Lock-down is international “worst practice” but Ramaphosa (and key business leaders) maintain it’s the solution

Day 132 after registering the first 100 Covid infections in SA made it clear how unsuccessful the lock-down has been: South Africa’s number of Covid infections/ 10 000 of the population despite the world’s harshest lock-down with a curfew, mandatory face masks and an alcohol ban passed that of a country that has never implemented lock-down, never made face masks mandatory and would have continued to buy South African wines were it not for the SA government that had banned the transport (and therefore export) of wine. (Figure 1)

Like that legendary village in Gaul ( home of Asterix and Obelix) held out against the might of Caesar’s Rome to maintain local culture, Sweden kept the constitutionally protected rights of its citizens intact (freedom to move, associate and work) whilst most of the world capitulated with lock-down measures before the might of fear brought about by flawed modelling of the Covid threat.

South Africa’s government early on sacrificed these rights, transforming its citizens to subjects, all “to ensure that the infection curve would be flattened to get ready for the Covid storm”. Figure 1 clearly shows how the curve was flattened, but today we know that it was not utilised to ensure Covid-ready hospitals with well-motivated staff serving sufficient beds in ICUs and care centres equipped with ventilators and required equipment.

The BBC had shown the world that the “flattening of the curve” was not used for that, at least not in the Eastern Cape.  The Minister of Health, Zweli Mkhize, however disputed the BBC findings, stating that, apart from the fact that the EC hospitals:

  • should follow medical waste protocols;
  • require more beds;
  • needed more nursing staff;
  • had to procure more ventilators, and
  • should get rid of blood on the floor and the rats,

the province was ready for the Covid crisis.

Easier to exterminate hospital rats than tender rats?

Mkhize made no mention that these problems were probably linked to the government’s continued feeding of the tender rats.

Quicker than what a minibus taxi can skip a traffic light, Andile Ramaphosa of Bosasa fame had convinced FNB to sponsor a R6 million contract to install Perspex shields and sanitise equipment in Gauteng taxis. He claims he is not personally benefiting from the contract awarded to SDI Force (an NGO).

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GDP shrinkage of 12%: It’s not the virus, but the lock-down, stupid!

Johannes Wessels (@johannesEOSA1) & Mike Schüssler (@mikeschussler)

At the end of the initial 3 weeks lock-down a GDP decline of about 5% was considered as quite a catastrophic outcome. Even at that level, it was considered worth the price since delaying the spread of the Covid 19 virus would give a window of opportunity for the health sector to get beds, ventilators and care protocols in place for the spike that would inevitably come.

The minister of trade and industry (dti), Ebrahim Patel, however dismissed the negative projections of economic shrinkage as mere “thumb-sucking”.

After prolonging the hard lock-down with just a gradual easing to level 4 to end May, the growing queues of the hungry waiting for food parcels, the increase in the claims from the unemployment insurance fund and the drastic shrinking of the state’s purse, would make a 5% decline in GDP a dream outcome.

The GDP figures for Q1 2020 will only be known end June. Data from other countries indicate that those whose governments had opted for a hard lock-down are in for excessive economic damage.

Change in GDP trend is the difference between growth in 2019 and 2020 1st quarters, implying that the Philippines that experienced a change of -6% went from 5.9% GDP growth in Q1 2019 to -0.1% in Q1 2020. This chart reveals the following:

  • Countries with a hard lock-down that kept only essential services and providers open, saw an average decline of 5,2% in GDP trend.
Continue reading “GDP shrinkage of 12%: It’s not the virus, but the lock-down, stupid!”

The City of Surreal Ramaphosa on the banks of the Rubicon

Johannes Wessels
@johannesEOSA1

Cyril Ramaphosa’s vision of “a first post-apartheid city with skyscrapers, schools, universities and factories” (if implemented) has all the potential of becoming a disastrous social engineering experiment wasting resources on a massive scale. Not because the idea of a new city is wrong per se, but simply because the president is ideologically wedded to state-led development, holding a very negative view of the role of the private sector.

Ramaphosa doesn’t consider the private sector as efficient or more effective than the public sector, despite the fact that State-owned enterprises are mismanaged, bankrupt and a drag on economic development with Denel and the SABC even struggling to meet salary commitments.

Peas of the same pod

The creation of such a city is, in the Ramaphosa framework, not a vision of dynamic economic growth, but an ideological blinkered perspective of how government can improve society. Ramaphosa and all the social engineers within the ANC are, in that sense, not far from the approach of Hendrik Verwoerd. The National Party was, just like the ANC, a force pursuing transformation through prescription and limitation of choices.

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Proletarian shopping at the Soweto Maul: Cele’s whistling in the graveyard doesn’t scare off the criminals

SA’s 2018 Crime statistics & the economy (1)

SA is increasingly deteriorating into a combination of the Wild West and a Mafia state with Government incapable of keeping crime in check. Minister Beki Cele admits “the ball was dropped” but remains adamant that “(w)e haven’t reached a state of lawlessness in South Africa and we won’t”.

The South African population begs to differ:  Crime pays… and quite handsomely as well.

Fred Mouton on crime stats

The returns on crime far exceeds returns on long-term investment in blue chip stocks.  South Africans’ trust in and reliance on the police is scarcer than icebergs in tropical oceans.  And inefficient policing doesn’t only kill the economy:  it kills justice as well.

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If you think a clean municipal audit is scarce, try to get a call answered quickly

Are we becoming a nation that celebrate losses? After each of the many Springbok losses ex Bok coach Allister Coetzee oversaw, he found “much positive to build on”. When reacting to the Auditor General’s scathing report about the financial management at local level, Zweli Mkhize, Minister of Cooperative Governance & Traditional Affairs and his deputy Andries Nel reminded me of Coetzee.

The Auditor General (AG) reported:

  • A 75% deterioration in in unauthorised expenditure to a level of R28.3 billion – a figure higher than the expected income from the increase in the VAT rate;
  • Team Failing Clean Audit Municipalities trumped team Clean Audit Municipalities by 224 – 33, a loss comparable to the All Black’s 57 – 0 trashing of the Boks, though damaging not only South Africans’ enthusiasm, but their financial well-being too;

Screen Shot 2018-06-07 at 8.54.36 AM

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SA’s fight against unemployment: The importance of pet food, popcorn & detergents in the quest for growth

Johannes Wessels
@johannesEOSA1

On a sunny autumn morning in Bloemfontein I visited a business hand-picked by Government as a National Gazelle: one of the firms Government believes has the potential for massive growth and substantial job creation to attack the three-headed dragon of inequality, unemployment and poverty.

Popcorn & Flat Bread

The National Gazelles Programme is financed (well, by tax-payers) through SEDA (Small Enterprise Development Agency) and the Department for Small Business Development (DSBD). In the first phase 40 firms were identified in “10 priority industry sectors aligned with the National Development Plan and SEDA’s SME strategy”. The recruitment of the next batch is underway. (In enterprise literature, a Gazelle is defined as a company that grows by at least 20% per annum for 4 successive years)

Having covered  the decline in the number of formal businesses and how company losses now exceed taxable company income , as well as Government’s failure to create a business-friendly environment , the focus is now on the positive steps Government has taken to promote private enterprise.

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