Business Finance in Post-Apartheid South Africa was the Focus of Inaugural Lecture

Professor Mabutho Sibanda.
Professor Mabutho Sibanda.

Dean and Head of UKZN’s School of Accounting, Economics and Finance (SAEF), Professor Mabutho Sibanda achieved a significant milestone in his academic career in August when he delivered an inaugural lecture titled: Business Finance in Post-Apartheid South Africa: Views and Evidence.

A firm believer that understanding and critically analysing the evolving landscape of business finance in post-apartheid South Africa can pave the way for a more inclusive and sustainable economic future, Sibanda set out his philosophical views and evidence on trends in business finance from the neoclassical lens to identify the possible paradigm shifts in financing businesses in the country.

He noted that, theoretically, firms first make investment decisions and then consider financing options for either expansion or start-up projects. These decisions, which mainly involve the use of financial intermediaries, lead to economic growth in a pattern of causality referred to as “supply leading” or “demand following” depending on the country’s level of economic development. 

In the past, South African firms mainly relied on equity as a source of business finance. However, recently, with the development of a robust bond market, this trend has been reversed, with firms embarking on debt finance to meet their expansion and working capital needs.

Drawing on his expertise in corporate finance, Sibanda described corporate financial management as an organisation’s heartbeat as it forms the foundation for all strategic decisions on the allocation of resources, investment choices and financial planning that drive the company’s growth and success.

He added: ‘As we delve into various trends and patterns that have emerged over the years, we must recognise the historical context in which these changes have taken place and their impact on different sectors of society, particularly the business sector. By shedding light on the successes and shortcomings of business financing models we can foster deeper comprehension of the challenges that lie ahead.’

The lecture served as a catalyst for discussions, collaborations and innovative solutions to address persistent issues in access to finance among South African businesses. 

Sibanda is an interdisciplinary scholar with research interests in development, finance, financial markets, credit, risk modelling and corporate finance. He is pursuing research on health financing to contribute to the achievement of the United Nations’ Sustainable Development Goals, specifically target 3.8 on universal health coverage, including financial risk protection, access to quality essential healthcare services and access to safe, effective, quality and affordable essential medicines and vaccines for all.

As a corporate finance expert, he regularly reviews financial models, leads the research components for capital raising projects, and is extensively involved in project development, feasibility studies and project structuring.

Sibanda is a founding director of the UKZN Business Rescue Unit (BRU), an associate member of the Institute of Bankers of South Africa and an associate member of the Institute of Risk Management of South Africa.

A progressive leader, he believes in lifting as he rises, evidenced by the mentoring and coaching of staff in the SAEF which has resulted in organic growth in these academic disciplines. He is also passionate about academic and student support which has led the School to raise funds to assist students from disadvantaged backgrounds.

The lecture was well received by local and international peers, students and staff.

Acting Deputy Vice-Chancellor and Head of the College of Law and Management Studies, Professor Managay Reddi congratulated Sibanda on an informative and thought-provoking lecture.

Ms Talenta Mabasa, research assistant at the UKZN Macroeconomics Research Unit commented: ‘This was such an interesting presentation as my research is on financial development and economic growth. I have learnt a lot, congratulations Professor Sibanda.’

Post-doctoral Research Fellow and member of the BRU Dr Frank Matenda said: ‘This accomplishment is another step in your journey. Your ability to relentlessly search for solutions to problems and find innovative ways to improve the world is the key to this success and many to come. I am inspired.’

Sibanda also used the lecture to acknowledge the many people who have contributed to his academic development including his wife, children and extended family. He said that he is indebted to seasoned academics such as his mentor Professor Emeritus Merle Holden and Professor John Mubangizi as well as Professor Anesh Singh who helped to shape his academic career.

Words: Hazel Langa

Photograph: Supplied

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