Women of Nozala Investments

JOHANNESBURG, South Africa (WOMENSENEWS)–When apartheid began to crumble in the early 1990s, Salukazi Dakile-Hlongwane returned from self-imposed exile in the United States to make her fortune at home in South Africa.

The country’s new, multiracial government wanted to erase the legacy of decades of racial discrimination and transforming the economy was high on the agenda.

In the first years of democracy, South Africa’s African National Congress-led government passed a flurry of new laws.

Known collectively as Broad Based Black Economic Empowerment, these new laws were designed to help people from previously disadvantaged groups–such as non-whites and women–acquire a greater share of the economy.

Armed with a master’s degree in development economics from a prestigious U.S. school and years of experience in international development organizations, Dakile-Hlongwane sensed opportunity.

Seven Financial Women Start Firm

In 1996, two years after Nelson Mandela was elected president in South Africa’s first multi-racial elections, she joined forces with six other South African women to create a woman-only investment company, Nozala Investments, which has attained a strong reputation in South Africa’s financial world.

“It was at the advent of our democratization,” recalled Dakile-Hlongwane of her decision to found the company. “It was part of the reconstruction and development program of the ANC that they would want to level the playing ground, opening up opportunities. Women in particular, and black people, had been disadvantaged under the old system.”

Nozala, which is 100 percent owned by women, now owns stakes in mining and telecommunications firms, as well as one of the country’s largest food catering companies.

The company’s success has helped make Dakile-Hlongwane, who currently serves as Nozala’s deputy chair and chief executive, a prominent figure in South Africa’s business world.

But while Nozala is working hard to create wealth for its investors, the company’s founders are determined that some of the riches trickle down to some of the country’s poorest.

“Black Economic Empowerment was never meant to enrich just the few,” said Dakile-Hlongwane, who grew up poor. “It was important to us to ensure that we combined our wealth creation with development.”

The economic empowerment laws encouraged many companies to diversify their ownership and management, in the process creating a new class of wealthy black South Africans who live in exclusive, formerly white, neighborhoods, play golf and drive BMWs.

New black and female-owned companies have risen to new prominence and, for the first time in the country’s history, blacks now own more of the country’s wealth than whites.

But the empowerment program has been criticized too for creating a small number of super-rich–many with political connections–while doing little to raise the standard of living for most ordinary people.

Unique Investment Models

Nozala and several other female-run investment groups operating in South Africa, however, have developed unique investment models that try to use the world of high finance to benefit women living in impoverished areas.

Among the shareholders in Nozala, for example, are women’s groups from impoverished areas, such as the Rural Women’s Movement, a local non-governmental organization working with low-income women in several South African provinces.

All of Nozala’s seven founding members and its black empowerment shareholders contribute 20 percent of their dividends to the Nozala Trust, which helps provide capital to small businesses in women’s areas.

So far, they’ve helped ordinary women found a bricklaying company, a company that makes and exports jam made from exotic fruits and a textile company that produces overalls for farm workers.

Most of the women they’ve helped are members of shareholding groups with the fewest resources, usually from impoverished rural areas.

“In most cases you borrow to invest, so you don’t see a profit for a long time. So our idea was, let’s use some of our dividends to help women build businesses,” said Dakile-Hlongwane. “They’ll have jobs immediately; they won’t have to wait until they earn money from their shares.”

Fakude Breaks Into Established Ranks

Like Dakile-Hlongwane, Nolitha Fakude is considered one of South Africa’s top businesswomen. But while Nozala buys shares of South African companies, and helps to build new ones on a grassroots level, Fakude is helping run some of the country’s oldest, biggest and most traditional firms.

Despite employment equity laws that promote diversity in business, a handful of women, and an even smaller number of black women, have made it to the top echelons of major South African companies.

According to a survey by the Businesswomen’s Association of South Africa, only 6.2 percent of CEOs and board directors in companies listed on the Johannesburg Stock Exchange are women.

Among company directors, only 10.7 percent are women.

Fakude is one of the few who has fought her way into this elite group.

In July, Fakude was appointed the first black executive director of Sasol, South Africa’s state-owned chemical and liquid fuel company. It was a major coup for the Johannesburg-based company, which stole her from Nedbank, one of South Africa’s major banking groups, after just 18 months on the job.

She also sits, in a non-executive capacity, on the boards of several other major South African companies.

Despite her personal success, Fakude also believes that black economic empowerment will be a failure if it only enriches a select few. For her, it’s an issue of justice, but also a question of competitiveness.

“We can’t leave the bulk of our people behind and just integrate the middle classes,” said Fakude, who is also the first female president of the Black Management Forum, one of the country’s oldest and most respected business groups, based in Johannesburg. “We’ll struggle to compete in this globalized world.”

Banda Succeeds at Business in Zambia

South Africa’s laws have helped some women, but elsewhere on the continent businesswomen have also proved they can succeed alone. One of them is Sylvia Banda, who lives in Lusaka in Zambia.

Banda used the skills she knows best–cooking and hospitality–to turn an initial investment of about $40 of her own savings into a food empire that turns over several hundred thousand dollars a year and is one of the country’s most recognized brands. Under the banner of Sylva (spelled differently from her first name) Professional Catering Services and College, she now runs a guesthouse, several restaurants, a catering service, a hospitality school and employs 155 people.

The Lusaka-based company also recently launched a line of dried Zambian foods, ranging from pumpkin leaves to caterpillars, and has long-term plans for a high-end hotel.

Banda credits her success to determination, focus and self-reliance. She has never taken a loan, building her business slowly by pouring her profits back into the company.

“Those companies that have succeeded, you find that they have the same principles,” said Banda. “They are creative and they also look for new ideas. No folding arms and expecting government to support them. The ones who have failed are the ones who have looked always for the government to provide alms for them.”

The research and production of this series on emerging female leaders of Africa was supported by a grant from the Carnegie Corporation of New York. The reporter, Nicole Itano, is a Johannesburg-based freelance journalist.