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DAVOS — With hindsight, Business Leadership SA‘s decision to appoint Bonang Mohale as its full time CEO, was inspired. Ever since he took office, the voice of big business has resonated loudly, playing a huge role in winning the war against corruption. It was the first time BLSA tapped a top ranked executives for what was previously a part-time post. As importantly, its board gave the long-serving Shell SA chairman and CEO a mandate to talk truth to power – overturning decades of wimpish supplication from the national job creation engine. In this inspiring interview, Mohale explains what informs his courageous approach and explains why everything changed for SA – for the better – on December 18. – Alec Hogg
This podcast was made possible by Brightrock, the company that introduced the first ever needs-matched life insurance.
Bonang Mohale the Chief Executive Officer of Business Leadership South Africa, representing about 80 CEOs of major companies and multinationals, mostly listed on the Johannesburg Securities Exchange.
And a very brave man. Over the past few months, you have been coming out punctured. What happened at Business Leadership South Africa that you’ve taken this more forward role?
I think we get our marching orders from the classic definition of leadership, which is about genuinely being obsessed of the development of others, and it requires three things. One, some sort of compelling vision, number two, it needs courage and three, integrity. So if we do not have the courage of our convictions as leaders, we might as well pack up and go. Leadership is about creating movement, it’s about ensuring that we are always asking the question, “So what else is missing to help out people to be able to see around concept?” that to me is what leadership is about.
Bonang, we’re here in the Kirchner Museum. I was here yesterday morning at seven o’clock to listen to the Edelman Trust Barometer and there was a lot of interesting stuff to come out but in the context of this conversation what they were saying is, the trust in CEOs in America is rising whereas the trust in government is falling through the floor but it’s rising because the CEOs came out and started having a position, especially in the Trump administration. Interesting that parallel to this is you’ve been doing the same thing in South Africa. You’re not swapping notes with anyone are you?
Totally unrelated but I think leaders are a product of their own context, so we were lucky that from being a pariah nation for 350 years, we then had our first democratic elections and as a result we exported this notion of reconciliation. Judge Richard Goldstone now sits at the United Nations, some of our imminent South Africans are consulting to a number of leaders and indeed countries about how you build sustainable democracy without firing a bullet, and then we had Thabo Mbeki who gave us 43 consecutive quarters of positive GDP growth. If I exclude the seven months of President Kgalema Motlanthe, we got ourselves into a spot of bother where not even our constitution could protect, not all the institutions that we put in place could have anticipated a leader that is prone to bribery, stealing and cheating, who’s not only given us corruption, but also redefined state capture.
Under those circumstances, the choice becomes do politicians speak up, does civil society speak up, and business has a disproportionate voice. So as business we chose that we are heavily invested in this country, South Africa I’m talking about. We are part of the future, we believe in its continuance and success and we took a purposeful, deliberate, conscious decision to speak up to protect our integrity and indeed our constitution. And this now embodied in the new strategy of this 60-year old organisation, when number one, we talk about inclusive economic growth and transformation.
Do you think though, with the change in the leadership at Business Leadership South Africa because it was a very white body and then you had a complete restructuring of the leadership where the new South Africa if you like, the democratic proportions were far better represented and do you think that’s what sparked it into action or do you know where it comes from because business has been quiet for a long time. Until fairly recently, prior to your appointment, we didn’t hear much.
It’s a confluence of factors. Of course we are not immune to the demographic, political, socioeconomic changes that are now called the South African Miracle and the Rainbow Nation. One of the things we have always wanted to do in business is; how could we be broadly reflective of the demographics, not just in colour, but also in thinking in cultural resonance, and also in being absolutely relevant.
So it’s no wonder then that we chose the protection of our key institutions, but also we deliberately said, “Can we position this sixty year old Business Leadership South Africa as a national asset?” because as a social component to business, when you create jobs 13.5-million created by business compared to 2.3-million by government, those employees pay taxes, PAYE, but corporate tax is at 28%. Those are the only two sources of revenue to any government anywhere else in the world; it needs to be spoken to. When it is being given to an immigrant Indian family I think we need to stand up and say, “Not in our name”.
Was it just them? Was it just the Guptas?
No it wasn’t of course, but these were the most brazen, the greediest, the most systematic, chronological and methodical with their approach because corruption is incidental, by definition, it’s transactional, but state capture is both systemic and systematic. It manifests in the repurposing of state-owned enterprises, it is about creating parallel but weak governance. It’s about creating a shadow state where cabinet is not finally accountable, but the final prize has always been the capture of National Treasury because of two reasons. One, it collected R1.144 trillion through SARS last financial year. Secondly, it has the largest asset manager in the continent with R1.8 trillion assets under management called the PIC, which is chaired by definition by the Deputy Minister of Finance. Of course, in there you’ll also find the legitimation of Rent City.
Why did it take, or it appears that it took international pressure to start unravelling the whole Gupta story? We of course had Gupta leaks to begin with, but the real pressure started going on to multinationals, McKinsey, SAP, KPMG and where they were brought to account in the global environment with the international media, with people like Lord Hain, who’s done a wonderful job for the country (I’m sure you’ll agree) in the European capitals. Why couldn’t we fix it internally?
The same way that it took global and international players to contribute to our freedom in 1994. We have been fighting state capture’s business for the last eight years, we are the ones that lobbied Lord Hain, and we invited him to South Africa through Hain Lee Institute. We personally gave him the evidence that we had as business and he assured us that he’s going to raise this at the highest level and he did.
But also what we did, we made it easy for the whistleblowers in government to speak up, Mcebisi Jonas, who refused R600 million at the time that most black people who grew up poor would have absolutely welcomed the opportunity, Themba James Maseko who was the DG of the Public Works Department became the CEO of GCIS and was indeed in the team that was helping craft a new vision, before Thabo Mbeki spoke out, but the men and women, strong warriors that did speak up in Eskom about the capture, who worked for Trillian, ex Regiments, encouraging people to work with amaBhungane and finance it as business, joining hands with civil society movements, 130 organisations put together by business under the conference of the future of South Africa (today it’s called Save SA) and working with organisations that entrusted in the constitution.
So you can see it’s a thousand and one initiatives with business bang in the centre of it because we realise that we are bang in the eye of the storm and we have to cease the bull by the horns. So Business Leadership South Africa has chosen to be a lobbyist, an activist in the phase of rampant looting and state capture that is of epic proportions in the order of about R100 billion a year, every year at least for the last ten years with the main architect, be the current president who started this in his days in exile, continued when he became the MEC of Economic Affairs in KZN. And this is the very same person that the ANC decided we wanted to challenge as sitting President Thabo Mbeki, hoping that maybe, just maybe the office might change him.
Did he not disappoint by continuing on the same fate, but he did it at a grand scale where even acquiring an appointment with the Head of State as an investor, you had to pay for that appointment. We were really in a deep place, now we’re absolutely emboldened and encouraged, we are in a stage of building, creating rather than tearing down, and destroying with a new ANC, the leader of the ANC, the President of the ANC, Cyril Ramaphosa also happens to be the Deputy President of the country. The same way that within three days of Emmanuel Macron being elected, the Parisians were working tall and high, both of the business and consumer confidence has increased and emboldened.
Do you feel that on the streets of Johannesburg?
Absolutely and we see it in Davos. Here our sole mandate is to promote foreign direct investment into South Africa to position South Africa as the best investment destination in the world.
Again, getting back to that Edelman Trust Barometer, because it is a big deal here in Davos, South Africa was used as the benchmark for the bottom. They said that Trump has made such a mess in America that America’s, “Even worse than South Africa” were their terms. I wanted to stand up and say, “Well, let’s wait for next year”. Do you think that’s the right call?
Absolutely. What really breaks my heart personally as the CEO of BLSA, is that all our challenges are an own goal, self-inflicted, cutting our nose to spite our face. We have a president that wilfully plunged us into this catastrophe.
Why did he do that?
State capture was the object, stealing was the only object.
Was he always for himself, not for the country?
It was never motivated by improving the quality of lives of the majority of our people, always about me, myself, and I, and by the time South Africa realised it, it was too late. We were the pariah nation and the most loved nation under ‘Rolihlahla’ Nelson Mandela; we were the most respected country in the world under Thabo Mbeki because arguably we had the cleverest and the best president in the world. Now even African countries are looking at us and saying, “What’s wrong with South Africans?” what every single solitary African country since 1957, Ghana’s emancipation from colonialism, the one thing they worked on and they got right is educating their people.
South Africa even got that wrong. We inherited an Apartheid education system and we drove it to the ground where we even badly communicated that all you need is 30% to pass when in reality it is not, we introduced outcome-based education that is best suited to developed countries like Canada etc. without the context, whereas the first minister of education in 1994, Professor Sibusiso Bengu held the fort as it were. We invested ten times more than any other African country and yet our outcomes later on in terms of literacy and numeracy are amongst the worst, Zimbabwe ten years into democracy had an 80% literacy rate.
You look at Ghanaians were the most educated in the continent, even Nigeria having invented corruption in Africa, I must tell you they are the most amazing, wonderful entrepreneurs, highly educated people in the continent and yet South Africa got even that wrong because we’re focusing on the wrong things. We led Labour, SADTU to run our education system, to appoint principals. Therefore, under those circumstances all you needed was 20,000. You are a school principal, 10,000, you are a deputy principal, but also it necessitated moving out dedicated, highly experienced principals with demonstrable track records out of the way to bring in the accolades and these political deployees and by so doing we probably inflicted more harm on a generation of young people, probably worse than Apartheid.
How do we leapfrog from here?
That’s why we’re in Davos. I’m encouraged by the theme of this conference that says, “How do we create a shared future in a fractured world?” because the world is fractured and the four themes really talk to the journey of South Africa. Firstly, how do we drive sustainable economic progress. Number two; it talks about helping to navigate a multipolar, but also a multi-conceptual world. Thirdly, how do we overcome societal divisions and then lastly, how then do we shape an ideal governance of technology because we know the future is the Fourth Industrial Revolution of artificial intelligence, internet of things, driverless cars etc. where 65% of the jobs that will be needed are not known, are not even created.
How do we prepare our children, the youth because 65% of Africans are less than 35 years of age. So some of the solutions that ought to come out must duly start with gender equity because when you invest in women, when you expose them to equality, when you give them access to financial instruments, you liberate not just a village, the entire community, the entire country. Because women as entrepreneurs, women as matriarchs, as warriors will make sure that their children are healthy, that they are well fed, that they are well educated, they are well clothed and they can look at this notion of resilience, which in Africa has to be food, energy, and water in excess.
There’s lots of talk about these things. It’s the execution. Now that is going to be the critical thing. There are two really important themes. The first one you touched on, the fact that perhaps all the rules were written for Mandela and we had the anti-Mandela that came into office. How does one ensure that the rules are now adjusted in such a way that if you are to get a repeat of a bad president coming into the office in South Africa that you don’t have a repeat of the disaster that we’ve just seen?
You’re absolutely correct. You know the problem of Africa and indeed South Africa in particular has nothing to do with the availability of resources. All our minerals, we are number one or number two in the world. In fact, 80% of the raw materials of the world come from the continent of Africa, 1.2 billion people, 54 countries that speak 2,000 languages. What we have failed to do is to extract more value out of these minerals. Today we call it beneficiation, so that we can create the jobs because the prices of raw materials the world over are constantly coming down, the prices of finished goods therefore value added is always going up. Therefore it is not rocket science that we have to choose the one that is more sustainable, coal, gold, platinum, all those are coming down, and the production is genuinely by Africans. So our problem has always been execution, the doing because it was General George Paton who said that great wars are won, not by good players, but by good execution because good execution will save even a mediocre plan. Well we have seen that in South Africa. We have developed some of the best plans in the world. It’s an alphabet soup of plans, names, RDP, NDP –
AsgiSA, 114 Point Plan –
We can go on.
On and on, but the doing, that’s where we’ve really been coming short. So by focusing on few, but high impact issues, I think that’s how we’re going to make a difference.
But what about governance, because if you have governance. I get the execution story, but if you have governance issues as this country has had over the past ten years then the potential for state capture will always exist.
To make an example, to reiterate this point, if you just stop state capture, you’ll save R100 billion per annum. If you stop the irregular, fruitless and wasteful expenditure, which the auditor tells us is in the order of magnitude of about R80 billion a year on average every year for the last ten years, you save R80 billion. Therefore, you are able to address the R51 billion deficit as per the Medium-term Budget Policy Statement. You are then able to comfortably pay for free higher education for the indigent. In 2010 calculations we thought if you were to give free education to every single solitary one of the 1.2 million higher education students, all you needed is R50 billion. That is nothing compared to what we are bleeding just from corruption.
So for me, the issue of governance is absolutely paramount because it’s acting with stopping the bleeding before you start new programmes. Hence as Business, we have said, “How do we protect our key state institutions with the focus on good cooperative governance?” because this is about the separation of ownership from control. One of the leaking sieves at the moment is the management of our state-owned enterprises because when you include municipalities, they are north of 324 of these things. Eskom has a net asset value bigger than some African countries and here are three things that have always been besetting our state-owned enterprises.
One is to ensure that they are adequately capitalised, number two that the governance is above board and then lastly in the case of Eskom it’s about ensuring that they do what they’re designed to do in Eskom, planned and preventative maintenance. That was not even done. The SABC to be a public broadcaster, not a propaganda machine for the ruling party, Transnet to make sure that it is absolutely the backbone of our infrastructure because if you can’t build roads you cannot even think of creating prosperity and therefore, sustainable.
So governance is the big thing.
It is absolutely, yes.
All right, let’s look into the future because this is the excitement that is on the streets in South Africa today. With the change in the presidency of the ANC, how quickly are we likely to see that working through or the different policies working through to the real economy?
You know, share price is driven by sentiment. Sentiment is nothing but rumour and speculation. What the investors and their analysts are looking for is one, that you have the political will, number two, that you have a plan in place. You don’t have to demonstrate that you have actually executed audit, although execution is absolutely key. So we have a plan, we have the new president of the ANC. In fact, in two weeks he’s done more than we were trying to do in the last six years. We now have an independent judicial commission of enquiry that in six years as per the state of capture report has not been instituted. One meeting on Sunday, on Monday evening it is introduced.
Shaun Abrahams, NDPP, who has been sitting on two years of demonstrable, credible evidence against state capture and corruption in general, did absolutely nothing, but in just two weeks, we have seen how the Asset Forfeiture Unit has frozen some of the assets and applications given, but also an arrest warrant for at least one of the three Gupta brothers. It starts a chain reaction where you are really going to enforce the rule of law because governance has two sides to it and that’s what we are absolutely encouraged about. So we come to Davos absolutely emboldened, walking tall and high and saying, “South Africa is now open for business”.
The tide has turned but from a practical point of view, from where you sit are you seeing more whistleblowers coming forward, more people wanting to give evidence at last? There have been enough opportunities in the past. People have been reluctant, but are you now seeing that they also appreciate that the tide has turned?
Absolutely. David Lewis at Corruption Watch is inundated. In my emails I’m inundated almost daily with people that want to share. We created a conducive atmosphere where it’s okay to speak up, we have communicated as business to say, “We’ll start with our very own”. That’s why the first member to be suspended under the new BLSA was KPMG, a private sector company. Then we suspended Eskom, the crucible of state capture and indeed Transnet.
Since then we have been having ongoing talks with McKinsey, with SAP and with Multichoice and now with Steinhoff to ensure that we understand that only a sliver of businesses are on the wrong side of history. Therefore not the entire business community needs to be painted with the same black brush that a majority of businesses have good governance, that there are wholesome businesses that are doing things that are absolutely in the best interest of their customers and indeed of civil society.
Bonang, when South Africa became a democracy, we had the Truth and Reconciliation Commission, which eased a lot of the pain out of the way people got closure. Is there an argument for another TRC now or are you on the camp of the vengeful that those who stole must go to jail?
This is an interesting notion because at any point in time in the history of the country you are always confronted with peace on the one hand and justice on the other. Young people always want justice, older people will give their bottom dollar to get peace. If the President of the ANC, Cyril Ramaphosa spent all his time chasing the thieves that have stolen from us, it will take ten years. There will be no time left for governance at all, but if it concentrates on ensuring that there is international competitiveness, that there is investment in agriculture, that we have put infrastructure in place, that we have improved the quality and the standard of our education, so that the outputs are much more telling and indeed sustainable, if he creates a task team that will deal with the thieves and he doesn’t have to worry about this because we have every single solitary conceivable law under which these thieves can be prosecuted, convicted and spend time and it does not need to be his job.
The former Public Protector, Thuli Madonsela did an amazing piece of work with little or no resources. State of capture report was done in six weeks. He looked at only one institution, Eskom. Imagine if he went to Transnet where the genesis was, imagine if he went to the PAC, which was the first company to finance a BE deal by the Guptas with Duduzane Zuma called ICT at the time that they bought a stake in ArcelorMittal at that time having stolen Kumba Iron Ore rights over the weekend. You can see that this thing is deep, it’s wide. How do you start undoing a scrambled egg?
He needs to box cleverly, he needs to focus on three or four high impact cases to send a message that says, “Those who have stolen must go to jail, but not spend a lot of time”. He has enough institutions that can deal with that effectively and efficiently. And it starts with the replacement of the current National Director of Public Prosecutions because he probably thinks that his mandate is the protection of the president, unlike the former Public Protector who understood that the mandate comes from the words, “The protector of the public” not of the mighty and powerful.
Just to close off with, we have a president in the Brazilian situation, with Operation Car Wash, more than three dozen now very powerful people sitting behind bars and even two presidents of that country who have been criminally charged. Do you see South Africa having a similar thing to Operation Car Wash and indeed would it be a good thing to do or are we just too peaceful for that?
You see we need to worry about the president and the legacy we want to leave our children. Africa is replete with stories of leaders that have looted and there were no consequences. A leader loses elections in Africa, chases the winner because of the power of incumbency with a machete, forces this leader around the negotiating table and they start talking about a government of national unity when all they’re talking about is ensuring that they die on the job. So we need to really be mindful of what type of legacy we are leaving our children by ensuring that we are absolutely exemplary and it has to start somewhere and I think Cyril has set the right tone and he is on the right side of history.
We have a choice between good and evil. State capture is evil. Business has chosen to be on the side of good. So as Business, we are rolling our sleeves, gathering our loins in anticipation to help this ANC led government to do absolutely the right thing to ensure that there is consequence management, especially at the top. That must be our starting point. Anything else, we leave it to the politicians to do only what’s in the best interest of the country, not in the best interest of politicians or the party.
What got you so passionate about this, what drives you?
I think I’ve always been a change agent, I’ve always been a defender of democracy, I’ve always been an activist during my school days, a poet that was anti-apartheid and because of these very few values, we worship the ground that our leaders walked on, we looked at our movement, the African National Congress as our true liberators. We thought we were different, that we are not going to walk in the footsteps of Angola and Nigeria, that we helped in Angola during Agostinho Neto, that we helped in the integration fighting alongside AZAPO of Joshua Nkomo at that time, that we have learnt from these experiences and that we were going to create something that is sustainable, that our leaders were incorrigible because they were driven by principles.
How wrong we were and now we look at this and say, “The Archbishop Emeritus Desmond Tutu was absolutely right that we need to continue to be vigilant” and then lastly the words of ‘Rolihlahla’ Nelson Mandela were telling. We didn’t understand where they came from when he said, “If this ANC government does to you what the Apartheid regime did to us, then you must to do to this ANC led government what you did to Apartheid, join hands with all our social partners and make sure that it is rooted out, defeated and destroyed”. It will break our hearts to do that, but it if it’s a corrupt ANC, rather it be destroyed than to go down with the whole of South Africa. We are truly a magnificent people. This is God’s own country, blue skies, African sunshine. It needs to be protected at all costs.
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