Missing the views and people of South Africa

The view of Cape Town from Table Mountain. (Photo by Michael Zifang Fan)

The first few weeks of class after spring break have been nonstop, so it’s nice to take a moment to remember the people and businesses we got to know in South Africa.

The country is facing unique challenges, straddling some of the benefits of a developed economy with some of the challenges of an emerging market country. It was incredible to visit the Johannesburg Stock Exchange and to hear about the challenges of maintaining the largest stock exchange in Africa in an environment with load shedding, or scheduled power outages.

At the Johannesburg Stock Exchange.

We met with financial firms launching new digital banks meant to target low to middle income South Africans — a group that went largely unserved by the formal financial system during the era of apartheid. We learned about a struggling retailer that is trying to rebuild after being overburdened with debt.

The waterfront in Cape Town. (Photo by Puja Kowley)

Our trip ended in Cape Town, a busy hub with stunning views on the southern coast of the country. It is fitting that our last company visit was Babylonstoren, an expansive farm and vineyard owned by CBS alum Koos Bekker (’84). The massive property also holds a hotel for guests who want to spend several days exploring the land and enjoying the good food and wine.

Based on what we saw that afternoon, Babylonstoren has plenty of services and activities to offer, leaving it with several diverse income streams. After a tasty spread and wine tasting, the head gardener took us on a private tour of the garden. We nibbled on fresh mint, sat on a lawn of chamomile, wet our feet in a fountain and snacked on citrus. All the while, we enjoyed views of the beautiful landscapes of Stellembosch. It was a fantastic way to end the trip. A big thank you to the organizers for planning such an incredible week.

–Jonnelle Marte ’19

Navigating the stark inequality in South Africa

A shantytown in Cape Town. (Photo by Jonnelle Marte)

Twenty-five years after the end of apartheid, the economic opportunities in South Africa are still very much divided along racial lines.

White people in the country make up a sliver of the population but own most of the wealth. A small number of black people have gained significant wealth since the end of apartheid, but they are in the minority. To add some numbers, the top 1 percent of South Africans – most of whom are white — own 71 percent of the country’s wealth. The bottom 60 percent of the population hold only 7 percent of the wealth.

Many of the executives we met with on this trip referenced the stark inequality as a distinct challenge that limits economic growth and shapes the identity of the client they work with. At the investment firm Investec, for example, most of their customers are middle-aged white South Africans. The firm has a philanthropic division aiming to close the gap by supporting education and entrepreneurship. But as one employee told CBS students, there are many issues to tackle related to racial inequality and all of them are equally important, making it difficult for well-meaning people to know where to start.

Apartheid was a discriminatory policy that segregated black South Africans from white South Africans and barred non-white people from working certain jobs and owning property. Families were forcibly removed from their homes and relocated into townships. Their opportunities were limited, and interracial relationships were prohibited.

Another hot issue mentioned by most of the business leaders we mentioned is the question of land reform. Some politicians and activists are calling for land to be returned to the South Africans who were robbed of their property during the apartheid era. The uncertainty over the future of land ownership is causing some people to hold back from making investments in agriculture and other industries that are reliant on land.

A neighborhood with colorful homes in Cape Town.. (Photo by J.C. Hay)

The unequal distribution of land is notable across the country. Some people have large homes, as well as access to good education and quality doctors. Many others, including the majority of black people in the country, are struggling to find jobs, let alone a place to live. Many reside in poor neighborhoods known as “townships.” In some shantytowns, people live in homes with a tin roof, cement walls and limited access to electricity.

The stagnant economy is making things worse people on the low end who are desperate to find work. With an unemployment rate of 27 percent, jobs are so scarce that agriculture firms hold back from automating tasks just to keep those jobs open. For example, sugar cane is harvested by hand, exposing workers to scorpions, snakes and other hazards. The work is difficult but there are people willing to take the risk for a paycheck.

The government has moved to support the poor by providing stipends and subsidizing education. But the efforts fall short of solving the inequality problem.

More businesses are starting to target consumers on the lower end by introducing financial products that more tailored to their needs. CBS students met with Michael le Roux, the founder of Capitec, a bank that launched in rural areas and grew rapidly by offering a simple account and lower rates on cash loans. The bank is now facing more competition from other companies targeting the low end of the market.

Discovery Limited, an insurance company that offers discounts to people who meet health targets, is launching a digital bank this month. The account will pay higher interest rates to people who adopt financially healthy habits, such as saving and paying off debt. TymeBank is another digital bank entering the market that will not charge monthly fees, arguing that it will save money by not offering physical bank branches, instead offering cash machines inside of grocery stores.

It will be interesting to see if these companies succeed.

— Jonnelle Marte ’19

Lights off – and back on – in Johannesburg

Shortly after arriving in Johannesburg, CBS students had to adjust quickly to a mild inconvenience. The lights kept flickering on and off in the hotel, leaving some people in the dark in their rooms and leading to long waits for the elevator.

The outages continued over the next couple of days, causing students to experience a few seconds or minutes of darkness at restaurants, in corporate conference rooms or at other events around the city.

Blackouts are a regular occurrence in Johannesburg, where there is insufficient infrastructure to provide continuous electricity for all the homes and buildings. However, the outages have been especially frequent after a cyclone in Mozambique damaged some of the power lines. 

Cyclone Idai, which landed in Mozambique on Thursday and swept over parts of Zimbabwe and Malawi, may have killed more than 1,000 people, according to a report from CNN. Government officials and rescue workers are still assessing the damage and the lives lost.

For the residents of Johannesburg, the impact is felt mostly in the increased frequency of blackouts. The city announced Saturday that it would be scheduling more outages, a practice known as “load shedding” that is meant to prevent an overload in the system. Eskom, the main electricity company in South Africa, moved the city to Stage 4 load shedding, the highest level and the point at which the government can enact unscheduled power outages as needed.

Load shedding has been mentioned again and again during our company visits as an example of the many ways that South Africa is still very much a developing country. The nation is home to the largest stock exchange in Africa, the Johannesburg Stock Exchange, and it has one of the most mature banking markets on the continent. It also has a liquid currency that can be bought and sold easily. At the same time, the unemployment rate is high, inflation is problematic, and the currency is among the most volatile in the world.

Some residents in the Soweto township may not be able to afford generators, making them more vulnerable to the power outages caused by load shedding.

As part of their daily lives, South Africans must deal with a low-performing schools, traffic-jammed roads and regular power outages. Some of the business executives we spoke with acknowledged that poor people are affected most by load shedding because they cannot afford to buy a generator. That could include people who live in the poor neighborhoods known as townships, where the homes are smaller, worn down and lack many of the amenities available in the wealthier neighborhoods.

At the businesses we visited, the darkness would last only for the few seconds that it took for the generators to kick into play. For South African residents who don’t have those financial resources, the outages can last for hours. With more of the blackouts being unplanned, the daily consequences could be far-reaching.

— Jonnelle Marte ’19

CBS on Safari in South Africa

South Africa’s massive safari industry is one of the biggest draws for tourists. 

With just a few days to go before the launch of the official Chazen GIP Trip to South Africa, about two dozen CBS students arrived in the country early for a chance to witness the nation’s sprawling landscapes and spot their favorite wildlife.

We drove out before dawn on Friday morning to begin our nearly 12-hour safari adventure in Kruger National Park, one of the largest game reserves in Africa. Our early departure paid off almost immediately when managed to see all the animals known as “The Big Five” before we even sat down for breakfast.

The Big Five — a list that includes the elephant, buffalo, rhinoceros, lion and the leopard – became known as the most dangerous animals to hunt because of their tendency to charge toward humans when they see them on foot instead of running away. Now that many of these animals are protected from hunting, the Big Five are the most popular animals to catch on camera. But some of them are much easier to find than others.

Within minutes of entering the park we came across a majestic herd of elephants grazing. We were also in awe when we approached three white rhinos eating near the road. The rhinoceros is one of the creatures most sought after by poachers who want to sell their horns for tens of thousands of dollars on the black market. Kruger loses about one rhino a day to poachers, according to our guide.

The most elusive animal was the leopard, which is hard to see because they tend to travel by themselves and are most active at night.

We received a tip from another guide about an impala “acting kind of crazy,” a sign that a predator might be lurking near. Sure enough, some people in our group saw a leopard slinking around in the tall grass while the impala squealed in fear. Sadly, the sightings were almost too fleeting to count for some of us who witnessed only a tail or a silhouette.

We will get a second chance to spot a leopard on Saturday morning when we participate in half a day of safari before boarding our flights to meet the rest of our classmates in Johannesburg.

The tourism sector overall contributed 2.9 percent to South Africa’s gross domestic product and employed 687,000 people in 2016, according to the most recent data available from Statistics South Africa. In an economy with a 25 percent unemployment rate, every job counts.

Bangu Masisi, the South African tourism official who spoke to our class earlier in the semester said that the government is currently running a campaign to inform tourists about the other attractions that South Africa has to offer, such as surfing and wine tasting. We will get to experience the wine industry firsthand when we visit the Stellenbosch region near Cape Town on Friday to see a vineyard owned by a CBS alum. Stay tuned to learn about more of our adventures between now and then!

— Jonnelle Marte ’19