Ramaphorian air spray no longer conceals the stench of a decaying economy

Johannes Wessels
@johannesEOSA1

President Cyril Ramaphosa’s commitment to revitalise the economy reminds one almost of president Zuma’s commitment to combat corruption: spraying air freshener to divert attention from a rotting carcass.

Read instructions on the can for effective application…

The person who promised in his New Dawn manifesto a growth rate of 3% in 2018 through “an unrelenting focus on economic growth” has delivered after 18 months a growth rate of 1.3% in 2018 and negative growth up to date for 2019. Some people would say low growth is still growth, however economic growth below the population growth rate impoverishes the population.

He presides over an economy in worse shape than when he assumed power: one characterised by:

Continue reading “Ramaphorian air spray no longer conceals the stench of a decaying economy”

SA lost 83 000 companies in the financial & business sector in 10 years

Johannes Wessels@

@johannesEOSA1

The landscape of incorporated South Africa in the financial and business services sector has changed dramatically: in 2007 a total of 222 532 companies in this sector submitted tax returns, but SARS Company Income Tax (CIT) data show by 2016 this figure had shrunk to 139 664: a 37% decline.

The CIT data base records a decline by almost 83 000 incorporated firms.  What happened?

This sector includes banks, money lenders, short term insurance firms and independent brokers, investment advisors, business consulting firms as well as real estate services. Figure 1 shows how the number of firms were relatively stable from 2007 to 2010 before a rapid decline before stabilising again from 2014 onwards.

Continue reading “SA lost 83 000 companies in the financial & business sector in 10 years”

The Chairman’s Conversation: Triggering a Groot Trek of productive knowledge out of SA?

Johannes Wessels

@johannesEOSA1

Stark dividing lines on the economy and the future of the country were drawn during the Chairman’s Conversation when Johann Rupert of Richemont, Remgro & Reinet was interviewed by Given Mkhari of the MSG Afrika Group.  The Black Management Forum called for controlling the “levers of legislation to determine what happens with capital, opportunities and business prospects” (state control of the economy) with Rupert hinting that “it would be quite easy to lose interest: South Africa has one last chance…

On talk radio, news websites and social media reactions rolled in, many calling Rupert “racist”, “paternalistic” and even “an arrogant ignorant” whilst others concurred with his comments about the young chasing BMWs and immediate satisfaction,  rather than patiently building their businesses and wealth.

The event and the reactions thereto is far more than a storm in a tea cup and one that the whole business community should take note of, as well as every company and politician that had attended the recent Investment Summit. 

The contours of the Chairman’s Conversation, the few comments from the floor and the tsunami of social media condemnation reminded me of a period in world history that had changed and influenced (almost) everything since then. My sense is that both Rupert and the BMF reckon South Africa is at the brink of society-shaking change as well.  That change does not necessarily bode well for the future of South Africa…

Continue reading “The Chairman’s Conversation: Triggering a Groot Trek of productive knowledge out of SA?”

SheNenegans and zol clouds: Summits almost like old-age home talent concerts

Government has developed a fool proof strategy to divert (most) attention from its frenetic fumbling of the economy that they had successfully put on full-throttle reverse.

The Job Summit’s rehearsed pitches and agreements to create jobs (almost as if jobs can be manufactured like overalls), to minimise retrenchments and to buy local,  reminds one of the annual retirement village talent concert: nothing new, innovative or inspiring. Rather old hat. It solicited respectful applause, but thankfully Nhlanhla Nene (ably assisted by Julius Malema and by the grace of the Guptas) diverted attention from the dreary Summit.

One has to give it to the ANC:  just as the Job Summit was obscured by sheNenegans, the previous big building block – the Emergency Stimulus Package – was enveloped by a court verdict releasing thick aromatic clouds of “Personal stimulus by zol”.  That high successfully obscured the regurgitating of empty promises of yesterday’s infrastructure development plans.

Can Trevor Noah develop such a script? Continue reading “SheNenegans and zol clouds: Summits almost like old-age home talent concerts”

Economic freedom globally up but SA tumbles down

ECONOMIC FREEDOM in South Africa deteriorates rapidly. The country has tumbled 12 places and is now firmly embedded in the bottom half of the 162 countries and territories evaluated in the Economic Freedom of the World: 2018 Annual Report. This report by the Fraser Institute confirmed SA’s decline from position 82 to 94 due to anti-freedom policies and practices.

In 2003 SA almost made it into the most-free quartile ranking gaining position 45.  Now the country is a 3rd quartile fixture, being three consecutive years in the bottom half.

The Economic Freedom of the World Report  is the world’s premier measurement of economic freedom, evaluating and ranking countries in five areas: size of government, legal structure and security of property rights, access to sound money, freedom to trade internationally and regulation of credit, labour and business. (See full report).

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Turning ad hoc-decisions into “add havoc” decisions: Updated prospectus shows SA has much “emerging” to do…

If the Ramaphosa quest for pursuing economic growth and restoring full investment status for South Africa was packaged as a new venture in January it would have received substantial interest. In light of the tsunami of promises about FDI since then, it may be time to look at an updated “prospectus”.

Indicator: Economic growth is the highest priority

In his “New Deal” Ramaphosa promised to keep “an unrelenting focus on growth”. He stated: “We must be bold and determined. We should be targeting 3 percent GDP growth in 2018 rising to 5 percent growth by 2023.”

Prospectus update:

Screen Shot 2018-07-26 at 6.01.54 PM
The Messenger (25 July 2018)

Continue reading “Turning ad hoc-decisions into “add havoc” decisions: Updated prospectus shows SA has much “emerging” to do…”