Philisiwe Buthelezi, the newly appointed CEO of the National Empowerment Fund (NEF), is just what the tainted and beleaguered funder needs. Someone to imbue it with credibility beyond reproach and to infuse it with a sense of urgency.
She takes over an institution that is suffering a credibility crisis. The NEF is viewed, at best, as having stumbled and funded too few empowerment projects. After being recapitalised for about R5-billion, the financier’s CEO, Sydney Maree, was sacked on suspicion of financial impropriety. The NEF has been run by acting CEO Nchaka Moloi in the interim.
Frequent criticisms include that it has an overlapping mandate with institutions such as the Industrial Development Corporation (IDC).
But Buthelezi sees things differently. She maintains that the NEF is unique as an empowerment funder and that any overlap with the IDC could be, say, as a result of the amount of funding involved.
She recognises a need to move beyond the assumption that all black business needs start-up capital and cites procurement contracts as an example. Sometimes companies are awarded these contracts by parastatals and need working capital. This, Buthelezi says, is an example of an area where the NEF can play a key role.
She would also like to see the NEF mitigating risk by taking a lead in bridging the risk gap so that commercial banks can step in and co-fund ventures. Having been closely involved in the reformulation of the NEF’s mandate and the development of its products, Buthelezi knows the fund’s limitations. For example, the product that is meant to assist black companies to list on the JSE Securities Exchange is not something she expects to have to haul out frequently.
Instead, she expects to fund projects such as initiatives by women’s groups that, for example, have obtained a contract from the Department of Health to supply curtains to hospitals, or young professionals who want to start a show of their own.
The outgoing chief director for empowerment at the Department of Trade and Industry can safely be described as having graciously sashayed between challenges with an unquestionable display of love for her country.
Testimony to her leadership is that she can present two candidates to take over her job at the Department of Trade and Industry: Polo Radebe, director for access to finance, and Jeffrey Ndumo, director for partnerships.
Her career spans three countries — South Africa, France and Germany — and includes roles as bank supervisor, corporate dealer, trade and industry diplomat and midwife to South Africa’s empowerment policy.
Of her three and half years as chief director she says: “It has been an exciting challenge, an enriching experience.”
She can afford to reflect on her contribution to shaping the historical process of empowerment. Buthelezi describes her role as having helped to place empowerment in a broader macroeconomic policy, with consideration for issues such as competitiveness and growth.
In the period she has been in charge of empowerment, she has seen the country move “from the why of empowerment to the how of empowerment”. This was achieved by firstly delivering the Broad-Based Black Economic Empowerment (BBBEE) strategy in 2003, followed by the passing of the BBBEE Act — a subject of intense debate only a few years earlier — and, as of last December, the formulation of the empowerment Codes of Good Practice.
Buthelezi and the government have been met with scepticism at every turn. The latest criticism of the codes is that they try to micro-manage commercial relationships; that they limit available deal-funding options; and that they will deter investments. “But that is what they said when we came with strategy and the Act,” she says in a manner that suggests she has heard it all before.
Her view of the private sector’s relationship with the government is one of curious ambivalence tinged with naivety. “A lot of [companies] have embraced [transformation],” she says, adding that she did not expect universal acceptance of policy directives such as the codes.
But she was surprised at a recent function when a partner from a law firm told her there was a lot of apprehension about the codes among clients. “We interact a lot with these people and they never bring up these issues,” she says. That, of course, could be because they do not want to incur the government’s wrath. Just ask Sasol, Anglo American and De Beers how that feels.
A more gratifying aspect of her work, she says, is when she hears an announcement of a billion-rand investment, such as that by glass manufacturer PFG, and is happy in the knowledge that the government has created the environment that allows this type of investment.
She would not be drawn into discussing frustrating or disappointing aspects of her work, but, inadvertently, let two slip. She believes that, unlike Germany and France where she held previous Department of Trade and Industry postings, the private sector in South Africa is not closely involved in policy development, including trade negotiations. An exception to this trend was the recent 250 submissions on the Codes of Good Practice, which she says were impressive in both number and quality.
Another frustration she alludes to is that, in spite of all the policies that have been put in place, there are still black business people complaining that they cannot access finance.
But her new job at the NEF gives her an opportunity to help solve that problem.
That challenge begins in earnest on July 1, by which time she will have finalised her contract. If she takes a three-year appointment, it will bring her years in civil service to 10. “I would recommend it to everyone for at least two years,” she says of working for government. “You begin to relate better to the challenges the country faces.” She has had a global view of industry from her position and believes it has helped her “understand how business works, something which you cannot take for granted”.
Buthelezi’s appointment to the Department of Trade and Industry in 1998 was preceded by four years in the private sector, where she was a corporate dealer with Standard Bank. The bank had poached her from the Reserve Bank, where she had been a supervisor for a year in 1993.
That was her first job in South Africa, having spent the preceding four years studying in France and the United Kingdom, where she also worked for the French bank BNP. In all, she spent seven years in France and she “just loves Paris”. Which is how, two years ago on a presidential visit to France, she surprised a delegation that included ministers Jeff Radebe and Alec Erwin as well as businessmen Patrice Motsepe and Peter Vundla. They found themselves scrambling for interpreters as she launched into French to deliver her presentation, telling her audience about La politique du BEE (BEE policies).
Buthelezi began her studies in 1986 with a BA in economics at the then Turfloop University in Limpopo. A Zulu girl in a predominantly Pedi speaking area? “I am curious,” she says, adding that she gets stifled if she says in one area for too long.
This gym fanatic is currently reading Who Says Elephants Can’t Dance?, the amazing turnaround story by the former IBM chairperson and CEO Louis V Gestner Jr. She clearly derives inspiration from good leadership.
At 40, it is fair to say the NEF is probably her last fling in the service of her country. After this, she will most likely mint money of her own as a player in her own right.
“My big idea is the NEF,” she says, suggesting that her propensity for the top job has probably deterred private-sector suitors. Well, their loss is the NEF’s gain.