Getting the Eastern Cape Development Corporation back on track needed a definitive turn-around strategy, the organisation’s newly appointed chairperson Professor Wiseman Nkuhlu said.

Nkuhlu, who held his first board meeting last month, is well aware of the challenges that face him in running a parastatal tasked with turbo-charging economic growth in the province.

But notwithstanding the launch of some innovative projects, the parastatal has battled to get into gear since it was formed by the then Premier Makhenkesi Stofile in 1997.

It hit a particularly bad patch in 2004 when the entire ECDC board was sacked by the former MEC for Economic Affairs, André de Wet, who also suspended chief executive Mcebisi Jonas, chief financial officer John Cerff and executive manager of property and development Don Maclean.

Until Nkuhlu’s appointment, the parastatal had seen three chairpersons come and go in less than two years -former chief executive Kevin Wakeford resigned due to frustrations experienced in his position.

Wakeford cited the lack of skills and competencies within the organisation and the uncertainty and instability created due to acting managers and staff as major contributory factors for his resignation.

“My role is more than stabilising the organisation, it is turning the ECDC around so we can deliver to the people of the Eastern Cape,” Nkuhlu said.

One of the first challenges facing Nkuhlu is to make the organisation profitable again.

“The ECDC has assets worth more than R1 billion and net assets of around R700 million. But it has made huge operating losses when it should be earning income from its property investments and interest from loans. My goal is to stop the net outflow of cash from the organisation by March next year,” he said.

One fundamental reasons for its losses is that the ECDC only manages to rake in 60 percent of its rental income and loan repayments – when the acceptable level is above 95 percent.

Nkuhlu, a chartered accountant by profession, said banks rarely made debt provisions of more than two percent.

“With a 40 percent loan provision, how can you advise people on business if you can’t handle your own finances? We need to earn our right to advise,” he said.

Part of his plan is to instill the capacity and discipline in the employees to turn the assets into income by putting the right systems in place and to ensure that everyone keeps to tight time-frames.

“I also want to restore the authority of the chief executive and ensure that all the managers are empowered and that their roles are clarified.”

This is a step he has already taken with the acting chief executive, Aneel Radhakrishna, who was tasked to come up with a clear strategy and targets for dealing with poor rent collection.

He said in the past the ECDC board often interfered with the duties of the chief executive. It was now important for the CEO to feel that “he is in charge”.

On the employment of a permanent chief executive, Nkuhlu said a final round of interviews would be held on September 6 and he was confident an appointment would be made before the end of September.

“I am confident that we are going to turn it around. By 2008, I want to see a clean audit report. The ECDC’s audit report has been disqualified for many years. The property register was not up to date and the loan book wasn’t well managed.”

Talking about the future potential of the ECDC, Nkuhlu said its focus on SMEs would be maintained, but that he would like to develop a micro-loan service for micro enterprises in the rural areas.

“They have simpler needs and expecting them to come up with a thorough business plan is too cumbersome.

“Also, we should be supporting foreign direct investment. We must be competent with what we do and deal professionally with overseas clients to make the province attractive.”

He highlighted the potential of the province and initiatives such as the national biofuels projects.

“The challenge posed by the Eastern Cape is that it is one of the poorest provinces, but it has great potential. It has a wonderful climate and agricultural potential, especially in the forestry and timber industry.

“The potential also arises from the role it has always played in the automotive industry situated in East London and Port Elizabeth.

“Its large population is positive in that it creates a big market for consumer goods,” he said.

However, it was important to turn this potential into something tangible, he said.

“There are a number of issues that have to be addressed, like having efficient and effective public institutions. That’s why I accepted this position, because it’s got a big role to play in the province. If you get the ECDC to run effectively, it could play the same role the Development Bank and the Industrial Development Corporation play in the economy,” he said.

• Professor Wiseman Nkuhlu was born on February 5, 1944 in Cala.

He studied at the universities of Fort Hare and Cape Town and New York University where he completed a BCom, CTA and MBA. He served articles with Hoek Wiehahn and Cross and qualified as a Chartered Accountant (CA) in 1976, after which he became a partner in charge of the Mthatha office.

From 1976 to 1990, Nkuhlu combined his role in the auditing profession with lecturing at the University of Fort Hare and later at the University of Transkei. He served as Principal and Vice-Chancellor of the University of Transkei from 1987 to 1991.

He served as economic adviser to President Thabo Mbeki and as chief executive of the secretariat of the New Partnership for Africa’s Development from October 2000 to July 2005. He is currently the chairperson of Pan-African Capital Holdings (Pty) Ltd.