Former foreign affairs director general Sipho Pityana has joined the swelling ranks of “new-order” mandarins who have re-deployed their administrative experience from the government to the business sector.
The trend is no accident. As Pityana explained last week, directors general and other senior public servants bring with them an understanding of public- policy intentions, high-level involvement in transformation and a track record of bringing about large-scale organisational change. They also have networking advantages.
Pityana now heads a black investment company, which this week unveiled a R165-million deal in acquiring 30% of Abedare Cables, a subsidiary of the Altron group. Pityana left the government two years ago, having acquired a reputation as an efficient and hard working state official in both foreign affairs and labour.
He is also chairperson of Izingwe Capital, a position he takes up after a stint as managing director of strategic business development at the beleaguered Nedcor.
Other former directors general who have gone into business include Sipho Shezi, who left public works to head Sirius Development Foundation, and Paseka Ncholo, who established the mining house Khumo Bathong Holdings after heading the Department of Public Service and Administration.
Ncholo’s successor, Robinson Ramaite, will take up an executive directorship at the newly formed Mining group, Khumama Platinum mining. Earlier this year, Department of Communications Director General Andile Ngcaba told South African journalists in Mozambique that he planned “to make money for [himself] and [his] family”, possibly in the communications field.
Outlining Izingwe’s investment philosophy, Pityana said it aimed to work with entities that “embrace South Africa’s transformation agenda”. The investment strategy was “opportunistic”, rather than sectoral.
Izingwe would like to operate in sectors that are either governed by transformation charters or where there are other pressures to transform.
Aberdare manufactures cables used in both the telecommunications and the electricity industries — two of its major clients are Eskom and Tel- kom. As state-owned enterprises, the utilities are expected to put pressure on suppliers about empowerment.
Of the 30% acquired, Izingwe directly holds 20%. A further 6% is held by the Motomo group, a long-standing operational empowerment partner of Aberdare, while 4% accrues to Hlumani Women’s Investment.
Pityana becomes deputy chairperson and his group immediately gains access to 30% of a R2-billion annual revenue, or R600-million. Part of this will be used to service the R165-million debt, presumably over a 10-year period.
Izingwe subsidiary Laetoli, will be paid for consulting on transformation work. The company has consulted for DaimlerChrysler, Barloworld, Old Mutual and Nedcor.
Apart from his public service experience, Pityana points out that his time at Nedcor exposed him to business opportunities on the continent.
He is is also a member of the New Partnership for Africa’s Development business group steering committee.
Eskom is a major player in Africa, with projects such as the $1-billion Inga Project in the Democratic Republic of Congo. This represents growth potential for Aberdare, which already exports from Mozambique to Libya.