OPINION: Economic transformation manifested by participating former SA Express employees
By: Matshepo Mokoena-Skhosana
JOHANNESBURG - South Africa is at war with inequality, poverty and unemployment; all these phenomena are inextricably linked to an untransformed economy.
We as a nation have tried a number of different strategies. I for one have always been a believer of alternative funding methodologies, no matter how impossible they may seem, to those who are committed to the conventional funding methods and institutions.
So far, doing things the way they have always been done has not assisted us in solving our economic questions.
I have recently been inspired by former participating SA Express employees, who have rebranded as Fly SAX by making two bold moves.
The first one was to assume a solution driven perspective, by taking their future into their own hands.
They are daring to save their jobs, by bidding for the company which is currently in provisional liquidation.
This is in spite of all the negativity clouding the aviation industry due to COVID-19. I had the honour of engaging with them, i found that there is definitely a method to their madness.
This vibrant group of participating employees are not going ahead with this bid out of ignorance, but rather from a position of strength drawn from a strategy that has been built on extensive experience.
Who better to save the airline either than the people that built it from ground up; people whose suggestions were silenced when mistakes were made; people who have suffered dearly as a result of other people’s actions.
Fly Sax has been officially named preferred bidder by the liquidators.
The second bold move they made was to approach an unconventional source of funding.
They reached out to Uprise Africa, an equity Crowdfunding platform.
Crowdfunding connects investors with a world of opportunities.
These investors are as diverse as they come from different corners of the world, subscribe to multiple ideologies, religious affiliations; sexual orientations ect.
They all come on the platform with one goal, collaborating to invest in entrepreneurs they believe in.
The collaborative finance means finance “made” by people – without the intermediation of financial institutions.
This collaborative economy is a mechanism whereby giving access to ownership is no longer seen as purely financial, but also social. The sharing economy manifests itself also in finance through collaborative finance.
Intentionally or not, participating SA Ex-Express employees could be providing the country with a new working model for transformation.
I say this with cautious optimism; this transaction could be used as a blue print for others, who have a vested interest in saving jobs and transforming industries at the same time.
The success of this could be bringing together consumers, investors and policymakers for creating business model based on shared economy and how it can benefit workers and the Business.
It would be a game changer to see them champion this innovative approach that embraces the sharing economy, and work together to help reach its full potential.
The rise of the social networks, stimulate the emergence of the new economic model based rather on the cooperation than on the competition.
Participants of the collaborative finance are convinced that by peer-to-peer financial transactions they can create more positive effects and that money becomes “human” again.
Traditional institutional funding has proven has proven to be difficult to access.
The slow uptake of Covid-19 loan guarantee scheme has been a demonstration of how accessible financial institutions are to entrepreneurs.
By 1 August 2020 only R13.26 billion in loans were extended by banks under the Covid-19 Loan Guarantee Scheme,” the Banking Association of South Africa said in a statement.
With our current unemployment rate sitting at 30.1, the youth aged 15–24 years are the most vulnerable in the South African labour market as the unemployment rate among this age group is 55, 2%. Our economic policies and instruments should be geared towards job creation, by creating a conducive environment for SMMEs to establish themselves, as well as growth mechanisms for existing ones.
The financial services sector, as a key sector that has the power to impact all sectors, and, has a strategic role to play in the establishment and growth of SMMEs. It is for this reason that it cannot be business as usual for the financial services this sector.
Innovation and reimagination of the sector required in order for us to step up to the challenges at hand.
Covid-19 exposed a number of dynamics within our country; there are two that stood out mostly for me.
The first one is the level of inequality in our country.
The second on is how the informal economy carries so many households.
The poor almost have no fighting chance to convert their income from consumptive to productive. Equity Crowdfunding Platforms like Uprise Africa gives the economically excluded an opportunity to be active participants in an investment market. Affording this segment, that normally only relies on stockvels as an investment option, an alternative.
The added advantage for all investors on the platform is the liberty to choose exactly what they as an individual or group wish to invest in, unlike conventional unit trusts for example where a manager decides on your behalf where to allocate your hard earned rands and cents.
As an industry player i for one am very proud of the initiative taken by the participating Ex-SA express employees. They have chosen to champion their own destinies as a collective with a common goal.
Their actions have inspired people across our country.
We as the finance industry have been challenged to step out of our comfort zone and start formulating solution that will convert social capital to factors of production.
The successful conversion of social capital to factors of production will have a huge impact on job creation; poverty reduction and inequality.
From a psycho-socio point of view, it will restore our pride and dignity as a people, as we would have done it ourselves.
The responsibility of building an ideal society is a responsibility that we should all carry.
Each stakeholder has their own special role to play. What then becomes even more critical is knowing when to assume a leadership role on issues that affect you or your association directly.
This is the lesson we take away from the bold actions of the participating Ex-SA Express Employees.
Matshepo Mokoena-Skhosana is the CEO of Global Diaspora Capital.