Letter from South Africa

May 28, 2008


Since the birth of South African democracy fourteen years ago, the country has been making great strides in its social and economic development. There is a clear emerging black middle class and South Africa is often referred to as an emerging economy alongside China, Russia, Brazil and India. Despite this, the majority of the population still live in poverty, and informal settlements fringe all the major towns and cities. Developing these communities and giving people hope is vital for the country’s future.

Community investment is one way to do this, and it is an important driver in the socio-economic transformation of society. And within this, the private sector has a very distinct role, partly as a result of the political history of South Africa (and the role the sector once played in keeping the Apartheid regime afloat, which it now has a responsibility to undo) but also due to government regulation, such as the Broad-Based Black Economic Empowerment Act of 2003. The act provides a legislative framework to ensure black people in South Africa gain significant participation in the economy through initiatives that assist them in acquiring company equity and ownership, move into management positions, develop their own enterprises, and improve their socio-economic circumstances.

Beyond legislative measures, the buzzword in corporate South Africa is corporate social investment (CSI). It refers to the contribution the private sector makes to community development and can take on many forms – from educational and welfare initiatives to health and housing as well as job and skills development.

One of South Africa’s biggest concerns is HIV/Aids. With one of the highest infection rates in the world – 11% of the population live with the disease – the country is facing not only a devastating health issue, but also a social and economic one.

A social issue because communities are fractured by the disease. It is estimated that over one million children are now Aids orphans and some are heading up households when they should be in school. The future effect of this is unknown but it is estimated that the resulting lack of skills and emotional support while growing up may have dire consequences for South African society. And it is an economic issue because entire industries – such as the extractive industry – can be crippled by the disease because employees are dying faster than they can be recruited and trained.

While the government is investing a lot in fighting HIV/Aids, it cannot do so alone and CSI initiatives are perfectly placed to partner with government to tackle the issue.

For example, Pfizer, the pharmaceutical company, has set up a flagship project called the Diflucan Partnership Programme. This is a public-private partnership between Pfizer and the government which helps HIV patients, who cannot afford antiretroviral (ARV) treatment immediately, receive medication for some of the most common infections associated with the virus. The medication is free of charge and enables sufferers to keep working and caring for their families. In this way, Pfizer is addressing health, social and economic aspects related to HIV/Aids.

As the number of children orphaned or made vulnerable through HIV/Aids grows, they not only miss out on school but many do not eat one decent meal a day. Tiger Brands, a South African food and healthcare company, runs a CSI initiative called Unite Against Hunger, which aims to alleviate immediate hunger and provide long-term sustainable solutions. The initiative provides support for the African Children’s Feeding Scheme (ACFS). The ACFS’ objective is to feed 18,000 orphaned, vulnerable and malnourished children every day. Tiger Brands donates food parcels worth R1.7m annually (approximately £120,000) and supports sewing clubs set up by ACFS for the mothers and grandmothers of the children it feeds. This provides these women with skills so that they can have a sustainable income with which to feed their families.

South Africa’s transformation is only just beginning. There is so much to be done that solutions often seem distant and impossible. But one thing is clear – community investment is vital in addressing a vast number of ills – the alleviation of poverty, improving the crime and security situation as well as HIV/Aids and others. If communities are uplifted and improved, other solutions will follow. And the private sector is well aware that real change cannot take place without them.

Mienke Retief is Assistant Editor at Trialogue in South Africa
Email: mienke@trialogue.co.za