In this exploration of eight famous, and not so famous, South African entrepreneurs, economic historian Stefan Schirmer celebrates the dynamism, tenacity and ingenuity of these individuals, while delving into the complexities of building successful enterprises in a society so deeply scarred by racial injustice.
In 2007, Nelson Mandela opened the first modern shopping mall in Soweto. The mall was the brainchild of Soweto-based entrepreneur, Richard Maponya and bore his name. For middle-class shoppers in Soweto the Maponya Mall was a boon, even if the jury is still out on how best to stimulate the economic development of the township, which remains an enduring spatial legacy of Apartheid.
South Africa is a complex place, deeply and irrevocably scarred by history. The entrepreneurs who helped to shape that history could not escape its complexities and injustices. Maponya, one of South Africa’s most iconic entrepreneurs, who, as a black South African, started his entrepreneurial career in the depths of Apartheid, was an exceptional individual, but he could never entirely rise above the contexts in which he was forced to operate.
Maponya was born in 1920, on the farm Spitzkop outside Tzaneen. His parents were farmworkers, but, unusually for children of farmworkers born in that era of pervasive racial discrimination, he managed to acquire sufficient education to graduate as a teacher. Even more unusually, instead of resting on the laurels of this extraordinary achievement, he decided to move to Johannesburg and take up employment at a clothing firm.
He got the job through family networks: a relative told him about the job and recommended him to the white manager at the company. Maponya was lucky in that he moved into retail at a time when companies, mostly white owned, began to recognise opportunities to sell consumer goods to the growing number of black consumers with sufficient income to represent a viable market. Maponya grabbed the opportunity with both hands. His sales acumen earned him a promotion, but it was clear that as a black South African his career opportunities within the company were severely restricted. To compensate, he sold second hand clothing on the side to township residents on a ‘pay-while-you-wear’ basis. When that became difficult, he resigned and tried to set up his own clothing company. When it proved impossible in the 1950s to acquire a license for such a venture – even with help from the law firm of Mandela-Tambo - he switched to selling foodstuffs (especially milk) in Soweto.
As his business empire grew to include a dairy, butchery, grocery stores and restaurant, he also worked on organising black businesses to do something about changing the incredibly restrictive business environment in which they had to operate. In the early 1960s, he became President of the Johannesburg African Chamber of Commerce and pushed to unite black business owners nationally. This eventually produced the National African Federated Chamber of Commerce (NAFCOC).
Starting in the late 1970s, during an intense period of negotiating with the Apartheid authorities, NAFCOC focussed its attention on keeping white-owned retailers, like Checkers, out of townships like Soweto. This policy stance was probably driven partly by self-interest and partly by the need to appeal to the policy makers of the day, who, in terms of Apartheid logic, might conceivably become sympathetic to the view that Soweto should be defined as a ‘black area’, and therefore reserved for black-owned businesses. NAFCOC in fact succeeded in keeping white-owned businesses out of Soweto during the 1980s. Maponya, however, after acquiring a filling station and a series of car dealerships in Soweto, left the confines of the township behind him. He moved into bus transport, a bottling plant in East London, construction and property ownership, and ended with offices in Johannesburg, Durban, Cape Town and Plettenberg Bay. And, with the foundation of the Maponya Mall, he now became responsible for bringing the big retailers like Checkers, Woolworths and others right into the heart of Soweto.
In many ways, Maponya exemplifies both what makes entrepreneurs successful and what they contribute to countries that give them the space to make their unanticipated, market-tested contributions to an evolving economy. In this article I will explore the ways in which some famous and some not-so-famous entrepreneurs shaped the South African economy. The entrepreneurs whose stories I will briefly outline here have certain features in common.
Entrepreneurship is usually associated with risk taking and creativity, and regarded as a fundamental determinant of a country’s economic success. Countries with many creative people, who also have a propensity to get involved in the risky business of starting new commercial activities without knowing whether these will succeed or not, are liable to expand their economies and make their people more productive. To create value, entrepreneurs need to be able to see economic opportunities that others cannot. That means they usually need to be different in some way. At the same time, they have to be grounded in the real world, because, if their creative endeavours fail to find a market consisting of actual consumers, they will go bankrupt and will have added no economic value. A successful entrepreneur is therefore someone who is both grounded and prone to flights of fancy, an outsider with an insider’s knowledge of an industry and market conditions.
Entrepreneurs also need to be hard-nosed and exceptionally determined. A new idea hardly ever takes off smoothly or immediately and, by its very nature, will be met with opposition from those who are invested in the status quo. It helps if they have connections and supporters who can guide and assist them through difficult times. They need to be individualists who have strong linkages with support groups of various kinds. They stand outside their times, but are also part of the societies and eras in which they operate. In South Africa that means they often did things to get ahead that are, thanks to the injustices that pervade our past, unforgivable.
Hugh Lanion Hall
The first gold discoveries in South Africa were made in the northeast, in Pilgrims Rest and Barberton. One of the many immigrants attracted to the area as a result of these discoveries was Hugh Lanion Hall. He came to the diggings from England as an adventurer, and, rather than mine the gold directly, started out as a hunter and transport rider, in a similar fashion to the better-known Percy Fitzpatrick, who achieved fame as author of Jock of the Bushveld. The book describes his adventures in the region, but Fitzpatrick made his fortune as a very senior mine manager in Johannesburg. Hall, by contrast, stayed in the area and established one of the biggest and longest lasting agricultural companies in South Africa: Halls and Sons. Today, the company, while still connected to the farm Mataffin, outside Nelspruit, is a global holding group with businesses in fresh produce (especially avocados), property development, pharmaceuticals, technology and financial services.
When Hall first acquired the farm in the 1860s, there was very little economic activity in the surrounding area. Malaria was the major barrier preventing settled agriculture on an extensive scale. Both African farmers and the Boer communities established higher up on the escarpment, around the town of Lydenburg, used the land primarily as grazing. As an outsider and adventurer, Hall saw the potential of the area in ways that the resident white settlers could not. In typical entrepreneurial fashion, he stuck with his idea in-spite of extensive adversity.
This is how he, himself described the early years of his agricultural venture:
“When we first established ourselves on the banks of the Crocodile River, all-the year farming in the Lowveld was unheard of. The Boers used to bring their sheep down from the Highveld for winter grazing, and as they trekked away again with the approach of summer, they shook their heads as they passed my place and predicted they would find my bones when they returned. It is true we had a long fight with Malaria, and for a time we had a Highveld farm where we could recuperate, but Mataffin has always been our foothold in Africa. We stuck to it through war, pestilence and misfortune. Sometimes our hold was precarious, but we never let go and in the end it repaid our loyalty.”
In Hall’s autobiographical account, black farmers do not feature much. To some extent, this probably reflects the reality at the time. Long-periods of warfare, climate change and white land expropriation had reduced local agricultural activities to low levels. However, we know that under different climatic conditions settlements and agricultural activities in what is now the Kruger Park were quite extensive. We also know that along the Drakensberg in this region, extensive terraced farming had been commonplace between the 1500s and the 1820s, when it abruptly disappeared. The reasons for this disappearance are still not fully understood, but probably had a lot to do with the violent upheavals that emerged in the whole area around the 1820s, upheavals that were not alleviated by the arrival of white settlers in the late 1830s.
From the 1870s, in other parts of the country, thousands of black entrepreneurs engaged in agricultural production and adopted new machinery and techniques to enhance the productivity of their farms. Overall, black farmers were probably more productive and innovative than white farmers during this time. Due to circumstances beyond their control, none of them were able to establish an enterprise with the longevity and scale of Halls and Sons, but many were exceptionally entrepreneurial in negotiating the obstacles that were constantly put in their way.
A little-known example of such an entrepreneur who operated in the area on the other side of the Drakensberg from where Hall made his start, was Jacobus Manok. Incredibly, in the early decades of the twentieth century, he established himself as one of the leading farmers of the ‘white’ Lydenburg district. Manok was firstly able to purchase a well-located farm in this district, where he built a dam and irrigated his fields. That in itself was a remarkable achievement. Then, in an area with a long history of pro-segregationist sentiments and opposition to any African activity that threatened to reduce the supply of cheap, coerced labour, Manok was elected president of the North Lydenburg Farmers Association in the 1920s, even though he was the only black member. The other members decided it would be a good idea to elect him as his farm was, by far, the most productive in the region.
Like Hall, Manok was an immigrant to the region and he was able to build up strong linkages with some of the leading white farmers. He initially came to Lydenburg in the 1850s, with his father Sikhonyane Zwane, from a region in the north (in either present-day Mozambique or Zimbabwe) from where they had fled an outbreak of violence and instability. Jacobus became well known to a local notable, General Schalk Burger, who later became vice-president of the Transvaal Republic. He worked as a constable and an interpreter before and during the War of 1899-1902. After the war, he heard that it was possible for Africans to buy land in the area, and decided to make a bid for the farm Aapiesdoorndraai in the northern half of the Lydenburg district. To ensure his success he retained the services of a local lawyer, who advised him to change his name from Zwane to something that sounded ‘less black’. Jacobus chose ‘Manok’, which, he explained to the lawyer, meant ‘also a man’ in Afrikaans.
Once he successfully secured title to the land, Jacobus spent the rest of his life negotiating the complex challenges of being a successful farmer in a mostly hostile and prejudiced environment. When the 1913 Land Act was mooted, he raised funds to travel to Britain to appeal to the King not to allow this destruction of one of the few rights Africans like him had been able to secure while Britain administered the Transvaal. He ended up not making the trip, but when a commission of enquiry investigating how to implement the Act visited Lydenburg a few years later, he refused to support the other African representatives in demanding a radically different dispensation.
He styled himself a Shangaan chief and allowed followers to inhabit portions of the farm he owned. However, he always assured neighbouring whites that he would not establish a ‘location’ on his farm. The irrigated portions of his farm were for his exclusive use, and when he died, he left the farm to his four sons. Some of them moved to the city, while others continued farming successfully. When I visited the farm in the early 90s and interviewed Jacobus’s grandson, the fertile irrigated sections of the farm continued to be devoted to high productivity crops, while the dry portions contained the dwellings of the current chief’s followers. Manok’s descendants had followed in his footsteps of negotiating with and reassuring white authorities and, in contrast to every other black-run farm in Lydenburg, had held onto their land and survived the Apartheid era that had destroyed so many others.
Agriculture’s contribution to the economy of South Africa was dwarfed by the contributions made by the mines that emerged in Kimberley and Johannesburg. These mines were mostly initiated and owned by immigrants from Europe. The main entrepreneurial contribution the mine owners made was constructing new corporate structures on South African soil, which allowed diamonds to retain their value and permitted capital-intensive mining of extremely low-grade gold-bearing ore. Both the diamond discoveries in Kimberley and the gold discoveries around Johannesburg were, by a very wide margin, the largest that had been made in the world up to that time. Both also presented substantial challenges if they were to become a serious source of revenue and profits. In Kimberley, the problem was the quantity of diamonds that could be pulled out of the ground. Diamonds were attractive when cut and polished, but they derived their value primarily from their scarcity, and they were scarce because they had never been found in densely packed seams that ran deep into the ground. When the miners who flooded into the area began to sell the diamonds they dug out of the ground on the market in large quantities, prices started to plummet. The problem wasn’t simply one of an increase in supply producing a downward adjustment in the price. What was happening instead was that the increase in supply threatened to fundamentally transform consumers’ notion that diamonds were a highly prized luxury item. This is where Cecil John Rhodes stepped in. Benefitting from the combination of his ruthless character and financial backing from European bankers the Rothschilds, he managed to buy up all the claims to Kimberley’s diamond fields and consolidated them into one company: De Beers. The consequences can be seen in the numbers: In 1872 the diamond fields were already producing one-million carats, by 1879 output had doubled, and in 1888 reached 3.5-million carats. After that time, De Beers gained control, and output remained at around 2.5-million carats until the Great Depression, when the market did finally collapse, albeit temporarily.
In the 1890s, gold exports took over as the primary generator of revenue in South Africa. During that decade the revenue generated by gold stood at £4.5-million per year. At the end of the 1890s, gold accounted for over 50% of South Africa’s exports. The price of gold was highly regulated and did not respond to a massive increase in global supply in the way that diamonds did. Consequently, gold mining challenges were all on the supply side. One was the huge costs associated with sinking the shafts needed to get to ore deep under the ground. Another was the equipment required and the high cost of crushing huge amounts of ore to get to trace amounts of gold. A third was finding a technological solution to cost-effectively separate gold from the ore, for which a technique using cyanide was eventually sourced. These challenges could only have been solved by large corporations able to attract huge financial resources, as well as the engineers, managers and other specialists required to run these complex and risky operations.
The joint-stock corporations that gold-mining entrepreneurs established on South African soil, along with a stock exchange, attracted £15,000,000 in investments into the Rand, from 1886 to 1895. The entrepreneurs responsible for making this happen consisted mostly of the same immigrants who had started ventures in Kimberley. They included Cecil John Rhodes, Julius Wernher, Alfred Beit, Barney Barnato, Herman Eckstein and Lionel Phillips.
There are many reasons why the gold discoveries on the Rand spawned modern development processes, albeit highly distorted ones. The sheer size of the gold deposits was obviously crucial, as was the fact that getting the gold out necessitated a highly sophisticated and committed effort. Nevertheless, the fact that some of the entrepreneurs responsible for the development of the Rand came to identify with the country and committed themselves to its long-term development also matters. Not all the entrepreneurs had the same attitudes in this respect. Rhodes, for example, seemed content to extract as much revenue from his gold investments as he could, so he could fund grandiose imperialist adventures in the North. He took little interest in the running of his companies and sometimes forced his managers into bad business decisions.
By contrast Julius Wernher had a long-term, business-focussed vision. In the late 1890s, at a time of economic upheaval, Wernher looked forward to a time when Johannesburg would be made up “exclusively of strong, viable companies whose valuation on the stock exchange would reflect a firm’s real value”. He was committed to building the economy of South Africa into a stable, well regulated economy made up of well-run companies.
Wehrner did not spend a lot of time in South Africa and ran his more than 70 South African companies from London. Others, however, lived in Johannesburg, contributed substantially to the development of the town and got deeply involved in South African politics. The German immigrant Herman Eckstein, for example, funded the planting of three million trees in Parktown and helped to found the Rand and Wanderers Clubs. Rather than looking to make as much money as possible and then get out, he was constantly looking to develop and invest in the future of Johannesburg and South Africa.
I don’t want to exaggerate the importance of the roots, the commitments, and the long-term visions of some of the entrepreneurs who helped to develop Johannesburg and South Africa, but I do think they matter more than is commonly acknowledged. So, while the immigrant character of all the mine-owners gave them access to knowhow, resources and knowledge of global processes that local people could never have martialled as effectively, the fact that many of them became involved in and committed to the further development of South Africa was important. It made them focus on the long-term viability of the mining industry, and ensured they were always on the lookout for investments and contributions that would lead to further economic change.
I also do not excuse, in any way, the other aspect of the way they ran their business. That has to do with their ruthless eagerness to exploit colonial conditions in South Africa to create a dependable supply of cheap labour. The way they did this was decidedly not in the interest of South Africa’s long term future. What they did was to adopt a deliberate and proactive strategy to use state coercion and a labour monopsony to cut costs. They demanded that the state vigorously enforce pass laws and ‘master and servants laws’, and actively sought to prevent labour competition between the mining houses. The mines therefore used and came to depend on the coercive capabilities of the South African and neighbouring colonial states to create a labour system that ensured real mining wages in 1951 remained at the same levels that they had been in 1916. This helped to ensure that the modern South African economy became incredibly distorted and unequal.
Ernest Oppenheimer was the mining entrepreneur who had the greatest impact on the development of South Africa. Like Julius Wernher and Herman Eckstein, but quite a few decades later, he came to Johannesburg from Germany, via London and Kimberley. His father was a cigar merchant in a German town called Friedberg, but his older brothers got involved in diamond trading and moved to London in pursuit of this business. He joined them in London and was then sent to Kimberley to spend time there, understanding the business at its source and representing the interests of the London diamond brokerage, Dunkelsbuhler & Company. He never left, and became so deeply involved in the workings of the town that he became the mayor from 1912 to 1915.
By sinking roots and immersing himself in South African mining he became intimate with many mining leaders and with the details of how South African businesses operated. This allowed him, in collaboration with the American-born William Honnold, to establish the Anglo American Corporation, largely with American financing. Anglo initially consisted of a broad portfolio of coal, gold and Namibian diamond mines. The gold and coal interests led him to settle in Johannesburg, although he continued to represent Kimberley in political office. The diamond mining interests led, in 1927, to Oppenheimer establishing a controlling interest in De Beers, which led to his appointment as chairman of the company Rhodes had founded.
Under Oppenheimer’s leadership, Anglo became the dominant mining company in South Africa through astute investments and company restructuring. He was also responsible - with a lot of input from his son, Harry Oppenheimer - for establishing a diamond trading monopoly. Under this system, even those diamond mines that weren’t owned by De Beers had to sell through the global channels that De Beers controlled. In this way, De Beers could ensure more effectively than ever that supply could be regulated to ensure diamonds maintained their value. In the 1950s, mostly after Ernest’s death in 1957 and the succession of his son Harry, Anglo became even more dominant by leading investments into the incredibly lucrative Orange Free State gold fields.
A further important role that Anglo and Ernest Oppenheimer played was in financing new ventures, including big investments in manufacturing firms, which was critical for South Africa’s long-term development. Developing a manufacturing industry is an important way to enhance the growth potential of an economy and to create job opportunities that have the potential to be much more productive, and therefore better paying, than those in agriculture and mining.
Manufacturing in South Africa has never reached the levels and the dominance in gross domestic product terms that would have been ideal for the country and its people. At the same time, manufacturing activities took root from an early stage in the country’s development, pre-dating the diamond and gold discoveries, and many of the country’s most successful industries and companies built effectively on those early roots. A good example of this is the milling of agricultural products.
One of the earliest records of manufacturing on South African soil concerns the ceding of water rights on the Liesbeek River to the proprietor of a flour mill in 1818. One hundred years later, in 1918, there were 638 grain mills in South Africa, most of them small, employing on average eight people per mill, but with substantial investments in machinery and the construction of elevators. In maize milling, the Premier Milling Company emerged as dominant and continued to expand in the twentieth century alongside a company that started out in the oats business, Tiger Oats. The latter pioneered oat milling for both animal feed and human consumption, producing the still famous Jungle Oats from 1920. The early development of the company was strongly influenced by, first, the connections that had already been forged between the Cape milling industry and British know-how, and, second, by the entrepreneurship, in particular, of Jacob Frankel and his son Rudy, along with Frederick John Collier.
Tiger Oats became a very large conglomerate by first consolidating a number of milling enterprises and then branching into related fields. Eventually the company acquired a pharmaceutical division (Adcock Ingram) – which was eventually unbundled - and more recently it moved into other African countries, Nigeria, Kenya, Mozambique. The core of the company was founded in 1921 by Jacob Frankel, a Jewish immigrant from Germany who settled in Johannesburg in 1896 and spent most of the first two decades of the twentieth century struggling to get his enterprise off the ground. He founded the company with financial assistance from Joffe Marks, a fellow immigrant.
Another branch of the company that came to be included into the larger conglomerate was started by Frederick Collier. He immigrated to South Africa from England in the 1890s with a £50,000 inheritance, invested in a Cape Town based milling company called the Cereal Manufacturing Company, and then spent a number of years travelling the world investigating how the best mills and machinery worked. He also undertook an ‘aggressive’ publicity campaign to counter prejudices against South African products. In 1910, Collier took on Daniel Bolton Redler as a partner, whose family had been involved in the milling industry in Britain. Redler ran the company after Collier left, and before Jacob’s son, Rudy, took over as CEO.
Rudy Frankel was born in Johannesburg, and for a while he was educated at St John’s College, the prestigious Anglican school established in Houghton in 1898. His brother was Herbert Frankel, who became the head of the economics department at Wits University, and later took up a professorship at Oxford University. Under Rudy’s stewardship Tiger Brands became one of the dominant manufacturing concerns in South Africa.
An aspect of Frankel’s activities as an entrepreneur I want to highlight are issues relating to his sense of identity, which emerge from his autobiography, Tiger Tapestry. As the son of a German immigrant he initially felt linked to his German origins, especially after a pro-British mob, angered by the German sinking of the passenger ship Lusitania during the First World War, attacked the Frankel home in Johannesburg. His feelings of disconnection from the dominant English speaking, Anglican culture were then enhanced by his brief time at St John’s, where he felt like an outsider and was vilified for being Jewish and speaking with a German accent. Later, after a visit to Germany in the 1930s and, especially, after the horrific events that took place in Germany during the Second World War, he came to identify more strongly with his Jewish heritage and became an overt supporter of Israel.
All along though, he conducted his affairs in English, and broadly identified as an English speaking South African. The point is this: As immigrants or children of immigrants, many South African entrepreneurs had fluid identities, and very many of them, despite having German and Eastern European roots, came in various ways to identify with and be linked to Britain, which, along with America, was the dominant economy in the world, and had the strongest economic ties to South Africa. These common cultural roots almost certainly, then, had an influence on how business was done in South Africa. For example, when Rudy Frankel was desperately looking for finance to expand Tiger Brands’ operations, he successfully turned to Ernest Oppenheimer to secure the necessary funds. Of course, Oppenheimer based his support on sound business principles, but it is also likely that Frankel was able to get into the room to talk to Oppenheimer and establish a certain level of trust because the two shared common roots and, at least to some extent, a common identity.
The Englishness of the culture that underpinned a lot of South African business activity - even though many of the entrepreneurs who started the businesses did not start out as English – angered and energised a group of young, white South Africans in the late 1930s and 1940s. In the wake of the challenges created by the Great Depression, and inspired by the symbolism of the 100 year anniversary of the Great Trek, these Afrikaans speaking whites came to identify with a radicalised ethnic ideology, commonly called ‘Afrikaner nationalism’. They played an important role in putting the Purified National Party into power in 1948. One of the issues that Afrikaner nationalists mobilised around was the idea that they should be able to work for themselves and not have to rely on ‘the English’ for employment; nor should they tolerate that so many of ‘their country’s’ resources were controlled by people who were not part of ‘the Volk’. One leader of this movement emerged as one of South Africa’s most successful businessmen. His name was Anton Rupert.
Rupert came from an established Afrikaans family from Graaf-Reinet, and achieved prominence in the early 1940s as a student leader at the University of Pretoria, where he also obtained a degree in chemistry. He then went to work for the ‘Redingsdaadbond,’ an organisation set up to raise and allocate funds to promising Afrikaner start-ups. At some point he must have decided that if you want something done right you should do it yourself, as he took the helm of a small tobacco manufacturing and distribution company called ‘Voorbrand’. It started small, simply refining and packaging pipe tobacco, which Afrikaner consumers were encouraged to smoke because it was made by one of their own. Later, Rupert and his company, now called Rembrandt, branched out into cigarette manufacturing, in a Paarl-based factory where the workers were mostly Afrikaans speaking, white women. He also ventured into bottling and selling wine and brandy, with Distellers Corporation, for which Rupert raised capital by appealing to the leading Afrikaans-speaking wine farmers of the Western Cape. He told them that this was an opportunity for them to take control of their product, and that they should trust him to expand and maintain the value of their market.
In his initial efforts, Rupert was essentially a successful example of what the literature calls ‘ethnic entrepreneurs’. They use their ethnic ties and embeddedness in a community to mobilise funds, establish trust, appeal to markets and get through tough times. Many entrepreneurs have started up like this and achieved certain advantages over those unable to mobilise support in this way.
However, Rupert became one of South Africa’s richest men because he quickly realised the limitations of being too embedded in a relatively small, and hardly ever coherent, identity-defined group. Too strong an emphasis on identity, he realised early on, creates problems, both because the target market often suspects that appeals to ethnic solidarity are really attempts to cover up a lack of quality, and because such marketing alienates the large numbers of potential consumers who don’t identify with the group. It also makes it difficult to do business and establish trust with those who are outside the group.
Rupert had big ambitions and emerged as someone with an unsurpassed talent for doing deals across the world. Though he continued in his quest to inspire the growth of Afrikaans businesses, he naturally conducted most of his business affairs in English. He collaborated with leading English-speaking businessmen like Harry Oppenheimer, purchased and marketed the products of the quintessentially English company Rothmans, and came to oppose some of the limits that the Apartheid system imposed on business activity in South Africa. Despite being a member of the Broederbond, he was often at loggerheads with such prominent Apartheid leaders as Hendrik Verwoerd and John Vorster.
By the 1960s, Rembrandt had already become a global industrial and luxury branded goods enterprise, and would come to encompass hundreds of companies located in 35 countries on six continents. In the 2000s, these companies generated yearly net sales in the region of US$10-billion. Thus, when Apartheid ended, the richest South Africans were Harry Oppenheimer and Anton Rupert.
Today the richest South African is Patrice Motsepe, an accolade he first received in 2012, with an estimated fortune of R20.07-billion. Patrice learnt his business skills from his father, who like Richard Maponya, started out as a school teacher and then launched a very successful Spaza shop selling basic goods to mineworkers. Growing up in this environment, Motsepe learned basic business principles and was exposed to some of the realities of the mining industry.
After graduating from Wits University, Motsepe joined the law firm Bowman Gilfillan, where, in 1994, he became the first black partner. He then saw an opportunity to move into the mining industry and founded Future Mining, providing mining services. In 1997, he purchased six marginal gold mine shafts from AngloGold for the low price of $7.7-million. He structured a deal allowing him to pay for the mine shafts out of the future earnings of his new company, African Rainbow Minerals. Motsepe followed this up with a string of similar deals in mining, and then moved into other areas, including finance and manufacturing.
Motsepe is a very successful South African businessman, and his business acumen has definitely added value to the South African economy. He is also a beneficiary and the most successful product of the black economic-empowerment (BEE) programme pursued by government in various forms since 1994. His success should serve as inspiration to other black entrepreneurs, both men and women, and our success as a country depends fundamentally on this happening at a much, much larger scale.
South Africa needs to produce a new crop of black entrepreneurs both to transform and to grow the economy. Unfortunately, it looks like BEE is not enough to bring this about. The stories of the entrepreneurs in this article should make it clear that it is always going to be difficult to find, let alone create, entrepreneurs. To be successful they have to combine a wide range of characteristics that will only rarely come together in one individual. They have to be mavericks, creative, tough-as-nails, individualistic, embedded in a community of support, able to gain the trust and respect of strangers, have an insider’s knowledge of an industry, and always be ready to go against the grain. It also helps if they have global connections and an understanding of how the world economy works.
With the pernicious legacy of Apartheid still with us in so many ways, and with so many black South Africans badly educated, living in poverty and unable to find employment, our entrepreneurship pool remains far too small. We have to tackle these underlying challenges if we want to get anywhere as a country. It is also the case that a low-growth, relatively closed, tightly regulated environment is not one in which entrepreneurship will flourish. What we need is a much more dynamic, expanding country, which recognises that committed entrepreneurs from anywhere will open up opportunities for more entrepreneurs. It is not a zero-sum game, and real success cannot come from operating in a tightly defined, protected space, be it a township or a ‘Volk’, as our most successful entrepreneurs, from Richard Maponya to Anton Rupert found out.