Who will be South Africa's next Koos Bekker?

And why it matters for the future of South Africa

It seems such a simple question – Who creates wealth in our society? – but ask a classroom of students and you’ll quickly realise that consensus is neigh-on-impossible. It is the working class that creates wealth, one student would say, which is why striking government employees last week across South Africa were justified in asking for higher wages.

No, some other student responds, it is ultimately the land that creates wealth, echoing the beliefs of the Physiocrats in 18th century France. That is why, these students argue, equitable land redistribution is key to future wealth creation in South Africa.

No, no, no, another student would add. Wealth is created by scientists. The most innovative countries in the world are also the wealthiest, and as economic historians have preached for some time now, the bedrock of our flourishing society is the application of scientific knowledge to make us more productive, produce surpluses, trade, and prosper.

Sure, a smart student in the back might say, but we cannot all be scientists. Some scientists might coin it, like Thomas Edison, who was worth more than $100 million at his death (in today’s money), or Henry Ford, worth more than $30 billion, or Elon Musk, worth more than $200 billion. Even the German immunologist, Uğur Şahin, who invented BioNTech’s Covid-19 vaccine is now worth a whopping $5.6 billion. But many other scientists languish in university laboratories. These examples actually show that it is not scientific knowledge that matter, but entrepreneurial nous.

Yes, the student might continue, scientists come up with new ideas, but it is ultimately the entrepreneurs that turn these ideas into commercial products and services that we all love. Consider Steve Jobs or Jeff Bezos or even Bill Gates: they weren’t the first to come up with the idea of a personal computer, or an iPod, or an online bookstore, but they were the most successful at building a product that people wanted to use. The true wealth creators are those that spot opportunities before anyone else, gamble their time, effort, and resources, and have the patience and determination to stay for the long haul.

TJ Strydom has just published a biography of the person who has contributed most to wealth creation in South Africa in the last decade. No, it is not a politician (although there are several who have become fabulously rich – at our, the taxpayer’s, expense). Nor is it a scientist (although there are cool scientists at South African universities inventing cool things). TJ Strydom’s book is about Koos Bekker, an entrepreneur who has had the foresight and gumption to hold onto an investment his then tiring firm, Naspers, had made in 2001, until it began paying off, big time.

In Koos Bekker’s Billions, Strydom tells the origin story of Bekker’s astute decision to invest in a then-unknown Chinese firm, Tencent. Many have described Naspers’s investment back then as the best investment in history, a claim that might not be entirely true but certainly not far off.

But the investment was not an immediate success. As Strydom notes, ‘far from creating value, in his first four years on the job Bekker had actually overseen a two-thirds decline’ in shareholder value. In his first five years, Bekker did not earn a cent: he had asked to be paid in share options instead, and the share price had gone down rather than up.

But his patience eventually did pay off handsomely. After 2010, Naspers’s share price rocketed. The figure shows the growth of Naspers versus the growth of the JSE, with 2010 as the base year. Despite a sharp decline in the share price in 2022, the share price of Naspers has increased 13-fold since 2010 compared to the JSE of less than 3.

Bekker did not only create immense wealth for himself, but also for everyone who owned Naspers shares. And that is almost every South African with a pension plan. Given his extraordinary contribution to our collective prosperity over the last decade, it is quite astonishing that this is the first book in the last decade to tell his story.

But Koos Bekker’s Billions is not just one fact after another. Strydom distils Bekker’s entrepreneurial lessons in fifteen chapters, lively, lucid, and often with a good dose of humour. It deserves to be read by anyone hoping to create their own wealth. And an international publisher.

It does pose an obvious question, though: Who will be South Africa’s number one wealth creator of the next decade? I think it is safe to assume that it will be someone building a company (or companies) that sell their goods and services to a global audience. Perhaps the name of the next decade will be a CEO running one of the biggest JSE-listed companies, one that is willing to bet against the odds. Or perhaps it will be one more unfamiliar, a start-up entrepreneur with the right idea at the right time.

It is also safe to assume that wealth locked up in a private company is not the kind of wealth creation that benefits all. Koos Bekker became fabulously rich, yes, but we could all benefit from his smart decisions and ruthless work ethic because Naspers is a listed company. So too Remgro, Pick n Pay, and PEP Stores and the legacy companies of twentieth-century entrepreneurs who still trade on the JSE.

Sadly, listing on the public markets is not as popular as it once was. Red tape and financial regulation have prevented many start-ups from listing publicly, and have even forced several bigger firms to delist. Most service-sector firms also don’t need that much start-up capital. Larger private capital markets allow them to stay private for much longer than before.

As I tell my students, South Africa’s next Koos Bekker would need to find not only the right business idea but also a way for ordinary South Africans to share in the wealth that is created. For South Africa to thrive, I hope that some of them will be up for the challenge.

*An edited version of this article was first published on News24. Data by Codera Analytics. Photo by 大 神 on Unsplash.

**On Thursday, 8 September, I will interview TJ Strydom about his new book at the V&A Waterfront’s Exclusive Books. 18:00 for 18:30. Join us for a fun discussion. RSVP to events@exclusivebooks.co.za.

***And on Friday, 9 September, TJ will join me, Oliver van Beemen (Heineken in Africa), and Karen Jennings (An Island) at De Warenmarkt in Stellenbosch for a discussion on economic and business histories in Africa. 16:00. RSVP to leap@sun.ac.za.