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South African Business 2023

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The 2023 Guide to Business and Investment in South Africa.


OVERVIEW ICT Government’s latest mobile contract is shared by four companies. As of 2021, National Treasury has appointed four companies as service providers to government, through its new mobile communication services contract, known as RT15-2021. The contract covers all entities of the state and is expected to allow for significant cost saving through better controls. The contract, which was previously held by Vodacom, is now shared between Cell C, MTN, Telkom and Vodacom. The transversal contract is for uncapped data for different categories of employees and includes mobile devices for packages from all service providers. Nearly 450 organs of state participated in the previous contract. This included 38 national departments, 99 provincial departments, 106 local government departments and 207 other state institutions. South Africa has not only been home to many pioneering banking apps on mobile phones, but the country’s operators continue to offer unprecedented innovation and levels of service. Arthur Goldstuck noted these trends in September 2022, further pointing out that the Reserve Bank will also speed up EFTs between banks with the introduction of a Rapid Payments Programme. Bank Zero not only uses biometric authentication for logging in, but offers zero-cost banking. Both MTN and Vodacom are offering much more sophisticated apps than when they first ventured into fintech: MTN MoMo has diverse offerings and VodaPay encompasses payment, lending, insurance and cash for emergencies. Invicta Holdings, an investment holdings and management company, has expanded into the fibre field at a time when working from home has massively increased the demand for data. Invicta acquired Dartcom Group for R500-million, giving it a presence in the ONLINE RESOURCES Business Process Enabling SA: Independent Communications Authority: Technology Innovation Agency: Credit: Caspir Camille Ruben on Unsplash SECTOR INSIGHT South African banking apps are world class. distribution of communication and renewable technologies and the manufacture of fibre optic cables (under licence from Japan). As South Africa joins the global trend towards online shopping and with the first networks rolling out 5G in 2020, data centres are going up all over the country. The latest to join the trend is software company Oracle which has chosen Johannesburg as the headquarters of its African cloud region. All of the company’s cloud regions worldwide will be 100% powered by renewable energy by 2025. Teraco stores data in Johannesburg, Durban and Cape Town. A second 30MW site is under construction in Brackenfell to complement the existing facility in Rondebosch. Africa Data Centre (ADC), part of the Liquid Telecom Group, has purchased a Tier IV data centre in Johannesburg, previously used by Standard Bank. The Council for Scientific and Industrial Research (CSIR) in Pretoria will host a new body aimed at preparing South Africa for the Fourth Industrial Revolution (4IR), the South African Affiliate Centre of the World Economic Forum. ■ SOUTH AFRICAN BUSINESS 2023 74

Banking and financial services African Bank is on the acquisition trail. OVERVIEW Banking and financ African Bank has signalled that it is ready to grow, with SECTOR INSIGHT an agreement to buy Grindrod Bank and an R80- Advisory companies that million deal to purchase lender Ubank. enabled state capture are After going into administration in 2014, Mutual African banks facing have sanctions. been granted licences. Bank took some time to recover and is still half-owned by the Reserve Bank but it has materially added to its retail client base and the addition of more than 4.5-million clients with the purchase of the troubled Ubank, which had as its base mine workers, will further strengthen its position. The R1.5- billion purchase of Grindrod Bank gives African Bank a stronger position in business lending. Consulting company Bain & Company has been excluded from British government contracts for three years because of the role the company played in the evisceration of the South African Revenue Service in the time of state capture. Although the Zondo Commission on state capture found that KPMG and McKinsey also enabled state capture, no such strictures have yet been applied by the South African government. Discovery Bank reported in June 2022 that it was signing up 750 new clients every day which puts it on course to achieve more than 600 000 customers by 2024. The bank, which launched in Ubank, 2019, has and with renewable a history energy, of catering a fast-tgrowing by the sector South with African enormous Reserve Bank minew already opened more than one-million accounts. Early in 2022, long-founterm insurer and asset manager Liberty delisted from the JSE and was unacceptable potential. Naspers Foundry is integrated into the Standard Bank Group. one of several capital investment adequacy funds ratio in May 20 consequently placed under curatorship. The New Development Bank, established to fund infrastructure Teba Trust looking Fund, which for opportunities owns Ubank, in was activ projects in BRICS countries, had approved loans of .1-billion a strategic to investor the financial when sector. the curatorship Insurance was anno be spent in South Africa by July 2022. This included renewable administrators technology of the fund is are of the particular National Union of M energy projects and the Port of Durban upgrades. (NUM) and Minerals interest, Council together SA. One with of the credit banks being The launch by Sanlam Investments of a Sustainable Infrastructure the South African services arm and of Nigeria’s payment Access systems. Bank Group a Fund is a sign of the times. The South African state has promised Council SA remains Capital positive Appreciation, about the future which of the ban a huge infrastructure drive but in the context of climate change Despite the is collapse part-owned of VBS by Mutual the Public Bank in 2018, the caused by the use of fossil fuels, the investment community mutual banks is is Investment strong, given the Corporation, nature of the is South African increasingly putting emphasis on sustainability. Sanlam Group Young will Women already in Business invested Network in a (YWBN) software has been gran invest R6-billion in the fund and aims to attract a further R5-billion bank licence and developer, Bank Zero also a intends credit to use card the mutual m from institutional investors. Investments will be made in housing, Tyme Digital payment went from terminal acquiring provider a licence and to runnin transport, health, water, waste, communication, conventional with energy services has available R500-million in more than available 500 Pick for n Pay and in less than two further years. investments. African ONLINE RESOURCES Second to Rainbow market among Capital the has country’s a stake new in banks w the investment company and is Financial Sector Conduct Authority: Bank, which officially launched in 2019 and is experie Insurance Institute of South Africa: growth in retail the deposits. owner of Discovery TymeBank, Bank which is applying the South African Institute of Chartered Accountants: model it uses received in its health a banking business licence to in reward goo behaviour. The 2017 Discovery and expanding group is already rapidly. ■a giant on t ONLINE RESOURCES 75 SOUTH AFRICAN BUSINESS 2023 Financial Sector Conduct Authority: Public Investment Corporation: South African Reserve Bank:

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