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Retail key for African entrepreneurs

December 17, 2014

Entrepreneur Herman Mashaba, who is best known for building the hair care brand Black Like Me, believes more African entrepreneurs should be participants in the ­­fast-growing retail economy on the continent.

He was speaking ahead of the inaugural World Retail Congress Africa 2013, which will take place in Johannesburg this week.

“If Africa does not create the necessary platform or environment for entrepreneurs, this continent will have major challenges.

“Mainly, we see big retailers and South African retailers going into Africa and we don’t want to end up with the retail space being dominated by only multinational companies,” said Mashaba.

More and more major retailers are looking to grow in Africa to capture the growing middle class as consumption soars.

Earlier this month, Stats SA reported that retail sales for the month of August grew by 3% year on year, despite Reuters reporting that analysts forecast retail sales to slow down to 1.2% after a year-on-year growth of 2.9% in July.

Business intelligence company Euromonitor International said earlier this year that growth in retail would not just be supported by traditional channels, but was also expected to be influenced by channels such as internet retailing, which saw double-digit growth every year from 2007 to 2012.

At the conference, Mashaba will share the key factors behind the success of Black Like Me and what the continent needs to do to foster a better environment for entrepreneurs.

One of the things Mashaba will touch on is how “crony capitalism” is killing entrepreneurship.

“We just cannot operate in an environment where people do business because of their political connections. That’s really one sure-fire way of destroying an economy, because crony capitalism actually leads to corruption.

“What it says to people is that you can only do business if you have political connections and we’re already seeing the trend in our own country with tenderpreneurs.

“Is this a sustainable economic system? We’re fooling ourselves.”

Mashaba, in his capacity as chairperson of the Free Market Foundation (FMF), is also very passionate about doing away with what he terms “draconian labour legislation”, which he says is destroying small businesses and making it hard for them to operate.

The FMF has taken its case to the Constitutional Court, but Mashaba said the other side, which included various unions as well as the labour department, was using stalling tactics.

“Our case is based on a very simple request, but one that will change the lives of thousands of unemployed South Africans.

“We are asking the court to change just one word in section 32 (of the Labour Relations Act) from ‘must’ to ‘may’, which will allow the minister (of labour) to exercise her judgement when considering whether or not to extend bargaining council agreements to employers who were not at the negotiating table,” said Mashaba.

The renowned entrepreneur continued: “At the moment, she has no discretion; she must extend.

“This means mainly SME (small and medium enterprises) employers are faced with wage agreements that they simply cannot afford and either retrench workers or do not hire as many as they would like.”

Mashaba concluded by saying that more developments on the case would be announced tomorrow.

Who is Herman Mashaba?

One of South Africa’s most celebrated entrepreneurs, Mashaba started his iconic Black Like Me hair care range in 1985.

It was the first black-owned hair care company in the country. It started in GaRankuwa township in Pretoria with three partners and a R30 000 loan.

Mashaba is a nonexecutive director of Black Like Me and executive chairperson of Lephatsi Investments, a broad-based BEE company with investments in financial services, mining, transport and logistics, and construction.

He holds several other directorships, including chairperson of the Free Market Foundation.

In 1997, Mashaba sold 75% of Black Like Me to Colgate-Palmolive in a strategic partnership and stayed on as managing director, but he bought the company back in 1999.

In 2005, he got an honorary award from Unisa for being an outstanding entrepreneur and leader.

In 2012 he won the Ernst & Young Lifetime Achievement Award.

This year he received an honorary doctorate in business administration from the Central University of Technology, Free State.

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