University of Cape Town (UCT)
The logo for the University of Cape Town (UCT). Thabiso asked that we do not publish a photo of him for privacy reasons.

On Friday the 1st of July, I had the privilege of meeting Thabiso Mondlane, fifth place winner of the Rising Tide Foundation Essay Contest. For his achievement, Thabiso won $250 and the opportunity to travel to a Liberty Camp.

Thabiso is a 3rd year finance student at the University of Cape Town. He enjoys fantasy, especially (as he will have in common with many of us) Game of Thrones. He discovered the competition after reading one of the posters placed on campus and decided that this would be a good opportunity to write on a topic that he has been interested in, but hadn’t found a pressing need to obligate him to research.

Against hundreds of students around the continent, it is an amazing achievement to come fifth. To achieve this, Thabiso wrote an impressive essay on entrepreneurship. In our talk, I asked what he wrote about and a few questions on the state of South Africa.

Thabiso focused on the factors that lead to entrepreneurial success, indicating labour and capital. In his analysis, he realised that while there is increased capital in South Africa, it is not easy to access. The state often limits an entrepreneur’s opportunities to gain funding, while simultaneously spending tax money irresponsibly.

The second major problem is that stringent labour regulations hold back entrepreneurs from providing employment and growing. Individual entrepreneurs are forced to minimise employment so as not to risk the wrath of heavy labour laws, and this leads to unemployment and a stagnant business. Individual entrepreneurs don’t have all the necessary skills to run a growing business and these laws hold back their ability to delegate.

In effect, the fundamental cause of entrepreneurs’ failure to grow and prosper is government intervention. State intervention has held down entry into the market and weakened the private sector through rampant regulation. In addition, many businesses’ and individuals’ reliance on state grants has created a dependency that has led to a weak private sector.

Thabiso indicated that not all of the state’s actions are negative. He stated that policies directly aimed at helping entrepreneurs tend to work, but that these are overshadowed by policies that do harm them. This is most pertinent in many policy maker’s vendettas against big business, but their policies actually hurt small businesses more often than not.

In short, the state has failed to create an environment appropriate for entrepreneurship. They try to intervene and compete directly, and in that way add to the difficulty of doing business.

I asked Thabiso what he would change if he could change, remove or introduce one policy in South Africa. He answered that he would remove many of our stringent labour regulations. The reason for this is that he identified unemployment as one of our biggest difficulties – and that our labour regulations are only contributing to making employment harder. He added that trade unions like COSATU shouldn’t be allowed to dictate labour regulations and that their special relationship with government betrays the very purpose of a democratic state that is meant to look out for all stakeholders.

Lastly, I asked if he thought there was any future for entrepreneurs in South Africa. He said there is. Big business leaving South Africa, while ultimately bad for the economy, does leave gaps in the market. Small firms can fill these gaps, and while difficult, there are still opportunities to be exploited.

I really enjoyed my chat with Thabiso and wish him luck at the Liberty Camp. I hope he keeps it up and becomes a strong and active leader for liberty.

Nicholas Woode-Smith is co-founder of the Rational Standard and its Technical and Marketing Director. He is a student at the University of Cape Town, with majors in Politics, Philosophy and Economic History. He is the youngest council member of the Institute of Race Relations in history and the Regional Director of Southern Africa for African Students For Liberty. He also writes science fiction – prominently, the Warpmancer and Cape Zero series.