Inflation risks rise as fuel costs climb & SA rethinks what generational wealth really means

And now, the money show with Stephen Curtis on 7.02.

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Good evening.

Welcome to the money show.

I'm Stephen Curtis.

Eight minutes after six the time.

And while they sort of school holidays, while there's not a huge amount of corporates

activity.

There's really one subject, which I think is dominating everyone's conversation relating

to money.

It's oil about all about Iran.

It's all about the conflict in the Middle East.

It's all about the US and Israel's.

The straight of whom was and oil prices at the moment.

We still don't know at this point what is going to happen at midnight tomorrow.

I made the points on Friday just before the weekend that if I were asked for advice,

I would suggest that government, that the various ministries involved already be ministry

the Department of Mineral Resort, Mineral Petroleum Resources, actually does have a proper

press conference, does not just issue a statement.

And I say that because there are so many questions that people would like to ask.

Get it all done.

Let all the news channels, let all the radio stations take it live.

And instead, you won't be harassed quite as much for interviews.

I don't know at the stage what is going to happen, but that would still be my advice.

If only to also show that you are taking this seriously to just do it as a sort of late

statement, I think might give the opposite impression.

Now, there might be things I haven't thought of.

Maybe there's a thought that actually we need to do it later rather than earlier because

if we do it earlier, people rushed to the petrol stations.

I think they're doing that anyway.

I went to go and fill up this morning and, you know, quarter to 10 had a petrol station

in a suburb.

You wouldn't think that would be a busy time.

Every birth was full.

As I wound down the window and I said to the guy who'd wound down the window next to

me.

So look, a full petrol station just burst out laughing.

We all know the situation, but if I were the department, I would take questions.

I'd be a bit sophisticated in my messaging rather than just putting out a blanket statement.

As I said, there may be things dirt that I don't know, but I don't think you lose anything

by actually just coming and doing the questions, doing the press conference, then sort of doing

it properly would be my advice.

Well, let's wait to see what happens.

We'll speak to a bit funny Chafelaro.

He's the CEO of the Fuel Industry Association about it in a moment.

In fact, he's in the studio already.

Johan Elses, the chief economist at the PSG group, there's so much to ask.

I mean, the Egyptian president said today, and he's sort of trying to convince Trump,

the US president, to back off, basically saying, look, if you keep going oil with $200

a barrel, I mean, I don't want to ask Johan Elses a question about that, but I feel

that I'm asked.

I mean, can you imagine?

We'll all be cycling to work.

And there's all sorts of interesting suggestions coming out of Lesotho there, their natural resources

minister didn't interview with Bloomberg, in which he suggested that Lesotho will ask

for a little bit more money from us for the water we get through the Lesotho Highlands

water project.

If you were Lesotho, if you knew how things depended on you, well, I'll do exactly the

same thing.

We do have some leverage, though, because the money matters to them.

So I think that'll be important.

And then also the master builders, South Africa, they're a bit worried about all of this volatility

to do with fuel prices.

And we thought it was an important interview, because it gets you to the long-term consequences

of the situation that we're seeing now.

This is where things start to get very, very interesting.

Good to hear from you tonight, OWA 30702-021-4460567, and voice notes, of course, on 07-2-702-1-702.

How are you feeling?

Ahead of midnight, Tuesday night, when fuel prices go up, 11 minutes now after 6 o'clock.

The money show with Stephen Crowder's live on 92.7 and 106 FM streaming on the Prime

Media Plus app and DSTV channel 856.

Well, still nothing that I can see on the Department of Mineral and Petroleum Resources WhatsApp

group, the media WhatsApp group, which I'm expecting we'll get a sense of what fuel prices

are going to do.

But I think you know by now, we're expecting the biggest monthly increase in fuel prices

in recent history.

Pleased to tell you that, above funny, Trafalar, or the CEO of the Fuel Industry Association

of South Africa is in the studio sitting opposite me now, above funny, good evening.

I really do appreciate you coming in.

Thank you so much.

I know you'll have a very well-informed guest.

I don't know if you'll share it with me.

What are you expecting to happen tomorrow night?

Well, I'm expecting the normal fuel price adjustment in the form of basic fuel price

I mean, adjustment on the basis of the under recovery that everyone has been talking about.

I'm also expecting to see the adjustment to the magistrate district zones, which are

predominantly informed by the tariff increase on the transplant pipelines.

Obviously, there's tech, the levies that has been announced by the Minister of Finance

in February.

That's what I'm expecting.

I'm basically expecting a normal fuel price adjustment, which will typically happen

every April.

But I mean, in terms of actual numbers, I mean, there are various variables and we don't

know all of those.

You know, most of them are, I suppose, five-rand, elite of all petrol.

Does that sound about right to you?

Maybe on the upper limit.

I mean, I just saw the numbers, I mean, of all adjustment in the suit earlier today.

I think the petrol has been adjusted by more than six-rand.

This is by like 13-rand.

I see.

So I'm expecting at least four South Africa, something like six-rand.

If we add everything else, BFP, levies and the magistrate district zones adjustment.

And on the diesel I'm expecting anything around, I mean, 10-rand, petrol, sorry, paraffin,

probably 11-rand, LPG, five-rand, picogram.

I mean, 10-rand for diesel, that's huge.

I mean, that's a massive, that's a massive increase.

We haven't ever seen anything like that.

It's quite time-a-scary if you have to think about it.

I mean, I always think about people who like, I mean, buy products in bulk.

So if you are a mine, even if you consume less than 300,000 liters per month, suddenly

you must multiply that by 10.

I mean, that's quite significant, I mean, chunk of money.

I would imagine there's going to be huge pressure on filling stations right now.

I'm sure people are queuing.

They were already this morning.

Have you been able to make sure there's enough supply in the country?

The supply of products in the country is stable.

We've got sufficient stock levels.

I know people have been reporting about dry sites, particularly on diesel.

Actually, I took a chance this morning because I was listening to climate

while I was driving.

I happened to be in the forest area near Montecacin.

I decided to get into one of the service stations to see.

I drive a diesel car, and then I went in.

They never asked me if I want a full tank or not.

They just said, OK, come, I've got diesel.

So, yes, there are reports of sites that are running dry because of panic by.

And I expect that number to increase,

I mean, quite significantly to double.

Currently, the number is still less than 200 sites that are dry on diesel,

but that number keeps on changing.

So that is the number probably that was reported this morning.

So tomorrow, by this time, I'm sure it's going to be chaos out there.

So everybody will want to beat, I mean, this massive price adjustment.

But I anticipate that we're going to have to recover,

come the first and second of April,

to catch up on those sites that will potentially have, I mean, dry,

I mean, products.

Government has said in the past they're not worried about fuel shortages.

They talk about us getting supply from Nigeria.

We also, of course, have Sassal, which is about about a third,

called 30% of our fuel needs.

No one knows how long this conflict is going to go on for,

or more bluntly, how long the straight-off humours will be closed.

Over the longer term, are you worried about a problem, a supply issue?

So Stephen, if you think about it,

when this was started, we thought it's going to be at least maximum two weeks.

Yeah. And it's now a month.

And I mean, the price of oil is not coming down.

It's still above 100, I mean, dollars per barrel.

And depending on what happens next.

So if they conflict, I mean, escalate,

we don't know what does that mean for us.

But at least based on what has happened in the past four weeks,

if we look at that, because the disruption

have been minimal in terms of the imports that are coming our way.

So if it continues on that level, we are fine.

I mean, we should be OK, because we are receiving imports of both

and crude oil and products.

And just been in mind that, I mean, the supply sources for crude oil

has changed significantly in the past 10 years.

We are more heavily dependent in the continent now.

Nigeria, Angola, and Ghana, they are very key in terms of supply of crude oil.

But products, that's where they sell volatility there,

because you're not going to be the only country that's looking for alternative

and supply sources.

So, but we are still at this point in time.

I mean, being able to import products.

I mean, if we just look at what's happening in other like I mean countries,

I mean, they are like significant measures now

where people are rationing products.

We are not there as a country.

When the fuel price jumps by this much,

is there going to be a longer term impact on your industry?

Because anyone who had even been thinking of making alternative plans,

I mean, at least one of our major supermarkets

supplies most of its stores through an electrically driven fleet, right?

They're getting electricity.

I presume from solar installations.

And I imagine some from Ascam.

Surely anyone else, considering the future after this,

is going to do the same thing.

Is this going to be one of those moments maybe?

We look back where the fuel industry changed.

Yeah. So, look, this is going to give us opportunities

to put things into perspective.

One thing that you need to remember,

if especially you are considering buying a car,

a new vehicle, you'll start to make a serious comparison

between the alternative.

I mean, I mean, like a sort of technology.

You look at the hybrid, you look at the fuel,

like I mean, EV and compared to the ice engine to see,

I mean, like in the long term, what are the savings?

But the other thing that is like evident

is that, I mean, the fossil fuels or petrol and diesel

still have quite a very significant role to play in the global economy.

I mean, if you look at what is happening in Europe in particular,

where they've really made progress in terms of like new vehicle technology,

but still, they are jumping up and down because of this.

I mean, crisis.

So, yes, it's going to give us some options

in terms of seriously considering alternatives

in terms of what we're seeing now.

There is supposed to be a new task team.

The president sort of referred to this, I think you were speaking

at an ANC conference yesterday.

Members of the Department of Finance, the Energy, etc.

Have they been in touch with you at all?

Well, I suppose those are government specific issues

that have nothing to do with us as private players.

So, we just read about it.

Like, I mean, just like members of the public,

we also like wait to hear what's their outcome.

So, we have no interest, no desire to be part of those discussions

because I will presume are very difficult conversations.

I'm funny, Trophilardo, really do appreciate you coming in.

Thank you very much indeed.

The CEO of the Fuel Industry Association of South Africa.

20 minutes after six, the time Johan

else is the chief economist at the PSG Group.

Johan, good evening and thank you for your time.

So, we have a task team.

Are there really any options for government to try and

lessen the pain?

I can't have, I can't think of anything obvious.

Hi Stephen, good evening.

Yeah, you know, I think back to the president

that was created in 2022 when

government also got the fuel levy for a few months.

Got the fuel levy by 150 per litre for three months in a row.

So, we could do that, but presumably that money has to come from somewhere.

The pandemic scramble many things in government finances.

I mean, and even if we did cut the fuel levy a little bit,

would it make much difference considering the scale of this increase?

Diesel probably 10 round a litre.

Yeah, so I think that specifically because they budgeted very conservatively in this

past budget for revenue from mining taxes.

I think there is some room in the budget without breaking the previously assumed

budget balance numbers and the date ratio numbers.

I did some calculations this afternoon.

If they cut the fuel levy by two rent a litre for two months,

that's around eight and a half billion rent worth of cost.

That they will for go.

Now in 2022, the cost was around 10 and a half billion.

They got that money through selling some of the strategic fuel reserves.

This time around, we haven't got a lot there, I assume.

But as I say, the budget was very conservative.

So there is some room in the budget.

And while it's still a big hefty increase,

if we then set with four and a litre increase,

I think then according to my numbers,

inflation on in April jumped to 3.7%,

they're not 4.2, which would have been the case with a 6-rand increase.

And I think that's almost the difference between an imminent rate hike or not.

So I think we'll give the consumers a little bit of leeway, not merge, but some,

but it'll make a material difference in terms of the inflation numbers.

And perhaps we won't need an interest rate hike in the cycle.

And all of the consequences of that all at the same time.

One of the things government's been very clear to do

and the finances has been very clear on is trying to reduce our debt.

Now in a situation like this, does that really matter?

I mean, debt always matters, obviously.

And but in terms of how people view our debt,

everyone was so excited, we were beginning to reduce it.

In a situation like this, I would imagine most international people watching us

would completely understand a government trying to stable for an interest rate hike

and doing it in a very responsible way if it were done correctly.

Absolutely, I agree with you.

I think foreign investors, ratings agencies, etc.

I would see this in the light of the crisis that has been created by this Middle East Wall.

Other countries going through similar situations,

trying to lessen the impact on consumers.

I think, yeah, we don't know, as you said earlier in the previous interview,

we don't know how long this will last.

But I think there's lots of pressure on the US government internally

and externally to end as quickly as possible.

Still, if they manage to lessen the impact on South African consumers

for a couple of months before reverting that fuel levy to the normal level,

and we then get a somewhat lower inflation outcome.

And in terms of interest rates, we see a delay in further cuts and not the need for a hike.

I think, taking all of that together, I think foreign investors, ratings agencies,

everybody would see that that's the better outcome.

Yeah, very much so.

I've got two extreme scenarios for you, one better than the other.

As everyone is probably going to say until this thing ends, no one knows what's going to happen.

But the president of Egypt today said, if it doesn't end soon,

we could end up with oil at $200 a barrel.

I mean, there's probably things you don't want to think about.

But what happens to our economy if it goes that far?

I mean, do we have an economy if it goes that far?

Yeah, well, it's same as previous scenarios when we saw significant spike in the oil price.

Whether that's at $200 or $150, I don't think really matters.

I think what happens immediately, you see a global slump, you see recession globally,

because oil is a big cost input, not only for business, but for consumers as well.

So everybody cuts back on spending, that causes a recession, but that demand slump then

immediately causes the oil price to collapse.

So in the past, when you look at the oil price cycles, whenever you've seen a spike like this,

pretty soon oil just collapses.

But of course, that creates lots of volatility.

It creates recessions, but then central bank starts cutting rates pretty soon,

because of that weak demand, the negative impact.

And if we take that step further, the big increase in petrol prices,

we discussed whether it's four or six doesn't matter.

But that's almost a deflationary scenario.

We pay more for petrol, but we've got less to pay for other things or buy other things.

So this downward pressure on other prices.

Yes, there's this risk that Reserve Bank sits with that it creates higher inflation expectations.

But in terms of your question, volatility like that creates lots of uncertainty.

It creates a recession, central banks step in.

So economies markets lots of volatility, but then we revert quickly back to where we were before.

And the other side of the war stops tomorrow, and who knows, I presume oil prices don't go

back to normal. It would take some time to restore faith in the markets,

but I imagine quite difficult to know. A month, two months, who knows?

Part of that scenario should of course, as you said earlier, be

complete opening of the straight of our moves. But let's assume that happens.

I think the oil price will fall pretty quickly.

Part of this significant increase has been because traders buying up lots of oil,

and then if suddenly there's no need, and they start selling, and then suddenly there's a lot

of excess supply, whereas demand has been weakened somewhat.

I think the oil price could actually fall back right back to 60.

So, imagine there'll be a...

And then petrol prices coming off as well.

Again, if we can look to 2022, in January, petrol prices was 19, ran something a liter.

It went up to 26 by July, and then by the end of the year, it was back at 20.

And that war is still ongoing.

Indeed. Johannes, thank you.

That ended with a more cheerful scenario, the chief economist at the PSD group.

It's 27 minutes now, after six o'clock.

The money show.

Arthur Carus' portfolio manager at macro solutions at the old mutual investment group.

Arthur, good evening.

One or two things to pick through.

I mean, FNB, a few big changes there, a bit of a restructuring.

Harry Kellen steps down, he's sort of taking early retirement, only CEO for two years.

How do you view all of that?

Well, first national bank, or first round as a whole, it's got a very strong bench

of really good managers in their underlying businesses.

So often the people that they're pointing to the chief executives of the major

divisions are people that are in the running to be CEO of the group at some time.

So I would pay attention to these management changes.

It's telling you who the next generation is, that the top leadership is going to come from.

Harry is an interesting situation.

He was chief financial officer of the group for about 10 years before he kind of took a sideways,

more of an operational role, I guess you could call it,

in running that business, and perhaps I don't have exact reasoning behind it,

but perhaps it was a bit of a filling a gap while they waited for the right person to run the back.

The other big move, Nati Kirsch, obviously South African, made the point earlier,

his brother Izzy, founded the company that founded the radio station.

His jetro-food service business, he's selling it to Cisco.

This is really primarily an American deal, quite a lot of money involved.

Yes, the huge deal, $2,000,000,000, and Nati Kirsch, I believe, owns about 75 percent of that

business. So he's in his 90s, so looking, I guess, to settle up his business affairs.

It's been a very successful business. It's been there for a very, very long time.

It would potentially have made a really good or an interesting acquisition for the

South African bid-corp business, which is in the same industry, but the heart of bid-corp

is about $8 billion, so that would have been a pretty hard deal for them to get done.

On the markets today, oil obviously stronger, aluminum prices are because of that

Iranian attack in the Middle East, and that puts South 32 up quite strongly.

Well, aluminum, the key thing with aluminum is, in fact, energy. So,

Borksite is painful, it's not very expensive, but what you need is energy to convert it.

If you remember, we've got these aluminum smelters in Richard's Bay that are all about,

that put together when SCOM had excess energy. So we imported the Borksite, we smelt it,

so effectively we're exporting energy. So when the prices of energy starts to go up,

then the price of aluminum has to take up to take that into account. Therefore, you've got a lot

of these aluminum plants in the Middle East, where there's lots of plantable energy close by,

so that's having an impact on the aluminum price.

Thank you very much. Indeed, Arthur Carras has portfolio manager at macro-solutions at the

old Mutual Investment Group, bringing the time to 6.30. What's up Steven? On 072, 7.02.

1.7.02. 33 minutes to 7. They're just sort of thinking about my trip to the petrol station

earlier today, and I was lucky enough to be able to do it during sort of working hours, and many

people would not be. I know many people will also be waiting until the last minute tomorrow,

completely understand. That does depend also where you are, where the filling station is, your roots,

and all of that sort of thing. Can you hear your experiences, though? Is it just normal? I mean,

I've been to a filling station in a kind of the biggest traveling day of the year, you know,

think December 15th, a couple of years ago, was huge. You get to one of the filling stations in

Harry Smith. I mean, anyone going to case it in is probably going to stop there. They had about

three times as many staff as they normally do. They had a DJ on the four chords, which was actually

quite fun. I mean, that gave it a vibe, you know? I mean, I hadn't seen a DJ on the four chord

before, but maybe I just hadn't lived. And that was pretty cool, and I thought actually there

might be a way for someone to roll with a punch. On a holiday, though, um, start of a holiday,

DJ on a four chord works. When everyone's going in, grudge, grudge to do this now, maybe not so much.

Recommendations on a playlist, please. For the fuel price increase, 07272170222 minutes to 7th.

856. We're good to hear from you this evening. Uh, report on Bloomberg today,

Les Soutu's natural resources minister Ma Chlommi Moleco saying they'll be looking for more

compensation for the money they send to us through the Les Soutu Highlands water project. The

terms of the deal between us and the Soutu are due to be discussed through the month of April.

Professor Mike Mallor is a visiting professor in the School of Governance at Vitz University.

Among many other roles that he's played over the years. Uh, Mike, good evening. Um,

this first deal was signed. Well, 1986, I think it was. How has Les Soutu compensated now? How

does the steel really work at the moment? Well, I'm, uh, evening to you just even into your

listeners. You know, the deal has evolved over time, but the basic principle is that South Africa

saved a lot of money by taking money, uh, taking water from Les Soutu and instead of pumping it up

from the orange river at allable north, uh, allowing it to run down from the mountain towards

Kharteng. We saved a lot of money. We could, we could have had that other option, but it was

agreed that if we were going to use the Les Soutu territory, uh, to bring the water to Kharteng,

we needed to pay Les Soutu some compensation. And that compensation was calculated on the basis

that they were helping us to save money. They deserve the share of that saving and they get more than

half of the value of the saving over time. Now, obviously, you seem to have lost, uh, Mike,

my leather. I'm hoping that there will be. That's going to be adjusted. There's inflation. There's

safe South Africa money. Sorry. Are you hearing me? Yes, we are now, Mike. We did lose you for a little

bit of, uh, uh, for a moment. You were saying when we last heard you that, uh, Les Soutu needed to get

over half of the money that we were saving. Yes, indeed. And, you know, there've been some

adjustments. They've got to be operational costs that are covered, but the basic principle

has remained the same. And it's done well for both countries. South Africa has saved money and

got water reliably and Les Soutu has got a reliable share of, uh, of, of revenue, which doesn't change,

by the way, uh, you know, because they have a, uh, a guaranteed supply from the dams and we give

them a guaranteed payment for the water. So it's been working quite well. Um, there is a problem,

though. It is one of the major sources of revenue of Les Soutu. And quite frankly, every time there's

a new government in Les Soutu, one of the things they look at and say, could we squeeze some more

money out of South Africa? It's an unfortunate, but, uh, but obvious, uh, approach to take. It doesn't

do. Oh, yeah. Uh, that seems to have disappeared now. They build strong relationships and can be,

now I'm back again. Sorry, I'm, I'm in a cry and I thought the university's internet was good,

but it's not as good as, uh, I thought, can you hear me now? I'll try and get you a bit of

things. Yes, we can, Mike. Thank you. Um, so, okay. I understand what you say. I mean politics

being politics. Um, is it a simple thing to change? Or is it a pretty kind of iron-clad

contract? I mean, if I were the South African government, I'll be saying to Les Soutu, now hold on,

you can't do this every time you have an election or whatever. So we're now going to put something

in stone. Yeah, I think there is a provision to review to the treaty and that's the one side of it.

And there's got to be some good reason to do that. And it's not obvious what that would be.

Much more important, though, there are other things that could be done in Les Soutu that will make

a difference both to South Africa and to Les Soutu and could increase income for Les Soutu.

And I think it would be much more sensible to talk about the options rather than, uh,

idea. I think we are probably going to have to abandon this, uh, even though it is one of the

most interesting conversations I can imagine moving about, you know, let's have an argument on both

to yield more, to yield more for Les Soutu than it does at the moment. Um, just while we've got you,

would electricity be an option often when you have a dam, you can generate electricity,

is that a conversation people could who should be having? It's a conversation that's very much

on the agenda. And one of the problems is that Les Soutu has a project for electricity

related to the second phase of the Les Soutu program and they don't seem to want to take it further.

All right, we'll have to leave that there. I think we'll give up on that conversation for the

moment. Unfortunately, Professor Mike Muller, thank you. I do appreciate you trying to do that,

visiting professor in the School of Governance at Ritz University. An interesting conversation,

an important conversation too, because, and I mean, I'm no rocket scientist, I'm no hydrologist,

but I think you and I both know that if we don't have some kind of agreement with

Les Soutu, well, hearting is in all sorts of trouble. And that's a huge part of our economy.

I can't really imagine any other way to do it. And we know that with the water we get from

Les Soutu currently and the amount that gets wasted and the amount that we sort of overuse,

how important a source of water is. So if that gets removed, we really are in very serious trouble.

I have to say though, as I think Professor Muller was sort of alluding to, we also give Les Soutu

money. And this is a big source of income for them. And as a result of that would be foolish,

I think, to sort of overplay their hand too much. But these are some of the things that really we

do need to just see if we're able to, that these are some of the things that people are looking at.

I would also just say that when it comes to water, it's just a reminder of how important it is to

think over the longer term. And so many of the issues we have now are because we don't think

over the longer term. Our courts aren't big enough. We don't have enough judges. We don't

have enough teachers. We don't have enough schools. Even though we all knew for a long time that

our population was going to increase. And so that's been the case with water as well.

One of the reasons we're where we are is that we have not been keeping up with the base

of development in so many parts of Derbyg and so many other places too. And this really does

require some long terms, strategic thinking about what you're going to do. How are you going to do it?

Which is the best outcome for everybody. And that is something, just something maybe,

we need to think about a little bit more. So I'm hoping at some point, both here and in

a suitu, you need this in order, democracy. So you do need longer term thinking. And we know,

and this happens that politicians are often short termists and they're short termists because

of the way that we make them correctly face elections. So interesting just to see what's going to

happen to that relationship with the suitu. It is absolutely something we will return to.

Good to hear from you this evening on 07272-1702. It's 12 minutes and after seven.

The money for Stephen Curtis is brought to you by Absor's sponsorships, proud sponsor of the Absor

K. Bebek, celebrating 20 years of taking it to the trails, Absor's original S&F SP.

Good to hear from you this evening. Well, you would of course have been watching the situation

around fuel prices. And they've been a few reminders today about how extensive and long-term

the knock on effects of higher fuel prices could be. First, the civil confidence index,

compared by F&B in the Bureau for Economic Research. This is confidence in the civil

construction industry, falling from 52 to 43 in the first three months of this year. Then a warning

from Master Builders South Africa that fuel prices could affect projects. And crucially,

the agreements that govern them, and you can imagine the long-term nature of some of these

agreements, Roy Amnisees, the executive director of Master Builders South Africa Roy.

Good evening. I think you've had to step out of something to speak to us. I really appreciate

the time. Thank you. We all know fuel prices affect the price of a construction project. How

worried are you about their knock on effects on your industry? Yes, indeed, Stephen. We are one

of the industries that directly affected by the fuel prices. This is so because we rely a lot on

it for our operations, the transporting of the material, transporting of our employees to

construction sites, and the use of the machinery that we use on site. So significant pushing of

our costing goes to 4L. So whenever there is a huge adjustment of 4L, more especially

upward adjustment of 4L, we suffer a lot. I mean, many contracts were signed long before

anyone had any idea that this could all happen. Could that lead to quite a difficult situation?

The last thing anyone wants in a construction project is a dispute about the costs.

Yes, indeed. It will definitely affect project delivery timelines because when you get

to a contract, you agree on a commencement date and the completion date. So with the high prices

of material, petrol, diesel, and other things, it will definitely affect it in that manner.

And in some instances, it will affect some of the projects in terms of the disputes because when

you hire me to build, you know, your assets, for example, you're building a hotel, you have

got time frame within which they have to start operating. If you're building a shopping center,

you've got the time frame within which it will be operating. And if there are delays,

then the disputes are declared and then it becomes a problem for us.

So it's very, very much significant for us. It will, as well, interrupt the

procurement circles because now contractors will have to embark on looking at the agreement,

trying to get an extension of time, trying to adjust the contract to factor in those prices,

because in some instances, I can tell you without that in my mind that if I'm in a project,

this multi-year project, it will continue with the pricing that was agreed upon at the beginning

of the contract, you can go without a profit margin in the construction circumstances are very,

very low. I mean, and that's really the issue. So if you're, you know, someone involved in one of

these projects, how do you resolve it? What do you do? I mean, do you actually try and have a

conversation with your customer? Do you do something like that now? I mean, do you try and do it

early on? Yes, for contracts that have already been intent into running, the most proven

way to approach it is for the parties to get together and try to spread this risk because nobody

knew about it. At the point of contracting, no one knew that it will be in a situation where we

are now. So that is one of the areas that we encourage our members, contractors in the main

to say, look at really negotiating the contracts and see if it can work, it must work because if

nothing like that happens, then it creates a problem that's where you end up with the disputes.

But for contracts that have been started, we encourage our members to actually look very carefully,

you know, they are costing requirements. It's not difficult to do because you don't know. This time

around, it's, you know, eight runs for a dessert. Next time, it may be 14 runs, the other time,

it may be 20 runs. So you can't really turn exactly where you're going to be. So it's something that

needs to be continuous at this point in time up until things becomes normal. But for now,

you really do not know. The other thing, Roy, if I were in your business and many businesses

will be in this position, someone might be in a negotiation about building a new shopping center

or something and the client will just say, we need to wait for this to be over because we can't

sign an agreement now. I don't know what's going to happen and isn't that really a problem for you?

It's also a problem and not only for us as a dessert, but it's a problem for the economy because

our sector is one of the drivers of the economy growth. So if you left project postponed

up until the war ended, which we don't know when it's going to end, it will have a very poor effect.

It will affect the economy and when the economy is affected, it affects the employment,

it affects, you know, the economic development of, you know, the countries that affect so many

things. So that will not be a terrible option. The riot option is to look at ways in which we can

continue with the project, we can continue with the work at the end and we can continue even with work

that was planned to happen because despite the fact that there's war and interruptions,

the economy has to run on the other side. And I mean, the other problem is some industries can

maybe avoid some fuel. I mean, costs in some ways, but you can't. I can't imagine, you know,

a cement mixer running on electricity. That is correct, David. We use machinery a lot. So yeah,

it can be on electricity. It can be on electricity. And just a mere transportation of the material,

a mere transportation of employees to decide, you know, you can't use electricity.

I mean, all of us, I mean, the other problem is the sheer uncertainty, isn't it, Roy? I mean,

no one knows what's going to happen. And that uncertainty affects every single long-term

industry there is, including yours. Yes, definitely, Steven. And many would argue with me that you

cannot plan for, you know, global disasters like war, you know, outbreak of diseases like COVID,

as we added. But the reality is that, Steven, at some point, we need to appreciate that these things

are going to happen in one way or the other. And I think as a country, we need to begin,

and even as a sector, we need to begin to look at ways in which we can deal with this, because

it's so sad for us, we're coming from the devastation of the 20 or 8 economic, you know,

and the global financial crisis, yes, yes. And then we had COVID-19 six years down the line of

track to recover from it. We did a little bit to have last year numbers are showing some

improvements. Then now we have got this challenge. So it is really, really devastating.

Roy, I'm Nisi. Thanks so much. Executive Director at Master Builders South Africa. No one's

going to be spared from this, I have to say. Seven o'clock. Seven o'clock, Steven.

Ron Axe. And at Steven Kruders. So Lex, what's happening?

Saying, Steven, the fact that it's a previously had a huge amount of strategic oil reserves,

which then sold off at a fitness and a deal, and a corrupt deal driven by the ANC as part of the

direct cause of the huge increase in petrol and diesel prices. So Lex, just a couple of things,

we've always had a strategic fuel reserve. The thing you're talking about was actually

overturned in the end by the courts. And you're talking about the fact that the oil reserve was

sold off at a very cheap price to people who were then obviously benefit when the price went up.

And we would end up having to restore that when the price went up. And that was reversed.

It didn't happen. And it's important to remember that the oil never actually left those tanks.

It's also not a huge amount. At the moment, I think it's about two to three weeks of national use,

which is not a huge amount. And just bear in mind, unfortunately, these prices are set

internationally. It's a bit like a food prices. You might think, well, it drained a lot in the

Mays built in South Africa. Therefore, Mays prices will be cheaper. They won't be I'm afraid,

because of the way that a food is traded on international markets. One other thing, by the way,

there was a time, next to our correct, where we did have a huge strategic oil reserve. And in fact,

I mean, I was sort of told during the time, I mean, as a kid, that, you know, the oil was

been kept underground in old mining shots. And that oil, would you like to know where it came

from? Anyone? Anyone? It came from Iran. From the previous government, not the current government.

It came from the time of the Shah of Iran. What did we give Iran in response? And return,

well, I wasn't really paying much attention at the time, because I was about four. But my

understanding and the consistent reporting from people who I pressed was that it was actually,

in some cases, artillery pieces, even, you know, the G4 and the G5, those rocket, those basically,

there's sort of a very special cannon that were made by the apartheid government. You might

know more about that than I do. It'd be good to hear from you or on that and maybe put me right,

I've got a fact there wrong. But that was my understanding. So the ironies of history, where did

we get that oil from? From Iran? Yeah, very interesting. You're with the Money Show 7 o'clock.

And now, the Money Show with Stephen Curtis on 7.02. Let's walk the tour.

The Money Show with Stephen Curtis is brought to you by Absor Sponsorships, proud sponsor of the

Absor Cape Epic, celebrating 20 years of taking it to the trails. Absor is a registered FSP 7 minutes

now after 7 the time. We will talk about generational wealth in a moment. I mean, so many people

think about what that is, but what, you know, the best way to kind of get there, we'll talk to

Haley Perry, a money coach and facilitator, had one life's truth about money in just a moment.

Dr. Mark Nassile is the author of the book, Mastering Sovereign Artificial Intelligence. I'm going

to start off by asking what that is. He's sitting right behind me at the moment. He'll be with you

in just a couple of moments. And then how I make my money, careers, understanding what happens

in our gaming economy, Raymond Ledwaba, is the CEO of, I think, gaming. I fascinating to see

someone making money out of that in particular. Maybe not the example that you want for your teenager,

but maybe, in fact, the example that your teenager needs. So looking forward to that conversation

in the next little while as well. Good to hear from you, of course, on our double A307020214460567

and voice notes. So no, 72721702.

The Lennie Show with Stephen Krudes live on 92.7 and 106 FM streaming on the Prime Media Plus

Snap and DSTV channel 856. So when you think of the brand name Nestlay, the company Nestlay,

you probably think of various things. You probably think of chocolate first.

It turns out that in Europe, on one of their shipments, I presume, a big truck that was going

from Italy to Poland, someone decided to steal, not one or two kidcats, 12 tons of kidcats.

I've been trying to do the math of how many that would be. They described them in units.

I don't, I've never had a unit of kidcat. I've got to say, I've had fingers of kidcat,

and I've had kidcat bars, but I've never had a unit of kidcat. What's a unit of kidcats?

Like having a unit of tea doesn't make any sense to me. 12 tons. So if you come across some cut

price kidcat over the holiday season, over the chocolate eating season, you probably know where

it's come from, although it'll have come a long way. I just would like to know, I mean, there's

such a great movie here, the great chocolate heist. You know, have a break, steal a kidcat,

whatever, steal a break, have a kidcat. Something along those lines. But your movie titles,

please, for the movie heist, the heist movie, about the theft of kidcat chocolate. I mean,

rarely. If you're going to steal something, you could at least make it a five star, 10 minutes

after. 7. 02. 6 to 8 pm. How many adverts do you think you've seen in your life? Some bank or

financial institution that will have images of an older person and a child? And the whole point

of the adverts, I mean, there are all sorts of words and wonderful music and all of that.

What they're really saying is, if you give us your money, you will have generational wealth.

It's a very powerful message. If you do something right today, your grandchildren will be the ones

to benefit. But how do we rarely view generational wealth? Haley Perry is a money coach and facilitator

at one life's truth about money. Haley, good evening. Good to chat again. I would imagine

everybody, when they think about it, wants to build generational wealth. But how do we really define it?

Evening Stephen, yeah, I think everyone's after a five star financial legacy, right?

Very much so, yes. Rather than needing to take a break with their finances. So, yeah, I mean,

I think from a generational wealth perspective, you know, it's this elusive thing, because we want

to get it right for ourselves. But often, I think we want, we really want to get it right for our

kids to save them. Perhaps some of the pain that we've had ourselves in our financial journeys.

And so, that's why this is such a great survey, because it really just taps into how people are

thinking and feeling about their money and what they think it is at the moment that they can do

to try and get this right. And I think one of the most impressive figures that we saw coming out of

this latest generational wealth survey from one life is that 99% of survey respondents say that

wealth building is important to them. And more than two thirds of South Africans believe that

they can do that even on a modest income. And that's really quite something, because last year,

that figure was sitting at 35%. So, something has definitely shifted, where South Africans are not

only feeling more hopeful, but also feeling more empowered about how to get there.

I mean, if you say to average people, are you able to save? I'm almost certain that, you know,

90% are going to say, no, I'm not, because life is too expensive. I need to do this. I need to do

this. And we can tell, obviously, because a people who have jobs and a pension, how much money is

taken out of that savings part every tax year. So, we can tell that people are stretched. How are

people actually able to manage it, you know, to actually say, no, no, no, I'm still quite optimistic

about being able to do this in some way? Yeah, look, that is the reality on the ground. We know

that it's been tough for most Africans for quite a long time. And one of the things that we always

teach when we're looking at this from a financial education perspective is really the name of the

game is it's not about how much you make. It's about how much you keep. And anything that goes into

the savings part or into the investment part is part of that definition of making yourself

personally profitable. And so, what we're seeing is that, you know, we've got different

trains coming through. We see that 60% or just under 60% have responded and say they're just surviving.

And around 30% of people saying that they are struggling financially. However, on the upside,

there are a lot of, there are a lot of positive indicators that have come out of the indexes

here. And for me, you know, that is showing that even though people are acknowledging that they

might have a bad month, you know, as you say, particularly when times are tough, we've got petrol

price increases coming. What people are doing is they are becoming more financially resilient

because they're looking at this and saying, well, even if this is a bad month, I'm going to regroup

and I'm going to go and get it right next year. And so, I'm sorry, next month. And so this is part

of developing this financial resilience is understanding that this is an ongoing effort.

And we need to persist in not only doing the right things with our money, but also getting ourselves

and increasing level of knowledge and confidence around our money, around what we can do better

and differently so that we can continue to improve on the metrics that matter.

I mean, for years, the people will say, South Africans don't say it. And sometimes I think there's

a little bit of a preachy thing to it. And I understand why people are so worried about that

because saving is so important. But again, people just have not been able to. At the same time,

though, for at least probably, Haley, I don't know, the last 20 years, there's been so much public

education about saving for the future. Sometimes in schools, sometimes on shows like this one,

sometimes corporates or financial institutions have had adverts or whatever it is. And I sometimes

wonder if the financial literacy of our society, despite everything, has actually started to improve

almost without us knowing in the last 20 years. I mean, maybe I'm sounding hopelessly optimistic,

but I sometimes wonder if that might be the case. Steven, I'm not sure if you're preaching

to the choir, but I feel the same way. You know, to give you an idea in this survey where we were

chatting to people, 42% of respondents say that they have a savings or an emergency fund in place.

Now, I remember doing interviews like this a couple of years ago and that number was significant

in Hilova. And so I do feel that there is definitely a level of financial literacy that's

increased, but critically, I think a lot of people understand that financial literacy actually

isn't good enough anymore. And that's where this aspirational element of what do we do,

you know, that's better than that. You know, if that's the baseline, how can we do more and do

things differently? And understanding, you know, additional financial services and products,

understanding how you can go from saving and then to investing, how you can protect your downside,

for example, with life insurance. All of these are important steps in not only having a nation

that's financially literate, but rather one that is financially healthy. And there are a lot of

efforts that have taken place, you know, from the financial services industry, from, you know,

like you said, platforms like yours, businesses like ours, where financial education and genuine

financial illness is actually the aim of the game. And I do like to believe that some of these

efforts really are paying dividends. Does it change the decisions people make perhaps at

quite an early age, whereas maybe someone at sort of, you know, just finishing whatever tertiary

qualification they were able to get and they were able to get money for, I think, well, actually,

I'm going to start a business because that's going to provide an employment for my children.

I mean, I see so many businesses now where you can see someone has started this or has created

a situation where their children will be able to take that over and you can understand why,

because to find a position for a young person, a job for a young person can be so tough.

Could it actually be changing the career decisions people make? This idea of a longer term

kind of thing. This is not just for me. This is actually for two or three generations from me.

Yeah, absolutely. I think, I mean, it's interesting because we see so many of these different

metric shifting. So you're talking about owning a business, for instance, in the survey when we

asked that question, only 12% of people regarded owning a business as a form of wealth building.

But what was interesting on the flip side is that only 6% of our associating wealth

with cars or luxury positions, whereas last year that figure was closer to 20%.

So we see shifting changes in not only how people are making decisions, but also the perception of

wealth where people are shifting what this means. So perhaps we've got a younger generation

who are less focused on things and more focused on certain freedoms, which is

different to the generation that you and I grew up in. And so I do think this is coming into play.

I mean, I'll give you an example. I had a conversation with somebody who finished

metric last year and she had done mass literacy. And she was asking me pretty detailed questions

around compound interests that she had studied as part of the budgeting aspect in within

who mass curriculum. And I must say I found it really hardening that this is part of the education

that our kids are getting at school because it definitely wasn't like that when you and I were at

school. I mean, I finished university with a B common and we hadn't spent more than half

an hour on personal finances. So there is definitely a changing shift here. And for me,

it is really interesting to see how it's coming through into these different numbers. And as you

mentioned, you know, into different decisions that that the youngsters are making too.

Haley, thank you so much. Haley Perry is a money coach and facilitator at one life's truth

about money, 19 after seven. The money show. Business books.

Well, your book this week, it's called Mastering Sovereign Artificial Intelligence,

owning and shaping the future in the age of AI. It's by Dr. Mark Nassila. It has a picture of him

on the front of half of his brain, seemingly encased in metal. I'm pleased to tell you

that he clearly survived the experience because he's sitting in front of me now. Mark,

good evening. Thanks so much for coming in. Good evening, Stephen. Thank you for having me

and to the listeners. He's also the chief doctrine analytics officer at FNB Risk.

Mark, I'm sorry to start with such a silly question, but what I know what AI is, well, I think I do.

What is sovereign AI? Stephen, sovereign AI, it's about the ability of a nation

or an organization to control the AI development, value chain. And maybe to give you a bit of more

context. For a long time, especially over the last three years, we've been talking about AI

to drive efficiency, to drive effectiveness, to help come up with innovations and drive digitizations.

But if you look at what's been happening, the impact of AI goes beyond just those benefits.

AI is influencing geopolitics. I think you saw France, Germany start to phase away the use of

zoom and then teams with a view of being independent technologically. AI is a big drive of

national security. We've seen what America and Anthropic have been having controversy about.

But AI is also driving their ability to solve social problems, their ability to create new

industries, manufacturing and building infrastructure. In fact, it's re-imagining the future of

economies. Because of all these benefits, we're now looking at AI as a national strategic driver.

And because of these nations, we want to control the whole value chain. Because just the output

from AI will drive the benefits I talked about. But the future of nations and organizations

depend on controlling the whole development value chain of AI. And that's what AI soranities all

about. It seems to me that we are just what I would call AI takers. We are not AI formers.

And I mean, I'm speaking just as South African. I don't know if that applies to the risk of

the continent as well, maybe. You're 100% right. When I wrote my first book about African

artificial intelligence, it was about leveraging AI as consumers. It was about using it to make

predictions. It was about identifying opportunities for AI to digitize things.

But you see, being a national strategic asset means looking at data and AI the way we've looked at

minerals like gold. And for us to get the maximum benefit, we need to look at it from a man

facturing lens. There is no nation that has ever realized its potential by outsourcing the

processing of its national resource. The same way, there is no nation that has realized its

potential ability by outsourcing its intelligence. Now, the top 10 highest investors in AI are the

same one who have been leading in manufacturing of all times. And they're not looking at efficiency

effectiveness. They want to glean all the benefits around AI, around creating new industries.

That's why we're talking today and we cover this extensively in the book AI factories. We need to

think of the factories of the future, employment of the future. How will our national security work?

How we need to be autonomous. In other words, be less independent. Think about if we have AI

running our hospitals, national security, tomorrow someone can be angry about it. And if we're

depending on other nations, they could say, if we don't do this, we're going to have to switch

off these nations. And beyond that, data represents our culture. And if we can control how we

process it, we also protect our policies, our culture, things we believe in and our plans of

the future. And that shift from just being consumers is critical. We need to be producers. We need

to offer something to the global world. And that will come from an opportunity to manufacture

intelligence with AI. So, I mean, there's so many questions that come out of us. I mean,

one of them is that we saw the US supposedly in the lead. That's what it looked like. And I say

this when we sort of internationally, really, if we're honest, probably consume Western media, really.

Suddenly, China came out of nowhere with deep think. That rivalry, does that give us a gap maybe

to have a bit of control over our own destiny, the fact that there are two players, not one,

particularly that Europe might also become a player. And then that also maybe we can create our own

models. And therefore, take a bit more charge of our own destiny. 100%. It gives us a big

opportunity to redefine the AI rest in our own identity. We certainly cannot compete against

America because they've got all the researchers, they're producing platforms through their

higher education institutions. China is, you know, leveraging open source models that we've got

the likes of Deepseek. We've got Quen 3 now, which are being produced at a very cheap price

and being skilled. But for us, I think our identity lies in the opportunities we have

driving efficiency, being less dependent, like you said. And making sure we save the economies

will have used to actually import these solutions. When we look at unique industries that have

opportunities, for example, the health sector, we can just drive efficiency in the health sector,

the education system, the energy sector, think about security and law enforcement, all of them

have an opportunity to redefine themselves using this technology. And we can just be a modern

smart economy as opposed to competing against the likes of China. And that will actually help us

realize our potential. In many cases, the idea of sovereignty applies to your economy, but it

applies to people think of national defense. So that makes it a government problem. In the United

States, AI has really been driven by the private sector. And there's been fascinating disputes

between the private sector. I can't remember the name of the country, the name of the company,

and the Pentagon over what they can do. It's not palenter. I'm anthropic. I'm anthropic.

And so I'm really interested in that tension between the private sector, which is developing AI,

and what government wants to do with it. And in the South African sense, or in the African

sense, and you want to master your sovereign AI, whose responsibility is that? Now, I mean,

it's easy to say, well, government and the private sector has worked together, but you need to

make them work together constructively. The controversy between America and anthropic

was a reality check of the impact and massive impact of AI and not just look at any other

technology. Nations that are powering AI are controlling the technology. That's why America

is defining what technology will be used for, how it will be used, and including taking control

of startups like anthropic, what they've done and reusing them using their laws. In China,

the Chinese government is actually subsidizing startups. That's why we have deep sick. We have

other startups like driving the likes of retail companies that China is supporting because China

knows AI is going to run every aspect of industrialization of the future. Because of that,

nations, governments must take control of defining strategies and creating fair play policies

to allow for how AI will be applied across all industries. Remember, Africa and South Africa,

we don't have big economies to make mistakes. So the areas we're going to prioritize will define

how much we get buying and trust across different industries. And they have, unfortunately,

they have to work together or else circumstances around AI will force different sectors to work

together. For example, you know, COVID first success to work together. I do think the impact of AI

is at that level. Thank you so much for coming in. I really appreciate Dr. Mark Netzile.

Netzile is the author of the book, Mastering, Sovereign, Artificial Intelligence,

owning and shaping the future in the age of AI is also chief data and analytics officer at FNB risk.

The money show, how I make my money. 25 minutes now to eighth the time. So I don't know if you have

teenagers in your life, but if you do, you probably shouted at some point, get off that device by

which I mean some kind of device on which they're playing games. So you can play them on your phone.

You can spend a lot of money on a console like a PS5 or a Nintendo switch or an Xbox. You can

spend even more money on something actually called a gaming PC comes with a keyboard. Now your

children might be very good at these things. I don't know if you think they could make the careers

in it, but I wouldn't be surprised if they think they can. Someone who's been able to make a career

in this and in our gaming economy is Raymond Ledwaaba, currently the CEO of iThinkGaming and Raymond,

a good evening to you when I last properly played a video game. This is what they sounded like.

Mario Brothers or so I'm told. I think my memory says there's probably a Commodore 64

in there. Raymond Ledwaaba, good evening. You're involved in something a little more sophisticated

than that. Good evening, Stephen. Thank you very much for having me. And yes, I am living my dream

at the moment, building a career, doing something that I've loved as a kid. And so it's a real privilege

for me to be working in this wonderful video games industry and particularly trying very hard to

work on building the South African gaming ecosystem. I mean, I think a lot of us, certainly

as parents, Raymond, you're probably my age, but as parents, think of games as sort of entertainment.

You see it in a very different way and I suppose I can imagine also there's a kind of

a snobbery maybe among a certain generation, my generation, that there's some movies we see as

high art. We never think of a computer game as high art and yet who are we to judge that?

Yeah, I mean, video games is an art form. It's a very digital art form and there's different

types of games similar to your example in the film industry, right? There are very different

types of films and so one certainly can look at it from an entertainment perspective.

And obviously obtain entertainment value from a game. There's people who will look at a game

and look at it from its artistic sort of like perspective because when I look at games and

just like many art forms, there's also soft power in there. There's culture. There's an ability

to influence people in terms of storytelling and so for me, yes, games are an entertainment form

but they also a commercial enterprise. I mean, just to give you an example on which is

global stats, right? Three billion people around the world play video games. So that's almost

half of the world's population and if you look at the commercial value of revenues generated

from this industry, it's north of 200 billion dollars. So money is being made and to contextualize

that number because I like your example of film, the size of the video games industry globally

is bigger than the music industry and the music industry combined. So there's tons of opportunity

in that space. I mean, if you think about how big the movie and the movie industries are and

that it's bigger than both of those, I mean, it really is incredible. How did you get into it?

Were your parents nicer than my children?

So, you know, I got into games by accident to be honest. I always loved playing games growing up

but then I pursued a career that my parents obviously would have channeled me into which is

a currency. I'm a chartered accountant by training and I did my, you know, articles at PWC

that went into banking and I was always fiddling though, you know, like there's every entrepreneur

knows that there's certain things that, you know, you could be in a corporate but you're doing all

of these side hustles. And so one of the things that I started in 2015 was a sports organization.

I really love sports. I love football. So I started a nonprofit called Disky 99. Well,

so I was employed at UPSA and during the pandemic, we couldn't run our traditional sports programs

and so we pivoted and we pivoted into e-sports and now e-sports is competitive video gaming.

And during that time, I realized that, you know, there's a huge opportunity but a big problem.

So less than 1% of video game developers on the planet are African. Yet we make up together with

the Middle East, the second biggest population of gamers around the world. So that tells me we are

consumers in this space but we do not produce video games. So I went into games naively five years

ago with the intention of building African-inspired video games because I saw a gap in the market,

which is the ability for us to tell our own stories and have our kids play video games

made locally and create a platform even for our kids and young people around the continent

because we are a youthful population as Africa. And so we need to channel this energy and young

people love games. They play them but they don't really realize and know that they can also make

them and run enterprises in this space. So there's all sorts of things in the IT industry when people

talk about ecosystems and the most famous one is sort of Silicon Valley San Francisco where so much

of the sort of personal computing revolution happened is our problem that we don't have an ecosystem

like that in southern Africa where a place where people are sort of together and interested in

designing games that would create that kind of ecosystem. Yes, there's definitely one part of the

problem. There's multiple facets to this challenge of the ecosystem. So certainly there aren't

clusters in southern Africa where you could walk into multiple spaces, there are computers,

there are people who are like you who think like you want to make games, whether it's as an

art form, as an entertainment form. And then there's also the perception of parents that parents

see games as this big distraction and they don't understand that there is again a career that can

be built in the space, there's money to be made in the space, whether you're making the game

yourself or you are streaming, there are so many avenues, right? Like there are esports players,

there's people who play video games and you know the prize pool is in the millions of dollars

and they're just playing a game. So there are massive opportunities but it's an industry that's

misunderstood. In southern Africa we are at an infancy stage in our ecosystem. There's just

the handful of studios locally that are building video games and making money and sustaining

themselves with sales of video games. And then there are a lot more of studios that are doing it

as a hobby, as a side hustle, but then they're doing something else to sustain their lives.

So yes, I think having a cluster is important and that's something that we're working towards.

So I think gaming as a business, we make video games but then we also do this ecosystem

development work that we have seen if we don't do it, our own company might not survive. So

we've met with the Department of Communications and Digital Technologies and we've sold them

the importance of video games as a job creation force, as a way for us to generate revenues and

have those revenues stay in the land, in the nation. So there's an advisory committee that we've

set up with the Department of Communications and Digital Technologies to look into this very

problem that you're talking about. How do we build a thriving ecosystem for video game producers?

Okay, so when you have a movie and even in the music industry, I kind of understand the

different roles. So you'll have actors, you'll have a scriptwriter, you'll have a director,

you'll have makeup artists, you'll have the crew, all of that. In a video game, what do you need?

And I presume that some of the bigger players like Electronic Arts or whatever will have all

sorts of different roles that people play. What would be some of those roles that's younger people

or anyone could start to consider? What would be the roles that people play that go into one of

these big sort of production video games? So a video game in its essence is a piece of software,

so you would definitely need programmers. So there's people who write a code to make a character

jump or make a character run. So you suddenly need programmers to deal with the IT aspects of every

video game, but a video game is also art. So there are characters that need to be drawn,

that character needs to be animated so that it moves. So you've got animators. A video game is a

story so there could be a narrative that is being followed throughout this video game. So you need

writers and storytellers and the sound. I mean, you started to show with an audio clip. So there's

musicians, the sound designers, and then there are game designers. So someone who thinks about how to

put all of these things into play. How do you make it fun? How do you make people come back?

What prizes are you giving at what point? What challenges? What puzzles are you putting in?

So there's a merit of options and careers that young people could consider in the space.

And then of course, then there's people like myself who are in finance. And we look up

how do we raise capital for the work that we do? Because just like in movies, building games

is quite a capital intensive industry. The type of hardware that you need to build video games is

not cheap. And the time that it takes, it could take a long time to have a game developed. And

then you've got lawyers that need to do the paperwork. And then there's a marketing team that needs to

ensure that everybody knows about the game. So it's a full scale industry with tons of opportunities.

So I mean, is there scope for someone inside Africa to do one of those jobs full time in the

gaming industry now? I mean, I've never bumped into someone who says, apart from you, I suppose,

who says, in South Africa, I work in the gaming industry or someone I know does.

Yeah, so I mean, like I said, the industry is still in its infancy. So there's a handful of

studios that are doing it full time. The talent that we have, I mean, there's a couple of

universities that are offering game development degrees. And they are churning out really talented

young people. And what we're seeing is that some of those people then find work overseas.

I mean, one of our amazing, amazing game designers just resigned from our studio last month to work

for a firm based in Saudi Arabia, but he's working remotely. And so we've seen a lot of demand

for talent from South Africa abroad in the video gaming space. And as we build our industry,

I can see in the next five, 10 years, lots more opportunities for young people to do this thing

full time. And it requires quite a few things, but one of the things that just can't get around as

you're opening comment about sort of Africa and the Middle East as consumers, if the market is so big,

you would think that the games would be tailor made to our market. And I don't get the sense that

they are. No, I mean, yeah, that's that that's a big challenge. And that's where we see the gap,

right? And I don't I wouldn't blame any studio for not even considering our narratives, our stories,

our cultures in their games, because if you don't have representation, what you're talking to

is an issue of representation. You can't blame someone for not thinking about your geography,

because they might not feel a connection to it, they might not know it, they might not understand

it. If they do it, they might not also do it, you know, well, they might not do it in the way that

it's supposed to be done. So that's part of the problem. That's why we need to ensure that,

you know, when a young person is selling their parents, hey, I want to be a game developer,

we don't discourage them, because we need that talent here so that we can tell our own stories.

So yes, that's a big challenge. And we've seen a studio also, I mean, like a good friend of mine

has developed a really fantastic game called Relooted, Ben Mayes from Yamakop. And it's a beautiful

game. It's about reclaiming African artifacts from Western museums. It's an important video game.

So I would encourage everybody to check it out. But, you know, because it's different, it's unique,

it's telling our story, there is a certain demographic around the world that is not

pleased with that game. So we also face these challenges when you're trying to build something

of your own that comes from the continent of Africa and you're putting it in the global market,

that tends to sometimes be that resistance because people don't understand it. I mean,

they're seeing black characters in the game and for them it's an issue which we don't,

we don't really get and understand why that has happened. Raymond Lidwarp is the CEO of I Think

Gaming, he's with us for another 10 minutes on how I make my money, how you do it in the gaming

business, 10 minutes now to eat. The money shows Stephen Curtis is brought to you by Apsa Sponsorships,

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Apsa's registered FSP. The money show, how I make my money. Eight minutes to eighth the time we

talking about a career in the gaming industry, Raymond Lidwarp is the CEO of I Think Gaming,

a gaming. Raymond, I do have to ask a question and I sort of ask this with my parent hat on,

that I think some people are kind of anti-gaming because I see it almost as addictive and if you

think of Fortnite, right, for a lot of people if you think of gaming, you think of Fortnite,

are you trying to get a child of Fortnite? So it's being played live with lots of other players,

so you can't pause it. So for the teenager, they're like, Dad, I can't pause this game. You can't

go back and all the parenthesis is the sort of blood and guts. And I sometimes wonder if the gaming

industry, I mean, that's before I even think of Grand Theft Auto and all the other stuff.

And I appreciate that the movie world has that too. But is that something that maybe the gaming

industry could think a little bit about? That's a very good question and I mean, I think

there are standards and regulations that ensure that video games have age-appropriate narratives,

images, ideas, because that is definitely a valid concern. But I think it's a very difficult

thing to control in someone's home because as an enterprise-making, a particular product,

you would be thinking about your particular idea and bringing it to life in a certain way.

And ultimately, once it gets into the market, it would get into the market with appropriate

age restrictions. And you would have agencies that would ensure that that is indeed the case.

And once it's been played in the home, certainly, certain devices to play stations,

your Xbox have parental controls that can ensure that you limit the time that your child is on

on the device. And so ultimately, the parent is responsible for the child, but you are

right in saying that there is that perception of what a game could be doing for young children.

But again, just to contextualize everything, 20% of game players are miners.

So it is an important demographic. There are tools and controls to ensure that

you can manage the amount of time your child plays. But similarly, YouTube would have the same

problem. And film, like you said, would have the same problem, TikTok would have the same problem.

So it's tough to manage these platforms, but yeah, at the end of the day, the parent has to do

the parenting. It's such an interesting stat when you say that only 20% of the people who play on

these are minus or under the age of 18, I presume. And I think automatically there's an assumption

that most people who play are young, but we know that's not true. In fact, I know at least one

person who's a bit older than me who will spend a long time on a game. So I have a different

question limit. Why is it? I mean, I've never really found playing these games interesting.

I can see that they're art, in many cases. I can see they're clever. I can see that they're

intellectual. I can see that a lot of work by very clever people has gone to them. I can appreciate

the product. But frankly, I'd rather read a book. And I don't say that to be insulting. I'm asking

a different question, which is, why do some people like games and some people don't? I find that

fascinating because I've come across some people who really love them and some people who just

can't stand them. And it doesn't matter what the game is, you know, it could be Tetris, it could be

Fortnite, but they still have that view. Yeah, I mean, certainly, you know, the market has different

types of personas that are interested in the products that we develop. You definitely have

people, I mean, like myself, I'm a golfer, for example, and I'm hooked on this golfing game.

I just can't put it down. I love soccer. I play FIFA a lot. So there's certainly different

types of games that appeal to your personality and the things that you like. So there's that

connection on that on that front. And certainly, you would find people who like indie games,

so games that are very artistic, that are not too mainstream, and they will play those games

for days. And yes, absolutely. I mean, then there's a customer or, you know,

someone like you who says, well, I'd rather read a book or I'd, you know, rather watch a movie,

and that's really our competition. That's what we are competing with. We're competing for your

attention, right? We work in the attention economy. And so if we can grab your attention and keep

in our game, then we would have designed a really fantastic game. If we go back to the drawing board,

but yeah, that's we compete with books and music and TikTok.

We've got just a minute left. Are you very optimistic still about growth of the gaming industry

here in South Africa? Are you optimistic that people will, in a few years, we'll see

I will go to a Brian bumper to people who say, oh, I work in the gaming industry in South Africa

for South Africans producing Southern African content. 100%. I don't see the growth of the industry

really slowing down. I see more people playing more games. And I think if we have the opportunity

as Africans to also contribute to these catalogs by building games that represent us, games that

infuse with our own stories, our own culture, then definitely we will see even growth on the African

continent. And so yes, in a couple of years, you'll be at a bribe and you'll be talking to

multi-billionaires that are making money from video games. Well, now you're selling it.

Raymond Lidwab, thanks very much. Really appreciate the time. The CEO of I think gaming. Are you

interested now? In a nutshell, in that direction? Someone better.

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Well, in the US, markets still really uncertain, not sure about what's going to happen,

and how it's going to play out in the Middle East. The Dow Jones is up 0.32%,

the Nasdaq is down half a percent. The S&P 500 is down 0.18% at the moment. And of course,

everyone just waiting to see, I suppose, what Trump does next, really. And Iran.

Lots of analysis suggesting that Iran really has a much stronger hand to play for various reasons

than the US, due to the straight up Hormuz. We'll be back with you tomorrow, good evening. It's 8 o'clock.