State-owned enterprises: The Parable of the Talents

Total disregard for governance and the basic enterprise principle of return on investment emerged from testimonies before the Zondo Commission, confirming the ANC approach to enterprises and corporate governance considers productivity, accountability and skills as immaterial. Ideological nepotism and cash-for-cadres dominated appointments and decisions. 

Both Government and the ruling party cannot submit a defence of “we were not aware…” about the dire state of Eskom, Transnet, the SAA or the SABC.  Warnings against the mismanagement of state monopolies and the stifling effect of State-owned enterprises (SOEs) on the economy had been voiced over and over again, also in parliamentary standing committees. There the ANC majority vote repeatedly treasured party and cadre loyalty higher than their oath to keep the executive accountable. 

The testimony of Barbara Hogan as well as the annual reports to Parliament by Transnet, Portnet, SAA, Eskom, Sefa and others reminded me of the parable of the talents as recorded in Matthew 25: 14 – 30. Continue reading “State-owned enterprises: The Parable of the Talents”

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:

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The Messenger (25 July 2018)

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

Government’s attempts to promote business formation as effective as a rain dance…

it would help more to combat crime effectively

Is the blind leading the blind when it comes to the promotion of black businesses? This question in my previous blog apparently ruffled a few feathers. Let us therefore compare the positive impact of Government strategies to stimulate business formation and the negative impact on business formation by Government’s failures in core governmental functions. Continue reading “Government’s attempts to promote business formation as effective as a rain dance…”

If monopolies are the problem, start dismantling the worst: the State-owned Enterprises

Rating agenciesWith Moody’s soon to announce their assessment of SA’s credit risk, Finance Minister Malusi Gigaba made it clear that a white minority was controlling the economy through a monopoly and that was now to change.  Gigaba, speaking mostly in isiZulu, said “The economy is controlled by a minority; they are a monopoly. There are a lot of companies owned by very few people and the services and products on offer enrich these few people.” (Gigaba: It is time to put us first ).

Addressing an ANC Youth League event in Pinetown, Gigaba remarked that there was an agreement in 1993 that white people would continue to have a say in the economy.  The ANC stayed committed to this, “but now has come a time for change. It is time to put us first.Continue reading “If monopolies are the problem, start dismantling the worst: the State-owned Enterprises”

With Gordhan out of the way Gigaba seems keen to embark on an anti-growth and anti-poor strategy

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Malusi Gigaba (GCIS)

One would expect Malusi Gigaba as new Minister of Finance to consider avoidance of further down-grades by rating agencies as his top priority. Policy confusion and instability coupled with growth unfriendly strategies already caused the Fitch and the Standard & Poor downgrades. However, Gigaba’s comments yesterday indicated that he is more concerned about growing black owned enterprises than about growing the economy or receiving value for public money. Continue reading “With Gordhan out of the way Gigaba seems keen to embark on an anti-growth and anti-poor strategy”