Focus on… South Africa

Victoria & Alfred Waterfront in Cape Town

Victoria & Alfred Waterfront in Cape Town

In the 1990s, I spent time in Johannesburg and Cape Town with my mom. I was participating in the Harvard Business School International Alumni Conference and then we spent additional time exploring. A couple of good friends showed us around Jo’burg – giving us the “insider’s tour” – one taking us into the townships and the other to key business sites and wonderful restaurants. In Cape Town, Harvard rolled out the red carpet including informational sessions with high-ranking officials and tours of all of the notable sites from the majestic Table Mountain to the historic Robben Island where Nelson Mandela was imprisoned. We also visited a friend’s winery for a tasting. What a contrast between the two cities and within the cities themselves – from the luxury Michaelangelo Hotel to Soweto!

In June 2009, I was in Cape Town participating in the World Economic Forum on Africa with some of the world’s top policy and decision makers to discuss that region and global challenges. I had “Meet the Leader” sessions with Ngozi Okonjo Iweala, Managing Director of the World Bank and Tendai Laxton Biti, Minister of Finance for Zimbawbe. As part of the Young Global Leader activities, we visited the Khayelitsha (“New Home”) township on the outskirts of Cape Town and participated in a YouthAIDS event at Masiyile High School in Cape Town. View pictures from the trip. I also had the opportunity to meet with various high-ranking government officials from Tanzania to discuss the plans for the Young Global Leader Summit there in 2010.

The Republic of South Africa is located at the southern tip of Africa, on the Atlantic and Indian Oceans. Namibia, Botswana and Zimbabwe are to the north; Mozambique and Swaziland are to the east; and Lesotho is an independent country surrounded by South African territory. The largest city is Johannesburg and has the largest economy of any metropolitan region in Sub-Saharan Africa. Cape Town, often called the “Mother City,” is the oldest city in South Africa and is the legislative capital. It is a popular tourist destination and has the top five national attractions in the country. South Africa is known for its diversity in cultures, languages, and religious beliefs. Although English is the most commonly spoken language in official and commercial public life, eleven official languages are recognized in the constitution.

The country’s diversity was not always valued. Since 1948, South Africa was ruled by a white minority government which enforced a separation of races with its policy of apartheid. In 1964, ANC leader Nelson Mandela, was sentenced to life imprisonment until his release in 1990. FW de Klerk repealed the apartheid laws and in 1994 Mandela became president and the Government of National Unity was formed. South Africa took a seat in the UN General Assembly after a 20-year absence. Now South African politics is dominated by the African National Congress (ANC). The leader of the ANC, Jacob G. Zuma, was officially chosen as the country’s president by the newly-elected parliament in May 2009. The main challenger to the rule of the ANC is the Democratic Alliance party. The formerly dominant New National Party, which introduced apartheid through its predecessor, the National Party, chose to merge with the ANC in 2005. Other major political parties represented in Parliament are the Congress of the People, which split from the ANC, and the Inkatha Freedom Party, which mainly represents Zulu voters.

South Africa is one of the founding members of the African Union, and has the largest economy of all the members. It is also a founding member of the United Nations and NEPAD. Nevertheless, about a quarter of the population is unemployed and lives on less than US$ 1.25 a day which contributes to a high crime rate and the continued epidemic of HIV-AIDS. South Africa has the single biggest HIV-positive population in the world and AIDS is the leading cause of death in the country.


  • Full name: Republic of South Africa
  • Population: 50.1 million (UN, 2009)
  • Capitals: Pretoria (executive); Cape Town (legislative); Bloemfontein (judicial)
  • Major languages: 11 official languages inc: English, Afrikaans, Sesotho, Setswana, Xhosa, Zulu
  • Major religions: Christianity, Islam, indigenous beliefs
  • Life expectancy: 50 years (men), 53 years (women) (UN)


    President Jacob G. Zuma of South Africa

    President Jacob G. Zuma of South Africa

    The overarching view from the Forum was that the economic crisis has created opportunities as well as obstacles for African economies. President Zuma outlined the measures his government is taking to stimulate the South African economy, including his recent promise to create up to 4 million jobs over the next five years with public investments. South Africa’s role as host of the 2010 FIFA World Cup, Zuma noted, will play a significant role in that effort, and should support the creation of over 400,000 jobs.

    Zuma cited the African Union as a promising platform for economic development, democratic reform and conflict resolution. “Africa is not without its own resources,” he said. Finally, Zuma called on the developed world countries to deliver on the commitments made at the London G20 Summit to reform global governance, shun protectionism and increase the lending resources of the IMF and the World Bank.

    We have to have institutions that are democratic and representative and, therefore, have greater legitimacy.

    Kofi Annan, Secretary-General, United Nations (1997-2006), stressed the importance of governance reform at the major international institutions, including the UN. “We have to have institutions that are democratic and representative and, therefore, have greater legitimacy,” he observed. This, he said, would encourage the developing countries to embrace economic reform and multilateral cooperation. “We have to have cooperation, because otherwise we may face highly destructive competition,” Annan warned.

    Ngozi Okonjo-Iweala, Managing Director, World Bank, Washington DC, cited a need for African governments and corporations to set their own investment priorities and seek out capital for those projects, instead of simply waiting for foreign investors to come to them. She also called on Chinese companies to outsource more of their manufacturing operations to Africa. “There is no reason why our clothes should be made in China using our designs,” she said. Soud Ba’alawy, Executive Chairman, Dubai Group, United Arab Emirates, encouraged African countries to focus on creating a more hospitable business climate. While the oil producing countries continue to seek investment outlets for their surplus export earnings, many investors in the Gulf countries consider Africa an unacceptably high risk. “Although,” he added, “if you look at the losses we’ve experienced the past couble of years in America, you have to wonder which continent is the risky one.”

    Jiang Jianqing, Chairman of the Board, Industrial and Commercial Bank of China, People’s Republic of China, said that Chinese investors increasingly are looking for opportunities to partner with African governments and companies on joint ventures. He also predicted a rise in investment flowing the other way, as African companies with valuable technologies – in renewable energy, for example – find opportuntiies to deply that technology in China.


    Girls at the Khayelitsha ("New Home") township on the outskirts of Cape Town

    Girls at the Khayelitsha township on the outskirts of Cape Town

    “The Girl Effect in Africa” session at the Forum was well-attended. A growing weight of academic research strongly suggests that investing in adolescent girls – by ensuring equal access to education, technology, employment and political participation – is one of the most cost-effective tools for reducing poverty in lesser developed countries. Yet, governments in many countries, as well as the global donor community, have been relatively slow to change their social and budgetary priorities accordingly.

    Colin Coleman, Managing Director and Head of Investment Banking, Sub-Saharan Africa, Goldman Sachs, South Africa, reviewed highlights from a research report – entitled Women Hold Up Half the Sky – issued by the bank in 2008. Among the key findings: Education greatly increases the likelihood that girls will work outside the home, dramatically improves the wages of those who find employment and results in lower rates of child mortality, HIV infection and other diseases. This makes education for girls a powerful driver of long-term economic growth. The study estimated that full educational equality with boys could raise the continent’s trend growth rate by two full percentage points, leading to a 30% increase in per capita income by 2030. Moderator Lisa MacCallum, Managing Director, Nike Foiundation, Nike, USA, said, “If you don’t get to girls by age 12, you are investing in the cure, not the prevention.”

    Education for girls is a powerful driver of long-term economic growth.

    Ngozi Okonjo-Iweala of the World Bank said the bank’s studies show that the economic gains from secondary and university education for girls are evening higher than from primary schooling. For every year of secondary school attended, average wages for girls increase by 10 to 20%, even higher than the 5 to 15% wage gains seen for boys. “If you catch them before some critical life decisions are made, it can have an enormously positive effect on themselves, their families and their nations.”

    Graca Machel, Founder and President of the Foundation for Community Development (FDC), Mozambique, argued strongly that the most critical need is not for increased funding or political commitment, but a fundamental change in traditional cultural attitudes, which frequently place a greater value on boys. “This is one of the most fundamental reforms we can make on this continent – to dismantle this belief,” Machel said. Richard Harvey, Chair and Former Chief Executive Officer of Aviva, Switzerland, argued that African families often place too great a value on the labor girls provide around the house and underestimate the longer term gains in family income that eudcation and employment can produce. Donald Kaberuka, President of the African Development Bank (ADB), Tunis, stressed the need to focus particular attention on the needs of girls in countries afflicted by war or civil strife. In some African countries, he noted, entire age cohorts have never seen the inside of a school, creating “lost generations” that now must be reached with remedial education and training.


    YouthAIDS event at Masiyile High School in Cape Town

    YouthAIDS event at Masiyile High School in Cape Town

    South Africa is still experiencing a health epidemic. It has a 18.1% prevalence of Adult HIV/AIDS. There are over 280,000 children living with HIV/AIDS and another 1.4 million AIDS orphans. There were 460,800 new turbuculosis cases in 2007. Malaria cases in South Africa are lower than many other countries in sub-Saharan Africa – 32,530 compared to over 11 million in Kenya. As communicable diseases ravage the country, obesity and chronic diseases such as heart disease, diabetes and cancer are on the rise in the region. It’s a trend driven by new lifestyles and old beliefs that big is beautiful. For example, the female prevalence of obesity is 35.2% and the male prevalence of smoking is 27.5% in South Africa.

    The World Economic Forum on Africa had a number of sessions on healthcare. In “Healthcare Delivery: Thinking outside the Hospital Box,” the general consensus was that collaboration and partnership are the best way to improve healthcare and health equity across Africa. “The private sector accepts the need to look for sustainable responses to healthcare, particularly for preventable and curable diseases,” said Brad K. Mears, CEO of the South African Business Coalition on HIV/AIDS (SABCOHA). Richard Friedland, CEO of Netcare Limited in South Africa, described an innovative public-private partnership to rebuild a hospital in Lesotho involving the World Bank and others, including the government.

    The objective is to bring healthcare services down to the little carts in the villages.

    According to Karl Hofmann, President and CEO of Population Services International (PSI), USA, Africa is “crying out for innovation” in healthcare delivery. “We need to take the traditional approach and turn it on its head. We need more resources at the base of the pyramid for community-based programs.” Participants agreed that the critical fourth “p” in public-private partnerships is “people.” Elizabeth Mataka, UN Secretary-General’s Special Envoy for AIDS in Africa, noted that private sector involvement is critical, but the objective is to bring healthcare services “down to the little carts in the villages.” Good initiatives are happening all over Africa, but they must be docmented. “We have no time to reinvent this wheel,” she said.

    The session, “Africa’s Hidden Epidemic,” highlighted the globalization of chronic disease. Olive Shisana, CEO of Human Sciences Research Council in South Africa, emphasized that, while there is general awareness of communicable diseases (such as HIV/AIDs, TB, malaria) across Africa, “nobody is talking about non-communicable diseases, such as cancer, heart disease and hypertension. Craig Nossel, Head of Vitality Wellness in South Africa and Peter de Wet, Business Unit Director and Acting CEO of Merck Sharp & Dohme in South Africa, put forth that company wellness programs are vital to prevent and manage non-communicable disease in the workplace, and to avoid productivity loss and stretched staff resources. Princess Nikky Onyeri, Founder and Executive Director of the Princess Nikky Breast Cancer Foundation in Nigeria, pointed out that the introduction of wellness programs is an alien notion in most African countries and should be encouraged across the continent by the South African government. Lauren Siebrits, CEO of PepsiCo South Africa, described PepsiCo’s partnership with the World Health Organization, focusing on the company’s sense of obligation to promote more nutritional products and educate consumers of all ages about “calories in vs calories out.”

    In a session on “Empowering Africa’s Development,” the topic was on access to energy. Until recently, access to energy has been largely ignored as part of social investment in Africa, said Obiageli Katryn Ezekwesili, Vice President of the Africa Region for the World Bank in Washington, DC. However, this “missing link” is essential of other social investments such as in education or health to achieve their full potential in a continent where only 6% of rural people have access to electricity and where energy poverty or outages cost the African continent 2% of its GDP. Rory Stear, Executive Chairman of Flambard Holdings Limited in the United Kingdom, said that solutions to making electrical power available should be broadly based and include, for example, making available appropriately powered devices such as wind, solar, etc. The poor in Africa spend an estimated US$ 17 billion each year on lighting – largely inappropriately on candles and kerosene.

    Rural electrification has helped improve health and education delivery.

    Antonio Fernando, Minister of Industry and Commerce of Mozambique, pointed out some of the basic ways that rural electrification has helped improve health and education delivery in Mozambique. People can now easily boil water, and vaccines can be refrigerated. Electric lighting allows teachers to plan their next day’s lessons at night, and even to give evening classes. They may seem to be simple issues, but they represent tremendous benefits to people who previously had no access to electricity. William Asiko, President of Coca-Cola Africa Foundation, added anecdotally that Coca-Cola has found that simply by placing a cooler at a point of sale, sales of his company’s products increased by 15%. This demonstrates the business proposition of electrification, Asiko said.


    Africa is experiencing one of the fastest-growing mobile telephony markets in the world. Now more than ever we have the opportunity to transform individuals and communities via technology innovation. Applications to expand include:

  • mobile banking
  • agricultural pricing data
  • mobile news reporting
  • e-health solutions
  • mobile education

    From the Forum session entitled “The Mobile Revolution,” Michael Joseph, CEO of Safaricom in Kenya, noted that mobile phones have transformed the grey economy, healthcare and the lives of 13.8 million customers, including fishermen and their families living in remote, secluded coastal communities. Mobile payment systems are the “real” revolution in emerging economies, Joseph explained. “People are using it to transfer money from one phone to another without the need for a bank account. They are transferring money, paying bills, buying goods and services, and making small charitable donations,” he said. “This is changing the fabric of society.”

    Contributed by Teresa Kay-Aba Kennedy, Ph.D., MBA. Part of the Power Living® Empowerment Series.

    ADD YOUR VOICE: Have you been to South Africa? What are your impressions? Post a comment here. Read about other places around the globe including China, Jordan and Brazil.