Tag Archive for: Economic Development

Sisipho Ntsabo
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EU and ACP seal a new agreement: Post-Cotonou Agreement

European Union (EU) and Organisation African, Caribbean and Pacific States (ACP) have sealed a new agreement.

The EU and ACP (which consists of 79 states) have both come to the end of negotiations for a new treaty that will replace the current legal framework – the Cotonou agreement. The Cotonou Agreement is a treaty between the EU and ACP that provides several innovative approaches to cooperation, all of which aim to address more effectively the pressing and varying challenges in the development of ACP countries.

The EU-ACP partnership focuses on the eradication of poverty and sustainable development. The new post-Cotonou agreement includes a broader range of policy areas such as democracy and human rights, sustainable economic growth and development, climate change, human and social development etc. The agreement will include three regional protocols for Africa, the Caribbean and the Pacific concentrating on the individual regions’ specific needs.

Photo Source: European Union, 2018

The negotiators of the deal reported that brokering the deal was a long process, and not an easy one.  “We mainly disagreed on migration, human rights issues and sexual orientation,” said Negotiator Robert Dussey. The reason for the long process was due to trying to reconcile the EU and ACP countries and their individual perspectives on this matter.

The EU and the ACP hope that the new agreement would strengthen the cooperation on an international field. The OACPS and the EU represent over 1.5 billion people and more than half of the seats at the United Nations. As the protocol of negotiations of the agreement lists migration management as a high priority area, there sets to be a promotion of legal migration.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

 

 

Sisipho Ntsabo
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Payin30 – Addressing Corporate Sustainability in The Corporate Sector

Addressing Corporate Sustainability in The Corporate Sector through Payin30

The #Payin30 initiative in South Africa has been largely driven and supported by the private/corporate sector. Corporate Social Responsibility (CSR) is a management concept or a business model, that consolidates topics of social and environmental concerns into their business policies, operations and their conduct. It is a way in which the company becomes socially accountable, not only to itself and the stakeholders but also to the public. Corporate social responsibility is the approach a company undertakes to enact a balance of the Triple Bottom Approach (TPL) – “People. Planet. Profit” while holding itself accountable to stakeholders.

CSR is a conscious effort to address the capitalistic nature of the business but being cognisant of the environment in which it exists – understanding that people, profit and the planet cannot operate in isolation.

The Corporate Social Responsibility (CSR) diagram: Photo courtesy of Getty Images

THE ROLE OF GOVERNMENT IN CSR AND PAYIN30

Although the business sector lies at the centre of CSR, the government as an authoritative power can play a catalyst role – yielding their power and voice to raise awareness of what CSR truly embodies. The government can a vital role in mediating between social agents (business sector and the public).

The United Kingdom (UK) government and the South African (SA) government have been exemplary in calling for action against 90-, 60-, and 45-day payment terms. On the 19th of January, the United Kingdom government announced that it has re-examined the Prompt Payment Code (PPC) to renounce delayed invoices owed to SMEs. Under the new reconstructed terms, companies are obliged to now pay SMEs within 30 days – which is half the time defined by the current Code. The UK government is looking to strengthen the rules, by increasing Small Business Commissioner powers as a post-covid19 economic strategy.

During the South African Investment Conference in Soweto, President Cyril Ramaphosa called for the government to ensure that SMEs suppliers are paid within 30 days. The Public Service Commission (PSC) is an independent and overseeing institution, ensuring the effectiveness and efficiency of public service performance. The PSC aptly states that “The non-payment of suppliers is in contravention of the Treasury Regulations and constitutional principles such as efficient, effective and economic use of resources, accountability and transparency”. The PSC will continue monitoring compliance with 30-day payment terms, announcing that they [PSC] will view non-compliance as financial misconduct.

These two exemplary moves by the respective are indicative of how not only government institutions can set precedence on ethical practices but also yield their power for the good of the greater society. The ability of government institutions to recognise the importance of SMEs as job creators, but also as an integral part of the economic ecosystem. The government is held accountable and is responsible for its stakeholders – the people and acknowledging that SMEs are the microcosm of society and the economy. The government’s role is a prime example of the influence of corporate social responsibility.

THE ROLE OF CORPORATE AND THE PRIVATE SECTOR IN PAYIN30

As the economic and social unit of society, corporate must operate in accord with sustainable strategies endorsed by the economic system in which it operates. The highlight of this is that corporate and business do not exist in isolation and their existence is dependent on the people and planet, there is a responsibility to the planet and the people. In pursuit of a sustainable business strategy, “CSR emphasises on the maximisation of the utility of resources with minimum consumption, exploration of resources without exploitation and maintaining the surplus balance of resources for future generations.”

The #Payin30 initiative in South Africa has been largely driven and supported by the private/corporate sector. Business for South Africa (B4SA), the SA SME Fund, and Business Leadership South Africa (BLSA), and supported by, amongst others, Business Unity South Africa (BUSA), the Small Business Institute (SBI) and the Black Business Council (BBC) have all put their heads together to support SMEs. This serves as evidence that corporates are largely aware of the role and influence in the country’s economic ecosystem.

Paul Hanratty, Sanlam Group Chief Executive Officer, and member of the Risk and Compliance, and Social, Ethics and Sustainability (SES) Committees speaks on the importance of the #Payin30 campaign.

Paul Hanratty, Sanlam Group Chief Executive Office

Hanratty says, that the #Payin30 is a supportive mechanism to SMES navigating the Covid-19 pandemic and will help them become sustainable in the long term. He follows this, highlights how the #Payin30 is also an economic strategy to the pandemic, urging all big businesses to adjust their payment terms in support of SMEs. Hanratty says,

 “Recovery will not happen exclusively through big national initiatives; it will happen bit by bit, in small but meaningful increments. The business sector in South Africa has the opportunity to play a profound role in the recovery of smaller entities.”

We cannot ignore the need for economic development and growth, but we must be cognisant that it needs to be done sustainably. We cannot grow the economy at the expense of the people or the planet. The progression of concepts like that of CSR is dependent on the partnership of the private sector and government.

CONCLUSION

In their article, ‘The Truth about CSR’, Kasturi et al note that there is an increasing pressure for corporate companies to “dress up CSR as a business discipline and demand that every initiative deliver business results.”. This takes away the essence of CSR is: “to align a company’s social and environmental activities with its business purpose and values.”. The authors of the article aptly advise that to maximise the positive impact of CSR, companies must depart from poor coordination of their CSR programs and the lack of logic connecting their various programs. Kasturi et al advise that maximising this means companies need to develop coherent CSR strategies by a) focusing on philanthropy, b) improving operational effectiveness, c) transforming the business model. Post the development of these three theatres, companies must develop a unified practice program through a four-step process. Step 1) Aligning Programs Within the Theatres, 2) Developing Metrics to Gauge Performance, 3) Coordinating Programs Across Theatres, and 4) Developing an Interdisciplinary CSR Strategy. Best-practices companies operate coordinated and interdependent programs across the CSR field.

We must understand the world from the triple bottom line: the social, environmental and financial – people, planet and profit. SMEs contribute immensely to the country’s sustainable growth and need the support of both government and corporations to ensure their survival and preservation. The global problems cannot be solved alone. The collaboration with entities like SMEs, NGOs and association can help them unleash the full potential of corporate social responsibilities. Payin30 is an important CSR initiative that serves as evidence of how government and corporate can work together to ensure the sustainability of SMEs.

 

Andrew Stegmann
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Only Two Sectors in South Africa’s Economy Grew This Year

South Africa’s economy has staged a solid recovery in the third quarter – with every single sector growing after the devastation of the second quarter, when the country was basically shut down in the first phase of lockdown.

Manufacturing, trade and mining saw strong growth, and there was also a notable jump in construction work, after eight straight quarters of contractions, says Momentum economist Sanisha Packirisamy.

The economy grew by 13.5% compared to the previous quarter, after a massive 17.5% contraction in the second quarter. Still, the latest GDP data shows that, after the first three quarters of the year, the South African economy was 7.9% smaller than a year ago.

Some sectors have been absolutely decimated by the lockdown and the pandemic’s impact on demand, given mass retrenchments and continuing uncertainty. The construction sector, for example, shrank by 20% in the first nine months of the year. Manufacturing (-15%) also contracted while trade, catering and accommodation – which includes the ravaged tourism and restaurant industries – shrank by almost 11%.

There are only two sectors that actually grew in the first nine months of this year: government services (+0.8%) and agriculture, which is now 11% bigger than a year ago. The sector boomed this year thanks to bumper summer crops, strong exports and solid prices.

After a lean 2019 due to foot-and-mouth disease and various droughts, good rains have fallen in many parts of the country this year. The country’s 2020/21 winter barley and canola harvests are expected to be the largest on record, while wheat production is predicted to reach a 19-year high, and the maize harvest is expected to be a third bigger than last year.

Exports of various produce have also been strong. For example, South Africa may export almost 10 billion pieces of citrus fruit this year, in what is expected to be one of the best seasons on record. This was thanks to a solid local harvest – but also strong demand, especially in Europe, for vitamin C as the coronavirus caused consumers to become more conscious of protecting their immune systems.

Maize exports increased by 235% to 963,441 tons in the third quarter, compared to the same period last year, reports Paul Makube, Senior Agricultural economist at FNB Agri-Business. “On the back of a bullish weather outlook with the La Niña pattern having taken hold above 90% chance for Southern Africa, agriculture’s outlook for the year ahead is even more positive,” says Makuba. La Niña, a weather pattern that begins in the Pacific Ocean, usually brings more rain to South Africa.

The preliminary intentions to plant report for summer crops indicates a 5% increase in planted area for the 2020/21 season to 4.15 million hectares. “This is likely to increase further in subsequent reports given the high commodity prices and better production conditions.”

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].

Andrew Stegmann
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COVID-19: Innovative Bandwidth Solution Helps NGOs Cut Costs

The COVID-19 pandemic has triggered a funding crisis for global Non-Governmental Organisations (NGOs) when they are needed most. As tax revenues from donor countries continue to shrink, and corporate social responsibility (CSR) budgets dwindle, NGOs must utilise all available measures to achieve potential savings without compromising the quality and quantity of their aid.

One way where potential savings could be achieved is through satellite connectivity. Continuous developments in the satellite industry offer a prime cost-cutting opportunity for cash-strapped NGOs. This is especially true for those operating across the African region, where satellite communication is already an established tool among the NGO community, so there is existing ground infrastructure to receive the satellite signals.

Notably, satellites have unique characteristics; such as their global unrivalled reach, as well as their reliability and resilience that enables them to provide truly ubiquitous coverage, covering 99% of the world’s population. Then there is also their rapid deployment that exceeds any currently available infrastructure.

Considering that limited connectivity infrastructure poses a major challenge to many NGOs, especially those operating in underdeveloped areas, satellite communication across these regions should be easily accessible and affordable.

Frank Bauner, CEO of IABG Teleport

Historically, an NGO would commission satellite links per location or project. Today, however, it is possible to establish a pool bandwidth for all remote locations across an expansive region like Africa, and save up to 25% of an NGO’s very-small-aperture terminal (VSAT) budget, by using the available bandwidth in an efficient way, without impacting the user experience.

This is because time-division multiple access (TDMA) technology allows private bandwidth pools to be set up with customisation of bandwidth allocation per remote location. And due to the vast coverage of satellite beams, it is possible to add all remote locations across Africa within one single beam – SES’s NSS-12 satellite is ideal in this instance, as it covers the entire African continent.

The specific solution is called Private Supra-regional Pool Bandwidth (PSPB), and the idea behind it is quite simple. Instead of procuring a single link for each location, a private pool bandwidth is established for all remote locations in the region. NGOs can also combine forces and procure the bandwidth together to reduce individual costs. But in order to ensure that unused bandwidth within the network is only used by other remote locations from the NGO, this pool bandwidth has to be private.

This means that the degree of efficiency achieved by the pool bandwidth, increases with the number of remote locations connected to it. This creates the opportunity for NGOs to join forces and maximise the cost-saving benefits. With a growing number of sites, even in one time zone or country, the probability of a simultaneous internet use will decrease. This probability then decreases even further when sites are located across different regions and time zones.

To put this into context, IABG has leveraged SES’s NSS-12 C-band capacity since June 2020, in order to upgrade our broadband satellite network infrastructure and support cost-effective iQ modems for African NGOs.

Thanks to the very powerful and economical new modem generation, IABG Teleport is enabling NGOs with connectivity services delivered via satellites with a low one-time investment.

Frank Bauner, CEO of IABG Teleport

Over and above these cost-saving benefits, the private pool bandwidth also allows backup service for sites that are connected via terrestrial networks. This backup service comes at no additional cost. Terrestrially-connected sites can be connected as a backup link to the pool bandwidth. In case of an outage of the terrestrial link, the connectivity can therefore be continued by the VSAT pool bandwidth.

 

For information as to how Relocation Africa can help you with your Mobility, Immigration, Research, Remuneration, and Expat Tax needs, email info@relocationafrica.com, or call us on +27 21 763 4240.

Sources: [1], [2]. Image sources: [1], [2].