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 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

Gazette:
Official journal of the government, used to publish regulations and Acts, the publication in which the Codes of Good BEE Practice were published on 9 February 2007 – making them officially the overriding set of guidelines on BEE

Gender:
A special criterion for compliance with BEE – according to the Codes; it is no longer sufficient to attain the targets for black participation if black women are not equitably represented in the black component, particularly for management, skills development and employment equity.In other words, if the target for employment equity at middle management level is 50% black representation, half of that must be black women or else the measured entity may only claim half the points for the respective element or indicator. The rationale for this extra-requirement is that black women suffered more prejudice due to their racial classification as well as the status of their gender (Codes 200, 300 and 400)

Generic Scorecard:
The overarching guide for organisations in setting targets for, and implementing, their enterprise BEE plans and transformation roadmaps.The generic scorecard lists the seven elements of BEE: ownership, management control, employment equity, skills development, preferential procurement, enterprise development and socio-economic development (previously residual), the indicators/ descriptions for these elements as well as their respective compliance targets.The QSE scorecard does the same as the generic scorecard, but with relatively less stringent compliance standards to accommodate the special needs of small enterprises – such as higher weightings for each element to allow these enterprises the option to choose any four elements on which to be measured (Code 000 – Statement 003 and Code 800 – Statement 800)

Good BEE Practice :
A general inclination to comply with the letter and spirit of BEE.The letter of BEE means the written measurable aspects of the Codes and the BBBEE Act such as targets – in which case good practice will result in the measured entity implementing BEE initiatives with the highest level of executive sponsorship, making compliance with BEE part of the critical performance of every division and reporting accurately on its achievements.The spirit signifies the intention of BEE in the broader socio-economic sense – which implies that the real motive for complying with BEE need not be the need to comply, but to advance the country’s transformation agenda.One of the most convincing forms of evidence of good practice is when companies and other measured entities strive to achieve more than just the targets stipulated in the scorecards

HDSA:
Historically Disadvantaged South Africans

Historically Disadvantaged South Africans:
Any person, category of persons or community, disadvantaged by unfair discrimination before the Constitution of the Republic of South Africa, 1993 (Act No 200 of 1993) came into operation.This was used synonymously with black people, but since it sometimes includes white women, it has since given way to black people

Human Resource Development:
One of the three main components of BEE, dealing with the training and recruitment of black employees to promote an equitable representation of black persons in companies and other employer-organisations.The two elements that fall under this component are skills development and employment equity, with their strategic importance to the country being job creation, general improvement of skills levels and the transformation of the South African workforce

Indirect Empowerment:
One of the three main components of BEE – comprising preferential procurement, enterprise development and socio-economic development – intended to promote the participation of black people in the economy by encouraging the formation of black enterprises through preferential treatment and development initiatives

Indirect Ownership:
Black ownership arising from investments in pension funds, private equity funds and also collective investment schemes instead of owning shares in the measured entity directly

Industry Body :
An association established to work with the DTI to develop the verification methodology and other professional practices for verification industries that will be used by verification agencies

Industry Charter :
A BEE charter developed by an industry – on the basis of the Codes – to guide the interpretation and implementation of BEE in an industry, including the stipulation of an industry scorecard with targets and weightings for the different elements.Under certain circumstances, an industry charter may be given the special status of a sector code (in terms of section 9 of the BBBEE Act), which enjoys the same status as the Codes

Industry-Specific:
Qualifying socio-economic development contributions that are unique to the industry in which an enterprise operates, which advance the objectives of BEE especially those associated with socio-economic development and enterprise development.One example is that of a bank implementing consumer-education programmes to assist the public with debt management or a petroleum industry instituting environmental awareness programmes

Intervening Entity:
A business, company or other form of juristic person (not a natural person) which owns a stake in a measured entity on behalf of a shareholder who can either be a natural (individual) or juristic (organisation or company) black person.This situation arises where one company with a certain percentage black shareholding buys a stake in another – with its own BEE credentials – which in turn buys a stake in the measured entity, thus creating a chain of ownership and making the calculation of the exact black shareholding of the measured entity complex (Code 100 – Statement 100)

Job Creation :
The creation of jobs to improve the lives of ordinary South Africans, which is one of the strategic outcomes of BEE and the overall economic development

Junior Management:
Staff members at the lowest of the three measurement categories for employment equity – the others being middle and senior – as reflected in the EEA2 Report submitted to the Department of Labour annually in accordance with the Employment Equity Act (Code 300 – Statement 300)

Know Your BEE Status:
The only way to know your BEE status in terms of the Codes is to measure each of the seven elements using the generic scorecard or the QSE scorecard, in which case you will need to choose four out of the seven. Your BEE score, out of 100, is better when verified by a verification agency accredited by the DTI.Your status can be one of the following, depending on your score out of 100:

Learnership:
A programme run by a company or any other measured entity for experiential learning and practical skills exposure – which is accredited by a SETA to facilitate work-based training and development of the majority of South Africans in order to increase their ability to secure gainful employment and build sustainable careers

Learning Programme:
A programme run by a company or any other measured entity – which is not a learnership – but still capable of advancing skills development and work-based training of the majority of South Africans. Depending on the impact that it is likely to have on the career prospects of its beneficiaries, a learning programme may fall under category A, B, C, D, E, F or G of the learning programme matrix. The highest category is A (as it leads to a recognised theoretical knowledge resulting in the achievement of a degree, diploma or certificate issued by an accredited or registered formal institution of higher learning) and the lowest is category G which merely results in increased understanding of the job or improved performance (Code 400 – Statement 400, Annexe 400 A)

Level of Contribution to BEE:
Depending on the BEE score obtained out of 100, a company or any other measured entity may be level 8 (the lowest status) up to level 8 (the highest). The essence of this level is that customers use it to compute the Rand value of their preferential procurement expenditure – the higher the score of their suppliers, the higher the factor with which they multiply the Rand value and the higher their preferential procurement score

Limitations:
All restrictions imposed on the rights of black participants or shareholders to exercise their voting rights or to receive due economic benefits.

Management Control:
The ability to influence the strategic decisions of a company or any measured entity through participation on the board or senior top and other top management structures. Taken together with ownership, management control is part of direct empowerment (Code 200 – Statement 200 and Code 800 – Statement 802)

Measured Entity:
An organisation – private or public sector - that is being measured on its BEE status

Micro-Enterprise :
Enterprises with the total annual turnover or revenue of less than R5 million – which are exempted from the requirement to comply with BEE

Middle Management :
Staff members at the second of the three measurement categories for employment equity – the others being junior and senior – as reflected in the EEA2 Report submitted to the Department of Labour annually in accordance with the Employment Equity Act (Code 300 – Statement 300)

Misrepresentation:
Falsification of BEE credentials, status or elements of the BEE status of a measured entity – a major ingredient of fronting

Monetary Contribution:
Cash investments in BEE initiatives made by the measured entity to black beneficiaries (be they individuals, enterprises or communities) to advance the objectives of economic transformation in South Africa

Multinationals :
Business corporations with operations in many countries. In the context of BEE, these are foreign-owned companies or South African companies with a global footprint – as long as they maintain their headquarters outside of the Republic of South Africa - whose policies and commercial practices might be at odds with some of the requirements of BEE, such as the need to sell shareholding to black investors.The concession in the Codes for multinationals is that those whose practice globally is against selling shareholding to minorities are allowed to make alternative equivalent contributions to BEE in the place of ownership, i.e. equity equivalents (Code 100 – Statement 103)

Narrow-Based BEE:
BEE status worked out of only ownership and/or management control elements, as opposed to a broad-based scorecard.This way of presenting or assessing BEE credentials is only allowed during the transitional period, i.e. 12 months from 9 February 2007, after which only broad-based scorecards must be used (Code 000 – Statement 000)

Natural Black Person:
A Coloured, African or Indian South African individual, as opposed to an organisation or corporate entity (juristic person)

Net (Equity) Value:
The value of the part of the business that black shareholders own, less any outstanding financial obligations or third-party claims, especially those incurred in the financing of the initial ownership transaction. The importance of net value is to make sure that black investors do not own shares that are encumbered for many years, thus stopping them from deriving the economic benefits of their shareholding while the measured entity is claiming points for ownership (Code 100 – Statement 100, Annexe 100 C)

New Entrant :
Black shareholders who have not concluded prior BEE transactions with an aggregate value of R20 million, measured in accordance with an acceptable valuation standard.Involving this category of black shareholders in a BEE transaction entitles the measured entity to earn bonus points (Code 100 – Statement 100)

Non-Executive:
Without executive day-to-day responsibilities in the running of a business or organisation.Black representation in non-executive positions does not earn the measured entity as many points as participation in executive management positions (Code 200 – Statement 200, Annexe 200 A)

Non-Monetary Contribution:
Investments in kind towards the objectives of BEE, especially for enterprise development and socio-economic development.These contributions could take the form of management time, mentoring, coaching and other interventions that can be linked directly to a positive outcome – either improved income or profitability of enterprises or better living conditions for black communities.Such contributions are measured by quantifying the cost of time spent by staff or management of the measured entity – not commuting time – as a percentage of net profit after tax

Non-Recoverable Contribution:
The monetary value of qualifying socio-economic development or enterprise development contributions which are not recoverable by the company, such as donations and grants.In terms of the benefit factor matrix, non-recoverable contributions carry more weight than recoverable ones (Codes 600 and 700 – Statements 600 and 700, Annexe 600 A and Annexe 700 A). The monetary value of qualifying socio-economic development or enterprise development contributions which are not recoverable by the company, such as donations and grants.In terms of the benefit factor matrix, non-recoverable contributions carry more weig

Owner :
The shareholders of a business (shareholders, partners, members of a close corporation and sole proprietors)

Ownership :
The level of black shareholding at holding company level as a percentage of the value of South African operation of the measured entity

Ownership Scheme (Broad-Based):
A means for black persons to own shares in a company as a collective scheme – on condition at least 85% of the benefits allocated by the scheme flow to black people and 50% of the fiduciaries of the scheme are black people and 25% black women. Schemes of this nature might qualify as a form of black ownership up to the point at which they account for 40% of the total black shareholding of the measured entity (Code 100 – Statement 100, Annexe 100 A)

Other Top Management :
Staff members involved in the strategic management of specialist divisions of the measured enterprise and the implementation of the enterprise strategy with regard to their area of specialisation, e.g. chief information officers, head of marketing, head of human resources and similar positions (black representation in these positions earn a measured entity less points than senior top management)

PDI:
Previously Disadvantaged Individuals.Individuals who were not actively involved in the economy because of in the old apartheid dispensation

Points :
Credits obtained by the measured entity for the implementation of BEE in accordance with the generic or industry scorecard, which add up to the entity’s total BEE score used to determine its BEE status or level of contribution to BEE

Preferential Procurement:
The redirection of procurement expenditure to black enterprises, qualifying small enterprises and exempted micro enterprises by means of special preferential measures such as early settlement of invoices, paying a premium price or training of black suppliers or exempted micro-enterprises to improve their chances of commercial success

Preferential Procurement Policy Framework Act:
Commonly called PPPFA in the government circles, this Act was promulgated in November 2000 to advance the interests of black enterprises by making it a requirement that all organs of state (state-owned enterprises and government departments and agencies at all levels) should give preference to black enterprises in their procurement decisions

QSE:
Qualifying Small Enterprise.An enterprise with the total annual revenue between R5 million and R35 million, which is entitled to use QSE scorecard, i.e. allowed to choose any four of the seven elements of the scorecard on which to be measured for BEE credentials

Qualifying Contribution:
A monetary or non-monetary investment in, or donation to, a cause to uplift the standard of living of black people – to fulfil the requirements of either enterprise development or socio-economic development – including CSI and sector or industry-specific interventions. The major determining factor is that the contribution should have a positive impact on the lives of black people

Qualifying Transaction:
A transaction recognised in terms of the Codes as being a sufficient means to transfer ownership to black people in the sense that it creates a sustainable business for black people

Realisation Points:
Points that a measured entity may only claim once it can prove that black people effectively own shares in the company, i.e. after a prescribed proportion of the total shareholding is completely transferred to black persons free from all the encumbrances of third-party claims especially in the form of debt repayments or interest payable

Recoverable Contribution:
The monetary value of qualifying socio-economic development or enterprise development contributions made in a form of loans and other similar quantifiable benefits which are recoverable by the measured entity.In terms of the benefit factor matrix, non-recoverable contributions carry more weight than recoverable ones (Codes 600 and 700 – Statements 600 and 700, Annexe 600 A and Annexe 700 A)

Representation:
The representation of black persons in an enterprise in line with the requirements of the Codes or an industry charter for the affected elements of the scorecard, such as management and employment equity

Residual:
Now known as socio-economic development, this means all contributions, including CSI, that are recognised in terms of the Codes because they provide a means for black people to improve their standard of living or to generate income for themselves

Rights:
The right to actively participate in the mainstream of the economy, either in the form of ownership, management control or any other way to influence the direction of the South African economy

Rural Communities :
Black people residing in non-urban geographic areas earmarked for development by the government, which are a priority target for broad-based BEE interventions

SANAS :
The South African National Accreditation System, an agency of the DTI whose responsibilities include the accreditation of BEE verification agencies.

Score:
The extent to which a measured entity fares against the targets set for the seven elements of BEE, either individually (out of the specific targets for respective elements) or collectively (out of 100) – used to determine its BEE status or level of contribution

Scorecard:
A report card for measuring an entity’s contribution to BEE, stating the weighting, targets and scores for all seven pillars or elements. It can either be generic or vary according to industry where charters exist

Sector:
A sector of the economy, which due to unique commercial circumstances might warrant a special scorecard other than the generic scorecard, as long as the differences in the targets and weightings do not compromise the spirit of the Codes

Sector Code:
A BEE charter with the status equivalent to the BEE Codes of Good Practice with regard to measuring BEE in a specific sector – published in the Government Gazette by the Minister of Trade and Industry in accordance with section 9 of the BBBEE Act

Senior Top Management:
Staff members appointed by the board or on the authority of the board to manage the measured entity on a day-to-day basis, who are involved in the development and implementation of the enterprise strategy, e.g. chief executive officers, chief financial officers and chief operating officers (black representation in these positions earn the measured entity more points than representation in other top management positions)

Skills Development:
Expenditure on initiatives geared towards the training and development of black employees, as a percentage of the company’s total annual payroll or what is called leviable amount

SME:
Small and Medium Enterprise(s)

Socio-Economic Development:
Investment in interventions that lead to the improvement of the standard of living among black communities where at least with 75% of benefits flowing to black communities – such as education, sport, health, environmental conservation interventions – as a percentage of net profit after tax (Code 700 – Statement 700)

Statement:
A component of a Code dealing with a specific issue or a group of related issues in the Codes of Good Practice. An example of this is Statement 103, on equity equivalents by multinational corporations, as a component of Code 100

Status (BEE):
A measure of contribution to BEE expressed as a percentage or level of contribution

Supplier:
Any person or company that supplies goods and/or services to any measured entity regardless of whether such supplier or service provider is an exempted micro-enterprise, a QSE or large enterprise

Targets:
These are the minimum levels of attainment of BEE credentials that have been set for the different (seven) elements of the industry, generic or QSE scorecards

Total Measured Procurement:
The total procurement expenditure incurred by a measured entity, a percentage of which must be spent on black enterprises or good contributors to BEE to determine the measured entity’s preferential procurement score.Just about everything a company procures or incurs expenditure on – with certain permissible exclusions such as taxation, some public sector procurement and some imports – is defined in the Codes as total measured procurement (Code 500 and Code 800 – Statement 805 for QSE)

Transaction (Qualifying):
All transactions resulting in black ownership of a stake in an existing or new enterprise, which form of ownership is recognised for the purpose of computing the measured entity’s ownership score – provided the resultant ownership fulfils the two key requirements of black ownership, i.e. economic interest and influence on the strategic decisions of the company or exercisable voting rights (Code 100 – Statement 102)

Transitional Period:
The 12-month period from the date of publication of the Codes in the Government Gazette (9 February 2007), during which enterprises may choose to use either the generic scorecard or the transitional scorecard.In terms of the latter, the BEE status is determined by multiplying the company’s ownership and management scores by 1.92 (Code 000 – Statement 000) or 1.18 for QSE (Code 800 – Statement 800)

Voting Rights:
An integral part of the management control element and ownership which measures the extent to which black shareholders or directors have influence that is commensurate with their level of participation. Black shareholders, board members, senior top management and other top management can only count to the extent that they have exercisable voting rights

Verification :
The checking and confirmation of, or the expression of an opinion on, BEE credentials presented in the form of a broad-based scorecard. Procedures and standards for verification are the responsibility of the DTI, SANAS and the Industry Body

Verification Agency :
An agency that is accredited by the DTI to give an opinion on BEE credentials of companies and other measured entities

Verification Certificate :
An opinion on the BEE credentials of any measured entity, issued by a verification agency which is accredited by DTI.It includes information on the level of contribution and scores on the different elements of BEE. The certificate, presented in the format of the industry, generic or QSE scorecard, is valid for 12 months from the date of issue

Nepad:
New Partnership for Africa's Development. The collective initiative of African countries - African Union - to enable Africa to form partnerships with the rest of the world to drive its own economic prosperity. Central to the success of NEPAD, the founders agree, is the ability of African countries to hold one another accountable (peer-review mechanism), upholding the rule of law and democratic governance. Among the pioneers of NEPAD are Algeria's Abdelaziz Bouteflika, Nigeria's Olusegun Obasanjo, Senegal's Abdoulaye Wade and South Africa's Thabo Mbeki.

Nigeria:
An oil-rich west African country found on the Gulf of Guinea - east of Benin, south of Niger and Chad, and west of Cameroun. Capital city, Abuja, and chief port, Lagos. Home of famous international scholars such as Wole Soyinka and Chinua Achebe, as well as musician Fela Kuti.

nine-eleven (911):
The day, September 11 2001, on which two hijacked airplanes were crash-landed into - and destroyed the New York 'twin towers'.

Nkrumah, Kwame:
The Prime Minister of Gold Coast from 1952 to 1957, and President of its successor - independent Ghana - from 19578 to 1960.

non-voting shares:
The type of shares whose owners or holders are not allowed to vote at the company's annual general meetings. See shares and voting shares

Ntsika:
Ntsika Enterprise Promotion Agency. An agency formed just after the advent of South Africa's new democratic order, under the Department of Trade & Industry, to promote the establishment and sustainability of SMMEs. Ntsika was later merged with NAMAC to form SEDA.

Nyerere, Julius Kambarage:
Fondly known as Mwalimu, the first President of Tanzania. Having campaigned for the independence of what was known as Tanganyika as a the founder of the Tanganyika African National Union, Nyerere later served as the head of the Organisation of African Unity (AOU) in 1984. AOU was the predecessor of the African Union.

NYSE:
New York Stock Exchange, commonly called Wall Street by financial commentators - because of its location in New York City.

Obasanjo, Olusegun:
Olusegun Obasanjo (born March 5, 1937) was the president of Nigeria (since 1999 to 2007). A born-again Christian of Yoruba extraction, Obasanjo was a career soldier before serving twice as his nation's head of state, once as a military ruler and again, as a civilian leader. He was succeeded by his fellow Peoples' Democratic Party (PDP) member, Alhaji Umaru Musa Yar'Adua, in mid-2007. This was the first time a Nigerian civilian leader handed over power to another.

Ohmae, Kenichi:
Born February 21, 1943) is one of the world's leading business and corporate strategists. He is known as Mr. Strategy and has developed the 3C's Model. For a period of twenty-three years, Dr. Ohmae was a senior partner in McKinsey & Company, Inc., the int

oligopoly:
An industry dominated by few players. Barely more competitive than a monopoly, oligopoly often puts the customers at a disadvantage. Due to reduced competition, the few industry players could be tempted to fix prices or engage in other anti-competitive practices. Oligopoly is not equivalent to anti-competitiveness, as the conduct of enterprises depend on a lot more than whether they have competition. See monopoly.

OPEC:
Organisation of Petroleum Exporting Countries, a cartel of countries of the world that export crude oil or its products to others. Members of OPEC include Nigeria, Venezuela and Saudi Arabia. Often at conflict with the economies of the world, OPEC sets production quotas for its members to control the international price of crude, commonly lowering daily production if the price is too low and increasing it if the price is too high - in the opinion of the members of the cartel.

operations:
The unit or area of an enterprise concerned with its core business or its primary reason for existence. The responsibility of an operations manager, an example would be the delivery of parcels in a courier business, the knitting of jerseys in jersey manufacturer. Without operations, an enterprise does not have any purpose.

ordinary shares:
Shares which are the risk capital of the business, also known as equity. The holders are part owners of the company and are entitled to share in any profits made. Dividends vary with company profits and are not guaranteed. The value of shares may rise or fall depending upon the company's success. If the company fails the ordinary shareholders are likely to lose their investment. The most common form of share which carries the greatest risk. Your dividends are subject to profits unlike Preference Shareholders or debenture holders. In the event of liquidation you are last in the queue to be paid out. However, in the event of rising growth, you are the main participant. This is the most common share type quoted on the JSE.

PIC:
Public Investment Corporation, used to be Public Investment Commissioners until 2004. This is the South African non-deposit taking financial intermediary responsible for managing government pension and provident funds. It is non-deposit taking because unlike other financial intermediaries such as banks it does not take deposits from members of the public. When government employees make their monthly contributions to a pension or provident fund, the billions of rand collected annually must be put to work in order to grow in value to enable various government departements to be able to pay pensions when their contributing employees retire.

policy:
A framework to guide planning, decisions and actions. Examples of a policy include the monetary policy, the fiscal policy and the credit policy. The first two are used to guide the actions and plans of banks, government departments and government agencies in setting interest rates, expenditure targets, etc. The last one, credit policy, is meant to guide credit committees of a bank to decide whether to lend money to a prospective borrower or not.

pound:
The currency of the United Kingdom.

preference shares:
The type of shares that entitle a holder to preferential dividends, which means that the holder will get dividends paid before the other ordinary shareholders are paid theirs. Often, preference share dividends are fixed in advance when the shares are issued. Preference shareholders are not allowed to vote at the company's annual general meeting, unlike ordinary shareholders.

premium:
An addition to the advertised price of goods or services. For shares, it is the price charged above the market price, which reflects the perception or expectation of a good quality of what they are buying. A premium could also mean the monthly payment to buy insurance products.

price:
The money value of a unit of goods, services or assets. Also see value.

private company:
A company whose shares cannot be traded publicly. See (Pty) Ltd.

private enterprise:
A business owned by private individuals as opposed to a public enterprise.

privatisation:
The transfer or sale of assets to private investors, mainly on the assumption that private enterprise is better at delivering services than public enterprises. The opposite of privatisation is nationalisation. See parastatals.

procurement:
The function of a business concerned with buying supplies, including raw materials for production, consumables, services and others necessary in the running and operations of the business. Procurement involves handling queries from prospective and current suppliers, issuing and receiving tender documents, managing relations and efficiencies of the processes involved.

produce :
The sum total of what a company produces in order to sell to its customers.

producer :
As opposed to a consumer, someone or a company responsible for the production of goods or services. Examples of producers include manufacturers, farmers and designers.

production:
The process of putting together raw materials to produce goods. Concerns of those in charge of production include meeting quality specifications and deadlines of customers, as well motivating staff members.

profit :
The positive difference between income and expenditure, which is often the motivation for most entrepreneurs to engage in risky enterprise. Revenue generated by an enterprise after it has reached its break-even point, usually expressed as a percentage of sales revenue. The opposite of profit is loss.

Profit-taking:
In the world of investments, it is important to remember the motive for investing. Investing here means spending money or anything of value to buy, develop, build or manufacture something with the hope of increasing the value of the money or whatever is spent. Investing is not merely putting money in a bank, as this is saving. Investing is what we commonly call "making one's money to work for them", like putting money into a business or buy shares. People who buy shares often do it for one or all of the following reasons:- to earn dividends from the share everytime the company in which they bought shares pays dividends to its shareholders (dividends are an investor's share of the profit made by a company after it has paid all its dues like tax, interest on loans, etc.)- to earn dividends from the share everytime the company in which they bought shares pays dividends to its shareholders (dividends are an investor's share of the profit made by a company after it has paid all its dues like tax, interest on loans, etc.)- to grow the value of their investment; commonly called realising a capital growth - (buy at a low price and sell at a higher price). This means for every rand one invests in shares, they can expect to earn additional value -which means that after some time of owning a particular share, an investor reasonably expects to have the value of the share increasing as their investment is used by the company to generate profits (earnings) that are re-invested into the business. To understand this, think of someone who takes R100 to a casino to gamble, wins R50 - now he has R150 (which is the original R100 and the R50 in winnings or earnings for an investor). Depending on the circumstances and approach of the gambler, they can take the whole R150 and gamble it again hoping to turn it into R200 or even R300. Any additional value created, for an investor, is called capital growth. Now, suppose the gambler - realising that the value of the money they brought into the casino has grown from R100 to R150,

Profit-taking:
To grow the value of their investment; commonly called realising a capital growth - (buy at a low price and sell at a higher price). This means for every rand one invests in shares, they can expect to earn additional value -which means that after some time of owning a particular share, an investor reasonably expects to have the value of the share increasing as their investment is used by the company to generate profits (earnings) that are re-invested into the business. To understand this, think of someone who takes R100 to a casino to gamble, wins R50 - now he has R150 (which is the original R100 and the R50 in winnings or earnings for an investor). Depending on the circumstances and approach of the gambler, they can take the whole R150 and gamble it again hoping to turn it into R200 or even R300. Any additional value created, for an investor, is called capital growth. Now, suppose the gambler - realising that the value of the money they brought into the casino has grown from R100 to R150, and immediately d

profitability:
The extent to which an enterprise is making profit as a percentage of sales revenue and as a means to evaluate the ability of an enterprise or its management to control costs. Investors generally prefer the more profitable enterprises or industries as they present better prospects for earnings.

profiteering:
Making profit by ethically dubious means, such as taking advantage of others' desperation or a one's monopoly. Examples of profiteering include running one's business using slave labour or child labour. Those who benefit from such practice will most likely justify their actions by saying that they entered into voluntary labour agreements with their employees. However, on close inspection particularly when one applies the principles of triple bottomline, the unethical nature of such business practice becomes hard to defend.

projection:
A technique or process of estimating what is likely to happen in the future. The most common projections in business include those to do with how much cash a business will generate (cashflow projection). A projection is not merely what we wish could happen, but what we realistically believe - based on informed estimates. Projection is part of the budgeting process.

property:
A form of investment in the form of purchasing commercial, industrial or residential buildings, with the view to making money from rental. Property investors also purchase land for development, offer property development and rennovations. Property is part of a balanced investment portfolio, with equity and cash. However, in our knowledge economy, property can also be intangible. Intellectual property, is an example of one form of property that is not made of buildings. Information technology, consulting, financial modelling and scientific research are just some of the examples of property that is not tangible, but often has a lot of monetary value.

proprietary:
Used to describe a name or property that is protected from unlicensed production or reproduction by copyright as a trade mark or similar form.

public company:
A company whose shares can be traded publicly, mainly through a stock exchange. Public companies are listed.

public entity:
An organisation established with the sole purpose of serving the interests of the public with regard to a specific need. Public entities are owned by the public, and usually have to report on its operations and financial admistration to a relevant government department - in terms of the legislation governing the utilisation of public funds.

pula:
The currency of Botswana.

purchase:
Buy goods, raw materials or services for resale or use by a business.

quadrant:
A quarter or a fourth of a whole. The popular context in which it is used today is Roberto Kiyosaki's book Cashflow Quadrant, in which the author identifies four forms earning a living - and calls them quadrants. They are employee, self-employed, business and investor. The author in this book attempts to show how one cannot attain or sustain a good quality of life in the employee quadrant, arguing that one must always strive to move to the investor quardrant.

qualification:
A remark or note by auditors that points to an irregularity in a company's financial statements. See unqualified report.

qualified report:
A financial statement of a company with remarks by the auditors that point to an irregularity or deviation from what is considered standard accounting practice or Generally Accepted Accounting Practice. See unqualified report.

quick ratio:
A measure of how well a company is able to pay honour or pay its financial obligations when they fall due. It measures the liquidity, availability of cash in the business to pay salaries and other cash payments, which is calculated by adding up the monetary value of all the current assets of a business less inventory or stock (debtors, bank balance and cash) and dividing them by its current liabilities (bank overdrafts, short-term loans, accounts payable). The ratio of less than 1 is a sign that the business might be in trouble, because it has more liabilities than assets. Related to the quick ratio is the current ratio, which is calculated in the same way, except the current assets include stock or inventory.

rand:
The currency of South Africa.

rate:
The measure of financial variables such as interest, foreign exchange and inflation. But the most commonly used context of the word rate is interest rate.

ratio:
A fraction used in determining the relationship between two quantities. These quantities might be profit and sales, which then measures what percentage of sales revenue is translated into profit (profitability ratio). Other useful ratios are return on equity, current ratio, debtors' days, creditors' days and a couple of growth ratios. Also see ratio analysis.

ratio analysis:
The use of financial ratios to assess the financial health of a company. This is done by measuring, through the use of ratios, the critical success factors of a business which include the following: liquidity, profitability, activity, return and growth. The ratios are then compared to those of the previous years' performance, at least three successive years at a time, as well as those of other companies in the same industry. The analysis can be used to decide whether to lend money to the business, to invest in it or not.

RDP:
Reconstruction and Development Programme. This was the programme of the post-apartheid South Africa aimed at undoing the damage of the country's apartheid past in the economic sense. The RDP was about just what the full name said, the reconstruction and the development of the South African economy to the benefit of the majority of its citizens - the blacks (South African Coloureds, Indians and Africans) who were excluded from the political and economic affairs of the country for centuries. The RDP was the responsibility of the Minister Without Portfolio, Jay Naidoo in President Nelson Mandela's cabinet. Naidoo later became the Minister of Communications, before leaving politics to go into business. The RDP is still used in South Africa to define the low-cost housing scheme, which was an attempt to build houses for all poor people. The RDP was a precursor to BEE.

Renaissance, African:
The African way of reclaiming pride, heritage and the dignity of Africans. Africa has been called all sorts of names with negative continent, such as the dark continent. In the same way that the Renaissance movement started in Europe in the 14th century to produce a 'complete human being', African leaders in the 20th and 21st centuries started preaching the rebirth of Africa as the continent whose people are unified in the fight against poverty and underdevelopment. President Thabo Mbeki of South Africa is the one who gave the concept its prominence during the establishment of the New Partnership for Africa's Development (NEPAD).

Reserve Bank:
Also known as the Central or Federal Bank in some countries. This serves to oversee or supervise the country's banks, implement its monetary policy, among others.

reserves:
Every company is expected to generate a profit. Out of the profit, it pays tax. What is left after it has paid tax is available for the payment of dividends to shareholders. Generally, companies will use this retained profit to boost its reserves. The reserves are then transferred from the income statement to the balance sheet as part of the shareholders' value added.resolution

resolution:
A decision of shareholders at a meeting. Different types of resolutions require different levels of involvement of shareholders. Resolutions are recorded and kept on the official premises of the company in accordance with companies' legislation.

resource:
A generic term for factors and components used in the production and management of goods and services. Resources can also be used in business to mean those companies that manufacture or deal in natural resources or products closely linked to natural resources such as mining and minerals - resource stocks or shares.

retail:
The type or level of business that sells goods or services to the (final) consumer. This is the level at which households purchase whatever they need or want. Also see wholesaler.

return:
The reward for risks taken. This return can be worked out as a percentage of the total capital, of the total value of assets, shareholders' equity, etc. A return is measured on an after-tax basis, and is used to establish whether the investment was worth it in the first place.

revenue:
Money generated by a company from the sale of its goods or services, or by government from taxes.

rights issue:
The issuing of additional shares to existing shareholders usually lower than the market price. This is a way of raising more capital while enticing the shareholders to keep their shareholding in the company.

risk:
The possibility that one may suffer a loss or the uncertainty about whether or not an asset will earn an expected rate of return. As much we take a risk in life facing each day, the risk is calculated. In finance, the situation is the same. Before making an investment decision, one must face the possibility that the expected gain might not be realised. Instead of avoiding risk, we manage it by taking measures to reduce the extent of loss in the event of our expected return not materialising. This is what hedging is about. There are different types of risk, depending on the situation. They include credit risk (for a lending institution, this is the possibility that the borrower might not repay the loan), currency risk (the risk that the exchange rate might change to the detriment of the investment we make) and political risk (meaning the political instability in the country where an investment is made might pose a threat to the expected return). Other forms of risk are interest rate risk, liquidity risk, capital risk.

risk-return analysis :
A technique used to compare the risk taken in making an investment and the reward that can be expected in order to decide whether to proceed with the investment or not. In financial decision making, the return (reward) must justify the risk. The higher the reward resulting from any decision, the higher the risk one must be willing to take.

SAA:
South African Airways. The national airline of South Africa.

SADC:
Southern African Development Community. An association or economic bloc of countries in the southern and eastern parts of Africa, including Botswana, Tanzania, Angola, Namibia, Zimbabwe and Mozambique.

sanctions:
A international trade restriction imposed on a country to force into a specific action. Sanctions involve refusing to do business with the country, its companies and even restricting travel to and from it. South Africa suffered a great deal of isolation in the 1980s due to its apartheid policy.

SARS:
South African Revenue Services. A revenue authority, under the auspices of the treasury department, responsible for the collection and administration of taxes, levies and duties. It is headed by a Commissioner, commonly referred to as the tax man.

Section 21 company:
A company established and run for non-profit purposes. The company normally is able to receive money in the form of donations from individual and corporate sponsors, who in some instances get tax exemption for the amount donated. When a non-profit organisation has to cease its operations for whatever reason, the general rule is that it should pass on its assets to an organisation that conducts the same business.

sector:
A part of the economy with such common or related features, characteristics and functions that - for analytical and policy purposes - it can be separated from others. Examples include private sector - to denote the sum total of organisations that are driven by a desire to serve private interests - as against the public sector. One can also use labels such as the automotive sector.

securities exchange:
A platform that regulates the buying and selling of various forms of security (financial instruments). These securities can be stock or shares (stock exchange), bonds (bond exchange), or futures (futures exchange). The exchange (buying and selling) for each security is done in the form of a bidding system, in which the final price paid is the highest offered, with a set number of days from the trading activity provided for the settlement or payment to be made. Investment on the exchange can be done through a stock-broker, who will charge a brokerage fee. Thanks to information technology, securities exchanges of the world are interlinked and investors can invest anywhere in the world - using modern technology as the Internet. Investors sell securities at different stages to realise a capital gain (trying to make profit on the price initially paid for the security) or to avoid further losses (if the price keeps on going down). For every seller, there has to be a buyer. So, when one investor sells because they either want to realise a profit on their earlier investment or to prevent losing more money, another (the buyer) believes the opposite. When more investors believe that the prices of securities on any exchange are going to increase they tend to buy more securities - creating more demand. In this case, you will hear the market commentators talking of a bull market or being bullish. When the majority of investors believe that the opposite will most likely happen, they tend to sell off their securities. In this situation, you will hear of a bear market. Sometimes, the collective opinion of the market is so bullish that the prices go up, beyond the realistic value of the securities. What goes up must eventually come down, and this will happen from time to time - and it is called a correction; much like the market (the collective opinion of the investors) coming to its senses. As in life, sometimes this 'coming to its senses' does not happen, and the only way to bring the prices under control is a crash - as it happened in the famous Wall Street Crash of 1929. The key to understanding how securities exchanges operate is information, especially about how economies work. Inform yourself and use the services of a stock-broker until you are confident of your grasp. Most of all, do not be greedy and try to get rich quick!

securitisation:
Raising loan finance the back of assets that one has. A business, for example, can raise money this way and then reinvest in other parts of the business. The cash generated by the assets is then used to repay the loan later. This is a financial technique that takes several factors into account, including the track record of the business, its credit rating, and the confidence that lenders or investors have in its ability to generate enough cash to repay its debt. You will know that a 'good name is better than riches'. In securitisation, the good name of the business certainly comes in handy, in the same way that a good credit record can enable you to get a loan from a friend or a financial institution.

security:
A financial instrument that companies and governments can use to raise finance from investors. These securities can be bonds, some shares, treasury bills, etc.

SEDA:
Small Enterprise Development Agency under the Department of Trade & Industry in South Africa. The agency was formed as a result of the combination of two structures, Ntsika and the National Manufacturing Advisory Centre (NAMAC). These two structures were founded in the late 1990s to facilitate the formation and sustainability of SMMEs.

sell:
Dispose of assets, commodities, goods or services in return for money or something with value. One can sell for cash or on credit (buy now, pay later). Selling is the main mechanism of enterprise, and depends on the willingness of the buyer to pay the stated price, which is often a function of demand and supply.

seller:
The party in a transaction with something to sell.

selling price:
The price for which a business sells its goods and services, which must be higher than the cost price to make the company profitable.

sentiment:
The collective opinion of the market, which represents the way the market or the collective influence of investors with one another and economic conditions at any given time, thinks of the future. This opinion is not the outcome of any meeting or conference, but the attitude of market players. Sentiment is an invisible intangible, but very powerful, force that determines prices of commodities, securities, goods and services.

services:
Intangible economic activities that can directly or indirectly satisfy the needs or wants. Examples include medical care and car-wash.

shareholder:
Individuals or institutions with a right or claim to the company's dividends as a reward for the contribution - capital or otherwise - to the business. There are ordinary shareholders, with voting rights, and preference shareholders, without any voting rights but with an entitlement to receive dividends before ordinary shareholders.

shares:
Units of a company that are issued or sold to investors who make a financial or other contribution to the company. Shares - be they preference shares or ordinary shares - are entered in a share register which is kept on the official premises of the company. Shareholders are rewarded for the risk they take in the form of dividends - payment made to shareholders out of the income retained when all the other obligations of the business, including tax, have been met.

shelf company:
A dormant company that can be sold with all its original details to expedite the process of registering a new company. A shelf company is preferred by entrepreneurs when they have to register a company, but do not have the time to wait for the office of the registrar of companies to authorise the new entity. So, by buying a shelf company they can trade legally using another entity that might have become dormant but still recognised by the office of the registrar. The name can then be changed later.

shilling:
The currency of such countries as Uganda, Kenya and Tanzania.

short:
In the securities market, investors base their actions on what they anticipate the market to do, i.e. what the price of whatever security they deal in to do. If they expect the price to rise, they would normally buy it with the plan being to sell it when the price reaches a certain level. On the other hand, if they expect the price to fall, they can sell whatever of that security they have, hoping to make a profit by buying it later at a lower price. By selling a share or any other security now, one can make a profit by buying it later and waiting for the price to rise again before selling it. This over-selling of a security because of the expected fall in its price is known as going short or taking a short position on the security.

skills development:
A programme to train people or to develop their skills in order to meet the needs of the economy.

SME:
Small and medium enterprise(s). Measured in terms of turnover and assets, these enterprises are given credit for the success of such economies as the US and Asian countries such as Malaysia, due to the fact that they tend to employ relatively more people than their large counterparts and fill the gaps left by the large counterparts - thus driving innovation and responsiveness to the needs of customers. Also see SMME.

SMME:
Small, medium and micro enterprise(s). Also see SME.

SOE:
State-owned enterprise(s), also called parastatals in some instances.

Soviet Union:
See USSR.

speculator:
An investor who buys shares or other forms of security - taking a higher risk than usual. Speculators buy and sell as soon as the security they bought reaches goes up to a certain level, and do not take a long term view of the market. In other words, they thrive on the up and down movements of the market.

Spoornet:
The rail utility of South African transport and logistics state-owned enterprise Transnet.

Stats SA:
A South African government agency that collects and computes data on the social, economic and other aspects of the country. Stat SA produces data on economic growth, population, unemployment, etc. It is a very significant agency, as the data it produces can be used by investors, businesses, individuals, foreign governments and analysts.

stock:
Another name for inventory or finished goods in store of any business ready to be sold. In the world of securities, it can also mean shares.

Sub-Saharan Africa:
All African countries from the Sahara Desert southwards. The Sahara Desert covers western Egypt, larger parts of Mali, Chad and Niger and parts of western Sudan. Simply put, Sub-Saharan Africa translates into Africa less the five north African countries, namely, Algeria, Egypt, Libya, Morocco and Tunisia. The region is made of 48 states.

subsidiary:
A subset of a holding company. As companies grow, they do not always rely on growing their sales by winning new clients or introducing new products or services, which is known as organic growth. They often take over or acquire others. When a company buys another in order to grow, the acquired company is known as a subsidiary, while the one which acquired it becomes its holding company.

supplier:
A company or individual that sells raw materials or services or goods to another business for further selling or consumption.

supply:
The amount of goods or services produced and/or available for sale. In the economy, the relationship between supply and demand determines prices. Prices go down when supply is greater than demand, and up when demand is greater than supply. The relationship between supply and price is best captured in what in economics is known as the supply curve.

surplus:
A positive difference between supply and demand or between income and expenditure. When our income exceeds expenditure, we find ourselves with extra money to spend, which we can the save or invest (if we are wise) or spend (if we are natural). A surplus in terms of demand and supply can drive prices down.

surplus units:
Persons in an economy with more capital than they need to use at a given time. These include lenders in any form - such as banks, investors, and venture capitalists. The opposite of surplus units is deficit units.

Tanzania:
An east African country south of Kenya, north of Mozambique and east of the Democratic Republic of Congo. Capital city, Dodoma, and main port is Dar es Salaam. Formerly called Tanganyika, it gained independence in 1961 with Julius Nyerere (fondly known as Mwalimu) as Prime Minister. Another city of Tanzania of regional economic significance is Arusha, where the Arusha Declaration was signed East African Community was formed for the first time in 1967. treasury bill

tax :
Government's share of the income, capital and wealth of its citizens (persons and businesses), which it receives in the form of a levy calculated as a percentage of earnings, profit and some transactions such as the transfer of property, inheritance, imports, etc. Annually, individuals and businesses have to submit tax returns to enable the revenue commissioner (the 'tax man') to determine how much tax is due or refundable to them. Revenue collected from taxes is used by governments to deliver services and build infrastructure, among others. Tax is only levied on what is called taxable income, which is different from income in general. Methods to determine taxable income are set in the tax legislation, which is revised regularly to prevent tax avoidance (the way of legally ensuring that one pays as little tax as possible) and tax evasion (using illegal means such as non-disclosure of income to escape one's tax obligations). Professionals and firms offer tax advisory services or tax planning to individuals and businesses to restrict their tax liability to the minimum.

taxation:
A system governments use to regulate, determine, collect tax from individuals and businesses. It can also mean the amount a business pays in the form of taxes or a proportion of its earnings or assets set aside for tax purposes, as an item on its income statement or balance sheet. Different countries have lenient or strict tax regimes, and the system each country uses is a major factor when individuals or businesses decide to make investments. Because individuals and businesses can earn income from countries different from where they are resident, countries often have what are called double taxation agreements to ensure that they do not levy tax twice on the same income.

Telkom:
A South African state-owned enterprise that provides fixed-line (as opposed to cellular or mobile) telephony to individuals and businesses. It subsequently was listed on the New York Stock Exchange.

time value of money:
The value of money as affected by the passing of time. Due to many factors, including inflation, the value of money to be received in the future is worth less than what the same amount is worth today. People selling investment or insurance products often tell us about millions or hundreds of thousands that we will receive in 30 to 40 years from the day they sell us the product. We look at the many zeros in the amount promised and get excited; what we do not realise is a million in 35 years will be as good as fifty-thousand is today. What you should ask the person showing the many zeros is: what is the present value of this large sum? You might find the answer interesting. You will probably still have to buy the product, cause you need to; but your expectations should not be a life of luxury out of a beach-house when you retire, as the amount might not even be enough to pay for your municipal rates!

title deed:
A legally binding proof of ownership of an asset such as property or land. The claim one has to a property is called a title, the deed is mere proof of the existence of such a title, as in en-title-ment to it.

tourism:
The industry constituted by a group of services and products related to travelling, especially by people from outside the country - but also local. This industry includes the activities of hotels, curio shops, tour guides, bed-and-breakfast, restaurants, travel agencies, airlines, resorts, tourist attraction centres and the welfare services that the tourists might need.

Transnet :
A South African state-owned transport and logistics corporation.

treasury:
A department of government or a business that is responsible for managing finances, including the authorisation of expenditure by various other departments, administering of taxes, collection of revenues and related functions. In a bank or other businesses, the treasury department is responsible for the trading and other functions that relate to the safe-keeping and investment of funds under administration to the benefit of the owners and depositors.

treasury bill:
A form of a short-term financial instrument used by governments - represented by their Treasury Departments - in the money markets to raise funds. Treasury bills are bearer instruments - issued without a name of the person who will eventually submit them to redeem the debt - used by governments to also control the liquidity of the financial markets.

trust deed:
A legal document capturing the essence of the relationship between two parties, a trustee and the beneficiary of the trust. A trust relationship empowers one party, the trustee, with the responsibility to handle the property or assets on behalf of another.

trustee:
A person legally responsible and empowered to handle property or assets on behalf of others, the beneficiaries of the trust. Such relationships exist in the case of pension funds where the trustees are expected to ensure that all the decisions and actions of the administration of the fund are in the best interests of the beneficiaries or members.

trusteeship:
The responsibility of the person legally empowered and responsible for handling assets on behalf of another. It involves acting in one's capacity as a trustee - in a role also called a fiduciary role.

twenty-ten (2010):
The year in which for the first time an African country - in this case South Africa - got a chance to host the World Cup on behalf of the International Federation of Football Associations (FIFA). A lot of people expect plenty economic benefits to flow from this occasion, with the industries best positioned to benefit being construction, accomodation, travel and tourism.

UN :
United Nations. With headquarters in New York, this association of the countries the world was founded in terms of the charter of the San Francisco Confernce in 1945 (just as World War 2 came to an end). It succeeded the League of Nations, which was formed in Geneva, Switzerland in 1920 after World War 1, in order to act as an arbitrator in international disputes. The UN operates through its General Assembly, Security Council, the Economic & Social Council and others.

UNDP:
United Nations Development Programme.

unemployment:
Non-utilisation of available labour or skills. When one is able and willing to work, but cannot find a job they are unemployed. The rate of unemployment is a result of the demand and supply of labour as a factor of production, i.e. when the supply of labour is higher than the economy can absorb at the cost that is acceptable. Sometimes it is the result of the shortage of appropriate skills, meaning that the unemployed people lack skills that the economy requires. This is often due to training that is not in keeping with the needs of the economy. Other causes of unemployment could be the salary expectations of the job seekers being much higher than what employers can pay, or even the influx of skilled people from other countries who are willing to settle for wages or salaries that are lower than what the local job seekers expect. There are two definitions of unemployment, the one is called expanded definition - to include those people who have given up looking for work. The standard definition counts only people who are actively looking for employment and excludes those who say that they are no longer looking.

unencumbered:
Free from any third party claims. In borrowing money, we often are required to provide an asset we already own as a collateral or security. The essence of a collateral is that whoever we are borrowing the money from, has a right to claim money against that asset before any other person - especially in the event we are insolvent and our assets have to be sold to recover the money to pay those we owe. This right to claim the proceeds of the sale of another's assets is called an encumbrance. Once we have paid the loan for which an asset was submitted as a collateral, the claim of the third party (in this case the bank) falls away, and the asset is free from the encumbrance or is unencumbered. Who wants to know whether an asset is unencumbered or not? Lenders. Banks will ask you for a collateral when granting you a loan. But before they do so, they will check with the relevant authorities to ensure that you did not offer the same asset as a collateral in securing a loan that has not yet be paid off - because in that case, the asset will be encumbered already.

unit trust:
A means to invest in a variety of companies by buying shares and selling units of these investments to its clients. The clients can then buy and sell units at any point without going to the stock exchange themslves or needing the services of a stock broker.

unlisted company:
A company whose shares cannot be traded publicly. Members of the public are able to buy and sell shares in a company if it is listed on a stock exchange. However, if the company is not listed, a private company, a close corporation, a partnership or a sole proprietorship, its shares are sold privately.

unqualified report:
A kind of a 'clean bill of health' given to a company's financial statements by auditors. If in auditing the statements of a company, auditors notice something that is not standard according to the Generally Accepted Accounting Practice, they are expected to state it in their report. This remark is called a qualification. So, an unqualified report is an auditors' report without any qualifications. It does not mean that the statements are perfect, though. See the opposite, qualified report.

update:
(regular) reports on the state of the markets, used by analysts, investors and other market watchers to make decisions on their investments. Updates are crucial because market conditions are sensitive to many political, social, climatic and economic changes. A good investment in the morning could be a bad one by midday due to a natural disaster in some remote part of the world or a mere threat of political instability in another country. Due to electronic communication technology, information on what the market is available live to most practitioners and investors - via radio or television bulletins and cellphone short message services.

US:
United States (of America).

USA:
United States of America or US.

USSR:
The Union of Soviet Socialist Republics. Capital city, Moscow. This bloc of socialist countries in Northern Asia and Eastern Europe was a force in the Cold War era. It was established in 1922 following the 1917 Revolution and the November takeover by the Bolsheviks under the leadership of Lenin. Its disintegration in the late 1980s and early 1990s resulted in the reorientation of the economic order of the world, and a further entrenchment of globalisation. Oil and diamonds are some of the major commodities in what is now loosely called the Former Soviet Union (FSU) countries, such as Russia.

usury :
Charging interest on loans at a rate higher than legally allowed. Although every country has laws that regulate the maximum rate of interest on different types of loans, it must be remembered that in medieval times usury was a sin. Some Muslims still do not believe in usury. These Muslims are known to donate any interest earned on their bank deposits, or a percentage of it, to charity - as their way of denouncing excesses or profiteering on the misfortune of others.

valuation:
The process of estimating the value of something, such as an asset. This process is often required before a bank provides finance to its clients to buy a house or a business. There are techniques of valuation, all which take a mastery of financial calculations that are used to estimate the value. We say estimate because, different valuations can produce different values of the same asset. In fact, there is never a unanimous agreement when a valuation is done. Professional services firms and specialist banks actually make money from buyers and sellers of businesses so as to give their opinion of whether an offered price for a business is 'fair and reasonable'.

value :
What a buyer is willing to pay for what they buy or the opinion of a buyer of how much something is worth. This is different from price, because in determining a price we often want to make a profit. Some things might cost very little, but cost a lot because of what the buyer thinks of them, in other words, how much value they attach to them. For example, we often talk of something as being priceless, because no amount of money can buy it. On the other hand, the value of anything increases once we are convinced of its importance, and this has nothing to do with how much it costs. You probably have seen people at a soccer match fighting to get a shirt thrown into the stand by a star. The shirt might cost very little in terms of money, but because of its association with a star, it often gets sold for a much higher price.

value-add or value added:
The value that a business adds to what it receives and what it produces out of it, by means of such activities as packaging. This is the difference between what revenue a business can generate from selling its produce and the cost of the materials and all the went into producing it. When a restaurant buys potatoes from a farmer, it washes, cuts, fries and packages them to produce chips. The chips can sell a lot more than potatoes, because of the value added to the potatoes. The concept of value-add can be applied in the same way to services.

valuer:
Someone who does valuations.

variable costs :
The costs of doing business which are primarily dependent on the volume of business done. For example, a company that bakes bread will have spend more on flour to bake 1000 loaves than when it only bakes 100. The opposite of variable costs is fixed costs, which do not increase with the amount of business conducted.

variance:
Deviation from the norm, expectations, plan or budget. Budgeting is crucial in business, but often adherred to. Due to many factors, one can spend less or more than the budget.

vendor :
Seller.

vendor finance:
Finance provided by the seller of a business to the buyer. This form of financing is common in most BEE transactions in South Africa due to the limited financial means of the black people interested in buying businesses.

venture :
A new or start-up business.

venture capital:
The type of financing provided - by venture capitalists - mainly to back start-up businesses. This form of financing commonly involves the taking up of a shareholding or equity in the start-up. Providers of venture capital are often not as conservative in their approach to investment, that is, they tend to risk much higher than an average investor, cause they understand that by taking on a higher-than-average risk, they stand to make a higher-than-average return.

venture capitalist :
A person or an investor who provides finance to new businesses or start-ups or businesses that do not have enough of a track record for banks to lend money to. As banks prefer lending to businesses with some proof of ability to generate enough profit in cash to pay back the loan, venture capitalists are able to close the gap by taking on the higher risk than most by backing a venture that it is yet to prove itself. As high as the risk is, so is the potential reward or return should the business do well. If investors were actors, venture capitalists would be the type of actors who do not mind performing their own stunts.

volatility:
The measure of fluctuation in the market conditions, supply, demand - and subsequently price - of goods, services, commodities, shares and other securities.

volume:
The number of units sold or bought or of business transactions concluded. Volumes of trade are an important factor in determining profit margins. Low volumes often result in high margins and high volumes in low margins. This can be applied during special sales, where in order to sell high volumes, the business can settle for lower margins per item.

vote:
A right to participate in the decisions of a business that is proportionate to the percentage shareholding one has in a company. Companies allocate shares to shareholders depending on the contribution, monetary or otherwise, they make towards the running and success of the business. These shares translate into a number of votes that in percentage terms matches the proportion of the business they own. For instance, if a shareholder owns more than 50% or more than half of a company's shareholding, he or she alone is the majority at meetings. It means that in making decisions about the business, that one shareholder will count as the majority vote. Often, a certain percentage shareholding also entitles the shareholder to appoint a proportionate number of directors to the board of the company.

voting shares:
Not all forms of shareholding or shares in a company entitle the shareholder to a vote. To understand this, one needs to read the laws that govern the administration and governance of companies. However, there are different types of shares allocated depending on the circumstances of the shareholder and the conditions of issue, each with different rights attached to them. Preference shares for example are non-voting shares in general, as opposed to ordinary shares - which are voting shares, although exceptions do occur.

Wade, Abdoulaye:
The President of Senegal since 2000. His contribution to the African continent is in his participation in the founding of the New Partnership for Africa's Development (NEPAD). He was also a member of its Heads of States Implementation Committee, with Presidents Abdelaziz Bouteflika of Algeria, Thabo Mbeki of South Africa and Olusegun Obasanjo of Nigeria.

Wall Street:
Another name for the New York Stock Exchange, which happens to be situated in Wall Street, New York City. Due to the economic significance of the US in world - due to the size of its economy - market watchers, analysts and investors take a keen interest in what happens 'on Wall Street'. This explains the popularity of publications the Wall Street Journal. You cannot play any game and ignore what the biggest players are up to.

wants:
Those goods and services that individuals consume, due to desire rather than need. The simplest differentiator between needs and wants is that one can do without wants, but not needs. Depending on lifestyle and living standard, however, some people confuse wants with needs. Traditionally, needs include food, shelter and clothes - but then, other people might have expensive tastes of clothes - introducing an element of wants to what could easily have been needs.

warrants:
A form of an investment in derivatives, which gives its holders the right to buy a linked or an underlying asset on a future date at a price that is usually higher than the market price. This asset could be a currency, a commodity, or even shares. Why would anyone buy the 'right to buy a share' instead of the share itself? Speculation. In the world of finance, speculation is a business, part of . Whereas we speculate a lot in our daily interactions, in finance any opinion about what the future could be like can be represented in monetary terms, and sold to others. When one speculates about the future on other simpler things and they are wrong, they will probably laugh it off. But in finance, this position amounts to a financial loss if you are wrong ('out of the money' as they say), a financial gain if you are right ('in the money) or both ('on the money'). In order to understand warrants, one must first understand the underlying assets and how they are traded.

wholesale:
The scale at which one buys or supplies goods and services. See wholesaler.

wholesaler:
A merchant or trader who buys goods and services wholesale, as opposed to retail. Retail suppliers sell directly to the end-user or the consumer. The consumer can be simply described as that person or business who buys something to use it, rather than sell it further. A business that uses computers to keep records of its daily transactions is a consumer of computers. Wholesalers often negotiate lower prices from producers or suppliers. They are able to negotiate lower prices successfully because they buy in bulk, i.e. larger numbers of the same item. In the same way that retailers can offer consumers an opportunity to 'buy one & get one free', wholesalers are able to buy at lower prices so that their businesses can sell at reasonable prices and still make a profit.

WTO:
World Trade Organisation. With headquarters in Geneva, Switzerland, the WTO was founded in 1995 to replace the General Agreement on Tariffs and Trade (GATT) of 1947 in administering free trade. Behind the formation of structures such as the WTO is the quest to protect national or regional economic interests in the face of globalisation. Various countries of the world tend to group themselves according to their wealth status, political affinity or other factors that enable them to collaborate in advancing their economic prosperity. Members of the WTO meet regularly, at least once every two years, to review progress on the administration of multilateral trade agreements and the resolution of trade disputes. Disputes result mainly from the trade tariffs. WTO's principles imply that countries must reduce trade tariffs in order to enjoy reduced trade tariffs in other countries. A tariff is essentially an tax levied on imports, often used by countries to discourage the dominance of foreign goods and supplies over their local industry. See import substitution.

zero coupon:
See coupon.

zero-rated:
A term to describe goods, services or supplies on which value-added tax (VAT) is not levied.

zero-sum game:
Based on the game theory, the way to understand this is to think of it as the opposite of what is called a 'win-win situation' in daily human relations. When people conduct their business in a manner that one can only benefit if the other loses, their approach amounts to a zero-sum game. The sum of a negative 1 and a positive 1 is zero. Since positive 1 is the inverse of negative 1, if one's gain (positive 1 result) can only result in another's proportionate loss (negative 1 result), their relationship fits the description of a zero-sum game. In finance, a situation often exists where taking one action exposes the investor to the equal possibility of losing. For example, by investing in a company that makes profit when the price of crude oil is high, such as a petroleum corporation, one faces the risk of losing if the price suddenly drops. Because the investor in this case does not have control over the price of crude oil, to cover their position in the event of a drop in crude oil prices, they might invest in other companies that stand to benefit if the price of crude oil falls, such as those that use a lot of petrol to produce their goods. The investor in this case uses the zero-sum game to protect their situation. See hedging.

Zimbabwe:
A landlocked southern African country north of South Africa, east of Namibia and Botswana, south of Zambia and east of Mozambique. A former colony of Britain, was known as Rhodesia until independence in 1980, with Robert Mugabe as Prime Minister, following a revolution and then the Lancaster House Agreement of 1979. Capital city, Harare.

Domicilium citandi et executandi:
Address at which legal proceedings may be instituted. Also refers to the address of where the person in question resides or receives mail from. This is the address for service and delivery of documents. The choice of domicilium should not be taken lightly

Ex gratia:
Ex gratia (sometimes ex-gratia) is Latin and is most often used in a legal context. When something has been done ex gratia, it has been done voluntarily, out of kindness or grace. In law, an ex gratia payment is a payment made without the giver recognising any gain.

Alhaji Umaru Musa Yar'Adua:
President of Nigeria from April 2007; successor of President Olusegun Obasanjo. Member of his predecessor's Peoples' Democratic Party (PDP) and Governor of the Katsina State - where he was born in 1951. Holder of an M.Sc Degree in Analytical Chemistry, President Yar'Adua was the first governor and President to publicly declare his assets.

BRIC or BRICs and BRICSAM:
Brazil, Russia, India and China - as a bloc of emerging markets, unified by their common economic and socio-political status. American, European and Japanese companies plan their business not only for today, but for the future as well. Since these companies have almost saturated the markets on their home turf, i.e. there is no longer much in the form of new buyers of their products and services in the economies such as the US and Europe, these companies tend to look to new untapped countries to extend their global footprint. That is the essence of being a multinational corporation, which most of these companies are. Development of economies or countries increases the ability of the citizens of the developing countries to consume, because with economic development, they tend to have more money to spend than before. Companies in developed countries, as well as some in other developing markets, study the BRIC markets as 'the next big thing' when they plan their expansion. Although China and India are in Asia, while Brazil is in South America, multinational corporations tend to think of developing markets on the basis of their similarities, because generalisation makes planning possible. You might also have heard on Chindia - for China and India. It is all a marketer's innovation to plan their penetration strategy for new unexploited markets.

China has become a favourite market for the whole world because of the size of its population. Large population size equals potential consumption. Russia has become fashionable after the disintegration of the Soviet Union, what used to be called the USSR for the Union of Soviet Socialist Republics. The countries that used to constitute this bloc are sometimes referred to as the FSU countries or Former Soviet Union countries because they might be sovereingn states, but they have cultural similarities - which marketers can exploit.

BRICSAM, by logical extension, stands for Brazil, Russia, India, China, South Africa, ASEAN, and Mexico.

ASEAN - in this case - is another geo-political bloc and/or economic bloc that was established in 1967. It is the Association of Southeast Asian Nations, namely Indonesia, Malaysia, the Philippines, Singapore and Thailand.

FSU:
Former Soviet Union countries - see BRIC

EAC:
East African Community

Burundi, Kenya, Rwanda, Tanzania, Uganda as an economic bloc of countries in the east of Africa. Originally comprised of Kenya, Tanzania and Uganda - until 2007 when Rwanda and Burundi were admitted.

On its official website, www.eac.int, the EAC describes itself as "the regional intergovernmental organisation of the Republics of Kenya, Uganda and the United Republic of Tanzania (add Burundi and Rwanda from 2007) with its headquarters in Arusha, Tanzania.

The EAC aims at widening and deepening co-operation among the partner states in, among others, political, economic and social fields for their mutual benefit..."

Mo Ibrahim:
An African businessman, founder of Celtel International, originally from Sudan. Although a successful businessman, Mo Ibrahim is better associated with the unique challenge he made to African heads of states through the Mo Ibrahim Foundation - www.moibrahimfoundation.org - with the quote "nothing, simply nothing, is more important for Africa than good governance". In 2006, he offered a prize "worth US$5 million dollars over 10 years and US$200,000 annually for life thereafter. The prize is open to former heads of state or government from sub-Saharan Africa who have left office in the last three years and demonstrated exemplary leadership".

The first Prize Committee was made up of Mr Kofi Annan - former Secretary General of the United Nations, Martti Ahtisaari - former UN Special Representative for Namibia and former President of Finland, Aïcha Bah Diallo - former Minister of Education in Guinea and Special Adviser to the Director-General of UNESCO,
Ngozi Okonjo-Iweala - former Finance Minister and Foreign Minister of Nigeria, Mary Robinson - former President of Ireland and former UN High Commissioner for Human Rights (and board member of the Foundation), Salim Ahmed Salim - former Prime Minister of Tanzania and former Secretary-General of the Organisation of African Unity (and board member of the Foundation).

The Committee's responsibility is to assess every sub-Saharan African leader who has left office in the last three years on their exercise of leadership, with the first winner announcement on 22nd October 2007.

Mergers and Acquisitions:
Often abbreviated to M & A, this is a form of growing a business by joining forces with (merger) or buying (acquisition) another. Expanding a business can either be organic or by M & A, also called acquisitive growth.

Organic growth is a gradual expansion by means of increasing sales, getting new customers or selling more to existing customers. However, sometimes companies decide that growth would better be served by roping in the capacity of another similar business, acquisitive growth. The advantage of an M & A, as opposed to organic growth, is that a ready-made business is brought in with its existing clients and reputation. The disadvantage might be in the failure of the two or more merging entities to blend their cultures, management systems, and the loss of jobs for some employees. This is because if two companies come together to form one, suddenly there are two sets of management, making at least one managing director, chief financial officer, etc redundant - as with other employees. Cultural incompatibility could lead to tension in the workplace, but then the diversity can be good for the new entity in enriching its scope of interpretation.

M & A can also be good for entrepreneurs, as it allows them to sell their businesses once they reach a certain level of profitability. In this way, investors can buy good assets (businesses) and entrepreneurs can create businesses, grow and then sell them for a profit in an M & A deal.

Kofi Annan:
Born 8 April 1938 in Kumasi - Ghana - this 2001 Nobel Prize Winner was the Secretary-General of the United Nations for two terms since January 1997, having been the Under Secretary-General for Peacekeeping before then in the organisation he joined in 1962.

He studied at the the University of Science and Technology in Kumasi, and completed his undergraduate work in economics at Macalester College in the United States in 1961. From 1961 to 1962, he undertook graduate studies in economics at the Institut universitaire des hautes études internationales in Geneva. Between 1971 and 1972, he was the Sloan Fellow at the Massachusetts Institute of Technology, receiving a Master of Science degree in management.

Fluent in English, French and several African languages, his career at the United Nations was not without controversy, although he earned the respect of many. At the same time, he was criticised for being propitiatory to the US sometimes at the expense. For example, his diplomatic and calm demeanour was lauded, but the was equally slammed for not doing enough during the genocide in Rwanda while in charge of peacekeeping at the United Nations.

Since retirement at the end of 2006, he served on many international bodies, including the Awards Committee for the Mo Ibrahim Foundation. See Mo Ibrahim.

derivatives:
This is a form of investment, we may call it secondary investments, whose value is derived from that of another - called an underlying asset. The underlying asset may be a share, a commodity like oil, agricultural product - or anything with intrinsic or inherent value.

When we buy a share in a company or a quantity of a commodity, we more or less have an idea what we are buying as we can attach value to it.

Because of the way shares are traded, sometimes experts take a view on what their prices will do in the future; i.e. whether the prices will go up or down. JUst like punters at a race-course, these experts, called derivatives traders, invest funds on their opinion materialising; they bet for instance that the share price of a certain company or commodity will go up or down - including betting on a specific price. They therefore can make money purely on the movement of the share or commodity without owning it. Derivatives are used by investors to protect their investments in the underlying asset and by speculators as well as arbitrageurs.

Investors use them to protect themselves from overexposure to one form of asset (called hedging). For example, if an investor buys a share in a company, they believe that the price of that share will go up. This means they believe that the company in which they have shares will do well. But, because there are no guarantees, and the opposite of their expectations may materialise instead, investors can legally bet on the share price going up (by buying the actual share) and bet on it going down at the same time (by buying a derivative that will only be worth anything if the share price goes down instead).

The rationale of derivatives trading is "what if my guess is wrong?" type of logic. In the end, only one scenario may materialise at a time; meaning the result is a zero-sum game, "you win some - you lose some", so in the end one never suffers a huge loss, but then they never win big either.

Speculators simply play the market by guessing that the others are wrong. When they see the majority of people (investors) buying a share because they believe it will gain value, rise in price, speculators bet on the opposite scenario, i.e. that it will lose value. It is more like gamblers. One bets money that they can throw a 7, and the other (speculator) bets the same amount of money that they will not throw a 7.

Derivatives trading is highly specialised and best left to specialists, who themselves can get it terribly wrong.

private equity:
Private form of investment in other people's company that involves an investor taking a disproportionately higher risk and responsibility in running the company they are invested in than normal, in their private capacity. Ordinarily, investors will buy a stake in a company and leave the managers to run it. Private equity investors, on the other hand, take a stake in a company and appoint a representative to assist in the running of the company, or participate in the activities of the board more actively than usual. Ordinarily, investors will be represented at shareholders' meetings, but private equity investors will attend more than just shareholders' meetings - which tend to take place four times a year under normal circumstances.

Private equity investors usually buy a stake in a company, hold on to it for a specific amount of time, with the intention of selling their share. The rationale for private equity investment is that some companies have potential to grow reasonably well, but they are not seen as such by the majority of investors.

If a private equity investor takes an interest in your business, be prepared to work with a partner out to protect their investment - hands on! At the end of their set time limit, they sell their stake at a higher price than what they bought it for, like with all other investments.

CPI:
Consumer price index - inflation at the level of the consumer, as calculated according to a set group of goods (called a basket) that are used or consumed by the average person in the area of measurement. The CPI is then measured on the basis of the sustained level of price increase in the goods as meaured.

It is measured, like the PPI, on a monthly basis, and any indication of an upward trend is taken to point to an increase in the interest rates.

Also see inflation

PPI:
Procucer price index - inflation at the level of the producer or as economists say, at the factory gate. The influence of PPI is mainly on the CPI. In the same way that the costs at the level of the wholesaler tend to be passed on to the consumer through the retailer, the costs at the level of the production of goods will be passed on to the retailer and eventually the consumer.

It is measured, like the CPI, on a monthly basis, and any indication of an upward trend is taken to point to an increase in the CPI, though this tends to happen a lot later than the rise in the producer prices.

Also see inflation.

Spoliation:
Tampering with, destroying, hiding or withholding evidence that is necessary or may be necessary for use in legal case. In business, this may involve destroying or failing to produce evidence in the form of documentation or whatever form that could be used in a case against the management of a company or any other legal person. Spoliation is an offence.

ICT:
Information and Communication Technology. This represents a sector, field of study, design, development, implementation, support or management of computer-based information systems - including software applications and hardware. It has become popular to broaden the term from Information Technology (IT) to explicitly include the field of electronic communication to emphasise the communication value of technology.

DVD:
A storage media used for computer storage. It is an optical disc usually used to store music, movies or large amounts of data. DVD stands for Digital Versatile Disc or Digital Video Disc. It is a larger version of a CD or compact disc which usually stores music or data upto 1 gigabytes

ADSL:
Asymmetric Digital Subscriber Line is a data communications technology that enables faster data transmission over copper telephone lines than a conventional voiceband modem can provide. It does this by utilizing frequencies that are not used by a voice telephone call

GSM:
Dates back to September 1987, started by world telephone companies. Global System for Mobile communications (GSM: originally from Groupe Spécial Mobile) is the most popular standard for mobile phones in the world. Promoted by an association called the GSM Association.

3G:
Third Generation Services that includes wide-area wireless voice telephony and broadband wireless data, all in a mobile environment. 3G is the third generation of mobile phone standards and technology, after 2G. It is based on the International Telecommunication Union (ITU) family of standards under the International Mobile Telecommunications programme

ISDN:
Integrated Services Digital Network. ISDN is better in quality and connectivity than old analogue telephone system but less than 3G. It is a circuit-switched telephone network system, designed to allow digital transmission of voice and data over ordinary telephone copper wires, resulting in better quality and higher data speeds than are available with analogue plain old telephone service or POTS. More broadly, ISDN is a set of protocols for establishing and breaking circuit-switched connections, and for advanced call features for the user. It was introduced in the late 1980s.

HSDPA:
High Speed Downlink Packet Access is the better and faster version of 3G. Also known as High Speed Downlink Protocol Access is a 3G mobile telephony communications protocol in the High Speed Packet Access family, which allows networks based on Universal Mobile Telecommunications System or UMTS to have higher data transfer speeds and capacity. Current HSDPA deployments support down-link speeds of 1.8, 3.6, 7.2 and 14.4 mega bytes per second, and can provide each customer with 30 gigabytes of data per month

Byte:
A byte is made out of 8 bits. In computer science a byte pronounced bait, is a unit of measurement of information storage. A 1000 bytes make a Kilobyte, 1000 kilobytes make a Megabyte whilst a 1000 megabytes make a Gigabyte with 1000 gigabytes making a Terabyte. A typical computer will have anything from 10 gigabytes of storage or 10 gigs to anthything like 250 gigabytes whilts a typical CD carries about 700 megabytes of data or music with a DVD starting at around 4.7 gigabytes.

Bluetooth:
Bluetooth is a new standard launched in May 1998 which utilises a short-range radio link to exchange information between enabled electronic devices, enabling users an effortless wireless data exchange. Bluetooth is an industrial specification for wireless personal area networks. it provides a way to connect and exchange information between devices such as mobile phones, laptops, PCs, printers, digital cameras, and video game consoles over a secure, globally unlicensed short-range radio frequency

Infrared:
Infrared or IR radiation is electromagnetic radiation of a wavelength longer than that of visible light, but shorter than that of radio waves. The name means below red from the Latin infra, below, red being the color of visible light with the longest wavelength. Infrared radiation has wavelengths between about 750 nm and 1 mm, spanning three orders of magnitude. The uses of infrared include military, such as target acquisition, surveillance, homing and tracking and non-military, such as thermal efficiency analysis, remote temperature sensing and short-ranged wireless communication between devices like a television set and a remote control.

SAT-3:
A submarine communications cable is a cable laid beneath the sea to carry telecommunications between countries. The first submarine communications cables carried telegraphy traffic. Subsequent generations of cables carried first telephony traffic, then data communications traffic. All modern cables use fibre optic technology to carry digital payloads, which are then used to carry telephone traffic as well as Internet and private data traffic. Today, submarine fibre optic cables have become the modern vessels for trade and communications between international markets and the African continent.

SAT3, WASC and SAFE is a submarine cable system which has been established which closely follows the route from Portugal, down the West Coast of Africa, around the Cape Town and finally landing in the East at India and Malaysia.

It is a historic Achievement made possible by the participation of 36 nations, the majority of the landings are in African states. Together they have fully funded the undersea cable system costing more than US600 million dollars.

EASSy:
The Eastern Africa Submarine Cable System (EASSy) is an initiative to connect countries of eastern Africa via a high bandwidth fibre optic cable system to the rest of the world. It is considered a milestone in the development of information infrastructure in the region.
EASSy is planned to run from Mtunzini in South Africa to Port Sudan in Sudan, with landing points in six countries, and connected to at least five landlocked countries – who will no longer have to rely on expensive satellite systems to carry voice and data services.
The project, funded by the World Bank and the Development Bank of Southern Africa, was initiated on January 2003, when a handful of companies investigated its feasibility.

TEAMs:
The East Africa Marine System is an undersea cable project headed by the Kenyan government to connect Kenya and East African states to the rest of the world via a fibre optic telecoms cable. See also Eassy, SAT-3, NBIN and SAFE

SAFE:
A submarine communications cable is a cable laid beneath the sea to carry telecommunications between countries. The first submarine communications cables carried telegraphy traffic. Subsequent generations of cables carried first telephony traffic, then data communications traffic. All modern cables use fibre optic technology to carry digital payloads, which are then used to carry telephone traffic as well as Internet and private data traffic. Today, submarine fibre optic cables have become the modern vessels for trade and communications between international markets and the African continent.

SAT3, WASC and SAFE is a submarine cable system which has been established which closely follows the route from Portugal, down the West Coast of Africa, around the Cape Town and finally landing in the East at India and Malaysia.

It is a historic Achievement made possible by the participation of 36 nations, the majority of the landings are in African states. Together they have fully funded the undersea cable system costing more than US600 million dollars.

NBIN:
Nepad Broadband Infrastructure Network. Formely known as East African Submarine Cable System or EASSy

2010:
The year in which for the first time an African country - in this case South Africa - got a chance to host the World Cup on behalf of the International Federation of Football Associations (FIFA). A lot of people expect plenty economic benefits to flow from this occasion, with the industries best positioned to benefit being construction, accomodation, travel and tourism.

MDG:
Millennium Development Goals (MDG). The targets set by a resolution of the United Nations called The Millennium Declaration. 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.

BEE:
Black Economic Empowerment, Act No 53 of 2003. The Act gives effect to South Africa’s national economic transformation campaign by empowering the Minister of Trade and Industry to publish regulations, industry or sector charters and Codes to advance BEE

Black Economic Empowerment:
Black Economic Empowerment, Act No 53 of 2003. The Act gives effect to South Africa’s national economic transformation campaign by empowering the Minister of Trade and Industry to publish regulations, industry or sector charters and Codes to advance BEE

bbBEE:
Broad-Based Black Economic Empowerment, Act No 53 of 2003. The Act gives effect to South Africa’s national economic transformation campaign by empowering the Minister of Trade and Industry to publish regulations, industry or sector charters and Codes to advance BEE

Economics:
Economics is the social science that studies the production, distribution, and consumption of goods and services. It is the branch of social science that deals with the production and distribution and consumption of goods and services and their management. The word 'economics' is from the Greek for (oikos: house) and íüìïò (nomos: custom or law), hence "rules of the house(hold)."

Business:
Any corporation, partnership, sole proprietorship, firm, franchise, association, organisation, holding company, joint stock company, receivership, business or real estate trust, or any other legal entity organised for profit or charitable purposes or a group working toward a financial purpose or gain. In economics, business is the social science of managing people to organize and maintain collective productivity toward accomplishing particular creative and productive goals, usually to generate profit.

Bulking:
The practice of combining bank accounts or funds under management in order to obtain better interest rates or returns on investment. Asset managers receive large sums of money from, say pension fund administrators who collect premiums from investors every month. The mandate of the pension fund would be to the asset manager: ‘get me the best return for my clients on this money that I am giving you’. Common sense suggests that if you deposit a small amount in the bank, you will get a small amount in interest than if you had a larger amount. But then, when asset managers find themselves with many ‘funds’ on behalf of pension fund administrators, they face several options. If they open as many accounts as these ‘funds’ they manage, they will get many small amounts for each of them in interest. The practice of bulking involves the lumping of all the funds into one mega-fund to generate extra interest, because the larger the amount of money that you deposit, the easier it is for you to negotiate better terms. There is nothing illegal about bulking, except that some large companies did not disclose to the different pension funds how much interest they earned, or worse even pocketed it. In South Africa, one prominent case was that of Alexander Forbes in 2006. Alexander Forbes ended up reaching a settlement of about R380 million with different retirement/pension funds. The fundamental problem is not with bulking, but with non-disclosure; the latter amounts to somebody who is ‘milking your cow’, which you place under their care, without your knowledge and without sharing the benefits of the milk with you – the owner

ITU:
International Telecommunications Union is the leading United Nations agency for information and communication technologies. As the global focal point for governments and the private sector, ITU's role in helping the world communicate spans 3 core sectors: radiocommunication, standardization and development. ITU also organizes TELECOM events and was the lead organizing agency of the World Summit on the Information Society.

ITU is based in Geneva, Switzerland, and its membership includes 191 Member States and more than 700 Sector Members and Associates

GAID:
Global Alliance for ICT and Development. An open multi-stakeholder platform backed by the United Nations that promotes effective use of ICT in activities aimed at achieving the internationally agreed development goals, including the Millennium Development Goals.

Linux:
Linux is a free open-source (of or relating to or being computer software for which the source code is freely available) operating system based on Unix. Linux was originally created by Linus Torvalds with the assistance of other developers. Strictly speaking, Linux is the kernel of a Unix-like operating system. it competes with Windows Operating System which is developed by Microsoft.

NEPAD:
New Partnership for Africa's Development. The collective initiative of African countries - African Union - to enable Africa to form partnerships with the rest of the world to drive its own economic prosperity. Central to the success of NEPAD, the founders agree, is the ability of African countries to hold one another accountable (peer-review mechanism), upholding the rule of law and democratic governance. Among the pioneers of NEPAD are Algeria's Abdelaziz Bouteflika, Nigeria's Olusegun Obasanjo, Senegal's Abdoulaye Wade and South Africa's Thabo Mbeki.

Eassy:
The Eastern Africa Submarine Cable System (EASSy) is an initiative to connect countries of eastern Africa via a high bandwidth fibre optic cable system to the rest of the world. It is considered a milestone in the development of information infrastructure in the region.
EASSy is planned to run from Mtunzini in South Africa to Port Sudan in Sudan, with landing points in six countries, and connected to at least five landlocked countries – who will no longer have to rely on expensive satellite systems to carry voice and data services.
The project, funded by the World Bank and the Development Bank of Southern Africa, was initiated on January 2003, when a handful of companies investigated its feasibility.

ROI:
Return on investment. See also Investment.

SEO:
In the online industry. SEO stands for search engine optimisation where websites are optimised to be searcheable via search engines like google, msn, yahoo, windows live etc.

SEM:
In the online industry. SEM stands for search engine marketing where websites are marketed on search engines like google, msn, yahoo, ask, windows live etc.

ROII:
Return on Internet Investment. Return on investment in an online business or websites

BPO:
Business process outsourcing is the contracting or outsourcing of a specific business process or task, such as call centre, to a third-party service provider. Usually, BPO is implemented by large companies as a cost-saving measure for processes that a company requires but does not depend upon to maintain its position in the marketplace. BPO is often divided into two categories: back office outsourcing, which includes internal business functions such as billing or procurement, and front office outsourcing, which includes customer-related services such as call centre or technical support.

BPO that is contracted outside a company's own country is sometimes called offshore outsourcing. This is common in countries like South Africa or India where offshore companies outsource their customer service processes.

FIFA:
The International Federation of Association Football or in French, Fédération Internationale de Football Association, commonly known by its acronym, FIFA, is the international governing body of association football. Its headquarters are in Zürich, Switzerland, and its current president is Joseph (Sepp) Blatter. FIFA is responsible for the organisation and governance of football's major international tournaments, most notably the FIFA World Cup, held since 1930.

FIFA has 208 member associations, which is 16 more than the United Nations.

OLPC:
The One Laptop per Child association is a Delaware, USA based, non-profit organization, created by faculty members of the Massachusetts Institute of Technology Media Laboratory, set up to oversee The Children's Machine project and the construction of the XO-1 "$100 laptop". Both the project and the organization were announced at the World Economic Forum in Davos, Switzerland in January 2005.

OLPC is currently funded by a number of sponsor organizations, including AMD, Brightstar Corporation, eBay, Google, Marvell, News Corporation, SES, Nortel Networks, Red Hat, and Intel Each company has donated two million dollars.

equity yield:
This is the return or growth generated by the equity portion of one's investment. the equity portion means the value of a shareholder's ownership interest in a company - less all the claims (such interest payable) and liabilities, but excluding taxes. Bearing in mind that an investment is made with the intention being to grow the value of the investment, equity yield represents that portion that the value of one's investment that resides in the company as part of its net asset value is able to generate over time; especially comparing it to what that investment could generate elsewhere.

COMESA:
The Common Market for East & Southern Africa.

This economic bloc was established in terms of a treaty signed in Kampala, Uganda, on 5 November 1993, and ratified a year later in Lilongwe, Malawi. Members include Angola, Burundi, Comoros, Democratic Republic of Congo, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seycelles, Sudan, Swaziland, Tanzania, Uganda, Zambia and Zimbabwe.

SKA:
The SKA or a Square Kilometre Array radio telescope is a set of thousands of antennae, spread over 3 000km, with half concentrated in a central region 5km across capable of transmitting tons of data via satellite

WiMAX:
WiMAx is the latest wireless broadband with a range of up to 80km, with a bandwith of up to 75bps. It is the successor to common Wi-Fi. It is a standards-based wireless technology that provides high-throughput broadband connections over long distances. It can be used for last mile broadband connections, Hotspots, cellular backhall and high-speed enterprise connectivity.

sub-prime lending:
The practice of lending money to people or businesses that do not deserve to borrow money, because they will probably not be in a position to keep up with their repayments.

Part of lending money is performing a risk assessment of the borrower, i.e. the one who borrows the money.

Risk assessment involves checking all the information about them to satisfy the bank or the lender, in advance, that they are in a position to repay the loan.

Sub-prime lending, especially in the US, the UK and Europe, meant lending to persons without proper credit risk assessment, or simply ignoring the clear finding that they would not be able to pay.

When the bulk of the aggregate money lent out to individuals and businesses forms part of sub-prime lending, the entire banking system is at risk of collapse - because, simply put, there is not enough money in the pockets of the borrowers to repay their loans. Since banks lend out money they take from depositors, with the promise that these depositors may withdraw it when they want or need to, this situation is not good for the confidence of the public in the banking system. We cannot have banks if those with money to deposit do not trust them enough to have it ready whenever they want to withdraw. The result? Nobody deposits money in the banks, and those with money deposited in the banks panic and withdraw just about everything, leaving the banks without enough money (liquidity) to carry out their business. Then shareholders who own shares in banks also panic - selling all or most of the shares they own. As you know, too much selling without buyers is not good for the markets, i.e. it creates a bear market.

The aggregate effect of the lack of confidence in the banking system is that the entire economy collapses, as banks drive the economy.

This is the reason why governments of the US, UK and Europe intervened to assist their banks - those affected by sub-prime lending - by lending them money or even buying some of the banks or cutting interest rates excessively to reduce the cost of loan-repayment and thus enable borrowers to pay back what they owe.

prime or prime minus or prime plus:
Prime lending rate - meaning the relatively favourable interest rate at which banks lend money to their 'good' clients.

Lending rates are linked to the perceived inability or ability of the borrower to repay the loan. The higher the risk that they will not be able to pay, the higher the lending rate. The lower the risk, the lower the interest rates.

Most 'good' clients often get prime lending rates when they take out a loan. The 'better' clients will get a loan at an interest rate lower than prime or 'prime minus...prime minus 0.5% or prime minus 1% or prime minus 2% or whatever 'discount' on the price of the loan the lender or bank deems appropriate.

Obviously, those clients 'worse' than the good clients will get an interest rate higher than prime, which is prime plus...prime plus 0.5% or prime plus 1% or prime plus 2% or whatever the additional penalty the lender or bank deems appropriate to impose on whoever they consider a bad repayment risk.

Although these rates are determined using credit scoring, clients may negotiate them or shop around - talk to more than one bank - before settling for a rate.