Kathy Gibson reports – As South Africa grapples with the issue of ongoing loadshedding, the private sector is quietly making a difference and going a long way towards solving the issue.
This is the word from Michael Jordaan, founder and CEO of Montegray Capital, who says: “In South Africa we have many problems, but many of them can be solved sustainably by business.
“For instance, the power crisis is impacting business in South Africa. The obvious solution is the rapid installation of solar, which is cheaper than paying Eskom rates to use during the daytime.”
He says the amount of solar installed by the private sector last year equates to one full level of loadshedding. “And this year I think it will equate to much more than a level of loadshedding.
“That is something that can be solved by the private sector.”
While many individual users and households can’t afford the cost of installing solar systems, Jordaan points out that many large business and commercial farms could afford to install solar to use during the day when they are operating, and the sun is shining.
In addition, there is funding available for these organisations to install solar and pay per use.
“And as these organisations take themselves off the grid, there is more capacity available for other users,” he says.
“I think we will see a difference in as little as six months, from things the private sector is doing.”
Jordaan, previously CEO of First National Bank and now a venture capitalist with startups that include fintech and telecommunications, was speaking as a guest of PSG Konsult’s Think Big Series.
He says the goal of Montegray Capital and the companies it funds is not to be a disrupter – although that may well be a consequence of doing the job at hand well.
“We want to bring things to the consumer that are better than what they have now. This could be disruptive, but that’s not the goal.”
A big problem that startups face, particularly in the financial sector, is to achieve a good level of distribution before the incumbents come up with competitive offerings.
“Startups need to have great sales and distribution,” Jordaan advises.
But consumers also have an important role to play. “Consumers are right to point fingers at the big banks and telcos – but they can also do something about it. They also need to look at what the options are, do something clever and switch.”
Jordaan looks forward to the day when every consumer has a smartphone, because they will be able to access so many services more cost-effectively – including lower cost for their calls.
“The smartphone opens up so many payments solutions. It is less expensive to use the phone, and you can do all your banking electronically instead of using cash. It can actually save consumers money.”
Looking to the future, Jordaan believes there are a multitude of opportunities that South African SMEs could be addressing.
“Clearly energy is a really, really big thing worldwide,” he says.
But the big changes in the next couple of years are going to be driven by artificial intelligence (AI), Jordaan believes.
“Everyone is taking about ChatGPT; we have never seen a technology be adopted so fast, and the use cases are incredible.
“People worry that AI will take their jobs, but the threat isn’t AI, it is someone who can work better with the AI than you can.
“I encourage people to lean into AI; it is magnificent how it can transform everything in education and the workplace.”
One of the biggest concerns for the South African economy is the brain drain, Jordaan adds. ‘There is not enough understanding about how crucial it is to keep those alpha skills, which can create more jobs. Losing one key skill can change the trajectory of the country.”