April 14, 2016

A Trailblazing Intellectual with Business Acumen


A Trailblazing Intellectual with Business Acumen

Thabo Owen Mokwena, the Director of the Centre of Public Entities (CPE)  and owner of Leago Group

A man working for the public’s greater good, proclaimed family man, businessman, intellectual and experienced developmental expert Thabo Owen Mokwena is the Director of the Centre for Public Entities (CPE), a research fellow and Chairman and owner of Leago Group, an engineering, investment and advisory firm.

“Growing up, when I started developing consciousness and comprehension, I remember trying to make sense of life and the world as it unfolds. I was only five. The dominant issue in society at the time was the so-called black power and the 1976 upheavals, and I could sense a dark cloud hovering from above,” says Mokwena.

As a young boy raised in a catholic household growing up in Mamelodi and Soshanguve, Mokwena remembers immersing himself into the church. His character was shaped and molded by the Catholic Church, he recalls serving in almost all church structures—from youth movements, to altar server, church choirs and other cultural activities.

“But, most importantly, I grew up with a real thirst and hunger for knowledge and intellectualism. My mother started her career as a teacher and, although she later became a housewife, she was very strict when it came to my school work. My father worked for the Council for Scientific and Industrial Research (CSIR), so he was exposed to and fascinated  by many scientists from abroad.

I’m sure he would have preferred me to be a natural scientist, but I felt myself drawn to the social sciences instead.”

In his career, Mokwena has held various board memberships, among other at PetroSA Pty limited, the Passenger Rail   Agency   of   South Africa (PRASA), Electricity Distribution Industry Holdings (EDI) and Leago Group, and has a wealth of experience in academia and both the private and public sectors. He has also contributed to the restructuring of the local government system in South Africa, leading the transformation of municipal assets, valued at over billions of Rands, during his tenure as CEO at SALGA.

He holds various qualifications from the University of Cape Town, University of Durban Westville, London School   of Economics, Wits and Oxford University, specialising in Economic Development, Business Finance and Strategy. He is currently also a research fellow at Wits University.

Drawing on his experience, Mokwena established the CPE as part of the Wits Graduate School of Public and Development Management (P&DM) in 2012. “Our aim is to bridge the knowledge gap around public enterprises and to be a leading centre of knowledge, practice and development in the public enterprise sector,” he says.

Since its inception, however, the CPE has re-established itself as a public benefit organisation outside of Wits. “The organisation’s financial sustainability model was not complimentary and consistent with the university’s own framework and policies. We now work with a number of universities, contributing successfully towards public enterprise development through quality research, advocacy and executive development.”

Mokwena conceived this development and research entity in an effort to mitigate some of the key socio economic challenges faced by the local economy.

“There is an acute gap—a glaring vacuum—for both the practical and theoretical mechanisms and instruments needed to reposition state-owned entities (SOEs) into game changers for economic development. SOEs have the ability to initiate interventions needed to address structural economic challenges and they can act as catalyst in turning around the current state of our economy.”

According to Mokwena SOEs have, since the dawn of democratic South Africa, been subjected to sustained instability, governance challenges—which undermines their potential to tackle the socio-economic challenges like high unemployment, income disparities and low growth.

“SOEs have suffered a long, sustained process of losing key leadership skills at the board governance levels and executive specialised technical skills. Some of these SOEs have not restructured themselves since they were formed in the apartheid era,” he says. In order to improve their current levels of operation, Mokwena believes there are a number of roadblocks holding SOEs back.

“Their mandates need to be reviewed and aligned with the current realities of both domestic and global conditions. Major sectors in the world have changed and advanced significantly, the financial services, energy and telecommunications industries are a few examples. SOEs which operate in these sec- tors need to move with times.”

According to Mokwena, strengthening the leadership of SOEs is central to most of the governance and performance challenges they currently face. “This however requires ethical and competent leadership. Engineering skills cannot be replaced by theologians, nor finance by meta-physicians,” he says. Mokwena believes that the development and advances with regard to technology play a key role in the modern world, and is concerned that SOEs in South Africa rely too heavily on technology imported from other countries. “Looking back in time, SOEs used to innovate and advance their own technologies, especially in the energy, arms development, aviation and petroleum sec- tors. Good examples of this is Sasol’s coal to liquid technology and Eskom’s boiler and turbine manufacturing. Today, however, we are importing most of our technology at a very high cost.”

Ensuring security of supply is also an important role Mokwena feels SOEs don’t currently fulfill. He says that entities like PetroSA and other agricultural entities were created with the good intention of ensuring security of supply for the domestic market. “When it comes to drought, much like what we are experiencing today, as well as disruptions in the oil industry, security of supply for the country is vital.”

“We look at ways to address these problems at the CPE and our role is three-fold. Firstly, we provide hands-on advisory service to the SOEs, especially in the areas of turnaround strategy and implementation. Secondly, we undertake relevant research on topical issues and tailored-made research for SOEs. Thirdly, we provide executive development, through training and skills development,” says Mokwena.

“We also do advocacy work, to highlight and create a social conscience on socio-economic matters.”

With his experience serving the public sector both as CEO of the local government sector and advisor to several ministers, Mokwena believes he has sufficient knowledge on government processes, particularly policy making, national resources allocation and revenue collection, to enforce real change. “Working within the public sector enables you to better understand the real needs of the people and the mechanism available to address these needs,” he says.

“At the heart of service to the public sector is the ability to improve the lives of people using public processes and resources.”

Putting on an academic cap, Mokwena says research can be a powerful tool in gaining a deeper understanding of a subject. “If we are talking about poverty, for example, proper research enables us to define not only the nature of poverty, but also the extent of poverty, highlighting the causes and possible remedies.”

“Academia plays a key role in the complex process that involves critical-thinking, developing skills and the constant production of new data and knowledge,” he says. On the other hand, he considers the private sector’s contribution to the economy as invaluable when it comes to technology and innovation, investments and growing the economy, job creation and the creation of economic infrastructure.

“I consider my own business, Leago Group, as a pioneering business and strategic investment partner. The expertise and knowledge repository we possess, coupled with extensive local and international networks and investment intelligence, position us as a preferred partner.”

The Leago Group comprises three subsidiaries, the main component, an engineering subsidiary with a reservoir of dynamic engineers currently involved with one of the major Eskom power stations, as well as various municipal infrastructure projects. The advisory subsidiary provides specialised advisory services to corporates and the third subsidiary, a lifestyle company, provides leisure and accommodation.

“The biggest transformative challenge for South African business is to invest and operate in industries that create jobs and more importantly to bridge the inequality gap. We, as the private sector, have a mam- moth task with regard to transforming the economy, moving away from our heavy reliance and dependency on traditional sectors like mining and agriculture,” he says.

Mokwena feels strongly that in order to achieve long-term growth, the South African economy needs to diversify into other sectors which could prove country’s competitive advantage, highlighting technology and innovation as key. “Information Communication Technology, the knowledge industry, services and financial sectors seem to be the fastest growing industries internationally.”

Once known for his hands-on approach to leadership, Mokwena says that while that approach was necessary, particularly during his time at SALGA, he prefers now to step back, creating space within the organisations he manages for creativity and innovation.

“During my time at SALGA it was neces- sary to be more involved, considering the implications of our work in local communities. My time at SALGA spanned over a seven-year period, from 1997 to 2005, and these were the key transformative years of our current local government system,” he says.

Mokwena, together with all relevant stake- holders, ultimately helped to create the new system of local government launched during the 2000 elections. This colossal task involved setting up new municipal boundaries, a new legislative framework, new political structures and new conditions of services and bargaining structures.

“My biggest achievement was the restructuring of conditions of services for the over half a million municipal employees. It was a massive task which impacted greatly on the daily income and benefits of employees, while also affecting the communities’ rates and taxes payable to local government,” says Mokwena.

While he feels he succeeded in creating a new dispensation that ensured equity, fairness and balanced remunerations and conditions of services for all municipal employees in the country, his victory did not come without challenges.

“My efforts unfortunately earned me the worst employer award from COSATU in three consecutive years, and the country was subjected to the most violent municipal strikes ever witnessed. I think people were resisting the changes, even though they ultimately proved to be both necessary and beneficial to them in the end.”

According to Mokwena, his second greatest success at SALGA came with the restructuring of local government funds, worth over R200-billion. “There was resistance from trustees of the funds, administrators and the asset managers. Our key concern was the abuse of pension money, with evidence of reckless investments leading to both losses and the bleeding of funds with excessive administrative and asset management fees. In the end we managed to create a dispensation conducive for employees to secure pensions funds that performed optimally, investing responsibly with less administrative cost,” he says.

“It was an immeasurable success, but also an incredibly important moment in my career. The pension fund restructuring in particular was a real eye opener. The level of vested interest by the financial sector was amazing, the abuse of the funds was, at the same time, very disheartening.”

Mokwena also served as the programme director for SIP7, a government initiative which focuses on the co-ordinated development of urban and integrated transport networks to establish cities as engines of growth and development. The aim of SIP7 is to accelerate infrastructure projects, including the planning and co-ordination of integrated public transport networks, building sustainable human settlements and the development of complementary economic and social infrastructure.

“SIP7 was meant to significantly transform spatial planning and land use in the ten biggest cities in South Africa. The ultimate objective is to redesign our cities and create new areas where people, irrespective of their race, gender and income, can live, work, commute and have access to economic and social amenities,” he says.

“Our greatest challenge at the moment is funding requirements for these infrastructure projects, with our financial projections for the various projects in excess of R500-billion. While some projects are already funded and some projects fundable, others are difficult to budget for. The current economic conditions are unfortunately adding pressure to the funding requirements.”

As a man working tirelessly to make a difference in the lives of the South African people, Mokwena finds himself looking up to revolutionaries like Che Guevara. “His sacrifice and undying spirit to fight for humanity is breath-taking. More importantly, he was a professional, an intellectual and a highly knowledgeable man,” he says.

“I suffer an unhealthy obsession in striving for excellence. I have difficulty being content with convention. I guess I am fired up most by my persistent curiosity to burrow deeper and ferret out the unexpected.”


30 Seconds with Thabo Mokwena

If you could leave a lasting legacy, what would you like it to be?

Inspire our youth to always learn and strive for skills and knowledge.

What is the best advice you ever got on both a professional and personal level?

I was once fortunate enough to have a five minute chat with Mandela on the 12 February 1990, a day after he was released. I was in Standard 9 (Grade 11) at the time and he said to me, “Please go to school  and come back to me when you finish your university degree.” I was motivated to study even harder. I could have not have failed a great man like Mandela. The then deputy president Phumzile Mlambo-Nqcuka also advised me to enhance my intrinsic value through education and knowledge. “Wealth you can lose, positions will come and go but knowledge is something that no one can take away from you, that’s your intrinsic value,” she said.

What is the best advice you have ever given?

I always encourage the youth to study and acquire knowledge. It will empower them with the mental agility to conquer and excel in a global village. I sincerely believe that knowledge and wisdom are supreme tools needed to navigate life as it unfolds. They empower you to make conscious and appropriate decisions in life. Armed with wisdom and knowledge you have  a greater degree of presence of mind at most, if not all, times.

What was the best investment you have ever made?

I once made an investment in aviation, supplying the local market with helicopters that offered specialised offshore capabilities. The venture failed, but the experience gained, the thrill and the innovation was immeasurable.

If you could invite any four people to dinner, who would they be?

The Pope, Ban Ki-moon, Mark Zuckerberg and my three daughters – I would count them as one!

What is your biggest no-no in business?

There is no place in business for brazen, unethical conduct.