Will Cyril be remembered as Nongquase II ? The modern day killing of cattle…

Johannes Wessels
@johannesEOSA1

Just just now (and not “long, long ago!”) there was a man who ordered his people to shut their doors and refrain from going to their places of work. His name: Cyril Matemela Ramaphosa. He told the people of South Africa that there was a way to ensure that the reputedly voracious beast called corona virus would not create havoc in the land.

The Keiskamma Tapestry, Cattle-killing Panel, Detail 3. Copyright Robert Hofmeyr

All his people had to do was to follow the advice of Nongquase as recorded in writing by William Wellington Gqoba who, as teenager, had lived through the infamous cattle killings and the resulting famine amongst the Xhosa:

Shut yourselves in your huts… In order to survive, you are to use many doors to close each hut, fasten every door tightly, and abstain from witchcraft.”

William W Gqoba: The Cause of the Cattle Killing

Substitute the words “abstain from witchcraft” with the phrase “abstain from going out to work and buy only what we allow you to buy”, and one has the contemporary equivalent of a decision that had decimated the livelihoods of tens of thousands of the Xhosa in the mid 19th C with a spiralling death peak caused by the resulting famine.

This is how it is happening in real time now. Cyril called together the many-too-many chiefs that form his cabinet. They talked and they talked and they talked. And they consulted with themselves and they consulted among themselves and they consulted again for themselves.

Continue reading “Will Cyril be remembered as Nongquase II ? The modern day killing of cattle…”

Enterprises, unlike bears, don’t hibernate: lockdown will cause the death of firms and people

Johannes Wessels
@johannesEOSA1

Government’s decision for a stringent lockdown has put at least 100,000 formal enterprises – incorporated and sole proprietorships – on death row by effectively freezing the economy. Unlike bears, firms do not hibernate well: without customers and clients buying their goods and services, they starve and die.

Business relief measures by the government and the funds established by the Ruperts, Oppenheimers, Motsepes and others may enable some enterprises to pull through. But a substantial percentage of formal SMEs will not. Not with an economy that is likely to retract by between 6 and 10%.

Enterprises are already in a predicament and have run up more losses than profits since 2014. SARS data shows that the assessed losses exceed the assessed taxable income for the period 2014 to 2018 by R830 billion (Figure 1).

An economy already damaged by anti-growth policies has now been dealt a vicious blow. The damage is systemic and a systemic approach is required to restore a healthy business environment.

Figure 1: The pre-Covid 19 situation of SA firms was dire

The economy doesn’t resemble Eskom’s electricity supply. Load-shedding means no electricity during the power lockdown, but when the switch is thrown on again with the transmission lines conveying electrical current, the lights burn, the fridges cool, the stoves cook and TVs entertain just like before. 

Continue reading “Enterprises, unlike bears, don’t hibernate: lockdown will cause the death of firms and people”

Lockdown? Or is it perhaps meltdown?

Johannes Wessels
@johannesEOSA1

Halfway into a five-week lockdown it is appropriate to compile a kind of “balance sheet”. When the lockdown was announced, Pres Ramaphosa made it clear that protecting lives against Covid 19 was paramount: a position he reiterated when prolonging the lockdown.

For the ANC Government, all other considerations weigh less and may be sacrificed. Mutating from a supreme commander in military camouflage uniform rallying his troops to “kill the virus” to a pope like appearance during Easter sympathizing with the population for carrying the heavy cross, almost like Simon of Cyrene, Ramaphosa has been lauded all around as “bold” and “presidential”. The few voices that since the beginning have argued that severe restrictions that limit fundamental freedoms would fuel poverty and unemployment, were brushed aside as being both inhumane and wrong.

To date it is uncertain whether the lockdown, the wide application of Bacillus Calmette–Guérin vaccine in SA or any ther factor has contributed to the (still) low infection rate in South Africa. What is dead certain is that the economy (already in a critical condition prior to the appearance of Covid 19) has been rushed into ICU to a position close to the door where the dead are wheeled out to the morgue.

Read EOSA’s proposals on how Government can assist SMEs by cutting CIT and exempting those with a turnover below R2.5 million from VAT.

Government has, as yet, to indicate its estimates of the economic impact of the lockdown measures, e.g.:

  • the decline in VAT receipts;
  • the decline in CIT (and for sole proprietors, the decline in personal income tax);
  • the additional costs of demands on the UIF;
  • the additional costs of deploying the military and the police at the current levels;
  • the cost of measures to support the informal traders, small enterprises and other assistance measures to support businesses;
  • the support measures to assist businesses in the hospitality industry;
  • how these would impact on the budget deficit and what the implications are for government debt.
Continue reading “Lockdown? Or is it perhaps meltdown?”

The celebration of rampant incompetence

Johannes Wessels
@johannesEOSA1

As grotesque neon-light signboards shout their messages out in the darkness of night, the ANC’s signature of their quarter century of rule has been rife in evidence in the first weeks of 2020. No, not the good life of liberty that the movement had promised, but the embrace and celebration of rampant incompetence.

Nowhere was that more obvious than:

  • in the jubilation about matriculation results;
  • when senior well-decorated police officers didn’t know their right from their left at the funeral of Richard Maponya;
  • in both the presentation of and applause for the platitudes in Pres. Ramaphosa’s ‘January 8 speech’.

Matric results: better outcome than Bantu education?

Continue reading “The celebration of rampant incompetence”

30 years on: Is Ramaphosa preparing his version of FW’s “to-the-dustbin-with-ideology” speech?

Johannes Wessels
@johannesEOSA1

Thirty years ago (on New Year’s Eve 1989), FW de Klerk knew that the South Africa was on the verge of massive change. The combined debilitating effects of apartheid’s shackles on the economy (including sanctions) and the impossibility to continue with the disenfranchisement of the majority of the population, prompted him to prepare his watershed 2 February 1990 speech in which he effectively pulled the plug on apartheid.

Will the combined negative legacy of the transformational drag on the economy and the implosion of state-owned enterprises (SOEs) prompt Ramaphosa to discard the ANC’s ideological stance in 2020? 

Continue reading “30 years on: Is Ramaphosa preparing his version of FW’s “to-the-dustbin-with-ideology” speech?”

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”