Friday, July 22, 2011

RAGS TO RICHES :PETER MAGEZA (African Millionaire)



Turning a dream into reality





Peter Mageza, managing executive at Absa Bank, tells Colette Steckel how the political turmoil in South Africa in the 1970s and 1980s shaped the lives of the nation's youth, including his own. And how optimistic he is about his future as a finance professional in a new South Africa

Peter Mageza's story of how he fulfilled his ambition to become an accountant is a tale of triumph over adversity. It began in Soweto, a former black ghetto 15 kilometres outside Johannesburg that is now home to some two million people. Peter, who was the youngest of six siblings, spent his childhood growing up in the township. His father, who set up one of the two high schools in Soweto and saw the value of getting a profession, fancied his son as a doctor, but Peter had other plans. 'None of my brothers or sisters had gone on to study medicine, so my parents thought it would be nice to see one of their children become a doctor, but medicine wasn't for me. My father and I agreed that I would pursue a career in finance.'
Which is how he ended up studying a degree in finance and business at the University of the North in the vast Northern Province of South Africa, one of the most populous yet poorest provinces in the country. Peter admits that although he was determined to become an accountant, his ambition was fuelled by the remarks made by a university lecturer in Peter's first year of studies. 'I was in a class of 100 first year students and our lecturer told us that no-one would qualify as an accountant. We weren't good enough. That became a challenge. I wanted to prove him wrong,' recalls Peter.

But he never got a chance to finish his degree. In the final year of his studies, he was kicked out of university and left with the options of either giving up on his sought-after accounting career or starting from scratch elsewhere. 'In the 1970s, universities were a barometer of what was happening in society. The country was in upheaval and, for political reasons, students were thrown out of university. I was one of the casualties of the apartheid system,' he rues.
In the 1970s, South Africa was at the height of apartheid, a policy of racial separation that began in the 1920s but became officially introduced with the rise to power of the right-wing National Party in 1948. Throughout the 1970s and 1980s, the student population championed the cause for change through the Black Consciousness Movement, a student organisation that was at the forefront of the struggle for liberation.

In 1976, the year that Peter and his peers were thrown out of university, South Africa was on the cusp of a period of civil unrest. The catalyst was an announcement by the then prime minister, John Vorster, that the Afrikaans language would be used in black schools. Students took to the streets of Soweto in protest. And the ensuing deaths from police gunfire ignited months of rioting throughout the country. Black schools and universities, including the University of the North, a hotbed of student political activity, were temporarily shut down. And attempts were made to silence the student voice.

'Everyone was involved in politics back then,' recalls Peter. 'You were either on one side or the other. There was no sitting on the fence. I happened to be a product of politics like everyone else. But I wasn't one of the politicians and I really wouldn't want to try and steal the limelight of those that were.'

Two years after his expulsion from university, Peter was still on the streets of Soweto, pursuing his political agenda and working occasionally for his father, who had given up teaching and established a business in the building trade. But a chance encounter put his longed-for accounting career back on track. 'It was fate really,' begins Peter. 'A friend of my father's helped me get to the UK and, whilst there, I bumped into someone who listened to my story and thought perhaps I needed to be given a chance to realise my dream. Because I never stopped wanting to become an accountant. The deal was that I would be funded for a year to start my studies from scratch in the UK. Thereafter, I would be on my own.'

Peter enrolled on an ACCA course at the former Polytechnics of Central London and North London. He stayed in the UK for five years, during which time he studied and made a living any way he could. 'I got by. I washed dishes, cleaned offices, cycled to lessons, lived in digs,' he laughs. 'At the end of it, I got my ACCA qualification and, for that, I am eternally grateful.'
He returned to South Africa in 1988, shortly afterwards landing himself a job with Coopers & Lybrand. Although by then apartheid was gradually losing steam through the economic sanctions imposed by the UK and US Governments, Peter decided he didn't want to stay in South Africa. He was seconded to the Coopers & Lybrand office in Swaziland, where he stayed for three years, rising through the ranks to become audit manager. 'Swaziland was a better environment to work in than South Africa. At least from a political perspective,' he claims. 'From my experiences in the UK, I knew what it was to have a normal life. And life in South Africa wasn't normal.'

By 1993, South Africa was on its way towards becoming a democracy with its first non-racial elections taking place a year later. Peter felt the time was right to return to South Africa for good. 'The change in the political landscape gave me an opportunity to come home but to a new South Africa that we had all fought for,' he says. Peter's return also marked a new shift in direction of his career. He left auditing and moved into management, heading up a transport and logistics company, before switching gear again to join the banking industry. He managed the process management arm of the technology and operations division of Nedcor, one of South Africa's four big banks and, within two years, was poached by rival Absa bank where, today, he is managing executive of the vehicle and asset finance division.

His division is a sizeable one, contributing over 25% to the total commercial banking earnings of Absa (according to last year's financial statements to 31 March 2003, the division's earnings were 289m Rand; earnings for the entire group was 3,441m Rand). He has a staff of 1,200 under his wing and runs the biggest asset-based finance operation in South Africa. But Peter isn't complacent about holding onto the top position. 'The market is and continues to be competitive, with lending margins being squeezed. It's an interesting time and we have to be highly influenced by cost, quality and risks.'

Despite high interest rates, which were hovering around the 17% mark until recently, and high vehicle prices, the division outclassed its market rivals, with a 21% hike in headline earnings last year, which was put down to the strength of the division in the used car market (the division controls just under half of the second-hand car market in South Africa). As for the future, Peter is optimistic about the economy and its impact on the bank as a whole. 'Right now, South Africa has entered a period of stable currency and, recently, interest rates have been coming down (to a record low of 9% last month). The South African economy is one of the most well managed economies in the world and for a banking institution like ours, operating in such an economic environment is quite positive.'

Despite the difficulties he has endured to gain his accounting qualification, Peter gives the impression of a man content with his career and the challenges posed by his role as managing executive at Absa. 'Is it luck that I've come this far?' he questions. 'I suppose for someone to succeed, it's because they've been given an opportunity. In the past, there were few opportunities. And that's reflected in the number of accomplished black accountants we have in South Africa today. Black folks couldn't do as they wished back then and so, even though they might have had the capacity to do well, the door was often closed. I was given a chance and I made the best of it.'

Peter notes, with some satisfaction, that the current South African Government is aware of the need to empower black South Africans, through righting social imbalances and creating jobs that offer hope and promise career progression. He counts himself among the fortunate few to have scaled the heights of a professional career and he's confident that, with increased opportunities, more black accountants will follow in his footsteps. 'The Government is driving the issue of employment equity so that the country has a representative profile of our society in all professions, including accounting,' he says. 'To me, that is the right way forward as it creates a platform for permanent future stability in an economy that is fully inclusive.'



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