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The Journal of African Business Issue 7

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Welcome to The Journal of African Business, a unique guide to business and investment in Africa. Since the inaugural issue was published as an annual in 2020, the quarterly format has been adopted, giving our team more opportunities to bring to readers up-to-date information and opinions and offer our clients increased exposure at specific times of the year. We cover a broad range of topics, ranging from energy and mining to tourism and skills development. A wide-ranging interview in this issue with a visionary entrepreneur gives a welcome insight into how the private sector can be deployed to solve issues that go to the heart of social problems, in this instance, affordable housing. Related to urban development is the article that lays out the vision of one of the continent’s great cities to create a smarter city. Special Economic Zones have been in Africa since 1970 but there has been a great deal of new thinking about the role that these zones can play in bolstering economic growth and promoting exports. An article explores the chief motivations for the growth of this particular policy intervention and notes that more zones and organisations representing these zones are aiming to work together, not only on a continental level but through the United Nations as well. Executive education can boost the earnings of graduates of Master of Business Administration courses, but can those post-graduate programmes also respond to and equip students with the tools to tackle African challenges? The importance of being properly covered by insurance for extreme weather conditions is the subject of two case studies by the African Risk Capacity Limited, a financial affiliate of the African Risk Capacity Group, a specialised agency of the African Union. And much more... Global African Network is a proudly African company which has been producing region-specific business and investment guides since 2004.


ACCELERATING THE DELIVERY OF AFFORDABLE HOUSING Rali Mampeule is passionate about bringing housing within the reach of residents of African cities. The launch of the African Housing and Infrastructure Fund heralds a new era of expansion for a model of making serviced land available that has worked extremely well in South Africa. A A housing model is being rolled out that will see affordable and integrated developmental cities developed around the continent. That’s the dream of Rali Mampeule, founder and Chief Executive Officer of the African Housing and Infrastructure Fund (AHIF). This is not a dream that exists in the clouds, this is a dream based on what this successful entrepreneur has already achieved with an innovative solution to a shortage of good-quality affordable housing. As a result of this far-sighted vision, thousands of plots of land in South Africa now have family homes on them. And the dream is not limited to bricks and mortar either. Rali and his team have been cooperating with scientists and researchers to work on and develop the latest technology to fast-forward the process of developing and building homes. The essence of the model is that Rali and his team buy land and prepare it for development. Given that in South Africa, many regional authorities were returning unused funding meant for the development of housing to the National Treasury, Rali set out to prise open that bottleneck of funding and development that was choking the delivery of housing. To deal with what he calls South Africa’s “two-millionunit housing crisis” Rali established the South African Housing and Infrastructure Fund (SAHIF) as a means of tackling the challenge of affordable housing in South 8

AFFORDABLE HOUSING Africa. The African Housing and Infrastructure Fund, to be launched in 2023, is the continental vehicle for taking on the same challenge. Says Rali, “We thought we could come up with a plan to accelerate the delivery of affordable housing by buying land and getting it ready for development. Then we put it out on the market for people to buy.” THE MODEL As a young man working as an estate agent, Rali was able to observe the processes of land development at first hand. What he saw was a lack of understanding of the complexity of the process. “You don’t get a billion-rand today and tomorrow you can start building on the land,” he notes. The town planning, permits and permissions might take two years and this was not properly understood. He saw a gap and so began the process of buying land, going through all the processes and installing services to make it ready for development. The baseline of the model is outlined by Rali as, “We accelerate the delivery of affordable housing by getting the land ready.” Normally, the fund will sell the land once it is developed. Buyers could be listed companies, government agencies, government itself or private developers. “They can also help in accelerating the delivery of affordable housing,” says Rali. “The bulk of it is for affordable housing,” notes Rali, but he stresses that schools and social amenities must also be part of the package. “It must become a sustainable development.” A vital aspect of the process is the planning framework of the relevant city. “We always work within the spatial development guidelines of the city,” says Rali. SAHIF will do various reports such as geotechnical, traffic impact and social impact studies in order to be better prepared and to pass on relevant information to government. If the reports find that a hospital is needed, this conclusion is passed on. The idea is to work hand in hand with government, using the spatial development framework as a guideline. Bulk services are not always available because the local authority might not have the capacity. In those cases, SAHIF aims to work with government by installing the services and then recouping its expenditure through rebates over a period of time. This approach allows the development to get started without the delay of waiting for services to be installed. Rali sums up this approach as follows: “The advantage of this model is that it accelerates the delivery of affordable housing. We help institutions so that they don’t have to return their budgets and residents benefit by being able to build units on the land that has been prepared. “We are an enabler of affordable housing because we are on the ground. We install the services and we go through the whole land banking process. We can do it at a speed because we are focussed and that’s what we do.” REMARKABLE PROGESS The SAHIF model has run for four years in South Africa and delivered just over 68 000 land opportunities or serviced stands to South Africans. Rali puts this achievement in human terms. “If you times that by four–because in each house you can estimate four people staying there–you can imagine the impact that we are having in terms of the delivery of affordable housing in the country.” Angel investors helped to get the fund off the ground and some family businesses also invested. By selling off a sizeable quantity of land, enough liquidity was created for the fund to now be self-funded in South Africa. Rali reports, “The fund is able to buy its own land and resell it without the need to open more rounds for investors. ENTREPRENEURIAL BEGINNINGS The first project undertaken by SAHIF was in Ekurhuleni, east of Johannesburg. Although Rali was born in Tzaneen in Limpopo, he spent many years in nearby Daveyton as a boy so there was added excitement for the property developer to be working on a project in the area where he grew up. A 568ha piece of land yielded close to 18 000 housing opportunities. Rali’s entrepreneurial spirit found its first expression in fast food while he was studying for his part-time undergraduate SAHIF IN NUMBERS • R15.3-billion: pipeline to be realised over three years • R1.7-billion: land value invested by shareholders • 100% black owned and managed • 108 160 stands expected to be realised through pipeline leading to 424 840 South Africans being positively impacted • Five provinces: strong geographic diversification throughout South Africa SAHIF management has a strong history of successful land acquisition and disposal. 1 476ha of land previously acquired was sold in a period of 24 months. This would result in a yield of approximately 73 800 units being developed from this land (not all of the land was sold as serviced land). These transactions had a positive impact in changing the lives of 295 200 South Africans, calculated on the basis of an average of four people per LSM 1-4 household. degree through Unisa. “I started my first business by selling boerewors rolls at Kyalami in Midrand. I have always been eager to become an entrepreneur. Entrepreneurship is not something that you learn. It is almost like hunting; you go out there and you find ways to get things done. You ask questions and then you build a business that makes sense.” Rali had the good fortune to meet a man who was willing to give him opportunities, Charles Everett. Rali’s 23-year journey in property had begun. First, as an assistant estate agent and then Rali bought a franchise and was able to pay that off within two years. Rali takes up the story: “I partnered with my brother and the CEO of Chas Everett franchises, Barry Davies, to help me with working capital. Two years later I had built a business in Midrand called Chas Everett Midrand. 9

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