Government has beefed up the National Empowerment Fund’s (NEFs) team with three appointments to the board including a new chairperson who goes by the name of Thando Mhlambiso.
In a statement released yesterday the NEF said it welcomed the appointment by President Jacob Zuma of the new chairman of the NEF’s board of trustees. The two other additions to the board of trustees are Jacqueline Williams and Sipho Zikode.
The appointments come as the NEF is adjusting itself to a more pronounced role as a development finance institution (DFI).
DFI’s have come under the spotlight given rising impatience that they were yet to come to the party within the needs of South Africa as a development state. DFI’s have been given tougher challenges under the New Growth Path which come with a shifting emphasis for institutions like the NEF to aim for the development of black industrialists and not merely focus on facilitating transfer of equity in existing businesses.
To be fair the NEF has under the guidance of CEO, Philisiwe Buthelezi, geared up to these new challenges to the best of its abilities over the past two years or so and may now be constrained by legalities beyond its powers. You can sense this constrain in the latest NEF annual report which shows the DFI has distributed about R4.5 billion for black empowered businesses since establishment in 1998. This has collectively created more than 31 000 “decent jobs” countrywide.
Extracts from the chief financial officer, Andrew Wright, annual statement lives one curious. “Capital is available to meet projected disbursements and hence the mandate for the next two years to the year ending March 2015. Thereafter, in the absence of the introduction of additional capital, sufficient capital is available to maintain portfolio management activity but not to meet additional new mandated disbursements”.
Added Wright, “The Board and management of the NEF are clearly aware of the need to raise additional capital for the purpose of continuing to meet its mandate through the disbursement of new investments beyond the two year projection expressed above”. He said various alternatives are being considered. They entail:
- Re-applying to National Treasury to be re-classiﬁed under Schedule 2 of the PFMA so as to allow the NEF to present a capital raising plan on the strength of the NEF’s own Statement of Financial Position.
- Establishing a special purpose vehicle to raise capital to follow through on any equity rights that materialise in the Strategic Projects Fund
“In lieu of the first two alternative, reapplying to the National Treasury for funding via the Medium Term Expenditure Framework process,” said Wright
This is perhaps the key challenge that will confront Mhlambiso in taking up the chairpersonship of the NEF. Mhlambiso previously served the NEF as a trustee and as chairman of the board investment committee. The NEF statement said Mhlambiso has more than twenty years worked in various capacities in asset management, principal investing, investment banking and corporate law across Africa and in the United States.
The trustees that have been reappointed to the NEF are Zukiswa Ntlangula, Allon Raiz, Nomalanga Mosala, Angelina Makwetla, Rakesh Garach, Avril Halstead and Jacky Molisane. The two executive trustees are Buthelezi, and the CFO Innocentia Pelo.
Mhlambiso said “It is enormously exciting to return to the NEF, on whose board I served for five years until 2010. I re-join an organization that is far more dynamic than the one that I left, and a team of accomplished trustees and executives who are as passionate as I about fostering black economic empowerment in our country, and possibly further afield. Together with my colleagues, I look forward to leading the NEF as it strives to contribute meaningfully and constructively to nation-building, to be relentless in operating an effective organization, and in promoting prosperity in other African countries.”
Buthelezi, said “under the esteemed leadership and counsel of the new board, the NEF should grow substantially as a development finance institution in South Africa. Our organisation enjoys a combination of new depth and acumen, and the retention of proven excellence”.
“The chairman, Mr Mhlambiso, has a reputation as a thinker, a leader and a visionary in financing and building productive businesses and underwhose oversight the NEF, together with contributions of the board in its entirety, is certain to help catapult black economic empowerment to greater heights”.
Profiles about the new board members supplied by NEF
Mr Thando Mhlambiso
He is an executive director of Allan Gray where he leads the firm’s operations and expansion plans across Africa (excluding South Africa). Formed in 1974, Allan Gray manages approximately $45 billion in assets on behalf of institutions and individuals and is Africa’s largest privately-owned investment manager. Prior to Allan Gray, he served in South Africa on investments across the continent as managing principal and head of infrastructure equity investments at Absa Capital, as CEO of Sanlam Private Equity, and as a founding partner of Kagiso Ventures Private Equity Fund. In the United States, Mr Mhlambiso rendered cross-border advice as a mergers &acquisitions associate with JP Morgan, and as a corporate finance attorney with the law firm Skadden, Arps, Slate, Meagher & Flom. Mr. Mhlambiso has also served as chairman of E2 and asvice-chairman of council (and chairman of the remuneration committee and a member of the executive committee) of the University of Cape Town. He holds an AB in Biology from Brown University, an MBA in Finance from Columbia University Graduate School of Business and a juris doctorate from Columbia University School of Law (where he was an editor of the Columbia Business law Review).
Ms Jacqueline Williams has attained a broad spectrum of experience and expertise as a political scientist, theologianand gender activist. Her point of focus has always been the empowerment ofpeople, especially of the historically marginalised groups in society, with regard torace, gender and class. She is the owner and managing director of the Johannesburg-based Williams & Calmer Management and Training Consultants, which provides a range of solutions in organisational development, training, facilitation and project management.
Mr Sipho Zikode is a deputy director general of the dti, is responsible forthe department’sEmpowerment Enterprise Development Division. Among other things, EEDD fosters the growth of SMMEs and cooperatives by creating an enabling environment and overseeing the support provided by agencies such as the Small Enterprise Development Agency and the South African Micro-finance Apex Fund. EEDD’s goal is to increase the number of SMMEs (currently 2 million) and cooperatives (17 000 registered, but many more informal, including an estimated 800 000 stokvels) in South Africa, and to grow their contribution to GDP from 40% to 45% over the next 5 years.