The once powerful African Council of Hawkers and Informal Businesses (Achib), which represents more than 110 000 members, is facing management turmoil and a financial crisis that could lead to its collapse.
The organisation was forced to vacate its central Johannesburg offices last week after it failed to pay rent and telephone bills for three months. Staff have also complained that they have not been paid for the same period.
The leading figures within Achib, president Lawrence Mavundla and CEO Patrick Silo, blame each other for the management crisis and the organisation’s financial woes.
Silo has accused Mavundla of running the 17-year-old organisation ”like a family cabal or a spaza shop”. Mavundla says Silo is a ”fake” who has failed to run Achib.
The organisation was established in 1986 to serve and protect the interest of micro-business through lobbying efforts and the provision of support services. It waged running battles with the apartheid government, fighting for the rights of hawkers to trade within the then discriminatory environment.
Since 1994 it has played a key role in equipping informal traders to enter the formal sector and lobbying legislatures and government on behalf of hawkers.
It has also been one of the more influential affiliates of the National African Federated Chambers of Commerce (Nafcoc). Because of his role in Achib, Mavundla himself is regarded as one of the most influential and connected black businessmen in the country.
The informal sector is the second-largest job-creation sector. Achib draws its income from informal traders who pay an annual fee of R120. It has more than 110 000 members.
The organisation has been the darling of the corporate world for many years. Last year more than 10 companies, including Coca-Cola and Standard Bank, donated hundreds of thousands of rands to the organisation’s 17th annual conference. Telkom alone donated R50 000.
Despite the apparent support from business, the organisation is on the brink of collapse. Mavundla admitted this week his organisation is experiencing serious cash-flow problems. But he said the fact that his organisation has failed to pay office rental does not mean it will go under.
”Achib is not an organisation on paper but an organisation of members by members. It presently offers two basic services — legal services and lobbying,” he said.
The office’s closure came after dramatic visits by several individuals, including sometimes Mavundla, who loaded the furniture on to trucks.
Silo insisted that Achib is bankrupt. ”The red light came on when Mavundla refused to give me access to financial statements. All sponsors never got financial statements and no proper financial controls were in place,” he said.
Silo accused Mavundla of ”pocketing” Achib’s money. ”All the money which was donated to Achib went into his pocket and was not used for the purposes it was raised for,” he said.
Mavundla denied this. He said Silo was appointed CEO to raise funds but failed ”even to raise a single cent”.
Mavundla said he had to intervene ”by coming to the rescue of the organisation by raising funds through acquiring a loan worth R20 000 and by personally contributing R10 000 out of his own personal account so [that] staff could be paid.
”Mr Silo is a fake, to say the least. He must go back to school,” he said.
Mavundla said Achib produced financial statements early last year. Informal traders who were contacted by the Mail & Guardian this week said they paid Achib membership fees but did not receive any benefits.
”Just a couple of months back I paid R120 for Achib membership,” said a member who asked not to be identified. ”Mavundla stopped coming to us and stopped seeing us in connection with Achib. He just didn’t have time for us.
”I then heard that he took office equipment and furniture from our office [Achib offices] and relocated to the Intertyre offices. I heard that the office [Achib] closed a week ago.
”Mr Silo, the CEO, left Achib because he did not earn anything from Mavundla. He decided to leave after working four years without pay.
”When Silo came to assist us Mavundla would come and mess everything up. I was very disappointed I had expected to move away from the streets. The Metro police take our stock, which is expensive.”
Nafcoc secretary general Buhle Mthethwa said the Achib has not been in good standing for some time and that the mother body would investigate its problems. ”We’ve been battling to contact Mavundla.”