Accreditation:
The recognition or licensing of an agency (verification agency) by the DTI to verify BEE credentials and issue a BEE verification certificate

Asset:
A business, or part thereof, when sold to black investors or shareholders to fulfil the ownership requirements of BEE

Associated Enterprise :
A separate business entity used to conclude, or created as a result of, a BEE transaction involving the sale of an enterprise or asset, whose black ownership can be credited to the ownership score of the measured entity that created it

ABSA:
A South African bank, formed through an amalgamation of Allied Bank, Trust Bank, United and Volkskas. ABSA was acquired by a British bank, Barclays, in 2005.

Account :
1. (as a noun) an account means a agreement or arrangement between two or more persons - one a buyer, the other a seller - to exchange goods or services especially with monetary value, e.g. an arrangement between a clothes retailer and a customer, which allows the customer to buy for a period of time, including credit sale agreements. 2. Another meaning of account - still as a noun - could be a relationship between a financial institution such as a bank and an individual or business for which money is kept for the purpose of deposits, withdrawals, transfers, etc. In this case the bank is allowed to charge interest on those who borrow from it, and is expected to pay interest to those who deposit money. 3. In accounting, account as a noun represents an bookkeeping entry to denote a group of related transactions such as income streams or expenses, liabilities or assets e.g. stationery, travelling expenses or entertainment, for the purpose of reporting.

Accounting:
That function of a business which is concerned with the representation of business decisions, plans, transactions, trading and operational activities - be they cash or credit - assets and liabilities. This follows set procedures and conventions, often summarises what has been happening in a business within a set period, called an accounting period or financial year - could be a quarter, half a year or a full year. Accounting does not only address what has happened already (financial accounting), but can also be used in planning the future such as in budgeting and making decisions about capital expenditure (management accounting). users of accounts or financial reports or statements are managers, investors, analysts, government. Accounting works more like a hospital bed-letter or a school report card, telling us about the state of health of a business, progress made, problem areas and things that require improvement. The real value of financial accounts, though, is in analysis, where different periods, companies and industries are compared to each other to establish what is standard, below standard or exceptional. Accounting is practiced by accountants with the help of book-keepers. Different countries set different standards and intepretations of the accounting concepts, which standards are upheld by the various professional bodies. Financial reports of listed companies and private companies must be audited by external independent auditors. Auditors are themselves professional accountants who would not have assisted in the preparation of the financial reports being audited. This requirement ensures that the users of financial reports do not simply have to take the word of management.

Accreditation:
An official recognition of a service provider as meeting certain professional standards. Accreditation is normally granted on an annual basis or at least for a fixed period of time, renewable on condition that the service provider maintains the required standards. Financial planners are some of the professionals that have to be accredited by professional bodies.

acid test ratio:
acid test ratio - another name for quick ratio.

ACSA:
Airports Company of South Africa. This company owns and operates the airports of South Africa. Its major shareholders are the South African government and Aeroporti di Roma (until August 2005, when the 20% was bought by the PIC)

Activity:
A factor of how a company is run with specific reference to - among others - its ability to turn stock over, i.e. how long it takes the company to sell stock once it has bought or produced it. The shorter the time that the stock stays in the company's store room, the more likely it is to generate good returns for its shareholders. This is because stock in a store room costs money the company a lot of money in insurance and also risks the loss of it being damaged or becoming obsolete.

Africa:
One of the seven continents of the world. These are Asia, Africa, North America, South America, Europe, Australia and Antarctica. Together with Asia and South America, Africa offers growth opportunities to the companies already established in the west, due to their abundant natural resources and large population sizes.

Africa Institute of South Africa:
A think-tank and research house situated in Pretoria, Gauteng Province, specialising in the economic, social and political affairs of the African continent.

AGOA:
African Growth & Opportunity Act, a law signed in May 2000 as Title 1 under the Trade & Development Act of the United States to open access to the US markets for specific products from certain qualifying (eligible) African countries. Products of the eligible African countries - qualification determined by the US on the basis of governance, rule of law and commitment to free market policies - include textiles, steel and agricultural produce.

Agriculture:
The science or process of food production through the rearing of animals and/or the cultivation of plants. As an economic activity, agriculture can take the form of subsistence (producing only to meet the needs of the farmer) or commercial farming.

AIDS/HIV:
Acquired Immune Deficiency Syndrome/Human Immune-Deficiency Virus.

Allocation:
The identification of where a cost incurred in a business belongs. In accounting, it is important that costs are identified properly so that the users of financial statements can be able to analyse the origin of various costs to enable and so that management can implement cost control measures.

All-Share Index:
The indicator of the performance of the JSE. When you hear of the markets being up, the All Share Index is also up. In fact, the only way to tell whether the 'market went up' is by checking the level of the All Share Index, to ensure that it is higher than what it was when the trading day opened. You will recall that investors buy shares only when they believe that they can sell them later at a better price or earn dividends from holding on to them. Both these opinions mean that the investor only buys shares if they are optimistic about the price. When the collective activity on the securities exchange such as the JSE is one of more investors wanting to buy shares, there is increased demand for them, which is bound to increase the price of an average share. So, at the end of such a trading day, the net effect of the shareholders' actions of buying would have been an upward movement in the prices of the most popular shares, hence the expression of the 'market being up'. A specific index such as the ALSI 40 will give you the same indication, but of a selection of shares. The equivalent of the All Share Index on the New York Stock Exchange is the Dow or Dow Jones, on the London Stock Exchange - the FTSE, in France it is the CAC, in Germany - the DAX, in Australia the ASX, in Hong Kong the Hang Seng, and in Japan the Nikkei Index. Again on the New York Stock Exchange, you might hear of the Fortune 500, being the index indicating the performance of a specific selection of shares on the exchange.

ALSI 40:
See All Share Index.

Alt-X:
The Alternative Stock Exchange, meant to enable small companies that would otherwise not be able to afford a listing on the main board of the JSE due to the costs of a listing or a smaller asset base. Some companies use an Alt-X listing to gain entry to the main board at a later stage. It used to be the Development & Venture Capital Board before 2003.

Analysis:
The use of financial information to gain a better understanding of a business. Users of financial statements always try to isolate problem areas and strengths or opportunities that a business presents to them. They can only achieve this by studying the financial information, like a doctor studies a patient's medical information. Their training enables them to decide what action to take after they have compared the results to those of the previous years, those of other companies in the same industry or sector, interviewed management and the company's suppliers and customers. Analysis is usually based on a set of ratios such as liquidity ratios, profitability and activity ratios. Analysis does not tell one what to do, but gives them the information they want in the form they want it. It is still the responsibility of the analyst or management or investor to decide. A saying that sums it all up in finance goes: 'the analysis is only as good as the analyst!'

Analyst:
One who conducts an analysis of financial information.

Asset:
Anything owned by an individual that has a cash value. This includes property, goods, savings or investments. Item of value owned by an individual. Assets that can be quickly converted into cash are considered "liquid assets." These include bank accounts, stocks, bonds, mutual funds, and so on. Other assets include real estate, personal property, and debts owed to an individual by others. An economic resource belonging to a company or entity, an item owned by the company or entity; an asset has future economic benefit and is the result of past financial transaction.

AU:
The successor of the Organisation of African Unity. One of the important steps taken by the African Union was to set up the African Peer Review Mechanism to improve democratic governance in Africa, under the flagship programme - NEPAD. Another achievement of the African Union was to place the issues of Africa on the agenda of influential world leaders.

Black:
A generic term for South African coloureds, Indians and Africans who are citizens of South Africa by birth or by descent, or by naturalisation that took place before 27 April 1994. If the naturalisation of such persons occurred after this date, such person should be one who – had it not been for the apartheid policy – would have qualified for citizenship.The term is used to determine who qualifies as a black person in BEE initiatives, but can also be used to describe companies depending on their BEE credentials, especially those with more than 50% black ownership (Schedule 1 of the Codes of Good BEE Practice)

BA - British Airways:
British Airways, the national airline of Britain.

Bear market:
The opposite of a bull market

Bank:
A financial institution that accepts deposits in the form of savings and investments, grants loans to borrowers, receives and pays out cheques, in so doing act as an intermediary or go-between that brings together persons with excess money (depositors) and those with a deficit (borrowers). Banks lend out the depositors' money to borrowers, charge the latter interest which is generally higher than the interest they pay to the depositors. The difference between the interest a bank charges and the interest it receives is profit to the bank. Banks also charge service fees for their services to customers. Both the interest and service fees that banks can charge are regulated by legislation.

Barclays Bank:
A British bank with operations in many countries of the world. Barclays bought a majority stake in South African bank ABSA in 2005 to consolidate its position on the African continent. The acquisition signalled to the world that the South African government is willing to open its economy to foreign investment, although there were public protests calling for ABSA to remain in South African hands and others were even insisting that Barclays be made to account first for its dealings in the era of apartheid.

Basel:
Basel II or Basel 2 is used to refer to the framework for the international convergence of capital measurement and capital standards adopted in 1999 and revised until 2005. See Who or what is Basel? The intention of the convergence is primarily to ensure that all the banks of the world adhere to common standards in capital adequacy, i.e. their ability to maintain the same healthy or safe levels of liquidity, risk management and accountability. Bear in mind that in simple terms banks take money from you (the depositor) to lend to others (borrowers) for a price (interest) that is higher than what they eventually pay you back when you withdraw. The difference between the interest they charge borrowers and the interest they pay you is the bank’s revenue from which they make profit. Banks are managed by different people with different mindsets, and their levels of fear of risk (risk aversion) are different. Those who fear risk the most (the highly risk averse) are likely to invest the depositors’ money in less risky ventures, i.e. those investments in which they run the lowest risk of losing the money. The more adventurous managers will invest in high risk ventures, those in which the possibility of losing the depositors’ money is high. However, the responsible thing to do for the managers of banks is to balance their investments to give the depositors and their banks enough chance to make money. This balance is part of ensuring the capital adequacy of banks. Simply put, this means that the money under the banks’ management is invested in a balanced portfolio of high risk-high return and low risk-low return instruments. This ensures that the depositors’ risk of losing their money is healthily balanced against their chance of getting their money back with interest. Capital adequacy is the result of the actual investments, but obviously should be guided by certain principles. These principles are set and enforced by the banking regulators in different countries. In order to enforce the country’s capital adequacy requirements, central banks or reserve banks receive reports on a regular basis from the banks, stating their portfolios – where the money they have under their management is invested. The basic measure of a bank’s capital adequacy from the viewpoint of a depositor is its ability to process withdrawal requests promptly (liquidity) and the guarantee that the depositor will get at least their money back in the end

Who or what is Basel?:
Is short for the Basel Committee on Banking Supervision. It was established by the central bank governors of the Group of Ten (G10) countries at the end of 1974. The Committee meets four times a year. It has about twenty-five technical working groups and task forces which also meet regularly. The Committee's members come from Belgium, Canada, France, Germany, Italy, Japan, Luxembourg, the Netherlands, Spain, Sweden, Switzerland, United Kingdom and United States. The secretariat of the Basel Committee is provided by the Bank of International Settlements (BIS), an international organisation established to foster international monetary and financial cooperation and to serve as a bank for central banks. The headquarters of the BIS is in Basel, Switzerland. It has two representative offices, one in the Hong Kong Special Administrative Region of the People's Republic of China and in Mexico City. The BIS was established on 17 May 1930. Its customers are central banks and international organisations, and the BIS accepts no deposits from, and does not provide financial services to, private individuals or corporate entities.

Belgium:
A northern European country, east of Germany, north of France and south of the Netherlands. The importance of Belgium to world economics is Brussels - its capital city - and the hub of the European Union

Big Five:
An informal name for the five big global audit and professional services in Arthur Andersen, Deloitte Touche Tohmatsu, Ernst & Young, KPMG and PriceWaterhouseCoopers, before the demise of Arthur Andersen in 2002.

Black Consciousness:
The philosophy propagated by the slain anti-apartheid leader of the 1970s, Steve Biko, which was a call to the black people to overcome their sense of worthlessness and start shaping their own destiny. At the time of his death, Biko was a political leader - advocating that black people should form their own movement to fight apartheid and not rely on others to fight for them. The value of Black Consciousness is encapsulated in his saying that 'being black is not a matter of pigmentation'. The philosophy is still evident in programmes and campaigns of today such as BEE and affirmative action.

Blue IQ:
Blue IQ - an industrial strategic programme of the provincial government of Gauteng, South Africa. The purpose of Blue IQ is to make Gauteng a "smart province", making the most of innovation and growth industries such as automotive components, manufacturing, tourism and logistics as the drivers. Various projects all over the province include the Johannesburg International Airport's IDZ, the Automotive Cluster in Rosslyn around factories for BMW and Nissan - and Ford, Volvo and Mazda in Waltloo - both around Pretoria, the Innovation Hub in Pretoria and the high-speed Gautrain Rail Link between Johannesburg and Pretoria. The famous Nelson Mandela Bridge also provides an incentive to visit the cultural hub of Newtown in Johannesburg.

BMF:
Black Management Forum of South Africa. A voluntary membership organisation of managers and business leaders founded in 1976 to facilitate the advancement of black managers. Admission to the BMF is open to members of all population groups in South Africa. The organisation also has a Student Chapter, an investment vehicle and other initiatives - and is particularly involved in the lobbying and public debate to promote Black Economic Empowerment (BEE).

Bond:
A financial instrument by means of which governments and big corporations borrow money from investors. A bond is what is called a bearer instrument, which is a promise by the issuing entity (borrower) to pay whoever presents that bond on a future determined date the amount which appears on it. As a result, bearer instruments can be sold before their maturity date to anyone and as many times as possible.
Governments and large corporations are able to issue bonds because of the confidence that investors have in their ability to pay their debts.

Bond exchange:
An platform for bond holders and other investors to buy and sell them to each other. Bonds are bearer instruments, just like bank notes; it does not matter who has it. As a result whoever has it can present it and claim the value written on it on their maturity date. The period between the date of a bond issue and its maturity is called it term or tenor.

Bottomline:
Profit or loss as the eventual measure of a company's financial performance calculated particularly according to the income statement. The traditional viewpoint used to be that as long as the company makes a profit in financial terms, it is doing well. Today's triple bottomline accounting requires financial performance to be in balance with the social and environmental responsibility. Companies that have made profit at the expense of the environment have found themselves losing out in law suits a long time after the shareholders have used up their financial gains.

Bouteflika, Abdelaziz:
The President of Algeria since 1999. His contribution to the African continent is in his participation in the founding of the New Partnership for Africa's Development (NEPAD). He also served as a member of the Heads of States Implementation Committee, with Presidents Thabo Mbeki of South Africa, Olusegun Obasanjo of Nigeria and Abdoulaye Wade of Senegal.

Brand:
The 'personality' of a product or service; the value it represents in the mind of the consumer or customer. An example that is easier to relate to is one of cars - which are supposed to provide a means of transport. However, cars such as BMW and Mercedes Benz symbolise style and luxury or status in the mind of both those who own one or wish to. No question, they provide comfortable transport means, but the way they are marketed tells one that they are bought for other stronger reasons than just transport. A strong brand enables the seller to charge a premium price because the consumer will put in an extra effort to acquire it.

Brazil:
A coastal South American country, which shares a border with Paraguay, Bolivia and Peru in the west, as well as Colombia and Venezuela in the north. Capital city, Brasilia. Major ports include Rio de Janeiro Salvador, and other towns include Sao Paolo. Exports include coffee and sugar. One of the major emerging economies of the world along with India and China.

Break-even:
(when used as a verb) means making enough money (income) to just cover expenses. In other forms it defines this point at which an enterprise does enough business to cover its expenses, or to break-even. Break-even can also be used to refer to the amount of business required - in the number of units of goods or services that should be sold to cover expenses. Break-even can measure the amount of money in sales (break-even sales in monetary terms) or the volume of business (break-even volume). Break-even point is calculated to determine the stage at which a business will start making a profit, by means of a technique in business planning known as break-even analysis.

Break-even analysis:
A technique in budgeting or business planning to establish the stage at which a business will start making a profit. The importance of this technique is that it makes it possible to know in advance how far a business will have to trade before making a profit, as most of us would start confusing the sales revenue with profit - forgetting that it costs money to make a sale.

Break-even point:
Tthe stage at which a business will start making a profit.

Break-even value:
The monetary value goods or services that should be sold to cover the expenses of a business in a given time period. Break-even value =Fixed costs/Contribution

Break-even volume:
The value of goods or services that should be sold to cover the expenses of a business in a given period of time.

Bull market:
This term is used to define a situation in which the prices of any share or other financial asset, a commodity (like oil, agricultural product or mining mineral) sustain an upward trend. A bull is used to describe an investor or player in the investment circles who is optimistic about the future price of any asset being traded. Hence, you hear someone saying that they are bullish. If one expects the price of cars, or any other thing to go up in the future they are said to be bullish about that asset. If the price of gold has been going up recently for a considerable amount of time, you might say it has been going through a bull market. There is no specific time period for a bull or bear market, it is all a matter of the phase as seen by the investors and analysts.

Certificate:
An official document, in the context of BEE, stating the BEE credentials of a company or other organisation – preferably one prepared by an independent party such as a DTI-accredited verification agency

Charter:
A document that sums up the interpretation of BEE, a scorecard and commitment to compliance targets, among others, by a specific sector or industry

Codes of Good BEE Practice:
A guide issued by the DTI – made up of respective Codes and statements – for the interpretation of the different BEE elements for all organs of state and enterprises, especially those without an industry charter, although a sector charter can under certain circumstances be given the status equivalent to the Codes. The Codes of Good BEE Practice were published in the government gazette on 09 February 2007

Compliance:
A state in which an enterprise or any other measured entity achieves the minimum targets set out in the applicable BEE scorecard, which entitles the measured entity to claim maximum points for respective elements of the scorecard

Control (Management):
One of the seven elements of BEE to measure the level of participation by black people and black women on the board of directors of the measured entity as well as in executive management as a percentage of the total number of board members and executive managers in the company

Contribution:
A recognised intervention, initiative or any other way to implement BEE, which is defined in the scorecard for each of the seven elements

Council (Charter):
A council, usually established by a line ministry in collaboration with industry players, to facilitate the implementation of BEE in the respective industry – including identifying gaps, advising on how to accelerate transformation and compiling progress reports

Credentials:
A summary of the criteria that indicate how much a measured entity complies with BEE, expressed as a score or level of contribution to BEE in accordance with the applicable scorecard, and preferably verified by an independent verification agency

Critical Skills :
Related to core skills (value-adding and strategic), this means those skills that are critical to the industry in which the measured entity operates, as determined by the relevant Sector Education and Training Authority (SETA). Skills development initiatives should focus on training black employees in these skills to ensure that they lead to the career advancement of black employees

CSI:
Corporate social investment means the investment of resources, cash or in kind, as a percentage of post-tax profit, to uplift the standard of living of black communities – a recognised form of contribution, especially towards the score for socio-economic development

Capital:
Assets available for use in the production of further assets. Wealth in the form of money or property owned by a person or business and human resources of economic value.

Capital inflows:
The sum total of funds flowing into an economy or country, due to local residents borrowing funds from abroad or foreigners making investments in the local economy. These inflows in the short-term affect the exchange rate, or the value of the local currency expressed in terms of another. For instance, when a foreign company buys a local one - buying shares in local business - the foreign company will need to change a certain amount of its currency into the local currency. This constitutes a capital inflow as opposed to a cash outflow, which is the opposite of inflow.

Capital markets:
Whenever government needs to raise money, it can rely on its credibility to borrow money in the form of from investors in the form of issuing bonds, for example. Even companies that are not that big can issue capital markets in the form of the same instruments. Bonds are nothing but a promise by the issuer (government and others) to pay whoever bears the bond with a face value on a certain date in the future. The confidence of investors in these long-term instruments do so on the basis that a government will not commonly go bankrupt.

Capital outflows:
The opposite of capital inflows. It is the sum total of funds flowing out of an economy or country, due to foreign residents borrowing funds from the local economy. These outflows in the short-term affect the exchange rate, or the value of the local currency expressed in terms of another. For instance, when a local company buys another in a foreign country - buying shares in global business - the local company (the bueyer) will need to change a certain amount of its currency into the currency of the country where its target company operates. This constitutes a capital outflow as opposed to a cash inflow.

Capitalism:
A system of organising the economy in which the means of production are owned by private individuals, motivated by private gain. Government intervention is mainly in the form of making laws and enforcing them, collecting taxes, etc. Also called free trade, free enterprise and free market system. The underlying assumCapitalism is the opposite of what are called command economies, such as socialist or communist systems.

Commodity:
Goods to which further value has to be added before they can serve a useful function. Examples of commodities are crude oil, maize and iron ore. All these have to be processed or refined before they can be consumed by the end user. The more they get processed or refined, the more the value that is added to them. For example, the same amount of crude oil accumulates value as it gets refined and purified. Commodities can be bought and sold in advance

Credit:
A facility that enables one (the creditor) to borrow money or buy goods or services without making an upfront or simultaneous payment. For individuals, credit is a means to borrow money and to 'buy-now-and-pay-later', whereas for companies and countries, it represents a further ability to issue raise funds by means of issuing bonds or shares. The extent to which an individual, company or country is allowed to borrow is normally a reflection of the confidence that others have in their ability to pay back what they owe - this measure is known as a credit rating.

Creditor:
One who lends money - which is commonly payable with interest -out to others, called debtors. Creditors are also created when a business provides goods or services to another, without receiving cash immediately. Payment for the goods and/or services is made after the delivery, with interest depending on the agreement between the two parties as well as on legislation.

developed country:
A label to describe those countries, also known as first world countries, that have attained a reasonably high levels of literacy, income per person, democratic governance, access to social services and healthcare, economic and other infrastructure, technology, and whose citizens generally enjoy a high living standard. Most European and North American countries are developed.

developing country:
Countries of the world that are yet to achieve what the developed world already enjoys. These countries, mainly in Africa, Asia, Central and South America, account for over two-thirds of the world population. See developed country.

dinar:
The currency of various African and Arabic countries, including Tunisia, Libya, Algeria, Kuwait and Iraq.

:

directorship:
The status conferred on one by virtue of being a director.

distribution:
The proportion of a company's earnings that is available to be shared among the shareholders. See dividend.

dividend:
Payments made to shareholders in proportion to their shareholding in the company. Dividends are paid after the company has discharged all its obligations including tax. As a result, they are not taxed in the hands of the shareholder.

DOHA:
Is the capital city of Qatar. A new round of World Trade Organization negotiations, launched at the Ministerial Conference in Doha, Qatar, in November 2001 and this is where the development round was born. Thus Doha Development Rounds is the round of World Trade Organization talks that began in 2001 at Doha, Qatar, where developing countries scored significant victories on intellectual property rights and health but still have uphill battles on market access and subsidies in areas such as agriculture.

DOL :
Department of Labour, a major influence on the South African financial markets as well as others in the world because it makes decisions and laws about labour. Labour, as one of the factors of production, is important to how the economy is viewed by investors.Indicators such as labour market flexibility (how flexible the labour laws of a country are) or the cost of hiring and firing staff are all functions of the labour laws of a country.

dollar:
The currency of many countries, such as Namibia, Zimbabwe and the US.

dot com or dotcom:
A colloquial or even scornful name of information technology (IT) companies or the era in which they were so fashionable as an investment that everybody felt obliged to own technology shares. At this point, so fashionable were the IT shares - due to exaggerated forecasts or projections - that the analysts and stock-brokers were almost bullied into recommending these shares. As a result, many IT companies listed, investors bought the shares - most at unreasonably high prices - only to lose money when the prices of these shares came down abruptly. The dot com era was the mid to late 1990s.

Dow Jones:
See All Share Index.

DRC:
Democratic Republic of Congo. A mineral-rich central African country west of Tanzania, north of Angola and Zambia, east of Congo (Brazzaville) and south of the Central African Republic and Sudan. Capital city, Kinshasa. The DRC used to be called Zaire, with Mobuto Sese Seko as head of state from 1965.

DTI:
The South African Department of Trade & Industry.

dumping:
A trade policy and practice resulting in one economy or country flooding the market of another with goods or services at prices so low that the local enterprises are unable to compete on price. This is made possible by low costs of production offered by the exporting country due to subsidies that enable the producers to stay in business. Examples of dumping can be found in the agricultural products of farmers in Europe and the US - who receive subsidies or financial support from their governments. Normally imports would be expensive more expensive than locally produced goods. But if the exporting country's government pays for the cost of producing anything, the exporter can afford to offer very low prices in the market - making the imports cheaper, thus frustrating those farmers without subsidies. The issue of subsidies that lead to dumping, called trade-distorting subsidies, has remained at the heart of trade talks between the rich countries of the world, G8 and the developing countries.

duopoly:
An economic situation in which an industry or sector of the economy dominated significantly by two enterprises or organisations. The extent of domination is crucial as it allows the two dominant players to manipulate the market to their advantage, by either holding back production or fixing prices or even imposing conditions on suppliers or customers that they would not otherwise do if they had more players capable of challenging their market domination. They are able to do this because the customers in this case do not have a choice of suppliers.

duty:
A form of tax levied on imports, property transfer, etc.

duty-free:
Governments can decide to exempt certain transactions, be they imports, exports or within the same economy, from the form of tax that would normally be payable.

Department of Labour:
One of the critical government departments in the drive to implement BEE with regard to employment equity, particularly the submission of annual reports and plans by designated employers

Designated Persons or Groups:
Black people who are unemployed and not attending school or required to attend school or other educational institutions by law or those who are between the ages of 14 and 35 (youth in accordance with the National Youth Commission Act, No 19 of 1996), those with disabilities and those living in rural or underdeveloped areas (Schedule 1 of the Codes of Good BEE Practice)

Direct Empowerment :
One of the three main components of BEE – comprising ownership and management control – intended to promote the participation of black people in the economy by increasing the ownership of shares and control of enterprises by black persons – with emphasis on black women, youth, workers, rural communities, people with disabilities and new entrants

Disabled Persons :
People who have a long-term or recurring physical or mental impairment which substantially limits their prospects of entry into, or advancement in, employment

DTI :
Department of Trade and Industry, which is responsible for overseeing BEE policy formulation, managing the processes related to the Codes and charters, implementation of BEE, the setting of standards for the recognition of verification agencies, among others

ECOWAS:
Economic Community of West African States. A regional economic bloc of countries like Nigeria, Ghana, Togo, Benin and Ivory Coast. A common currency is under discussion for this bloc.

elangeni:
The currency of Swaziland; plural: emalangeni.

encumbered:
The opposite of unencumbered.

Enron:
An American company whose accounting scandal in 2002 led to its bankruptcy, the prosecution of most of its senior management, the collapse of Arthur Andersen (their auditors) and a change in the accounting standards all over the world. Enron was neither the first, nor the only company, to be hit by accounting scandals. What made it prominent was the losses suffered by its employees with regard to their pensions, the response of its auditors and the complexity of the competing interests in the case.

enterprise:
A business (venture).

entrepreneur:
One who engages in enterprise, spotting opportunities - where others see problems - to provide solutions profitably and taking them effectively.

EPZ:
Export Processing Zone. See IDZ.

equity:
Shareholding in a company as an investment.

equity markets:
Markets in which investors and companies buy and sell shares to each other for profit, capital gain and speculation - regulated by exchanges and the appropriate regulators.

EU:
A regional bloc of European countries established in 1958 to integrate the economies of its member countries. It was originally called the European Economic Community, then became the European Community, and then the European Union in 1993. The European Central Bank was established in July 1998 in the run-up to the introduction of the common currency, the euro. The headquarters of the EU is in Brussels, Belgium.

euro:
The currency of the participating member countries of the European Union, collectively called the eurozone. These countries include Austria, Belgium, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, and Spain - with some still to decide whether to join the union or not. The currency is administered by the European Central Bank, working in collaboration with the individual central banks of the participating member states. It is also used in some countries that are not members of the European Union, such as the Vatican City and Monaco.

eurodollar:
A deposit in dollars in a bank or a bank branch outside the US.

exchange rate:
The price of one currency expressed in terms of another; e.g. the rand-pula exchange rate to imply how many pula one will need to buy a rand or how many rand to buy a pula. Why would anyone use rand to buy pula or vice-versa? Suppose you needed to visit Botswana (where pula is the currency or the money used to buy); you would need to change your South African rand to the currency of the country you are visiting, more like you would need to learn to speak French if you were to visit Cameroun. The decision about how many units of the Botswana currency translate to rand or vice-versa is usually decided by the foreign currency market. This market is not a physical place, but the network of buyers and sellers of currencies - born out of a realisation that as countries do business with each other, there will be an ongoing need to fix the values of their respective currencies relative to each other, depending on different economic forces, such as demand, supply, buying power and inflation in one country (currency) with respect to the other. Exchange rate can be fixed or left to fluctuate (floating currency) in line with these economic forces.

exempt income:
Income that is exempt from income tax. This amount is subtracted from the income of the tax payer before taxable income is calculated.

export:
(as a noun) goods or services sold to economies (countries) outside of the one in which they are produced, or (as a verb) to sell goods or services to economies (countries) outside of the one in which they are produced. As an example, most African countries export raw materials, especially minerals like gold and platinum, to other countries, who in turn use them to manufacture jewellery. The opposite of export is import.

Economic Interest:
The entitlement of shareholders to receive financial or other form of commercial gain from owning shares in a company, such as dividends – one of the two critical features of ownership

Elements:
Seven pillars of BEE scorecard, namely ownership, management control, preferential procurement, employment equity, skills development and socio-economic development (previously called residual)

Employment Equity:
Sufficient representation of black people, women, youth and people with disabilities in a company or any other measured entity, which better resembles the demographic reality of the country (Code 300 and Code 800 – Statement 803 for QSE)

Employment Equity Act:
Promulgated in 1998 to facilitate the transformation of the South African workforce to reflect the demographics of the country as regards race, gender, disability and age profile The employment equity element of the scorecard is intended to give effect to this Act

Enterprise Development:
The investment of monetary (cash) or non-monetary (in kind) resources in the development of black enterprises, qualifying small enterprises and exempted micro-enterprises (Code 600 and Code 800 – Statement 805 for QSE)

Equity Equivalent :
An alternative contribution to selling a stake to black investors by a multinational business, in terms of a public programme or scheme of a government department, provincial government or local government in South Africa approved by the Minister of Trade and Industry, giving the multinational an entitlement to indicative points under the ownership scorecard – measured mainly as a percentage of the multinational’s South African operation or total revenue (Code 100 – Statement 103)

Exempted Micro-Enterprise:
An enterprise exempted from compliance with all the seven elements of BEE, due to their small turnover - total annual turnover of less than R5 million

Exemption:
Provision for certain measured entities to be exempted from complying with some provisions of the Codes in order to accommodate their unique commercial circumstances

Exercisable (Voting Rights) :
The power of black people (shareholders or management) to influence decisions or vote their shares without undue restrictions or limitations – making sure that a company does not claim credit for black shareholding for whom the black people do not have a true vote or for black managers or directors without commensurate powers to influence decisions as they should (Code 100 – Statement 100, Annexe 100 C)

Flow-Through Principle:
The principle in terms of which black ownership must be traceable to the hands of a natural person (not a company or corporate entity – called juristic persons) before the measured entity can claim points for it. It was introduced to ensure a more accurat

Formula:
There is a formula for each of the seven elements of both the generic and QSE scorecards.However, the general formula for calculating the score per element is as follows:A = B/C x D. A is what needs to be calculated, i.e. the score for the element being measured, be it ownership, management control or enterprise development. B is the actual score attained by the measured entity for the element, i.e. if the target for black ownership is 25,1% and the measured entity is only 10% black owned, the value of B will be 10. C is the target for the element being measured, as stated in the applicable scorecard. D is the weighting for the element being measured, ie the total number of points allocated to the element being measured in the respective scorecard.All the other formulae are variations of this general formula

Fronting :
Misrepresentation of BEE credentials to enable the measured entity to claim credit for BEE initiatives that are not keeping with the spirit of BEE. Although hard to prove as it deals with matters of intention to circumvent the spirit of the Codes, a verification agency is expected to highlight the risk of fronting or report it to the Minister (DTI) once indicators are detected

Fulfilment (Ownership):
Ownership fulfilment is the state of black ownership in which the black shareholders have been released from any third-party claims on their shareholding – especially once they have fully paid the debt incurred to acquire the stake so that they can enjoy the full rights associated with shareholding (Code 100 – Statement 100, Annexe 100 C).The difference between the percentage of black shareholding and the third-party claims on such ownership is known as net value, for which seven points are allocated on the ownership scorecard – the points must be scored in full before the point for ownership fulfilment can be claimed by the measured entity

fair trade:
fair trade - conditions or practices in business that uphold the principles of fairness.

FAIS:
The Financial Advisory and Intermediary Services Act. A South African law promulgated in 2002 to protect investors against unethical advisory practice by investment professionals. The act requires that financial advisors and intermediaries be licensed by the FSB before they can offer advice. Licensed advisors and intermediaries are also required in terms of this act to declare to their clients any commission they earn for the services they render. See FSB.

FICA:
Financial Intelligence Centre Act of South Africa, which among other things required that banks and other 'reporting institutions' should report any suspicious transaction to the Financial Intelligence Centre. As a result of this Act, promulgated in 2001, financial and other reporting institutions had to re-identify their clients by collecting information to ascertain their nationality, residence and other security-sensitive information. The main influence of the Act was to counter money laundering - which is a ploy to mask the source of money made from illegal activities such as drug smuggling by depositing it in a bank either in the name of a business that did not really generate it or a person who might have had nothing to do with it, leaving it in the account for a while until it can be withdrawn without arousing suspicion.

fiduciary:
A person or legal entity or the nature of a relationship between two people or parties, in terms of which one (the trustee or the fiduciary) is responsible to the beneficiary for the safeguarding of assets in trust or to act in the best interest of the beneficiary.

finance:
The part of a business or institution that is responsible for the management of financial resources, including financial decision making, investment decisions and managing the time value of money. Finance, on the other hand, can mean the actual financial resources; as when one says that they are trying to secure finance for their business plan - implying financing of the business.

financial markets:
An interaction of players, not at a physical market, such as the borrowers, lenders and the intermediaries. The borrowers play a role in the financial markets because they need more than the have (deficit economic units, creating a demand), lenders are important because they have more than they need (surplus economic units, making up the supply) and intermediaries such as banks and others who bring the two sides together. What happens in the financial markets is crucial to economic growth. The relationship between borrowers, lenders and intermediaries is structured in a variety of financial instruments such as loans, treasury bills, bonds, shares and others - which themselves end up being traded, creating what is called a secondary market.

Fitch Rating Agency:
An independent rating agency that issues ratings to guide investors in their decisions. Fitch is not the only rating agency, there are others like Moody's. All similar agencies grade countries (economies) and companies according to a scale that ranks them according to their creditworthiness, economic and political stability, future prospects for investment, investment climate, ability to honour obligations, etc. A downgrade in ratings by an agency such as Fitch or Moody's could mean a flight of capital from the country, because some investors give a specific mandate to their brokers or fund managers to invest only in companies or economies with a certain minimum rating. This works much like a university saying that they will not admit you unless you have a B-aggregate for matric and at least an A for Maths; almost impossible to negotiate.

Fixed cost:
The costs of doing business which are not primarily dependent on the volume of business done. For example, a clothes manufacturer will have to pay rent on the premises in which it conducts its business whether or not manufactures two or hundred garments, unlike the material used to manufacture the garments - the greater the number of garments made, the higher the amount of material (cost). The opposite of fixed costs is variable costs.

FNB:
First National Bank, a financial services provider which is a division of the First Rand Group.

forecast:
An opinion about the future, depending on one's analysis of the present, past and other factors. Just like a projection, a forecast is not a wild guess, but an estimation of what is probable. Forecasts are useful in planning, but are not accurate. Their level of accuracy depends on the certainty of the information available.

forex:
Foreign exchange, especially as a service rendered by banks or other financial services institutions like foreign exchange bureaus to clients in facilitating their access to currencies other their countries' own, when travelling or trading with countries that use a different currency. Due to the ongoing changes in the exchange rates, forex has become a specialised service with its own economists, traders and speculators. Businesses that trade in currencies other than their own countries' or that hold assets in other currencies run the risk of translating a profit in one currency into a loss, and vice versa. For example, mines extract gold in South Africa and sell it to the international gold market, which uses the US dollar as a currency. One kilogram of gold when one US dollar costs R6 is different to when the same dollar costs R6.50. This is why South African companies that depend on exporting their produce often prefer a weaker rand as it translates whatever they sell in dollars or pounds into more money in South African rand, without selling more than they usually would. This possibility that any the financial performance of a business could be affected by the changes in the value of one currency against the other is known as the exchange or foreign echange rate or currency risk, and forms a major part of managing businesses, especially hedging.

Fortune 500:
See All Share Index.

forward contract:
Most of us are used to buying something, paying for it and taking delivery. Such buying is influenced by what we see. We walk into a shop, spot something we like, decide we will take it, and walk out with it. Sometimes, we know what we want and what it looks like, but the shop is out of stock. We often agree if we do not have a choice to wait a week or two for delivery. This kind of buying is spot buying, as opposed to forward buying. In the financial markets, however, investors or their representatives can buy something that has not even been produced yet. For example, when you hear of the price of maize going up, there is no maize that actually changes hands. Buyers and sellers sign a contract committing to exchange a product or commodity in the on a future date at a price agreed upon in advance. This is called forward buying, and the agreement is known as a forward contract. Why would anyone do that? In anticipation of what will happen to the price in the future, some investors try to act now to protect themselves. For instance, someone who believes that the price of crude oil will go over the $70 per barrel soon might want to commit to paying no more than $65 in about three months. Bear in mind, for every one who believes the one thing, there must be another who believes in the opposite scenario. In this case, the buyer believes the price is going to exceed $70, while the seller believes it will not. So, they make a deal. After three months, the buyer brings $65 to pay for their barrel of crude oil - whether it is trading at $60 or $80. Depending on where the price is at the point of exchange, the futures contract could be 'in the money' (the price is higher than $65 and the buyer wins) or 'on the money' (the price is $65, and nobody wins) or 'out of the money' (the price is less than $65, so the seller wins). Just about everything can be bought and sold forward: currency, commodities, shares, etc.

Four I's:
Four-pillar policy

four-pillar policy:
The national policy of some countries, including South Africa, of ensuring that the country has four major - preferably locally owned - banks to encourage competition which should lead to better service and lower cost of finance. Generally, the acquisition (buying) of one of the big four banks by another is discouraged, as is a merger (combination). This policy was behind the decision by the South African Finance Minister to disapprove the attempted acquisition or takeover of Stanbic by Nedcor

FRA:
Forward rate agreement. Another form of a forward contract, in which the agreement is not about the price to be paid for a commodity or asset, but on the interest rate payable in the future. See forward contract.

France:
A European country, north of Spain and east of Italy, Switzerland and Germany. Capital city, Paris. Home to automotive giants such as Peugeot and Renault. But the more significant French company is Airbus, the maker of jet airplanes, that has been gaining ground on American Boeing - leading to many heated trade discussions and litigation involving the European Union and the US.

franchise:
A form of enterprise in which the original idea is protected by intellectual property rights, allowing the owner to charge a royalty fee to any other entrepreneur (franchisee) who operates a business modeled around the original idea. The owner of the franchise (the franchisor) ordinarily provides marketing and training support to the franchisee. Successful franchises were built around simple business ideas, but have become huge multinationals, such as McDonalds and Starbucks.

franchisee - see franchise.:
See franchise.

franchisor - see franchise.:
See franchise.

FTSE:
Financial Times Stock Exchange Authority. An independent company - originally a joint venture between the Financial Times and the London Stock Exchange - which creates and manages indices and data. The FTSE 100 index monitors the share prices of the top 1

G8:
Eight of the world's economically leading countries that in a cooperative effort meet periodically to address international economic and monetary issues. The countries are Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States whose representatives, normally the Head of States from these countries meet periodically to discuss economic concerns of the world.

Gates, Bill:
Founder of Microsoft, a top multinational corporation renowned for its leading software design, who from a tender age learned to appreciate the power of information by working in a library, among other things. Also author such books as 'The Road Ahead' and 'Business at the Speed of Thought'.

GDP:
Gross Domestic Product. This represents the total monetary value of goods and services produced in an economy over a year.

GEAR:
Growth, Employment and Redistribution.

Germany:
The Federal Republic of Germany is one of the world's leading industrialised countries, located in the heart of Europe. It is bordered to the north by the North Sea, Denmark, and the Baltic Sea, to the south by Austria and Switzerland, to the west by France, Belgium, the Netherlands and Luxembourg, and to the east by Poland and the Czech Republic; split into East German and West Germany after World War II and reunited in 1990, The importance of Germany to world economics is Frankfurt (Frankfurt Motor Show), it is the largest economy in the European Union and also world No. 1 manufacture of luxury vehicles like BMW and Mercedes Benz.

Ghana:
Area 238,539 sq km. Capital Accra. Dense forests on the coast, savannah inland. The first black African colony to become an independent state. Formerly the British colony of the Gold Coast, it gained independence in March 1957. Became a republic in 1960. Led by Kwame Nkrumah (1909-72) who dreamt of a United States of Africa. World's largest producer of cocoa (60% of exports by value).

globalisation:
The growing interdependence of countries world-wide through the increasing volume and variety of cross-border transactions in goods and services, and also through the more rapid and widespread diffusion of technology. Not just an economic phenomenon, but frequently described as such. People around the globe are more connected to each other than ever before. Information and money flow more quickly than ever. Goods and services produced in one part of the world are increasingly available in all parts of the world. International travel is more frequent. International communication is commonplace. This phenomenon has been titled “globalisation.”

GNI:
Gross National Income - is the sum of all income earned in a country over a specified period, commonly a year. It is calculated by taking the total value (expressed in monetary terms) of goods (cars, clothes, foodstuffs, etc.) and services (financial advisory, consultancy, plumbing services, etc.) produced within a country (in other words, that country's Gross Domestic Product or GDP), adding to it all the other forms of income earned from other countries, and then subtracting similar values paid from the country whose GNI is being measured to others. Income from other countries can be earned by individuals or corporates that operate outside their home countries, including people employed in countries other than their own and multinational corporations. The income could take the form of dividends from investments abroad or interest earned from outside the country. For example, a Kenyan national employed in the UK might send money back home every month or a Nigerian company operating in South Africa could send some of its profits back home. In both these instances, the GNI of Kenya and Nigeria, respectively, will be increased. The simpler way of defining GNI is to see it as the net income earned by the citizens of a country, irrespective of where they earn that income, as long as it finds its way to their home country.GNI per capita is the average GNI. By spreading the total GNI among the citizens of the country in question, we get the GNI per capita. The higher the levels of income among the citizens of a country, the higher its GNI per capita. Therefore, countries with higher levels of marketable skills and high value job opportunities will have a higher GNI per capita than poor countries with high levels of unemployment and low paying jobs for the few employed citizens.GNI per capita is directly related to the standard of living in a country. GNI per capita is the average GNI. By spreading the total GNI among the citizens of the country in question, we get the GNI per capita. The higher the levels of income among the citizens of a country, the higher its GNI per capita. Therefore, countries with higher levels of marketable skills and high value job opportunities will have a higher GNI per capita than poor countries with high levels of unemployment and low paying jobs for the few employed citizens. GNI per capita is directly related to the standard of living in a country.

goods:
Tangible economic products with a direct or indirect contribution to the satisfaction to the needs or wants of customers. Examples include clothes, food and appliances.

Hong Kong:
The Hong Kong Special Administrative Region of the People's Republic of China is a Special Administrative Region of the People's Republic of China located at the south coast of China. Hong Kong usually participates in international events under the name "Hong Kong, China".

Heng Seng Index:
Hang Seng Index is a capitalization-weighted stock market index in the Hong Kong Stock Exchange. It is used to record and monitor daily changes of the 33 largest companies of the Hong Kong stock market and as the main indicator of the overall market performance in Hong Kong. These companies represent about 70% of capitalization of the Hong Kong Stock Exchange.

HR:
Human Resources. In business HR means the people and the value they add to the business. Due to the nature of business today, and how crucial people are to the success of any enterprise, looking after people is increasingly important, hence the growth of human resource or HR management. Looking after people is more challenging than looking after machines, as machines are fully controllable, cannot decide for themselves and do not have individual preferences and complications due to temperament; and most of all machines do not bear a grudge.

hire purchase:
A method of financing the purchase of goods by taking delivery of them, then paying for them over a period of time in periodic payments - commonly monthly - called installments. Legally, the ownership of the goods received is only transferred to the buyer once they have paid the full price, although they get to use them like owners. In return for having the goods for which they have not fully paid the price, the seller is entitled to add finance charges or interest to the advertised price, within the limits of the country's credit legislation. If buyers fail to honour their monthly payments, the buyer is allowed to repossess the goods. As a result, the buyer is required to inform the seller before they move the goods from the address recorded at the time of sale as the place where they will be kept. The opposite form is a cash sale.

hedging:
A way of reducing the uncertainty of the future. Since the uncertainty of the future can never really be reduced, the only way is to make provision for the bad times. One cannot reduce the possibility of getting a puncture when driving a car, so they keep a spare wheel. The spare wheel in business dealings can take the form of futures and options - derivatives whose value is favoured by a future situation that poses the risk to the position taken. When going out dressed in a 'dry-clean only', the uncertainty about the whether means that one will take an umbrella along. If it never rains, the umbrella remains unused, and the person carrying neither loses nor wins. This is the reasoning behind taking out insurance policies.

holding company:
A company that owns a significant stake in another company to control its strategic direction. See subsidiary.

HIPC:
Highly Indebted Poor Countries.

hedge:
A hedge is an investment that is taken out specifically to reduce or cancel out the risk in another investment. The term is a shortened form of "hedging your bets", a gambling term. Typical hedgers purchase a security that the investor thinks will increase in value, and combine this with a "short sell" of a related security or securities in case the market as a whole goes down in value.

hedge fund:
These are funds usually used by wealthy private investor or institutions. Hedge funds are restricted by law to no more than 100 investors; the minimum contribution is typically $1m! The first hedge fund started in New York on 1 January 1949. Hedge fund managers sell stock short and trade in options of the shares they hold.

HSRC - Human Sciences Research Council:
Human Sciences Research Council

HIV/AIDS:
HIV (Human Immunodeficiency Virus) is a retrovirus that infects cells of the human immune system. It is widely accepted that infection with HIV causes AIDS (Acquired Immunodeficiency Syndrome), a disease characterized by the destruction of the immune system. In the United States and Europe, antibodies to HIV are one of the criteria for a diagnosis of AIDS.

IDC:
Industrial Development Corporation. The IDC was set up to facilitate South Africa's industrial development.

IDZ:
Industrial Development Zone. A zone of a town, city or any place specifically set aside for the development of a particular industry or related industries. It is easier to have a company manufacturing cars situated close to another manufacturing components, parts and complementary supplies like seats. This arrangement makes communication more effective and delivery smoother due to shorter distances. Zones of this nature can be found around ports, harbours and airports sometimes, then they are called export processing zones (EPZ). Most towns were actually developed around IDZ, hence you hear of the likes of mining towns.

IMF:
International Monetary Fund. This is a specialised agency of the UN, established in 1944 to promote international monetary cooperation.

import:
(as a noun) goods and services bought or purchased from an economy (country) outside of the one consuming or purchasing them, or (as a verb) to buy or purchase goods or services from an economy (country) outside of the one consuming or purchasing them. When an African country buys watches or other items of jewellery, such as those made in Switzerland, it is importing them and the watches are called imports. The opposite of import is export.

import duty:
A tax charged or levied by government on goods and services that are imported into a country. This is often a way of discouraging imports to protect local industries in the pre-globalisation era; see import substitution.

import substitution:
A strategy used by some governments to protect their local industries by imposing taxes on imports. This strategy is often blamed for lack of competitiveness in such protected industries, as it was the case in the apartheid era in South Africa. Being isolated and protected from the competitive forces of the rest of the world, companies in countries that depend on import substitution are left behind the technological advancements, which could render them more competitive than if they are protected and never forced to compete. Import substitution encourages mediocrity, and slows economic growth. It is however used to different effects by all countries - developed and developing - depending in one form or another. It has the same effect as trade-distorting subsidies that developed countries provide to their farmers to produce agricultural products with such ease as to be able to sell them at below-cost prices in foreign countries, and still make a profit; see dumping.

income :
Income - money, or its equivalents, that is received by companies or individuals in the form of salaries, wages, interest from investments, inheritance, rent from property owned, dividends from shares, lottery winnings, etc. For tax purposes, income can be either of a revenue or capital nature, with the former generally taxable and latter not - although exceptions exist. Income from salaries, wages and lottery winnings ('working for your money') tends to be less sustainable than income from investments, shares and property ('money working for you') - as a general rule - and can be used as a measure of financial independence.

income statement:
A formula in financial accounting that is used to calculate the profit or loss of a company. An income statement starts at the top with revenue generated, goes down subtracting the costs of generating that revenue, then expenses, then interest on paid on loans, depreciation and tax. What is left after all these items have been dealt with is the profit that is available for distribution to shareholders.

index:
An indicator of performance of a securities exchange or an economy.

indicator:
A number, ratio, or an index which analysts can use to determine the performance of a company, an exchange or an economy.

industry:
A group of related economic activities that provide a common set of goods, products or services.

inflation:
A sustained increase in the general level of prices of goods and services in the economy. Inflation can be the result of a higher demand, called the pull inflation, or an increase in the cost of producing the goods or services. Either way, inflation is used to make decisions about interest rates.

information:
Information is a term with many meanings depending on context, but is as a rule closely related to such concepts as meaning, knowledge, instruction, communication, representation, and mental stimulus. Information is the result of processing, manipulating

information technology:
Includes all matters concerned with the furtherance of computer science and technology and with the design, development, installation, and implementation of information systems and applications [San Diego State University]. An information technology archi

interest:
In finance, interest has three general definitions. *Interest is a surcharge on the repayment of debt (borrowed money). *Interest is the return derived from an investment. *Interest is the right to one's claim in a corporation, such as that of an owner or creditor.

intermediary:
A broker or 'go-between' or interlocutor in a relationship, bringing two or more persons with similar or different by related interests together. In a financial transaction, an intermediary could be a bank. In this case, the bank's role is to solicit people with a cash surplus (depositors) and those with a cash deficit or shortage (the borrowers). Performing the function of an intermediary carries risks and benefits. For the risk taken, the intermediary is allowed to charge interest and service or management fee to both the depositor and the borrower. This is primarily how intermediaries make money. Any lender or borrower is entitled to know in details what the services they receive will cost them and who benefits. An intermediary can either be deposit taking, as in the case of banks and insurance companies, or non-deposit taking - such as the PIC and the Land Bank

investment:
Investment is a term with several closely-related meanings in finance and economics. It refers to the accumulation of some kind of asset in hopes of getting a future return from it.

investor:
A person whose principal purpose is to invest money prudently and productively over the longer term with the investment objectives being achievement of a reasonable return and capital appreciation to preserve purchasing power. Individual who commits money in the hopes of earning a profit.

IPO:
Initial Public Offering. This is the occasion for a company to list for the first time on a stock exchange, and could also be called an initial listing.

Italy:
The Italian Republic or Italy (Italian: Repubblica Italiana or Italia) is a country in Southern Europe. It comprises a boot-shaped peninsula and two large islands in the Mediterranean Sea, Sicily and Sardinia, and shares its northern alpine boundary with France, Switzerland, Austria and Slovenia. It is a founding member of what is now the European Union, and a member state of the United Nations, NATO and the G8 nations

Japan:
Japan - an east Asian country, comprised of a group of Pacific islands - with the main ones being Hokkaido, Honshu, Kyushu and Shikoku. Capital city, Tokyo. A member of the G8 countries, and home of automotive giants such as Toyota, Nissan and Mazda as well as electronic multinationals like Sony.

job creation:
see labour market.

job market:
A journal (through French from late Latin diurnalis, daily) is a daily record of events or business. A private journal is usually an elaborated diary. When applied to a newspaper or other periodical the word is strictly used of one published each day; but any publication issued at stated intervals, such as a magazine or the record of the transactions of a learned society (a scientific or other academic journal), is commonly called a journal.

journal:
JSE

JSE:
Johannesburg Stock Exchange. A hub of the equity or stock markets in South Africa, the JSE creates a platform for investors to buy and sell shares in various listed or public companies. These investors could local or foreign; in fact on the day when there is a holiday in the US or England, the selling and buying on the JSE is substantially lower. Listed companies are expected to conduct their business according to the rules and regulations of the JSE, and failure to perform accordingly often results in the suspension or delisting of the company. Investors who want to invest on the JSE are advised to contact a legitimate stock broker - who is a member of the JSE - to assist them. Smaller companies than what the JSE requires have an alternative to list on the Alt-X, but they can grow onto the main board of the JSE.

Julius Nyerere:
Julius Kambarage Nyerere (April 13, 1922 - October 14, 1999) was President of Tanzania, and previously Tanganyika, from the country's founding until his retirement in 1985.

Kenya:
An east African country to the south of Ethiopia and Sudan, east of Uganda and north of Tanzania. Capital city, Nairobi, and main port, Mombassa (Mombasa). Main exports, coffee, tea, pineapples and roses. Became independent in 1964, with Jomo Kenyatta as Prime Minister.

Keynes, John Maynard:
Keynes, John Maynard - a 19th century English economist whose theories included one about how governments should intervene in a a depression to fuel demand. He argued that the government could achieve this by means of tax cuts and increasing its own expenditure. His most important writing is still The General Theory of Employment, Interest and Money, published in 1936.

Kiyosaki, Robert:
Kiyosaki, Robert - the author of such books as 'Rich Dad - Poor Dad' and 'The Cashflow Quadrant'. In 'Rich Dad - Poor Dad', Kiyosaki bases is top-seller on the story of his father, the 'poor dad', who remained in debt although a fairly learned man with college degrees and his mentor, 'rich dad', who was a millionaire without any formal education. Kiyosaki pays tribute to what he learned from both his dads, and talks about what the rich raise their children versus how the poor do it. One habit of the rich cited by Kiyosaki in his book is how they 'buy assets not liabilities'.

knowledge economy:
knowledge economy - an economy in which knowledge is the key commodity. Traditional economic thinking was centred around land, mining and manufacturing as the main drivers. However, the breakthrough in the information technology, making it easier to share information in real time across political boundaries, has meant that access to information is more important than the possession of natural resources. This does not mean that natural resources are no longer important, but that the future of economic prosperity rests with access to information.

kwacha:
The currency of Zambia

labour economics:
The branch of economics concerned with issues of labour as a factor of production.

labour market:
A market which provides the interaction of job seekers (labour supply) and employers (labour demand). On the job (labour) market labour (as a factor of production that converts raw materials into products) is sold by the job seekers to the employers for wages or salaries. The labour market is subject to the laws of supply and demand, meaning that the price employers are willing to pay for labour depends on the supply available. A shortage of a certain type of workers can make the few who are available to be able to successfully ask for higher pay. An example, in African countries school teachers and nurses are generally poorly paid, compared to what they are able to earn in European countries.

Land Reform:
A programme of the governments of South Africa and that of Zimbabwe. The main aim of the programme is to attain a state of equitable land distribution among all citizens, which implied giving land to blacks who had been dispossessed in terms of the racial discriminatory practices of the past. The mechanisms of the programme, however, became too tied to legal processes to the extent that rate of redress caused a sense of disillusionment among the majority. Some of those unhappy about the slow progress of the programme blamed its perceived failure on the 'willing buyer-willing seller' or free market approach. In Zimbabwe, the failures of the Land Reform programme resulted in large scale land grabs from around 2000/1.

lapse:
A term used to denote what happens to a policy as a result of non-payment of premiums by the policy-holder. When a policy lapses, the agreement becomes invalid.

lending:
The practice of giving money to others (borrowers) with the purpose of receiving the amount back. The agreement is usually for a term agreed upon by both the borrower and the lender. In return, the lender can charge the borrower some interest within legal limits. The laws are there to ensure that the terms of repayment are fair and the rights of the borrower are generally protected. The lender is also allowed to charge service fees - again without overstepping the bounds of the law.

liquidity:
The measure of the ability of any person or business to have enough cash readily available to pay their debts in the short-term. In business, cash is normally used to buy stock in order to sell it at a higher price that what was paid for it. Even more complex, the stock might require raw materials to produce, which means the cash can go a step further and take the form of raw materials. For example, a baker goes to the bank to borrow money to run their business for a week. The bank lends the money to the baker, who goes out to buy flour, ovens, aprons, and salt. He/she keeps these raw materials in the storeroom overnight. While the materials are in the storeroom were bought with cash, which implies that they are in fact cash in another form, it will take a while before the flour in the storeroom is turned into cash - as it must first be mixed with other ingredients, mixed with water, heated in an oven for a while before bread is produced. Now consider a situation where the baker has to pay staff for the month, while the cash he once had has been used to buy materials. Do you think his/her workers would be happy to be paid in flour or aprons, even when they know how much these are? So, if the baker cannot meet his/her obligation to pay wages because there is no cash, the business could be in a difficulty with regard to its liquidity. Liquid cash is best when paying accounts, rent, electricity, and other short-term obligations. Therefore, a business has to ensure that it has enough cash to settle such obligations as paying its workers' wages. Being liquid does not mean financial prosperity, and having no cash does not amount to failure, though it can create hiccups in the smooth running of the business.

listing:
The act of complying with the requirements of a public stock exchange such as the JSE to the extent of listing one's company so as to enable members of the public to trade in its shares. Through a listing, any company can share the risk of financing the business as well as the benefits. Listed companies have to produce a certain number of reports in a year, separate the executive and non-executive directors, report their financial, social and environmental responsibilities, publish reports in the media that will reach all the shareholders, and avail a certain proportion of shares for the public trader.

loan shark:
A profiteer of mainly unethical lending practice. Loan sharks lend money to desperate borrowers at exorbitant interest rates, and often resort to illegal means to collect - such as the impounding the borrowers' ATM cards.

management :
Employees of a company that are responsible for the leadership and strategic decision-making. The responsibility of management include deciding on the direction that the company should take, what resources are to be allocated to achieve the set goals, how performance of other employees is managed, who gets hired and who gets fired, who gets promoted, what gets paid in the form of salary increases, if any, etc. Management positions include that of the Chief Executive Officer, Chief Operating Officer, Chief Financial Officer, Marketing Director or Manager, General Manager, etc.

Mandela, Nelson:
The first President of a democratic South Africa. Inaugurated in 1994, Mandela - affectionately called Madiba - participated in the revolution that led to a political settlement that gave rise to the new democratic order. He was released from jail on February 11 1990, after 27 years in jail. What endeared Mandela to the world was how he led his country on a path to reconciliation, including the formation of the Truth and Reconciliation Commission. After his term of office, he dedicated his time to advancing the cause of the protection of children, the fight against HIV/AIDS and raising funds to build schools in impoverished communities. He founded the Nelson Mandela Children's Fund by donating a third of his salary when he was President, and later used his prisoner number 466/64 as a rallying cry to accumulate funds for the fight against HIV/AIDS and poverty.

manufacturing:
The industry or sector that transforms raw materials into finished products or components thereof.

margin:
Tthe difference between the income earned by an enterprise or business and the cost of generating that income. Also called a profit margin, this is a measure of how the business is able to charge customers more for its goods or services than it paid to produce or buy them. Margins can be either low (when the business decides to make less per unit sold, as in a promotional sale) or high (in which case the enterprise takes advantage of a high demand against low availability or supply). Products such as bread are often examples of low margin, high volume supplies - meaning the high volume of sales makes up for the low margins. Also called a mark-up.

markets:
In the financial world, this does not represent any physical market place, but a network of investors, financial institutions, borrowers, governments, and economies in general, especially the way in which perceptions of the main players interact with surpluses and deficits (shortages) of funds to create a business community involved in buying and selling debt and benefits to one another. Markets can also mean the effect of the sentiments of the main role-players, as expressed in terms of the value and patterns of trade. For instance, on any given day, a war breaks out in a hypothetical country. On the surface, the war looks like a political squabble over a piece of legislation or a decision of some statesman. But, because this hypothetical country happens to have resources such as oil or minerals, buyers of these commodities realise the implications of the war as far as it will stifle the production or supply of the commodities for a while. They go out buying all the surpluses of the commodities produced in that country. Other buyers, seeing the unusual trend of buying, panic and do the same. Suddenly, the number of buyers by far outstrips the amount of commodities available in the market. This pushes up the price of the commodity. To make this interesting, suppose then the war is declared over, and the price of the commodities bought during the tension is still in the hands of buyers who were playing it safe in case production were to be stifled. Now the buyers of yesterday have a surplus of commodities, that they do not necessarily need. The panic that caused the price to go up has subsided when people realised that the war was not going to be sustained. The clever buyers now have in their possession, commodities they might have paid a lot for since they bought when the price was going up. Suddenly, they realise that they have to get rid of the commodities, now facing a price that is going down. They sell in panic of losing out even more. Their actions trigger more panic buying until the price cannot go any further down. Although simplified, this is more or less how the price of oil can fluctuate so much in one day.

Marx, Karl Heinrich:
A 19th century German philosopher, economist and influential revolutionary social theorist. His economic theory of Marxism (dialectical materialism), proposed that the modes of production are bound to evolve from feudalism, capitalism to socialism, with a complete overthrow of any existing system inevitable if it should resist to change gradually. Marxism had a lot of influence on the revolutionaries of the world such as Nelson Mandela. Most people like to believe that this theory is irrelevant after the collapse of the Soviet Union and the advent of globalisation. But a careful study of the growing influence of the international labour movement and more pressure on private enterprise to balance financial interests with social and environmental responsibility suggests that it is still early to conclude. One of the books by Marx is Das Kapital.

Mbeki, Thabo:
The second President of a democratic South Africa, who took over from Nelson Mandela as the leader of the ruling party, African National Congress. His leadership emphasised poverty alleviation and economic growth. He was also one of the pioneers of the African Union and its flagship programme, NEPAD. During his term of office, the African Parliament started its operations in Midrand, Gauteng Province.

metical:
The currency of Mozambique, which replaced the escudo in 1980. Escudo is the currency of Portugal, which had colonised Mozambique.

micro-credit:
A form of credit in the form of smaller loans than average. Micro-credit tends to cost relatively higher than other forms of credit. Larger loans are often available at lower interest rates than micro-loans. Here is why. A bank or a lender must hire a qualified analyst or banker to receive and assess credit applications. The staff member costs a fixed salary every month, which means that if they make larger loans, which translates into a lot of money in interest, they are being utilised more efficiently than when they assess and approve smaller loans. The smaller loans mean a smaller amount in interest earned by the bank.

micro-finance:
Micro-lending.

micro-lender:
A lender who provides smaller loans. The definition of small varies from one context to another, but most banks do not specialise in micro-lending due to the cost of making such a loan being as high to them as making another amounting to millions.

micro-lending:
The business of providing micro-finance.

MIDP:
Motor Industry Development Programme. A campaign by the South African government to promote the development of the local automotive industry, encouraging local production for export - which creates local jobs - by providing incentives to the participating companies until 2012.

Millennium Declaration:
A resolution of the United Nations. The targets set by this resolution are called the Millennium Development Goals (MDG). The goals are to: halve poverty in the world by 2015, achieve universal primary education, promote gender equality and empower women, reduce the mortality of children under the age of five by two-thirds, improve maternal health, combat HIV/AIDS, malaria and other diseases, ensure environmental sustainability and to develop a global partnership for development.

mining:
An industry centred around the exploration, extraction and initial processing of natural resources such as precious metals like gold and platinum. Mining has been the driver of economic growth in countries endowed with minerals and other natural resources, but has also been a source of conflict in some parts of Africa. Often warlords would fight for the control of resources, selling the minerals to unscrupulous dealers who in return provide money to buy arms and sustain the war. One attempt to stem the illicit trade of what are known as blood or conflict diamonds took the form of the Kimberley Process - which now requires that the source of every diamond be provided when it is traded.

Mining Charter:
A charter for the implementation of BEE in the mining sector of South Africa. This charter was developed and adopted by the industry players in 2002. It was the second charter of its nature, after the first one was developed for the Liquid Fuels and Petroleum industry in 2000.

Mombassa:
The industrial port of Kenya, built on Mombasa Island. It also provides services to Uganda (which is landlocked) and Tanzania.

money market:
A network of financial institutions, government and investors - which is responsible for the provision of short-term lending and borrowing. Instruments in the money market include call deposits and bankers' acceptances.

monopoly:
A market structure which is dominated by one industry player and little competition or threat of substitute products, services or market entrants. This situation gives the industry's only player to set prices at will, as consumers do not have a choice but to buy from them. A monopoly is therefore not good for quality service and competitive prices. Once a competitor is introduced, we often see prices dropping.

Mugabe, Robert:
The Prime Minister of Zimbabwe from 1980 and President from 1987. One of the most popular leaders of the revolution that led to the country's independence, Mugabe's approach to land reform saw his country become increasingly isolated by some members of the international community and inflation soar to over 400% at one stage.

Mwalimu :
See Julius Nyerere.

Flow-Through Principle:
The principle in terms of which black ownership must be traceable to the hands of a natural person (not a company or corporate entity – called juristic persons) before the measured entity can claim points for it. It was introduced to ensure a more accurate calculation of black ownership in situations where a natural black person owns a stake in the measured entity not directly, but through a chain of companies.The actual ownership by natural black persons is calculated by multiplying the exact percentage of black ownership within each juristic person from the highest level of shareholding down to the level of a natural black person. In its modified form, the flow-through principle allows the recognition of at least one juristic person with more than 50% black shareholding in the chain of ownership as being 100% black owned (Code 100 – Statement 100)

Formula:
There is a formula for each of the seven elements of both the generic and QSE scorecards.However, the general formula for calculating the score per element is as follows:A= B/C x D. A is what needs to be calculated, i.e. the score for the element being measured, be it ownership, management control or enterprise development. B is the actual score attained by the measured entity for the element, i.e. if the target for bla