Betting on the “good ANC guys”: Building sand castles in an hourglass

Johannes Wessels
@johannesEOSA1

The perception of numerous commentators and business leaders that South Africans should mobilise behind president Cyril Ramaphosa, Pravin Gordhan and Tito Mboweni to support the “good guys” in the ANC to ensure an economic recovery, is not only simplistic: it is utterly naive.

It is also not new. It is a rehash of the theme of the 1970s when the National Party was assessed as comprising good guys (the verligtes) and bad guys (the verkramptes) with many commentators arguing the case to support the verligtes. The person who eventually took the quantum leap with a definite break with apartheid (F W de Klerk) was not counted amongst the verligtes. He was seen as rather conservative and a natural choice to chair the Ministerial Council for White “Own Affairs”.

Verlig-verkramp focused primarily on how Nationalist MPs were oriented on apartheid. That analysis had no eyes for another fundamental division: The PW Botha approach with the security structures of the military and national intelligence as key players versus those who preferred a civil-oriented approach with parliament in the fulcrum. De Klerk belonged to the latter faction. Botha and the securocrats had commenced talks and interaction with both Nelson Mandela (then in Pollsmoor) and the ANC in exile, but De Klerk was largely uninformed and excluded from these discussions.

Playing whilst the resource base is shrinking…

Verlig-verkramp was an insufficient perspective to detect the person who would make the decisive break with apartheid.

Now, many commentators and business leaders still cling to the hope for action and clear policy direction, contrary to what is happening in reality. The hope that “Ramaphosa knows what is required” is based on viewing the ANC as comprising a “good ANC” and a “bad ANC” and that the good guys will restore the country to a golden growth path. Treasury’s document on economic policy is clung to as a lifebuoy.

The good guys are supposedly led by Ramaphosa, Mboweni, Pravin Gordhan and Gwede Mantashe, with the bad guys represented by Ace Magashule, Faith Muthambi, Supra Mahumapelo and others.

This cowboys-and-crooks-perspective is naïve. It also fails on at least four grounds. 

Continue reading “Betting on the “good ANC guys”: Building sand castles in an hourglass”

Treasury’s document: Small shift in common sense; no giant leap in ideology

Johannes Wessels
@johannesEOSA1

The public reaction to the most important Government document on economic policy since the ANC threw GEAR (Growth, Employment and Redistribution Policy) into reverse, namely Treasury’s “Economic transformation, inclusive growth, and competitiveness: Towards an Economic Strategy for South Africa”, will convince both Moody and potential investors that South Africa remains far removed from a stable investment destination.

Since its release end August, the Treasury document attracted both support and condemnation. For some it signals a first ray of the much-delayed New Dawn promised by Ramaphosa’s 2017 manifesto; for others, a total onslaught on worker’s rights and a selling out to the forces of unbridled capitalism. 

Much bolder than the elaborate National Development Plan (NDP) that received mere lip service during the Zuma-Ramaphosa era from 2014 – 2018, Treasury’s document bluntly concludes:   

The current state of the South African economy is unsustainable. Low economic growth entrenches poverty and inequality… Addressing our economic challenges requires an immediate focus on policies that will raise South Africa’s potential growth.”

Ideological drift sand

Continue reading “Treasury’s document: Small shift in common sense; no giant leap in ideology”

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”