Founder: Turnaround Talk
Since the begging of 2021, when loadshedding intensified into what is now the energy crisis, Turnaround Talk has received plenty of comments and correspondence from observers asking a single issue: surely South Africa’s economic crisis cannot solely be blamed on loadshedding? South African companies must also be playing a role by not performing to their full potential. Are they top performers?
Let us rewind to remind ourselves of the challenging situation we face. In 2022, it was estimated that South Africa loses approximately R500 million/day when the country experiences Stage 6 power cuts. However, at the beginning of this year, the South African Reserve Bank pointed out that this figure is closer to R900-million/day.
The above statistics are the Governments contribution to the economic crisis. But we still need to answer the question as to whether South African companies are also playing a role in the problem. According to a recent article by Moneyweb, South Africa boasts 33 of the 100 fastest-growing companies in Africa ensuring that we do indeed have top performers.
Top companies
The Moneyweb article points out that Two Nigerian companies were top of the latest list of the continent’s fastest growing companies.
Abuja-based Afex Commodities Exchange – which provides brokerage and trade finance services for commodities such as maize, sorghum, cocoa and rice – is in first position.
Moniepoint Inc, a Lagos-based company that offers banking for small businesses, is ranked second with a compound annual growth rate over three years of more than 321%.
The third spot was taken by Kenya-based e-commerce company Sokowatch, with a compound annual growth rate over this period of 242%.
The Moneyweb article points out that Deimos Cloud (a South African company) achieved a compound annual growth rate in this period of 177%.
Completing the top six South African companies on the ranking list were BlueSky Digital Solutions (12th), Northam Platinum Holdings (23rd), Vertice MedTech Holdings (28th), Impala Platinum Holdings (29th) and Routed Hosting (31st).
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The article adds that some prominent South African companies were lower down the list.
These include African Rainbow Minerals (51), Naspers (52), Spur Corporation (65), Sea Harvest Group (76), Sygnia (77), Goldfields (81), Dis-Chem Pharmacies (91), MTN Group (94) and Exxaro Resources (98).
Caxton & CTP Publishers, Printers and Distributors subsidiary Cognition Holdings was ranked 90th with a compound annual growth rate over three years of 13.54%.
The Moneyweb article points out that the Financial Times said that, as in the ranking’s inaugural year, Covid-19 appears to have accelerated the move online, with companies providing digital services in finance, payments, trade facilitation and healthcare all making headway.
These are not only some of the current top performers but will be top performers for some time.
Potential of African start-ups noticed
“It also seems to have been the time in which Silicon Valley investors, as well as those in Asia and Europe, discovered potential in the African start-up scene, particularly in the tech hubs of Lagos, Cape Town, Johannesburg, Nairobi and Cairo,” it said.
To feature in the ranking companies had to meet a number of criteria, including:
- revenue of at least US $100 000 generated in 2018;
- revenue of at least US $1.5 million generated in 2021;
- be an independent company and not a subsidiary or branch office of any kind;
- have its operational headquarters located in one of the African countries; and
- for revenue growth between 2018 and 2021 to have been primarily organic, in other words ‘internally’ stimulated.
The Moneyweb article points out that Deimos CEO Andrew Mori said the company’s impressive performance in the latest ranking is a testament to its unwavering commitment to providing innovative cloud and software services to businesses across Africa.
“At Deimos, we believe in constantly pushing boundaries and setting new standards in our industry,” he said. “This recognition is a testament to our commitment to delivering innovative solutions to our clients.”
Demios is paving the way as a benchmark for future top performers.
Emerging giant
Outside of an interest in business and business development, I have a significant interest in sports. One of the common debates that I often have with my peers is: who was the best cricket player of all time. The frustration with this debate is that any list that you come up with will contain numerous unmeasurable variables. It’s the Muhammad Ali vs Mike Tyson debate rehashed. These were top performers in their field from different generations.
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Have we answered the question that was asked earlier in the article? Unlike other lists where the ranking are based on many unmeasurable variables, this list has a clear criteria and benchmark according to which companies are measured. Do we have top performers?
The performance of the companies in this article is a classic example of how South Africa can lead set the benchmark when it comes to establishing Africa as a world economic superpower. However, unfortunately, we are dealing with a Government that is doing the country a disservice by not prioritising the resolution of the country’s Energy Crisis.
There are many business rescue practitioners and financial analysts who predict that South Africa will see more companies facing financial distress this year. This should never be the case if we have 33 of the world’s 100 fastest-growing companies within our borders. This only further supports the narrative that the Energy Crisis is the single biggest contributor to financial distress in this country. Further, Government is an agent of this distress.
Before the Covid-19 Pandemic, Africa was home to four of the world’s fastest-growing economies. One of these was Rwanda which was described as a country that was punching well above its weight division. Overcoming adversity is one of the things that African companies are well renowned for.
Imagine what South Africa could achieve on a global scale if all of the role players in the country played a fair game? We’d have many more top performers.
