Africans Investing in Africa

Thursday, 9 October, 2008 - 10:20

Business and civil society have an important role to play in ensuring the sustainable development of Africa says Sipho Mseleku, CEO of the Association of SADC Chambers of Commerce.

Business and civil society have an important role to play in ensuring the sustainable development of Africa says Sipho Mseleku, CEO of the Association of SADC Chambers of Commerce. He urged Africans to invest in developing their own communities and not to rely on foreign funding which in most cases, comes with conditions. Mseleku was speaking at the CAF Southern Africa “Innovating for Sustainability – Africans Investing in Africa” conference that took in Johannesburg from 17-18 September.

The conference aimed at exploring how innovative financial models involving local investment, private equity and social enterprise can enhance the region’s sustainability. Delegates also explored the relationships between social investment, good corporate governance and leadership. Speaking on a variety of topics, speakers agreed that corporate social investment (CSI) programmes that do not engage with local NGOs and the social context of programmes will not succeed. Rather, NGOs and CSI should work together to build communities in a sustainable way.

Speaking at the conference, chief executive officer of Empowerdex Vuyo Jack, urged NGOs to ensure that CSI funding benefits the poor. Jack, whose company championed the black economic empowerment ratings in South Africa, said monitoring whether the impact of CSI donations benefitted the historically-disadvantaged is difficult if NGOs are not themselves able to implement monitoring and evaluation processes.

In a similar vein, Inyathelo – the South African Institute for Advancement’s (SAIIA) Senior Coordinator for Governance and Policy Development, Ricardo Wyngaard, questioned suggestions by Andile Ncontsa from Old Mutual that philanthropic giving has not worked in South Africa and asked whether Ncontsa’s suggestions were based upon empirical evidence. Wyngaard, whose organisation works with institutions and organisations to develop a professional approach to raising the donor-investment required to advance their objectives, says that this was similar to CAFSA’s slogan of being ‘committed to effective giving’. He further questioned how Ncontsa’s prediction that the relationship between corporates and NGOs is going to be about paying for value coincides with the market-failure theory, which is often used to explain the prevalence of the non-profit sector.

In his keynote address Mseleku said that giving should not only happen through CSI. He called on government to find ways to encourage personal and individual giving (for example through tax incentives to people/families who adopt orphans).

But it is not only about giving in a narrow sense. Picking up on this point, BHP Billiton’s Malebo Mahape called upon corporates to involve community structures when implementing their CSI programmes. “Effective CSI cannot happen from the office”, she said.

Extending this argument, PPC’s Francie Shonhiwa said that apart from engaging community structures, CSI practitioners should also capacitate NGOs to be able to deal with their own problems.

Apart from relying on CSI programmes and donor funds to implement programmes at the community level, many NGOs are now realising the importance of using private equity to sustain their programmes.

CEO of the Social Private Equity South Africa (SPESA), Kojo Parris, noted that this approach to funding will help NGOs to sustain themselves. This is particularly important in a context of funding drying up. This approach has already benefited organisations such as Kagiso Trust (KT), a NGO which helps to finance and manage educational and developmental projects for underprivileged South Africans.

KT CEO Kgotso Schoeman, said the decision to establish an investment agency was taken at the time when South Africa was heading for its first democratic elections; when KTs donors where no longer prepared to donate enough money into its programmes. Schoeman says they then established an investment agency in order for the organisation to have its own assets and continue implementing programmes.

Ikamva Labantu Empowerment Trust’s view is that CSI should help to take impoverished communities out of poverty. The Trust’s managing director, Sipho Puwani, said that NGOs need to tell business what they can deliver and also inform future CSI strategies.

- Butjwana Seokoma is the information coordinator at SANGONeT

NGO Services

NGO Services