers.

Is it therefore possible that unions are against the introduction of preservation, at least in part, because it would weaken their bargaining position when it comes to industrial action? If this were the case, are unions acting in the best interest of their members? Although the cashing in of a pension helps a retrenched or dismissed worker to survive in the short-term, it leaves them vulnerable in the long term (as per Cosatu’s own admission). Would workers not be better off remaining employed, but settling for lower benefit increases?

In an environment where employment levels are higher, there is no doubt that preservation and annuitisation upon retirement are desirable as it would reduce the burden of the state to look after people in their old age. Our focus should therefore be to increase employment levels. The unions in SA have an important role to play in this regard. To increase employment across the board, it is important that labour relations in SA improve, settlements are reached early and protracted strikes are avoided. In addition, unions should come to the party to create a more conducive environment for employment to grow by demanding less stringent employment conditions and protection. Unions should support youth subsidies, internships, vocational training, special labour dispensations in selected industries/regions, etc. In the long-run unions can only benefit from increased employment levels in SA, even if it means having to compromise on workers’ rights in the short-term.

The current approach is not working and has not worked over the past 20 years. Unemployment in SA has become a national crisis and cannot be dealt with in the usual way. In a previous blog, I recommended the appointment of a Minister of Employment who will have ultimate responsibility for employment levels, will co-ordinate across different government departments, unions, private sector and NGOs and will have the power and tools to drive the process. As part of this, we need unions to stop simply protecting their own turf, but to think more broadly about what will ultimately be best for our country, including for their members.

 

What do you think of the new pension tax laws? Do you think we can implement it considering our low employment levels? Do you think unions are worried about their industrial action bargaining power? Do you think unions can do more to promote employment in SA? I would love to hear your feedback.

In the mean time, keep your talking straight!

 

#Preservation #Pension #Unions

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


  • 0

Give us cheaper access to credit

Times are tough in SA and people need access to credit. The problem is that for the most vulnerable, interest rates and fees on microloans are very high, which leads to expensive instalments and high bad debt levels. Using a house as security can lead to much lower instalments, can save the borrower a great deal of money and can increase the comfort level of the lender. Many people own houses that are not properly registered, that do not have title deeds and therefore cannot be used as security. Many others do, but are underserviced by lenders. If we could increase the proportion of registered properties in SA (that can be used as security) and better service low-income home owners, it would increase the accessibility of credit at lower interest rates.

There are broadly two types of credit that people in SA have access to, namely secured credit (which includes bonds and vehicle finance) and unsecured credit (which includes microloans). The interest rate that institutions charge on unsecured credit is much higher than on secured credit, because defaults (bad loans) are typically higher (more people do not pay back unsecured loans than people who do not pay back their bonds) and in the case of an unsecured loan default, there is no property or goods to repossess, so the institutions do not recover any of the unpaid loan.

Interest rates on unsecured credit are currently above 27% per year for most unsecured lenders. Under the new Draft Regulations, which will likely come into play this year, the maximum allowable interest rate will be 26.5% (repo rate TIMES 1.7 PLUS 15%) for unsecured loans. For bonds (or home mortgages), the maximum interest rate under the Draft Regulations will be 18.75% (repo rate PLUS 12%), although most people are able to access much lower interest rates on their bonds (13% and below, which is less than half of what unsecured borrowers pay).

What this means is that the most vulnerable people in SA who are taking out loans are paying twice or more for the privilege than people who can offer security. The very high instalments that unsecured lenders have to pay, reduces the affordability of loans and increases default levels. You are more likely to run into financial difficulties if you have to pay twice as much back on your loan every month.

According to the National Credit Regulator (NCR), unsecured credit in SA as at September 2015 amounted to R162 billion (up 10% from the previous year). This was about 10% of the total consumer credit at that time. That is a lot of money owed by people. It also implies large repayments required. Based on the new Draft Regulations, this implies an annual interest bill of a staggering R43 billion. If these borrowers were able to provide security on their loans, in the form of a house, they could theoretically save a massive R21 billion in interest payments every year. Imagine the positive impact that this could have on their pockets and on the economy as a whole.

So why are so many people in SA unable to access secured credit? Is it because they do not own property? The answer is a definitive no. According to the NCR Consumer Credit Market Report for the Third Quarter of 2015, 75% of new mortgages (bond loans) that were issued were larger than R700000 in size and a massive 95% of mortgages were for sizes above R350000 and above. By number, only 25% of new mortgages granted in 2014 were for R350000 or less according to the Centre for Affordable Housing Finance in Africa 2015 Yearbook. Because almost no bank is offering 100% mortgages (you typically have to pay a large deposit), the R350000 mortgage mentioned above probably relates to a property worth R450000 or more.

According to the Centre for Affordable Housing Finance in Africa, only 3% of mortgages in number (during 2014) were granted to people earning less than R15000 per month, which is needed to finance a house valued at R370000. This means that the majority of people who own houses worth less than R370000 are not getting mortgages. The same report noted that over 40% of registered properties in SA are worth R300000 and below, which means that an even higher proportion of SA properties fall into the group above, those that are not receiving mortgages.

In addition to the 40% plus of registered home-owners who are not receiving mortgages there are a further 1.5 million (estimated) home owners who are not even registered as home owners. The Centre for Affordable Housing Finance in Africa estimates that “just over half of the 3 million subsidised houses delivered by the state since 1994 are formally registered in the deeds registry”. The rest of these houses are not registered. If we take both registered houses worth below R300000 and the unregistered houses, it implies that well over half of SA home owners have no access to mortgage finance.

What does this mean? It means that over half of South African home owners are not using their homes as security for the loans that they take out. It means that over half of South African home owners are paying interest rates that are twice as high as the interest rates they would have paid if they had been taking our mortgages, using their homes as security. It means that there is a huge untapped opportunity to provide South Africans with cheaper credit and potentially larger levels of credit.

What is the downside of using your home as security on a mortgage loan? We have discussed the upside of such an arrangement, but there is a downside. If you default on a mortgage loan, your home may be repossessed! The question is whether this is worth the risk? If your loan instalment is half of what it normally is (with your home as security), will it not be much more affordable and will you not be much less likely to default? If you know that your home is at risk, will you not be much more careful in the amount that you borrow and much more diligent in making sure you keep up your instalments?

So what can be done to tap into this huge opportunity of cheaper credit for the most vulnerable in our society? There are two things. Firstly, there must be an aggressive drive by Government to ensure that all properties are properly registered and that the owners have legitimate title deeds to their properties. Secondly, banks and other lenders must be encouraged and even subsidised (to some extent) to offer mortgages to the half of South African home owners who currently have no access.

There is no shortage of money in SA to fund the potential increase (or reclassification) of debt that these steps above would imply. According to the latest banking statistics from the SA Reserve Bank (SARB), the total rand-denominated deposits in the system amount to R3.1 trillion. In addition, according to the SARB Quarterly Bulletin, there was R264 billion of assets lying in money market unit trusts. It would take a fraction of the huge cash balances in the SA economy to provide mortgage funding to the 50% of South Africans that do not currently have access to it.

What is holding the lending industry back from offering these much-needed loans on better terms to the most vulnerable in our society? There are three main reasons, in my opinion. Firstly, lenders are extremely conscious of risk. They cannot and will not give a mortgage loan to someone who does not have a title deed. They are also wary of providing loans to groups that they consider more risky. To address this concern, there should be the push discussed above to ensure that all properties are properly registered; Government should provide some level of subsidy to encourage such loans and to mitigate risk (whether it be through tax relief, higher BEE scores, concessions on future BEE requirements, etc.); and lenders should price for these risks (i.e. offering average interest rates of say 18% vs. the 13% typically charged on existing mortgage book, but still well below the 26.5% on unsecured credit).

Secondly, credit providers are often wary of entering markets where they do not have sufficient data and systems (to price with comfort). To address this concern, it is important to start putting toes in the water. These markets can only be better understood and priced for over time. And the time is now. In addition, there are many unsecured credit providers that have large client databases and could conceivably use these data to better price alternative products (mortgages vs. unsecured debt). It would take a decision from shareholders and management, possibly driven by encouragement from the wider SA populace, including Government, to take the leap into this market segment.

Thirdly, credit providers make more money from unsecured lending than they do from mortgage lending. This may be a more difficult concern to address, but it is not impossible. As long as mortgage lending in the under-serviced market is properly priced for, there is no reason why it should not be profitable to lenders. It may not be as profitable as unsecured lending, but it may well be more profitable than current mortgage lending. In addition, it should be considered good for the economy and for long-term growth within the banking sector. It is therefore necessary to take a leap, which may involve a gradual transfer of products. Such a leap may affect the bottom line in the short-term, but over the long-term, it could be very positive for the country. It is important that shareholders and management consider the greater good and act in a socially responsible manner in this regard. I am hopeful.

I challenge Government and credit providers to sharpen their pencils, to be innovative, to think of the greater good, to be compassionate to the most vulnerable people in our society and to come up with solutions. Use your skills, your infrastructure and your commitment to our country to help unlock the huge potential sitting in underutilised property as a form of security. History will judge you.

 

Did you know that interest rates are so much higher for people that cannot offer security? Did you know that over half of South African home owners are not currently using their homes as security for loans? Do you think that this offers a meaningful opportunity? Do you think that credit providers and banks will grab this opportunity or will we just keep talking about it? I would love to hear your feedback.

In the mean time, keep your talking straight!

 

#UnsecuredCredit #Mortgages #Credit

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


  • 2

We need a Minister of Employment

Unemployment is the most important issue facing SA at the moment. If we do not grow employment numbers aggressively and quickly, we face an increase in poverty and inequality that could result in a populist uprising. Past attempts at dealing with this issue have failed and we now need a new approach. We need a Minister of Employment who will stand or fall based on employment levels. This needs to be a very senior appointment, which has the mandate and power to co-ordinate efforts across all ministerial portfolios, unions, NGOs and the private sector.

For much of the past 15 years, more than one third of South Africans have been unemployed (using the expanded definition). The most recent expanded unemployment rate (October 2015) was 34.4% (whilst on the narrow definition, the rate was 25.5%). For the youth, the situation is much worse with almost half of people between 15 and 34 being unemployed on the expanded definition (and more than 60% of those between 15 and 24). We are sitting on an unemployment powder keg in SA.

Whilst numerous reasons can be put forward for our low employment numbers in SA, including low cash deployment and increasing automation by the private sector, inflexibility of labour, low economic growth and weak commodity prices, the main responsibility should lie with our government. Globally, governments stand or fall based on their ability to reduce unemployment levels. SA should be no different.

It is time that our Government identifies unemployment as the top priority for our country and throws all that it can at dealing with the problem. Despite having a large cabinet with 35 ministers, there is not one department (or minister) that has as its primary responsibility the increase of employment in SA. The Department of Labour comes the closest, but in its stated vision, “employment creation” is only mentioned after “investment” and “economic growth” as priorities. The Department of Labour and the Minister of Labour also do not appear to rank amongst the most senior portfolios and ministers in cabinet, with the departments such as Treasury, Basic Education, Health, International Relations, etc., attracting much more attention. It is difficult to see Minister Mildred Oliphant dictating to Minister Pravin Gordhan on appropriate tax rates for promoting job creation; demanding from Minister Malusi Gigaba that visa regulations need to be relaxed to boost tourism; or setting targets for Minister Angie Motshekga and Minister Blade Nzimande on the number of science and engineering graduates required to boost the SA economy.

What we need in this country is a new Ministry that has as its sole responsibility the creation of employment. We need a Minister of Employment. This needs to be a very senior appointment in the league of a Nhlanhla Nene or a Trevor Manuel. The Minister of Employment should be empowered to co-ordinate all the resources within the cabinet to address the issue of unemployment. As such, this minister should be the chair of an inter-ministerial committee, including Treasury, Labour, Education, Public Enterprises, Tourism, Trade and Industry and other relevant portfolios. This minister should report directly to the president and provide at least quarterly feedback to Parliament. This minister should stand or fall by trends in employment numbers.

The Minister of Employment should be involved at a high level with all areas in SA that are needed to promote employment growth. As the ultimate champion of employment, this minister must ensure that all areas are working in concert, that duplication is avoided and that all the required energy is focused on the problem of unemployment.

The Minister should have insight and influence over all legislation and regulations in SA to ensure that they are aligned (or at least not contrary) to increasing employment. With such a minister in place, we would not have experienced the own goal of stringent visa regulations impacting tourist numbers and hence tourism employment growth.

A task team should be formed with industry, Treasury, the DTI and other parties to identify specific job-creating industries to promote through regulations, tax incentives and protection, if needed. Similarly, a task team should be established with organised labour and the private sector, possibly using the Nedlac infrastructure, but chaired and driven by the Minister of Employment. This task team must ensure that the labour environment becomes more flexible (even if only in selected job-creating industries) to boost employment growth.

The Minister of Employment should involve organisations such as Brand SA, Proudly SA, SA Tourism, Homecoming Revolution and others in a co-ordinated campaign to promote SA as an investment destination and the consumption of SA-produced products over imported ones.

On the skills front, the Minister should co-ordinate a strategy to ensure that the country produces the right graduates, provides the right vocational training and imports the right skills to support the industries identified to be major job creators. To achieve this, the Departments of Basic and Higher Education need to be involved as well as the Department of Home Affairs and the private sector.

There are numerous other areas where the Minister of Employment could become involved, including trade deals with other countries, infrastructure development, agriculture, science and technology, public enterprises, etc.

The role of Minister of Employment will be very challenging and will require hard work and commitment. However, we need large plans to address large problems. This role will need support from a wide range of role players, regardless of political affiliation. There should be large-scale buy-in from all South Africans. It is difficult to see how the vast majority of South Africans would not benefit from growing employment. Solving this problem will go a long way to addressing other problems facing SA. I therefore call upon the ANC, opposition parties, the Government, private sector, NGOs and ordinary citizens to speak out and demand action on unemployment. I call for your support in appointing a Minister of Employment (together with the power and support that such a role requires) immediately. We cannot afford to wait any longer.

 

Do you agree that unemployment is the most serious challenge facing SA? Do you think more can be done with centralised planning and coordination? Would you support the appointment of a Minister of Employment? What suggestions do you have to improve my description of this new role? I would love to hear your feedback.

 

In the mean time, keep your talking straight!

 

#MinisterOfEmployment #Unemployment

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


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You’re biased, but maybe not on purpose

Unless you are an overt bigot (racist, sexist, etc.), you would probably deny that you are biased. You probably think you are fair when it comes to decisions like electing your school governing body, choosing who to appoint in a job, picking someone for a promotion, choosing who to do business with, etc. The bad news is that you are probably not – you more than likely suffer from familiarity bias. The good news is that once you are aware of it, you can do something about it.

Be honest with yourself, who are the people that you freely associate with? Are most of them like you? Do you speak the same language, did you go to the same school, do you go to the same church/mosque/synagogue, do you support the same sports teams, do you look the same? Although there will be exceptions, in most cases people associate with people who are similar to them. Is this a bad thing? Not necessarily – freedom of association is enshrined in most modern democratic and legal systems, including the US Bill of Rights and the SA Constitution. However, what happens if your preferences insofar as who you associate with start impacting the decisions you make outside your family and circle of friends? This can lead to familiarity bias – making decisions and choices in favour of what is familiar to you rather than what is deserved, logical or right.

Familiar bias is a particular problem when it comes situations where certain groups are in power (whether it be political, in business or in societies) and outside groups find it difficult to progress as a result of it. Notable examples are glass ceilings that women have and continue to face in the workplace, lack of representation in company management, exclusivity of sports clubs, onerous rules by body corporates and favouritism when it comes to government tenders and appointments.

To illustrate, please put yourself in the following position. You are the manager of a group of employees at a large firm. They are a mixed bunch, coming from different backgrounds. At work, you maintain a professional relationship and you even socialise on occasion (e.g. year-end lunch). However, you get along better with some of your colleagues, maybe you visit each other’s houses, maybe you play sport together, maybe you see them at church, maybe your children go to the same schools. You just like certain of you colleagues more than others, they think like you, you trust them more, you feel more comfortable with them. You now have to promote someone in your team and there are a number of candidates, some in your circle of friends and some not. If there are no rules guiding the promotion process, if there is no-one looking over your shoulder, who are you going to promote if you are faced with candidates who have similar qualifications and talents? Will it be the candidate that you like more and feel more comfortable with or will it be another candidate? The honest answer, more often than not would be the former. That is familiarity bias.

The problem with a situation like this is that it is very difficult for people who fall outside the familiar group to move into positions of responsibility, unless there are processes in place to encourage this. Women, regardless of background can attest to this. It is only in the past 50 years that women have really started come into their own in the workplace in most developed countries. It was a long and arduous process to break into the “boys club” and in many cases, this is still an ongoing battle.

In SA, our problem is more unique. We come from a history of institutionalised discrimination. Prior to the 1990s, limits were placed on who could be employed, who you could do business with and even who you could associate with. White South Africans were institutionally favoured over other population groups and by the time the situation changed, they were in a position of huge advantage. When majority rule commenced in SA, the government was faced with the choice of aggressively redistributing wealth through nationalisation, land repossession and penal taxation or using a more gradual market-friendly approach. Although it had a mandate to proceed with the former (with the Freedom Charter clearly stating that “The national wealth of our country, the heritage of South Africans, shall be restored to the people”), it chose the latter approach.

This gradual approach used various mechanisms, including employment practices within the public sector, government appointments, government tenders, black economic empowerment (BEE) and affirmative action (AA). There can be arguments made for the success achieved to date with these programmes and there can be arguments made that in certain cases, the wheel may have turned too far. Either way, we still have a very unequal society in SA, with most of the wealth and economic power in the hands of the previously advantaged and most of the political power in the hands of the previously disadvantaged.

An important element of transformation in SA that has been largely ignored by the policies that have been pursued is that of familiarity bias. People are more likely to embrace transformation and address issues within their control if they believe in the process and do not feel pressurised into it. It is important to change people’s minds. It is important that people look inward, address their own familiarity biases and actively try to keep them in check. People should be encouraged to be fair in the decisions that they make and not be driven by familiarity bias or adverse reactions to policies.

That may be easier said than done. On the one hand, there are many previously advantaged people that believe the process has gone too far and as a result, it has become very difficult for people from such a background to gain employment and promotions in both the public and private sector. On the other hand, there are many people in Government that believe they have the right and mandate to employ cadres in senior positions, even if better candidates are available and delivery suffers.

These views on both sides of the coin results in familiarity bias continuing unchecked. In the private sector, companies continue to do business with people they know, like and trust. Promotions (especially at senior levels) still accrue proportionally more to white males than any other grouping. In the public sector, senior appointments and promotions of individuals who do not have struggle credentials or party affiliation are less likely to happen than for those that do. Black kids are still often made to feel uncomfortable if they are outnumbered at school and vice versa. Non-white families often find it difficult to be accepted into previously white neighbourhoods.

Most of us know what it feels like to be on the receiving end of bias. Who has not experienced bias because of the way they look? Maybe it is the colour of your skin, maybe it is your body shape, maybe it is the way you dress. People experience bias because of the way they speak, often because they are communicating in a language that is not their first. People are looked down upon because of their background, where they live, their religion, which school they went to, which sports team they support and so many other factors. If you look inside yourself, even if you are amongst the most privileged in our country, you can identify times when you were at the receiving end. Instead of simply returning the favour or transferring our biases to others, maybe we should take a moment and think about it. Think about how you would like to be treated and treat others in that way.

It is important that we do not simply leave the process of transformation to government, but that we do our part to encourage it in our spheres of life. The next time you face a choice that involves people that are different from you, take a moment to reflect before you make your decision. The next time xenophobic violence flares up in your area, put yourself in the shoes of the foreigners that are being targeted and think again about your choice. The next time you are faced with someone of another race in your school or neighbourhood, think about their dreams and aspirations before you make your choice. The next time you are electing someone to leadership, whether it be at your school, club or other community organisation, consider your familiarity biases before proceeding. The next time you employ or promote someone, be open to what may be the uncomfortable choice, taking into account the inequality that remains in our society. The next time you choose a sports team, take into account those players that are struggling to break in for other reasons than talent. The next time you do a business deal, be open to role-players other than the usual suspects. Do this because you love this country and you want to make it a better place for you, your children and your grandchildren to thrive in for generations to come. Do it, because it is the right thing to do.

 

Can you admit that you suffer from familiarity bias? Are you purposefully biased or are you sometimes unaware of your actions? Is this an us or them scenario for you? Will you check yourself the next time you face a choice? Do you think your choice will be different? I would love to hear your feedback.

In the mean time, keep your talking straight!

#FamiliarityBias #NoToRacism

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


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Who would you like to see in cabinet?

Our country is full of talented individuals who I think can do a better job at cabinet level than the incumbents. Considering the election risk posed by loadshedding as well as the expected rise of the opposition, maybe it is time for government to start looking wider than cadres for top positions. Who would you like to see in cabinet?

Our cabinet is one of the most bloated ones in the world and the first thing I would suggest is to aggressively trim it down to from the current 35 ministries to around 25 portfolios (as it was in the early years of our democracy). I would then look to fill the key portfolios with top-class individuals who can take on the challenges to improve delivery. I would focus on technocrats with strong corporate experience, regardless of political affiliation. My key portfolios include (alphabetically) Education, Finance, Health, Home Affairs, Justice, Labour, Police and Public Enterprises. There are obviously other important portfolios, but I have not proposed ministers for them. Feel free to make your suggestions in the comments section.

For Education Minister, I am looking for someone who is passionate about quality education and who has strong administrative experience in the field. My first choice would be Jonathan Jansen, the current rector of the University of the Free State (UFS). Jansen is a very outspoken champion for higher standards and improved delivery within the SA education system. During his 6 years as rector of the UFS, he has negotiated many obstacles successfully and has taken the institution to new heights. His outspoken nature, administrative acumen and no-nonsense attitude could provide a well needed shot in the arm for our education system. I can see him lifting standards, ensuring that schools have strong leadership and empowering teachers to deliver better results, whilst saving money at the same time.

On the Finance side, my first choice would be for Trevor Manuel to come back. He has been our best Finance Minister in recent history, in my opinion, overseeing one of the strongest periods of fiscal discipline and economic success in our country’s history. Having been one of the key architects of the National Development Plan (NDP), he is also well positioned to help drive this long overdue project. By including the NDP under the Finance portfolio, we are more likely to avoid gridlock and bottlenecks with its roll-out.

In the Health portfolio, we need to someone with a great deal of health administration experience who can oversee the improved running of public hospitals as well as drive preventative care and primary healthcare initiatives. My candidates here have to come from the private sector where our healthcare standards are some of the highest in the world. Leading my field would be Jonathan Broomberg who as CEO of Discovery Health since 2005 oversaw the establishment of the largest healthcare administrator in the country and is also a medical doctor and health economist. Another candidate is Blum Khan, who was CEO of Metropolitan Health during the rapid growth phase of GEMS (while it was solely administered by Metropolitan Health) and has a long history in the SA healthcare industry. First on the list of priorities for the new minister would be to reduce the leakage from public health and improve delivery. Next would be to drive the roll-out of the National Health Insurance (NHI) programme, with a great focus on preventative care and primary healthcare. There is a great deal of low-hanging fruit in this area (in my opinion) and improved results are likely with the right management and without the need to spend more money (than has already been allocated).

In the Home Affairs portfolio, where I would include Social Development, I would propose Johan van Zyl, the recently retired CEO of Sanlam. He has arguably been the most successful CEO of an SA financial services company in recent history, taking Sanlam from strength to strength. Prior to that he was in charge of Santam (which has become the leading short-term insurer in SA) and was the rector of the University of Pretoria. He would be well positioned to streamline the processes surrounding our massive grants programme as well as population registration and immigration. There are large amounts of money that can potentially be saved here, whilst improving delivery and efficiency.

The candidate that stands out for me to take over as Minister of Justice is Thuli Madonsela. As public protector, she has been an exceptional proponent of open governance and the fight against corruption. Her substantial experience at the Public Protector’s office as well as her prior legal experience places her in a strong position to improve delivery in the Justice department. Work needs to be done in reducing the large backlogs in our criminal courts, the high number of awaiting trial prisoners and problems surrounding crimes committed by suspects out on bail. She would also need to address our high incarceration levels, with a strong focus on rehabilitation.

My choice for Minister of Labour is Zwelenzima Vavi. I may not agree with all his policies (I am pro liberalised labour laws to aggressively promote job-creation). However, I believe that Vavi is strong on delivery and anti-corruption. It is important that SA does more to reduce labour disputes, disruptions and prolonged strikes. Vavi, with his long track-record in organised labour leadership may be uniquely positioned to facilitate a new compact with labour, whilst being a useful partner in job creation initiatives.

When it comes to Police Minister, it is important to look at candidates that have a strong track record of reducing crime levels. The province that stands out for the greatest reduction in contact crimes over the decade from 2004 to 2014 is Gauteng (39% reduction). During most of this decrease in crime levels, Mzwandile Petros was the police commissioner. He was widely hailed for his openness and aggressive stance against corruption, in addition to the reduction in levels of crime. I would like to see him taking over as our Minister of Police and aggressively drive anti-corruption measures, improved efficiency, better training, stronger co-operation between agencies, higher conviction rates (often due to shoddy police work) and ultimately lower crime levels.

For Public Enterprises Minister, we need a turnaround specialist with strong corporate experience and extensive international contacts. I suggest Maria Ramos for this position. She has a strong track record in leading the financial and operational turnaround of Transnet in the 2000s, she was instrumental in the Barclays Group Africa transaction in 2013 and was part of the very successful National Treasury team during Trevor Manuel’s tenure. She would be well positioned to help drive the turnaround of Eskom, which could include the introduction of a large private sector player (in a joint venture with Eskom on the distribution side) and liberalising the regulatory environment to encourage more private sector generation, especially in renewable energy.

 

If you had a blank sheet, who would you appoint in the key Cabinet positions I discussed above? Who would you like to see as Minister of Defence, Foreign Affairs, Housing, Transport and others? Are there any specific portfolios you would add or remove? I would love to hear your feedback.

In the mean time, keep your talking straight!

#SpeakingOutSA

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man

Photo by brainstorm1984


  • 1

Speak out South Africa!

I am indelibly tied to South Africa. It is the country of my birth, the home that I love, the place where I will grow old with my family and where I will lay my head one day. I am 100% committed to the transition we have seen in our society, the roll-out of freedom, the march towards non-racialism and the attempts to create at least equality of opportunity. I remain hopeful that together, with the meaningful assets at our disposal, we can become a very successful country. However, right now I believe we are at a crossroads. Right now, South Africans need to speak out at the issues that are pulling our country in the wrong direction. Please join me and speak out South Africa.

There are many commentators in our country who are speaking out. They are speaking out against lack of delivery, whether it is the loadshedding caused by Eskom, the poor outcomes in education, health and crime. They are speaking out against corruption, citing issues such as tenders, cadre deployment, Nkhandla, Guptagate and more. They are speaking out against our lack of economic growth and our rising unemployment. However, I have two main problems with the way that people are speaking out in SA. Firstly, there are too many people who are unbalanced in their criticism and include distinct racial undertones in their discussions. Secondly, there are too few people in the tripartite alliance and in the business world who are speaking out and often those that do are marginalised and victimised.

Why is an unbalanced view problematic in SA? It is a problem because it fails to give credit where credit is due and because it is grossly unsympathetic to our history and the way that most people feel about it. We come from a very tortured past in this country where there was an institutionalised division between the haves and the have not’s. Despite what so many people may think, 20 years of democracy is by far not long enough to erase the damage that our past has created. This is made so much worse by the fact that we remain such an unequal society, that our unemployment is so high and that our economic growth is so low. The electorate is often called ignorant for continuing to vote for the ANC, despite its failings. In my opinion, that statement is totally ignorant and totally misses the point that most ANC supporters have seen meaningful improvements in their lives over the past 20 years. People are voting for the party that they believe acts in their interest.

By simply criticising the performance of government without putting forward a balanced case, commentators are alienating the electorate before they even have the opportunity to listen to arguments. Similarly, criticisms with racial undertones can so easily be shot down by government and supporters of government. It gives them an easy way out! A balanced argument is so much more difficult to dismiss out of hand. To take a valuable weapon from an underperforming government, we need to remain balanced and force them to address the issues. Play the ball and not the man is a motto we should adopt in this regard. Even if this does not sway the powers that be (who have a vested interest in not being shown to be fallible), it has the potential to sway the electorate that has voted them into power. I have faith in our people and our voters.

Why is a lack of criticism from insiders a problem? This one is obvious. They either do not want to show weakness or fallibility or they are afraid that speaking out may damage their position within the alliance, which is a justified concern. The problem for the alliance is however that their long-term tenure is ultimately dependent on receiving support from the electorate and that they cannot expect such support not to wane in the wake of underperformance. If they do not improve, they will be voted out, unless they resort to nefarious means to remain in power.

There are many people within the ruling alliance who are unhappy with the current state of affairs, but are scared to speak out because of the consequences it could have for them, and rightly so. Many outspoken leaders have been rewarded by being pushed out into the cold, like Zwelenzima Vavi, Pallo Jordan, Trevor Manuel, Ronnie Kasrils and Tokyo Sexwale. I would urge politicians within the ruling party to set aside their concerns and speak out for the greater good of our country. Please do more Kgalema Motlante, please speak out Cyril Ramaphosa. Be on the right side of history.

The business world, especially large business, also finds itself in a very delicate position. The New South Africa has given them a very comfortable environment to operate in, with good infrastructure (Eskom permitting), rule-of-law, low interest rates, a growing public sector, limited competition, low tax rates and increasing social grants to fund purchases of their products. Yes, there are issues surrounding BEE and the labour market, but growing profits and rising share prices highlight how good they have had it. They have much to lose by speaking out and alienating government and its electorate. So they wait. I just hope they do not act like FIFA’s sponsors and only speak out once the wheel has turned. Instead, now is the time to speak out South African business and help to affect changes.

Independent commentators, especially those of you with strong credentials, please do not give up the fight. We need you now more than ever Thuli Madonsela, Max du Preez, Zapiro, Ferial Haffajee, Eusebius Mackaizer and so many others. Refuse to be bullied, ignore accusations of racism, do not simply be painted as opposition apologists. Remain balanced and continue chipping away. We will get there.

South Africa is a free country, with freedom of speech, freedom of association and a free democratic process. Our civil society is vibrant and do not simply believe what they are told. Together, we can build the land swell that will move our country in the right direction. It does not matter who you are, speak out. Without bringing race into it, speak out against what you see wrong with our country. Use balanced arguments and offer solutions when you speak out. If you are an insider, let go of your fears and speak out. If you are a business leader, be on the right side of history and speak out. If you are an independent commentator, do not be bullied and speak out. Speak out South Africa.

Speak out to your friends, comment on facebook and twitter, fight against corruption in your local communities, schools and work places, support the National Anti-Corruption Forum and Corruption Watch, call your councillor, write an email to your premier, call the Union Buildings on 012 300 5200 and ask for Cyril Ramaphosa, email Ronnie Mamoepa on ronnie@presidency.gov.za, call the presidential hotline on 17737 or email President Zuma on Presidentrsa@presidency.gov.za. Comment on my blog!

 

What are you going to do to speak out? I would love to see your views. In the mean time, keep your talking straight!

 

Marius Strydom is the owner of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


  • 0

Corruption – A human condition

The arrest of FIFA officials in the past week has brought discussions on corruption to the fore again. For South Africans who are very concerned with the corruption in our country, this offers an opportunity to look at corruption in a global context. The fact of the matter is that corruption has been prevalent throughout the ages in all parts of the world. Even though some countries and institutions have managed to curb corruption to a meaningful extent, the unfortunate truth appears to be that corruption is a human condition. We need to constantly and aggressively tackle corruption if we are to make headway.

What causes corruption?

The Merriam Webster dictionary defines corruption as “dishonest or illegal behaviour especially by powerful people (such as government officials or police officers)”. Robert Klitgaard, who is an expert on corruption, came up with a corruption formula where corruption (C) = monopoly (M) + discretion (D) – accountability (A).

The first term means that in a country or institution where the leadership has a great deal of power, either because it is a dictatorship (no elections being held) or where opposition is weak, corruption is likely to be much greater than in a democratic or free country or institution. The second term means that corruption is more likely in a country or institution where there is limited transparency of processes, where processes are not clearly defined and where there is limited oversight. The third term means that in an environment where corruption goes unpunished or where punishment is light, corruption is much more likely to be prevalent.

What I take from this equation is that, especially in large institutions controlling large amounts of money, corruption is the most likely outcome, unless it is actively countered. Unfortunately, history bears this out. There has been no civilisation, no group of people, and no country that has been totally free from corruption, even the most successful ones. From ancient Egypt, through the Greek and Roman Empires, the Chinese civilisation and Europe in the middle ages, corruption was a serious issue. Corruption has continued in the developed world during the 20th and 21st centuries.

Today, the countries that score the lowest on Transparency International’s Corruption Perception Index tend to be in the developing world and are dictatorships (like North Korea), failed states (like Somalia or arguably Sudan) or countries suffering from conflict (Afghanistan, Iraq, Libya). In 2014, SA ranked 67 out of 174 countries, scoring higher than Brazil, Italy, India, Thailand, Mexico, Argentina and Iran. However, there were a number of developing countries that attracted a higher score than SA, including Barbados, Chile, the UAE, Botswana, Mauritius and Namibia.

How do successful countries counter corruption?

In 2014, the four countries that were considered the least corrupt were Denmark, New Zealand, Finland and Sweden. These countries typically have “high levels of press freedom, open budget processes and strong accountability mechanisms”.

With the exception of the UAE (and maybe Hong Kong), all of the top 25 countries in the Corruption Perception Index were democracies where power changes hands between different political parties from time to time.

A key feature of scandals in the developed world over recent years, whether it was Watergate, Elliot Spitzer, Rod Blagojevich, the Chen Shui-ban Scandals or the Profumo Affair is that they typically lead to resignations or arrests (although there are exceptions like Silvio Berlusconi). In many developing countries though, corruption often goes unchecked and unpunished for years.

The key differences between countries that are generally prone to corruption and countries that are less prone to corruption are that 1) it is easier to identify corruption in certain countries because of transparent and open processes; 2) there are more likely to be whistleblowers in countries less prone to corruption; 3) the press is more likely to report on corruption; 4) the people are more likely to be outraged by corruption; 5) political parties (companies) are more likely to demand resignations from or pursue prosecutions of perpetrators; 6) opposition parties are more likely to be strengthened by corruption from the ruling party (potentially to the point where they can take power); and 7) the political process allows for a peaceful transition of power.

What about South Africa?

In SA, many of the conditions above are in place for the country to fall in the less corrupt group, but there are issues that are amiss. It appears as if it is sometimes more difficult to identify and prove corruption in SA, because there is sometimes a lack of transparency and poorly defined processes. Especially when it comes to tender processes in SA, there is a great deal that can be done to make it more transparent. Rules around these processes should be more clearly defined and aggressively policed, while the processes themselves should be made public knowledge.

We have whistleblowers in SA, but very often these individuals are vilified, which creates a serious disincentive in the fight against corruption. The way in which the Public Protector, Thuli Madonsela has been treated is a clear example of this.

We certainly have a free press in SA and there is a great deal of reporting on corruption. Large parts of our population are also outraged by corruption. However, outrage has not been sufficient to put a meaningful dent in the support of our ruling party (considering recent election results). This may well be because most people are on balance happy with the delivery that Government provides to them rather than them being oblivious to corruption issues. If so, there is a meaningful risk to the ruling party that they will lose support going forward unless issues are addressed. It would be interesting to see polls surrounding Nkhandla, Eskom and President Zuma’s approval rating and how these are changing over time.

In SA, there sometimes seems to be a resistance from the ruling party to demand resignations and pursue prosecutions of the perpetrators of corruption. Where these occur, they are often at a relatively low level (e.g. Guptagate) or they are mired in controversy (NPA, Hawks, Crime Intelligence, SAPS, SARS).

Opposition parties have been strengthened and are likely to be strengthened in future if Government does not do enough to address the concerns of the people surrounding corruption. However, it is not yet clear whether this trend will be sufficient to jeopardise the ANC’s majority support in major municipalities, provinces and nationally. The municipal elections of 2016 could give us a strong indication of this trend.

Finally, we have evidence that our political process would allow for a peaceful transition of power. We have seen a peaceful transition of power from the National Party to the ANC in 1994, we saw the peaceful departure of President Mbeki in 2008 and we saw a peaceful transition of power in the Western Cape in 2009. There are concerns though that further transitions may be more difficult. Time will tell.

Conclusion

Corruption unfortunately appears to be a human condition. It has occurred and occurs everywhere regardless of country, creed or institution unless the necessary steps and processes are in place to counter it. It is not sufficient to simply depend on the good ethics and morals of our leaders. To counter corruption globally and in SA, we need to demand transparency, create a conducive environment for whistle blowing, ensure freedom of the press, be outraged by infractions, prosecute offenders, remove support for parties that condone such behaviour and maintain a free democratic process.

Many of these processes are in place in SA, but there are warning signs and we need to be vigilant. Continue to ask the difficult questions, be brave enough to speak out, demand accountability and withdraw support if positive steps are not taken.

 

Do you agree that corruption is a human condition? Do you concede that SA is better positioned than many other countries? Do you think that things will get better in SA? What are you doing to reduce corruption? I would love to see your feedback.

In the mean time, keep your talking straight!

 

Marius Strydom is the owner of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


  • 0

Let’s get aggressive with Eskom

Eskom remains in the news with continued load shedding and increasing talk of a partial privatisation. Recent developments surrounding BHP Billiton’s South32 demerger also offers an opportunity. There are three steps that should be taken surrounding Eskom, namely that Eskom should do a Telkom (form a private sector JV to house its new generation businesses), Eskom (or government) should buy the aluminium smelters from South32 and mothball them (or Nersa should allow contracts to be renegotiated) and government should promote private electricity generation. It is time to get aggressive with Eskom.

Eskom should do a Telkom

Over recent weeks commentators throughout SA have been discussing the possibility that Eskom becomes at least partially privatised. Government and the ANC have sent mixed messages with Gwede Mantashe stating that privatisation is not on the cards, while admitting that government may consider selling parts of Eskom (or listing a minority stake in the company). Lungisa Fuzile and Enoch Godongwana on the other hand mentioned that the “war room” had decided to consider allowing the private sector to take up to a 30% stake in Eskom’s power generating assets. It sounds like semantics to me and it certainly appears as if this possibility is being considered.

In my view, a listing of a minority stake in Eskom is not an attractive option. Although it will allow the parastatal to raise capital, it would not address the skills and capacity shortage within Eskom. It is also unlikely that Eskom will be an attractive asset for private investors considering its current financial and operational woes.

A better option would be to sell off some of Eskom’s generation capacity. This would bring in new capital as well as skills and technology. In a previous blog, I suggested a derivative of this strategy to deal with our electricity problems, namely that Eskom should do a Telkom. Eskom should form a 50:50 joint venture (JV) with a private sector company to house its new generation projects, including Medupi and Kusile. In the medium-term, this JV could also assist in the routine maintenance of existing power stations to reduce the current capacity constraints on Eskom. Over the long-term, the JV should be tasked with rolling out state-of-the-art generation capacity, with an emphasis on renewable energy. This would allow Eskom to effectively deal with its current problems, while at the same time retaining a stake in new electricity generation. This could provide it with healthy upside, similar to what Telkom experienced with its Vodacom JV.

Mothball aluminium smelters

It was recently announced that BHP Billiton’s demerger of its South32 company has been completed. South32 is in the process of being unbundled, which will mean that BHP Billiton’s shareholders will become the direct owners of this business. South32 owns aluminium, coal, manganese and other businesses in Australia, Southern Africa and Brazil. Of particular interest to electricity consumers in SA are its aluminium smelters in Kwazulu Natal and Mozambique.

In a previous blog, I highlighted the very unfavourable contracts that these smelters have with Eskom and the unnecessary burden it is placing on our electricity grid. These smelters, which use more than 5% of our electricity are currently able to buy their electricity from Eskom at well below what it costs to produce (less than 10% of what it costs to run diesel power plants). These contracts will run until 2028! I suggest one of two options, namely that Eskom or government buys these smelters and mothballs them (closes them down) or that Nersa (National Energy Regulator) allows these contracts to be renegotiated, which will likely also lead to a closure of the smelters.

The latter option might be difficult to effect as it will have a very detrimental impact on South32 shareholders, but it would have a very positive impact on South Africans and would be financially most attractive to Eskom. The former, would require a capital outlay from Eskom or government, but would still make financial sense and would be very positive for our country. The closure of these smelters would immediately free up electricity supply. The money that Eskom would save on diesel generation as well as the money that would be freed up on its balance sheet (Eskom currently carries a liability of R9.3bn to account for the future cost of these contracts) could allow it to pay off the cost of such a deal in a fairly short time.

Now that South32 is being unbundled, the chances of positive developments on this front must be increasing. I wait with baited breath.

Encourage more private generation

The third step that I suggest may take a bit longer to deliver, but is ultimately very important and in line with developments internationally. That is to encourage and facilitate the private generation of electricity as I detailed in a previous blog. It is a stated goal of Eskom to promote Independent Power Producers (IPPs), but the process has been extremely slow over recent years. There are two main problems, namely that the process is fraught with red tape and needs to be accelerated and that IPPs can only sell their electricity to Eskom, which further adds bureaucracy.

In my opinion, regulations should be changed to allow IPPs to sell directly to consumers, whether this would be municipalities, industry or individuals. This would free up the opportunity for a great deal of solar generation in urban areas (maybe a Solar City for SA), a quicker roll-out of wind farms and the building of small-scale power plants. The private sector is ready to step in, but it must be made easier for them to get involved.

Conclusion

When we first experienced load shedding in 2008, there were some reasons to excuse Eskom. The most important reason was that our economy grew very strongly over the preceding years and demand for electricity rose aggressively. So Eskom was caught unawares. However, they immediately started with steps to remedy the situation, including building new power plants and increasing the cost of electricity. This time round, there is very little excuse. Eskom has had 8 years to sort out its problems and it is charging us much more for our electricity. This time round, we cannot give Eskom the benefit of the doubt. We cannot reasonably believe that Eskom will be able to solve its problems on its own. The track record shows us that Eskom is struggling and that it needs help. It is time to stop with the excuses. It is time to get aggressive with Eskom.

We need positive steps and we need it now. We need private sector involvement on a small scale (promoting IPPs) and on a large scale (private sector JVs). We also need to get rid of the consumers that are using our electricity without paying enough for it (aluminium smelters). There is an expression that “Americans will always do the right thing – after exhausting all the alternatives”. Government and Eskom, please do the right thing!

 

What do you think of my suggestions of dealing with Eskom’s problems? Do you think more private sector involvement is needed and will help? Do you think that aluminium smelters should be mothballed? Do you think that government and Eskom is ready to do the right thing? I would love to see your feedback.

In the mean time, keep your talking straight!

 

Marius Strydom is the owner of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


  • 1

Why is your medical aid expensive?

In response to my blog last week about medical schemes in SA carrying too much cash on their balance sheets, many people indicated that they are unhappy with how much they pay for medical aid. Most responders felt that they got too little back from their medical aid and that it was poor value for money. In this blog, I would like to explore this contention. Do we pay too much for medical aid? If so, why is our medical aid expensive? What can be done to reduce the cost of medical aid?

Do we pay too much for medical aid in SA?

Before I address this question, it is important to dispel a number of misconceptions about medical aids (and medical schemes):

  • Medical schemes are not-for-profit entities, which are run on principles of mutuality and solidarity. It is important to differentiate between an administration company (e.g. MetHealth), which receives administration fees from schemes it administers (e.g. GEMS). The schemes do not make profit for a shareholder. Any surplus that is produced during the year, remains in the scheme and helps to boost its solvency. If you are paying too much for your medical aid, it is not because the scheme is making profits from you;
  • Medical schemes pay out 87% (in 2013) of your contribution in claims, with the rest of your contribution being used to:
    • Pay for administration (GEMS pays MetHealth, DHMS pays Discovery, etc.) – it costs money to collect contributions and to pay claims. The amount paid for administration as a proportion of contributions is well below what would be charged by a life insurer or a short-term insurer, so you are getting a good deal;
    • Pay for managed care – it costs money for managed care companies to negotiate fees with hospitals, doctors/specialists and pharmaceutical companies. Without managed care, costs would be even higher; and
    • Ensure the solvency of the scheme – medical schemes in SA have to maintain surpluses in excess of 25% of annual premiums to satisfy the Council for Medical Schemes. Sometimes as a result of high growth rates, a change in the mix of business or weak investment returns, some of your contribution will be used to increase the buffer in the scheme;
  • The claims ratio of medical schemes (87% of contributions in 2013) is meaningfully higher than that of short-term insurers and life assurers which typically pay out less than 70% of premiums in claims – the remainder being used to cover administration costs, commission and to produce a profit. If you are paying too much for your medical aid, it is not because the scheme’s claims ratio is too low;
  • The majority of your medical aid contribution goes to cover eventualities that require hospitalisation. Typically less than 25% of your contribution (sometimes much less if you are on a cheaper plan) will go towards doctors (and specialist) visits and medicine. When comparing what you get out every year relative to what you put in, you need to compare the small contribution to doctors’ visits and medicine to the number of times you actually visit a doctor (or buy medicine in that year);
  • Medical schemes are a form of insurance and not an investment. This means that it is only those that are unlucky enough to become sick that are likely to get more out of medical aid than they put in. If you don’t have a triple bypass, if you don’t develop breast cancer, if your daughter does not get leukaemia and if your son is not in a serious car accident, you are likely to get out less than you put in. If you are in that situation, well done, you have been very lucky; and
  • Medical expenses increase as you get older, but your medical aid contributions do not. This means that if you are a young member of a medical scheme, your contributions are helping to pay the medical claims of old people in the scheme. On the flipside, when you get old, other young members will help to pay your claims

So, once we have taken account of these misconceptions, is it true that your medical aid is expensive? And how should we measure this? In 2014, the average monthly gross contribution for a family to medical schemes in SA was R3056. If there was not a large proportion of families that only had hospital plans, this average contribution would have been even higher (estimated at R3700p.m. in 2014).

This is a great deal of money, considering that the average compensation per employee in SA was only R14700p.m. in 2014. As a result, households on average paid out c.25% of their monthly income in medical aid (assuming one bread-winner per family). In the USA, which is one of the countries with the highest spend on medical insurance, the average family contributed 16% to medical insurance in 2012 (based on average medical insurance spend of $8200 p.a. and average household income of $51700 p.a.). Based on this comparison, your medical aid is expensive.

Now let’s look at this in a different way. What has medical aid inflation done over recent years compared to CPI (consumer price index)? To do this, I have compared the average monthly medical aid contribution in 2013 to that in 2004 and calculated the average increase p.a. over the period and compared it to the average CPI over the same period. The average increase over this period of 8.8% p.a., exceeded the average CPI over this period of 5.8% p.a. by 3% p.a. This means that medical aid has certainly become more expensive on a relative basis.

Therefore, based on a comparison with the USA (one of the most expensive markets) and relative to history, your medical aid is expensive. The question to be answered now is why?

Why is medical aid in SA expensive?

In my opinion, there are a number of reasons why your medical aid is expensive in SA, some of which are general issues worldwide and some of which are specific to the SA environment. Globally, medical inflation has been exceeding inflation over the recent history. Over the 5 years from 2009 to 2013, global medical inflation exceeded normal inflation by 5.5% on average (well above the experience in SA). The most important drivers of medical inflation globally are technological advances, an ageing population and poor lifestyle. In SA, new medical technologies as well as increased radiology and pathology investigations has driven costs upwards. This is expected to continue.

However, over and above the global trend for medical inflation to be above normal inflation, there are other country-specific reasons why your medical aid in SA is expensive:

  • Prescribed Minimum Benefits;
  • Adverse selection by age and gender;
  • Shortage of healthcare professionals; and
  • High required solvency.

The Medical Schemes Act requires that all medical schemes in SA provide a set of Prescribed Minimum Benefits (PMB) to their members. This includes an extensive list of 270 conditions (some of which are very expensive to treat) as well list of 25 chronic diseases. What the PMBs mean is that if you want to be covered under a medical scheme, it is all or nothing – you are either covered for all the PMBs or you are not allowed to buy medical aid. Because the PMBs are so extensive, this makes even the most basic hospital plan in SA very expensive. If the Act had allowed for a less extensive list of conditions to be covered, the cost of medical aid could be reduced and more people would be able to afford it. Currently people do not have a choice in this regard and many have to go without private healthcare altogether rather than being able to afford a reduced list of benefits.

Adverse selection in the context of a medical scheme means that people that are sick or know they will need treatment are more likely to buy medical aid than people that are healthy and are less likely to use the medical aid. This is just human nature. However, for medical aid to work properly, you need healthy people to contribute so that there is enough money to pay for the needs of sick people. You need certain people to get less out of their medical aid so that other people (the sick people) can get more out. There are two types of adverse selection in SA that are a problem and contribute to why your medical aid is expensive, namely age and gender selection.

If you look at the age profile of medical schemes in SA, there is a big gap in membership between the ages of 19 and 35. People often stay on their parents’ medical aid until they start working and then very often go without cover until they are older. This is because they are less likely to be sickly at this age. Similarly, it is interesting to note that between the ages of 20 and 35, the proportion of female members in medical schemes rises and then falls off again from age 40. This is because women during child-bearing ages are more likely to need medical aid for maternity benefits.

The problem with not enough young people being on medical aid and too many women dropping their medical aid after their child-bearing ages is that this increases the cost of medical aid for everyone else. If people were more inclined to join medical schemes early and stay on them for their whole lifetime, the cost would reduce for everybody. This is why there is a drive to make medical scheme membership compulsory and many companies enforce this with their own employees. If you are forced to join, you cannot make adverse selection decisions that will increase cost for your fellow members.

Medical schemes, with the help of managed care firms, negotiate with hospitals, pharmaceutical companies and doctors for the best possible rates for their members. Although they are reasonably successful in achieving this when it comes to hospitals, pharmaceutical companies and general practitioners, the rates for specialists are often very high. This is because we have a shortage of specialists in SA and they have pricing power. This is exacerbated by the fact that many of the PMBs have to be treated by specialists. As a result, this makes your medical aid too expensive.

Finally, because medical schemes in SA are not-for-profit, you as the member are responsible for the scheme to have sufficient capital. During the early years of the new Medical Schemes Act (post 1999), members had to pay more into medical schemes than needed for their cover so that solvency levels could be built up to the regulated 25% of annual contributions or even higher. Even today, if medical schemes grow fast or their built-up capital fails to increase in line with medical inflation, members have to fork out to maintain the solvency (a portion of annual contribution will be used to boost solvency). This situation is made worse by the fact that a 25% solvency level is very high and that most schemes invest this money too conservatively. If the Council for Medical Schemes (CMS) were more accommodating (requiring solvency in line with underlying risk, which should be lower) and encouraged schemes to invest in higher-yielding assets, there would be a reduced need for contributions to fund solvency increases. In fact, contribution increases could be lower as the performance of the capital can help to boost the performance of the scheme.

How can we reduce the cost of medical aid in SA?

There are a number of things that can be done in SA to reduce the cost of medical aid, some of which will require the regulator to step and others will require medical schemes to make changes. There are, however things that you can do to reduce the cost:

  • We need more young people to join medical schemes and more women to stay on medical aid after their child-bearing age. Remember, medical aid is a form of insurance, not an investment – join when you are young and receive the benefits when you are older;
  • Compulsory membership to medical aids should be mandated, especially for low cost benefits options, so that costs can be kept low;
  • The CMS should consider allowing an alternative medical scheme product with reduced PMBs. This will not cover as much, but more people will be able to afford private medical treatment – the public sector would still be available to those people for conditions not covered under reduced PMBs;
  • The CMS should consider a different solvency regime for medical schemes that reduces the level of capital to what is actually needed to protect the well-being of schemes;
  • Medical schemes should invest their capital more aggressively so that returns can beat medical inflation, reducing the need for a part of contributions to be used for this purpose;
  • We need more skills in the SA medical industry, especially more specialists. We should try and reverse the trend for medical professionals to get their training in SA and then to go and work in other countries. This is related to the general trend in SA for us to lose skills;
  • Medical schemes should continue negotiating lower fees from hospitals, pharmaceutical companies, doctors and administration companies – the larger schemes are, the more their bargaining power would be, so increased membership of young people could help here as well; and
  • Most importantly, we should do more to prevent people getting sick in the first place. There should be more done to encourage people to stop smoking, eat better, get more exercise, prevent TB getting out of hand, receiving antiretrovirals if they are HIV positive, etc.

Conclusion

Your medical aid is expensive, but not as expensive as you may think. You are currently covered for a wide range of conditions and if you are one of the unlucky, those that need a heart transplant, those that develop cancers that are very expensive to treat, those that are involved in bad car accidents, those that have children with childhood illnesses, etc., you will be well looked after. If you are one of the lucky, it may seem as if you are wasting your money and paying much more out than you get. However, like spending your whole life paying insurance for fire protection on your house, you would probably prefer not to claim, because if you do, it means your house has burnt down. Accept that medical aid is insurance and what you are ultimately buying is peace of mind – when things go badly wrong, you will not be ruined financially or have your life shortened.

At the same time, let’s do what we can to reduce the cost of medical aid under the constraints above. Join, even if you are young and healthy; lobby the CMS for an alternative set of PMBs and for a different solvency regime; lobby your medical scheme to invest your assets more aggressively and continually negotiate better rates on your behalf; lobby government to create a more attractive environment in SA to retain skills; and try and live a healthier life – give up smoking, eat more healthily, get more exercise, get tested for HIV, get your persistent cough checked out, get your cholesterol tested, get a pap smear, etc.

Together, we can tackle this problem and make the future a healthier and less expensive destination.

 

What do you think of my assessment? Were you aware that most of your medical aid contribution is to cover you against hospital treatment? Did you know that the range of conditions you are covered for is so wide? Were you aware of the impact of adverse age and sex selection? Are you doing something to improve your health or would you consider it? I would love to read your feedback.

In the mean time, keep your talking straight!

 

Marius Strydom is the owner of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


  • 0

Too much cash in medical schemes

I attended the Actuarial Society of South Africa Health Seminar in Cape Town last week. While much of the agenda focused on developments surrounding benefits being offered (low cost benefits attracting a great deal of attention), one topic stood out to me and that was how medical schemes invest their assets. This led me to do some digging and I have come to the conclusion that medical schemes in SA hold too much cash. By the end of 2014, I estimate that these schemes were sitting on cash piles of c.R36bn. Including other fixed investments (government and company bonds), I estimate that more than 80% of medical scheme assets were invested in low-risk assets.

Why is this a problem? The two main reasons are that 1) it disadvantages scheme members, who are the ultimate owners of these assets and 2) that this money is lying fallow and is not available for investment in the SA economy, which suffers from a low savings rate to start off with.

Medical schemes in SA are required to have solvency equal to at least 25% of their annual medical scheme contributions. As a result, these schemes have had to build up substantial capital bases. The latest disclosed numbers were R46bn at the end of 2013 (R52.5bn including medical savings accounts).  This could have grown to R60bn by the end of 2014. This capital ultimately belongs to the medical scheme members, although they will never be able to extract it. However, if the capital is invested wisely, it can earn a healthy return for members who can then benefit from lower medical scheme contribution increases in the future.

The problem with investing such a large proportion of assets in cash and bonds is that it becomes really difficult for assets to earn an inflation-beating return. This means that the return on assets, instead of contributing to the health of the scheme (by generating returns in excess of inflation) is instead a drain on the health of the average scheme. The medical scheme contributions grow every year in line with medical inflation and for solvency as a percentage of contributions to be maintained, the assets also have to grow in line with medical inflation. If they do not, then solvency has to be boosted every year from contributions, via a higher annual increase. If medical schemes had a more aggressive investment philosophy, higher returns would be earned over the long-term, which could well exceed medical inflation and help to reduce the necessary annual increases. This would certainly have been the case over the past decade.

South Africa suffers from a low savings rate and could benefit from increased investment. The medical schemes in SA could contribute to this if they were to adopt a more balanced approach to their asset investment. If these schemes had a balanced fund backing their assets, they could increase their investment in equities and properties by c.R20bn.

What stands in the way of more aggressive investment by medical schemes? There are a number of factors, including:

  • The conservatism of trustees;
  • The short-term focus of what is in essence a very long-term business; and
  • The rigidity of the Council for Medical Schemes on solvency.

Medical scheme trustees in SA take their fiduciary responsibility very seriously. Their primary focus is to make sure that the schemes are conservatively run, that solvency is maintained, that appropriate benefits are offered to members and that contribution increases are kept low. There is also a meaningful focus on keeping non-health expenses low, with the most important being administration and managed care fees. This desire to limit non-health expenses is also sometimes put forward as a reason for not employing asset consultants to invest their assets. Trustees appear averse to have to pay excessive asset fees to consultants.

It is my opinion that trustees may be doing their members a disservice by being overly conservative in asset allocations. I think it is time for increasing discussion on this issue, especially for schemes that have solvency levels in excess of 30% (as most have). Trustees should also not under-estimate the potential return benefit of a balanced portfolio and should not shy away from paying asset fees to achieve this. It is important though to negotiate and make sure that asset fees are not excessive.

The business of medical schemes is managed with a very short-term focus. There is annual negotiation with service providers, benefits are redesigned if needed on an annual basis, administration fees are negotiated annually and contribution rates are set on an annual basis. Although it makes sense to run the operations of the scheme in this fashion, it does not necessarily make sense to manage the assets on the balance sheet with a similar short-term focus. The revenues within the typical scheme from contributions are generally sufficient to deal with the expenses as and when they become due. There is a limited need for some cash in the bank to facilitate these transactions, but the vast majority of the assets of a medical scheme will not be called upon in a year of operation. As such, cash flow requirements do not demand large cash balances and operationally, it would be totally acceptable for the bulk of assets to be tied up in longer-term investments.

A concern that is sometimes put forward surrounding increased investment in riskier assets such as equities and property is that asset values can fluctuate. Although this is true in the short-term, such assets tend to consistently outperform cash over the long term. As long as there is not an operational call to liquidate such assets in the short-term, fluctuations in asset values can be negotiated by an investor. They could ride out any asset value fluctuations to achieve a superior return over the long term.

An area where asset fluctuations can become a concern is if it pushes solvency levels below the 25% mark at the end of the year. This would cause the Council for Medical Schemes (CMS) to become involved. If the CMS adopted a longer-term approach and started to introduce risk based capital (RBC) measurements for medical schemes, it may free schemes up to invest more aggressively without having to worry about falling shy of the 25% level in a given year.

In conclusion, it is time for medical scheme trustees and the CMS to start thinking and talking about a different approach to investing medical scheme assets. The CMS should come up with new solvency guidelines that are more long-term focused and encourage schemes to invest their assets to match their long-term need to beat inflation. Trustees should recognise that managing the assets of medical schemes is also a very important part of their role and one that should attract more attention. The right changes to asset mix can help medical scheme assets beat inflation and can help to limit medical contribution increases going forward.

What do you think of my assessment? Were you aware of the large assets that medical schemes hold in SA? Did you know that they were so heavily weighted towards cash? Do you believe that it is necessary to invest more long-term to beat inflation? Do you think trustees and the CMS will change the way they think about medical scheme assets? I would love to read your feedback.

In the mean time, keep your talking straight!

 

Marius Strydom is the owner of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


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