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The Actuary The magazine of the Institute & Faculty of Actuaries

Wider fields: Leading the charge

The word sabbatical shares a root with Sabbath and hence connotes ‘one year in seven’ set aside for learning, growing and sharing.

In practice, having worked 21 years straight, our six months was perhaps more of a ‘demi-unvigintical’. But the concept was the same — throw yourself into a different idiom with the intention of both lending our skills and also improving them.

We headed off to Africa at the end of a particularly dour January. Our destination was firstly Namibia, and a four-month stint with Save the Rhino Trust (SRT). We then had two months in Zimbabwe with Dambari Wildlife Trust (DWT), which runs a broad conservation/education programme.

Being, as I am, a bespectacled, bald actuary more familiar with pension funds than pachyderms, it seemed to me highly likely that my beloved spouse (the 10-year director of Save the Rhino International) would have rather more to contribute to our host organisations than me. Indeed, the aspect of the trip that caused most nervousness was the prospect of working for, rather than with, my wife. In practice, the spousal division of labour fell fairly naturally into help with fundraising (my darling wife) and work on policy, strategy and procedure (the balding one).

My actuarial skills proved to be directly translatable into conservation only once: a nice little piece of population modelling to work out how a set of financial incentives directly linked to rhino-calving success might pan out over the next generation or two. The concept is deceptively simple — tell the local communities that surround a rhino reserve they can have a share — say, 50% — in any rhinos born within the conservancy. Payment will be in terms of investment in schools (but could just as well be a cash dividend).

The local communities now have a very strong incentive to see the rhinos alive, well and breeding rapidly. Poaching losses mean fewer calves, so creating a disincentive to poach. However, the devil’s in the detail and you rapidly begin to see that there are a number of different ways of allocating shares in rhinos. For example, you could just link payments to calf numbers (or specific individual calves), but then communities might benefit even while poaching of sub-adults or post-reproductive males continued unabated. So perhaps you could link payout to total population size, but what happens if overall population size drops? Do you take a school’s computer away again? There are lots of other variations. Finding something that’s fair and simple is not so easy.

So, I had lots of actuarial fun projecting different systems forward in time to see how they might pan out in practice — and how much donor funding would be needed to sustain the incentive, absent a deep and liquid market in rhino calves — allowing for different rates of poaching, calving and natural mortality. In the end I liked a ‘share of calves with hurdle’ model, the hurdle simply being that overall population growth had to be positive. This seemed to me to meet most needs and wasn’t too hard to explain.

Business on the ground
As I said, my actuarial skills were seldom called on directly, but more general business skills — well, this is more often where I was able to contribute something to the cause.

A good example of this is the Zimbabwe National Rhino Strategy. The current strategy dated from 1997. Since then:
• Mugabe’s ‘fast-track land reforms’ had sledge-hammered the ‘breadbasket of Africa’, as Zimbabwe was known, with land invaders taking over tracts of National Parks and private reserves for grazing and rampant game poaching.
• Pandering to ‘war vets’ had fuelled hyperinflation. ZW$1bn wouldn’t buy you a loaf of bread, assuming you could find one to buy. This wiped out all pension savings and has left countless pensioners dependent on hand-outs and food parcels.
• The country had become a pariah state with zero tourism revenues making life even harder for the incredible folk that hung on in there and tried to protect their hugely important black rhino population — which today remains a massive proportion of the world’s last few thousand such animals.

The two-year madness of Zimbabwean hyperinflation remains fascinating to me, as a practitioner in financial services.

I talked to many business people about what it was like. The inflation rate hit somewhere around 80 billion percent per month. It’s just staggering. I talked to a printer who took an order and shook hands on a deal. The client then said he’d just go over to the bank to pick the cash, but the deal had to be cancelled because they were re-pricing literally every 20 minutes.

In Bulawayo, the going rate for hard currency was referenced back to a group of nuns. No trade occurred without first phoning a nun to check the up-to-date dollar price. The rate reached around ZW$100bn for US$10, but that was the cash-in-hand rate. If you were trading US$10 for a cheque, you’d ask for around 300 times that amount, say ZW$30trn — because the maximum withdrawal from a bank was a mere ZW$5bn, and it would take you so long to withdraw your cash that you needed compensation. Talk about discount rates. These guys’ mental arithmetic with hedge-fund type numbers is incredible.

I would stress that, in just two years, the country has made an astonishing start on the road to recovery. All of that notwithstanding, the national rhino conservation strategy was long overdue a re-vamp.

Comparable conditions
So it was that ma belle femme and I ended up producing PowerPoint presentations, ‘facilitating’ breakout groups, minuting proceedings and, ultimately, drafting from scratch a new Zimbabwe Rhino Policy and Management Plan 2011-2016.

Do you know what, it’s really not unlike running any business, if you ignore the land-grabs, guns, politics, abysmal pay and unbelievable working conditions.

So, for example, the strategy has five limbs. These are as shown in Table 1, firstly in rhino language and secondly in my language.

Table 1

Now, I am being somewhat disingenuous here. The challenges faced by rhino people are immense. You can’t really compare running a business in the UK to dealing with all the issues, practical, legal, logistical, financial and political — but there is sufficient overlap at the strategic planning level that actually we were able to grasp the overall picture at a high level and had the experience and nous to be able to translate it into a workable plan.

I found my business skills in demand constantly during the six months’ sabbatical, specifically analysis, advocacy and drafting skills. For example, I translated a scientific impact assessment of the way in which tourism affects rhino behaviour into a plain-English ‘national protocol’ for Namibia. Essentially, the sub-species of uniquely desert-adapted rhinos that live in the northwest of Namibia are unfenced and free to roam. It’s a bleak landscape, in which water is at a premium. Well-meaning eco-tourists like me, who want to see the rhinos, are unwittingly chasing them away from precious water sources, potentially causing calves to be still-born and generally causing unseen harm. By developing a viewing protocol akin to the well-established gorilla-watching protocols of Uganda, everyone can emerge a winner, including — importantly — the local communities who derive income from running the tourist concessions. So long as the local community is on your side, you have half a chance in the poaching war (hence the schools-for-rhino programme noted above).

Other work included helping with budgeting issues, drafting a standard operating procedure for use of private firearms on duty and developing a volunteer programme for Dambari Wildlife Trust. Dambari is a fascinating organisation, which has a strong rhino component to its work but has wider aspirations, including a programme dedicated to human-wildlife conflict; specifically, the problem of carnivores such as cheetah, leopard, painted wild dogs and hyenas taking valuable livestock. Through education initiatives aimed at both children and adults and through rigorous science, they are helping both sides to survive — the people and the predators.

Final thoughts
Overall, what did I make of the sabbatical?

I believe we have been able to help and in some cases, significantly. It’s not that the people we’ve worked with in Namibia and in Zimbabwe couldn’t do what we did.

Of course not. It’s just that they are so stretched that a helping hand gave them the space to get on with the hard graft while we helped move the planning and paperwork along.

Our reward? It’s impossible to know where to start. We’ve had experiences and access that are granted to the very few. However, the real reward has been the trust, enduring friendships, warmth and knowledge that even balding, bespectacled pensions actuaries can sometimes make a wider contribution.

For more information on rhino conservation see
www.savetherhino.org or feel free to contact the author at kenneth.donaldson@capita.co.uk. With many thanks to Capita, for allowing me the time off.

Kenneth Donaldson

Kenneth Donaldson is director of actuarial services at Capita