Category Archives: ANC

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In a post-Zuma SA, sacrifice will be needed

In the wake of the Gupta leaks, polarisation in SA has increased significantly with a strange alliance of free-market (mostly DA), populist (mostly EFF) and disgruntled ANC voices (often repressed) on the one side with Zuma and Gupta defenders on the other side. The current discourse often ignores the elephant in the room, which is that with a sky high unemployment rate, faltering economic growth and poor education outcomes, serious changes are needed in SA, regardless of who is at the helm. If we do not aggressively address the inequality in our country, exacerbated by these factors, we are at risk of a populist uprising, which could set us back significantly. Sacrifice will be needed.

The Zuma and Gupta defenders faction is aggressively employing a strategy of shifting focus away from the accusations of corruption and weak delivery toward the ills of what they call White Monopoly Capital. On the other side, you find a strange union of populists, who want Zuma out of the way to deliver genuine redistribution, aided by nationalisation and seizure together with ardent supporters of the free market, many of whom are fed up with funding an often inefficient government and yearn for the days gone by.

Because of the polarised environment, these two factions often misunderstand each other and may be talking across purposes. Firstly, not everyone who is concerned about the influence and ownership of the white population on the SA economy are simply taking this stance as a way of defending Zuma (and the Guptas). Many of them have valid concerns, including the extreme inequality in our country (to a great extent along racial lines), the high unemployment and the low economic growth.

Secondly, not everyone who is calling for the ouster of Zuma and the removal of Gupta influence is a closet racist secretly yearning for the return of Apartheid. Many of this faction are genuinely concerned that the country is poorly run and recognise that for the long-term success of SA, we need better education outcomes, increased employment and higher economic growth.

What is plain to me though is that whatever happens to Zuma, whoever succeeds him and whoever wins the 2019 general election, serious issues need to be addressed in SA and it will take sacrifice from especially the wealthy in the country. Even if the DA manages to secure a victory (outright or through coalition) in 2019, they will have to continue with and implement new more aggressive redistribution policies in addition to dealing with the existing challenges of our country, including poor education outcomes, crime, healthcare, unemployment and weak economic growth. Even if the new government manages to enhance efficiency (reduce corruption) and achieves better bang for the taxpayer buck, this is unlikely to be enough. To fully address the growing challenges of our country, especially in the light of a rising debt load, pressure on exports and credit downgrades, whoever takes over will have to seriously look at the tax dispensation.

The aim of the new government should be to enhance its tax revenue through higher tax rates and possibly a wealth tax (which will put direct tax pressure on wealthy citizens and corporations), but in exchange to deliver improved services (which could reduce the indirect tax burden, including school fees, private health costs and security); to drive skills development to make the populace more employable; and to create a conducive environment for economic growth and job creation.

Any party who claims that they can create a stable and growing economy, which provides opportunities for all and reduces inequality, without raising taxes, may be fooling themselves. At the same time, any Zuma and Gupta opponent that thinks that their removal and replacement will usher in a golden age of growth and wealth creation without sacrifice, will be hugely disappointed.

We are facing some serious challenges. Our first phase of redistribution (from the mid-1990s to the late 2000s), which resulted in significantly improved service-delivery, the creation of a large and growing black middle class, the transfer of meaningful corporate ownership through BEE and the introduction of a basic (albeit insufficient) safety net through grants, occurred during a period of almost unprecedented asset appreciation, commodity price increases and economic growth.

These tailwinds are gone now. We cannot depend on rising asset prices to lead to almost all BEE transactions being successful and creating an effective transfer of wealth. We cannot depend on high commodity prices to buoy our exports and support our tax receipts. We cannot depend on low interest rates to allow us the freedom to drive lending-based growth.

We have to find a solution that will be effective in the world we live in. Part of this solution will necessitate a South African New Deal, where the haves pay more in tax, which is utilised to upskill the have-nots, to employ them through infrastructure programmes and to provide them with many more opportunities to increase their economic participation across the board.

At the same time, steps should be taken to kickstart economic growth, including liberalising labour markets, creating an attractive tax environment for selected globally competitive (or potentially competitive) industries, selective public private partnerships to explore growing industries (Eskom in the renewable energy sector stands out), less stringent immigration requirements to allow us to attract more skills and much increased government efficiency where we get much more value for the tax rands spent.

It is my view that the majority of privileged South Africans as well as the corporate sector would be more than willing to make the necessary sacrifices as long as they see the long-term benefits that could emerge and the risks that could be moderated. Those that do not, should seriously consider the alternative, which is rising populism, increasing economic disruption and growing polarisation.

Really successful companies are not scared to invest for future growth and sacrificing short-term earnings in exchange for a more certain stream of growing earnings going forward. The average well-off South African should have a similar view. Rather sacrifice income and consumption in the short-term, in exchange for a less uncertain and brighter future. What is of course vital is that whoever increases the burden on South Africans does so from a position of zero tolerance for corruption and at the same time, significantly increases the efficiency of how tax rands are spent. Those who are currently unwilling to sacrifice may soon change their minds if they see concrete delivery. That is at least my hope.

Do you think that the removal of Zuma and Gupta influence will automatically lead to a better life for you and your family? Are you prepared to sacrifice when asked by new leadership who promises improved delivery and a more secure future? Do you think you can have your cake and eat it or are you more realistic? I would love to hear your feedback.

In the mean time, keep your talking straight!

#GuptaLeaks #WhiteMonopolyCapital #NewDeal

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


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Time to organise, not divide

After the shock cabinet reshuffle by President Zuma early Friday morning, South Africans of all walks of life expressed outrage, called for action and started to organise. The land swell of opposition, including the usual suspects, but also members of the ANC top 6, axed ministers, struggle stalwarts and growing numbers of grassroots ANC members, reached its zenith at the memorial of fallen struggle hero, Ahmed Kathrada with an emotional and stinging speech by his widow Barbara Hogan. Since then, cracks have started to show with competing calls for marches, a serious backlash against the #BlackMonday hashtag and a perceived lack of action against Helen Zille by the DA. What should be clear to everyone is that the removal of the President Zuma cannot be achieved without significant support from ANC members and MPs either inside or outside of Parliament. For the latter, co-operation between disillusioned ANC members and the opposition is key. Unilateral and ill-conceived actions are guaranteed to dilute any such attempt. Now is the time to organise, not divide for all parties determined to reclaim the country.

Over the course of the weekend, there was no (maybe well-intentioned) campaign that has done more to dilute opposition to the unilateral actions of the President than the #BlackMonday hashtag. On Twitter, vocal opponents to the reshuffle who were earlier calling for the resignation of the President started to express outrage at the campaign, asking pertinent questions like where was black Monday after the Marikana massacre, during the #FeesMustFall campaign, in opposition to recent racist events and of course in opposition to Apartheid. The tag was poorly chosen in my opinion and not enough was done to organise a united front (e.g. SAFTU and Zwelenzima Vavi are embarking on another #OccupyTreasury march this morning).

The DA press conference on the future of Western Cape Premier Helen Zille also served to dilute the opposition to the President with many calling on it to clean its own house before speaking out against the President. However, in my opinion, there was no way that the DA press conference could have had a more severe outcome for the Western Cape Premier. She is facing a disciplinary hearing and the DA leader, Mmusi Maimane clearly stressed that it was for bringing the party into disrepute and not a freedom of speech issue. It would serve the DA well to expedite this process so that its undiluted energy could be focused on the crisis in our country.

In my opinion, the DA is making a strategic error in calling for a march to Luthuli House on Friday. There is nothing that will be more effective in encouraging the ANC to close ranks than a partisan initiative like this. This move smacks of political opportunism rather than a genuine desire to deal with the current crisis. Instead, the DA should reach out to other opposition parties, organisations and disgruntled ANC members to organise a united series of actions, including marches. They and the EFF will after all need all the support they can get to have any chance of success with a vote of no confidence in Parliament.

And this is where the focus should lie, in my opinion. All actions taken in the coming days and weeks should be aimed at encouraging enough ANC MPs to vote their conscience if and when the vote of no confidence is tabled in Parliament. Already, Pravin Gordhan has become a focal point for opposition, calling on South Africans to organise and stating that he will be guided by his conscience and “do the right thing” when a vote of no confidence arrives. If more MPs are to follow their conscience, it is imperative not to give them a reason to close ranks, but instead to include them and all opposition parties and organisations in upcoming actions. It is time to organise, not divide.

Are you wearing black today? Do you support unilateral actions by the DA and other parties/organisations? Would you prefer a unified set of actions, including marches? Do you believe ANC MPs will break ranks? Do you think a vote of no confidence will succeed this time? I would love to hear your feedback.

In the mean time, keep your talking straight!

#BlackMonday #CabinetReshuffle #PravinGordhan

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


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It is time for parties to shift left

It is easy to see the results from the last week’s local government elections in SA as purely a rebuke of the ruling ANC. In addition, we should see it as a cry for help from the poor and disenfranchised, a cry for better services, more opportunities and jobs. It is a cry for a better deal in SA. All political parties should take heed of this message. They should realise that none of them will achieve meaningful growth in their support without aggressively addressing the concerns of the poor in SA, both in messaging and delivery. It is time for those parties serious about continued growth to shift left.

The ANC was the biggest loser in the local government elections, seeing countrywide support declining from 62% in 2011 to 54%. It has lost outright control in four major Metros, namely Tshwane, Johannesburg, Nelson Mandela Bay and Ekurhuleni. In addition it will lose many other municipalities to the opposition or will have to govern through coalitions.

The ANC should embark on a period of self reflection to understand why voters in the large Metros did not come out to support it in these elections. Now is not the time for in-fighting. It is time for a leadership overhaul and aggressive focus on improved governance in the Metros and municipalities they retain as well as provinces and nationally. There is nothing like political competition to focus the mind and it is my hope that the increased threat of losing further support will invigorate the ANC to improve delivery. Because it retains the strongest power base in SA, national government and 8 out of 9 provinces, it is best positioned to improve the outcomes for the poor and most vulnerable in SA. It is likely that the ANC will increase its pro-poor focus utilising its significant power. We can only hope that it achieves this at least in part by improving efficiency.

The DA was the biggest winner in the local government elections. It is likely to take control of three major Metros in the form of Tshwane, Johannesburg and Nelson Mandela Bay, while it has the outside chance to form a ruling coalition in Ekurhuleni and being part of an EFF-led coalition in Rustenburg.

It would be easy enough for the DA to fall into the trap of gloating and self congratulation after these elections, but that would be a mistake. The people in many Metros and municipalities have given the DA an opportunity, but not a blank cheque. The party now faces a huge responsibility to deliver on its promises. If the party’s track record in other municipalities is anything to go by, it should take a very technocratic approach to ruling new regions, including attracting more skills, identifying inefficiencies and aiming for clean audits.

It is hoped that the DA will be able to achieve cost savings. They key is how it will apply these cost savings and how it will deal with the existing deployment of resources. It is my view that all savings achieved should be employed to enhance the conditions and prospects of the poor and disenfranchised. Poor service delivery should be addressed with the utmost urgency, followed by developmental spending in the poorest of areas. Local infrastructural spend should be encouraged, with a focus on creating employment.

However, I would go even further than utilising savings to rebalance the budget towards the poor. There is an important case to be made for reducing spending on affluent areas in lieu of poor areas: 1) it is morally the right thing to do, considering the inequalities of the past; 2) rising unemployment, stubborn inequality and low economic growth is creating a ticking time bomb for SA that cannot be ignored; 3) the development of poor areas and creating opportunities for the disadvantaged is important not just for stability, but to encourage long-term growth; and 4) the only way for the DA to defend and grow its support is to deliver to the constituency that (at the margin) put it in power.

If the DA does not shift left and illustrate a clear pro-poor focus, its gains during the recent elections could easily be reversed. The next election could see a much higher turn-out in poor areas with these votes going to the ANC or the EFF. To cement its gains, this constituency has to see the benefits of DA rule.

The EFF garnered less support in the recent elections than many analysts, including myself, expected. It received 8% of the national vote and did not obtain an outright majority in any municipality. However, it has created a very strong base from which to grow, it is in a position to determine who will rule in major Metros and it has the opportunity to be involved in the governing process, promoting its own policies.

The EFF is already a left-leaning party with a pro-poor focus. Its challenge now is to turn its policies into concrete delivery in the municipalities where it is part of the coalition. It has to choose its partners wisely and it has to be realistic in its demands. It has not garnered enough support to drive revolutionary changes in the way budgets are allocated, but it is in a strong position to ensure that a strong and sustained shift left starts occurring where it is involved.

In my opinion, the EFF can have a bigger impact in coalitions with the DA than with the ANC. In such coalitions, the EFF would be a clear and unambiguous voice for the poor and if successes are achieved, it may see its support growing over time. In coalitions with the ANC, it may face a number of problems: 1) the elimination of inefficiencies and delivery may not be as strong (if ANC track record is anything to go by); 2) it would not stand out as clearly as a pro-poor left-leaning voice of the poor as in a DA coalition; and 3) it faces more risk of being co-opted by the ANC and that some of its support is reabsorbed by the ANC.

SA is facing numerous challenges, including rampant unemployment, stubborn inequality, low economic growth, poor education outcomes and inefficiency (including corruption). The ANC, especially under its current leadership has not effectively addressed these concerns and it has lost support as a result. The uncertainty caused by lack of delivery has led to the rise of opposition parties, but it has occurred in a very negative political environment and a bruising election campaign. It is my hope that the era of coalition politics in SA will offer the opportunity for more constructive engagement between political parties. It is time to unite and address our challenges or face a populist uprising over time.

I continue to promote a New Deal in SA, with an aggressive focus on unemployment and education. Even if it leads to economic pain in the short-term, we should make a definitive decision to refocus our budget on these areas. We absolutely have to create an inclusive economy and improved education outcomes so that we can look back a decade from now at today being the turning point in the SA story.

In addition, I stand by my view that we need a Minister of Employment who has the necessary power and the ultimate responsibility for increasing employment. This minister must stand or fall based on progress here, this is where the buck should stop. In our current cabinet as well as in a DA shadow cabinet, the responsibility for dealing with unemployment is decentralised. This has not worked and is unlikely to work in the future. The role must be centralised, we need a champion and we need delivery.

 

How do you feel following the local government elections? Are you encouraged or disappointed? How do you feel about political competition and the rise of coalition politics? Do you believe that we should and will have an increased pro-poor agenda going forward? Do you think that our parties will shift left after the election? I would love to hear your feedback.

In the mean time, keep your talking straight!

#LGE2016 #NewDeal #MinisterOfEmployment #TshwaneCoalition #JHBCoalition

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


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When will we cross the Rubicon?

On the evening of 15 August 1985, PW Botha took the stage in Durban to open the National Party Natal Congress. Countrywide this was a much anticipated speech and for weeks there had been speculation that it could change the direction of SA. There was cautious optimism that the ANC could be unbanned, that Nelson Mandela could be released and that SA would cross its own Rubicon. In the end, Botha completely deviated from his original speech and delivered what became known as the Rubicon Speech, which was more of the same fear-mongering that South Africans had gotten used to.

In response to the speech, the rand collapsed by 35%, foreign exchange markets and the stockmarket was closed for a week to try and reschedule international debt and SA entered its darkest hour, which lasted until 1990. From shortly before the Rubicon Speech until 1990, SA existed under an almost constant State of Emergency and the country was engulfed in violence. It was only after the Rubicon Speech that international sanctions and disinvestment programmes started reaching critical mass, leading to huge outflows of foreign capital, a depreciating currency and weak economic growth.

By 1990 the Rubicon was finally crossed, but not by PW Botha. He missed his opportunity and it took almost 5 years of violence, death, disruption to education, economic strife and national polarisation before the Nationalists took the inevitable step.

On 31 March 2016, Jacob Zuma had a Rubicon moment of his own. Pressure against President Zuma had been building for years, starting even before his appointment when he was embroiled in legal battles. However, he managed to consolidate his position of power despite concerns surrounding the Guptas, Nkandla and strategic deployments. Everything changed, in my opinion, on 14 December 2015 when he backtracked on his appointment on David van Rooyen as Minister of Finance. From that moment on, the forces against the President gained momentum with Guptagate and the Constitutional Court judgement last week adding fuel to the fire. By the end of last week it had become clear to all but a few (including maybe himself) that the tide had turned convincingly against his presidency and that his sustained tenure had become untenable.

During his speech in reaction to the Constitutional Court judgement, the president had the opportunity to act in the interest of the ANC and the country and to fall on his sword. Instead of crossing the Rubicon, the President opted to leave the country in limbo and to delay the ultimate outcome. He has now forced the ANC to embark on a long and painful process that is likely to result in his ultimate removal, whether at the 2017 Elective Conference or at an earlier convened conference (the latter being more likely, in my opinion). We can only hope that unlike the decision by PW Botha in 1985 not to cross the Rubicon, that Zuma’s decision will result in less extreme and less prolonged damage to the ANC politically and to the country’s economy and societal fabric.

It is clear to me from the ANC Secretary General’s speech on 31 March 2016 that the rallying behind the President is a temporary measure to promote unity in the ANC in the run-up to the municipal elections. At the same time, the ANC is likely to continue with its own internal processes, including the Gupta investigation and consultation with its branches, which may result in penal steps against the President. These processes are likely to be concluded only after the municipal elections, the results of which may add even further to pressure to remove him.

Opposition parties in SA are gaining substantial political capital from the scandals surrounding the President and this is likely to result in meaningful gains at the polls. The ANC is at risk of losing the major metros of Johannesburg, Nelson Mandela Bay Metropole and Tshwane. It is my opinion that such losses will remove any doubt within the ruling party that a realignment is required to avoid substantial losses in the 2019 general election. An early elective conference, resulting in the replacement of the President will provide the ANC with a two-year period to arrest the decline in its support and successfully defend its majority in the general election.

It is my opinion that the ANC’s room for manoeuvre will be severely restricted over coming months through opposition gains at the polls and opposition actions in Parliament, the courts and in the streets. I believe that we will cross the Rubicon later in 2016 or early-2017 at the latest. It is simply a matter of time.

What happens after the President is replaced will be key to the long-term success of the country. In my opinion, it is imperative that the new president leads the charge in SA for a New Deal, with buy-in from all the major political parties. We should make a definitive decision to refocus our budget to deal with the challenges of unemployment and education, even if this leads to economic pain in the short-term. In response to such a New Deal and the announcement of concrete steps to deliver it, opposition parties and ordinary South Africans should give government the support and the time to deliver by calling for a cessation to extra-Parliamentary actions. We need more South Africans in the workplace and fewer protesting on the streets and campuses. We absolutely have to create an inclusive economy and improved education outcomes so that we can look back a decade from now at today being the turning point in the SA story.

 

Do you think that President Zuma should resign or be removed from office? Do you believe that the ANC will lose meaningful support in the municipal elections? Do you expect that ANC internal processes will result in the President’s removal? Do you think President Zuma will survive in his position until the 2017 ANC Elective Conference? When do you think we will cross the Rubicon? I would love to hear your opinions.

In the mean time, keep your talking straight!

 

#Rubicon #ZumaRubicon #NewDeal

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man

Photo by GovernmentZA


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We need a New Deal in SA

South Africa is facing a national crisis of unprecedented proportions if we do not address unemployment, poverty and inequality with the utmost haste. Failure to do so could result in a populist uprising in this country, which could set us back by decades. Instead of political infighting, we need to stand together and offer the disenfranchised in our country a new deal. Unemployment and quality education must become our top priorities, even if this means we have to make sacrifices. Now is the time to act. We cannot afford to wait any longer.

In the 1990s when the ANC came to power in SA, two main deals were struck. The first was between the ANC alliance and the National Party (NP) to allow for the peaceful transition of power. The second was the less talked about deal between the ANC alliance and the private sector in SA. Although never explicitly laid out, this deal implied that that ANC would step away from some of its core Freedom Charter principles such as that “The People Shall Share in the Country’s Wealth” and “the Land Shall be shared Among Those Who Work it” and the private sector would be supportive of the ANC’s aims to transform the country from its old Apartheid state to one where there was a more equitable distribution of wealth and opportunities.

As a result, the ANC that took power in 1994 was market-friendly, did not call for the nationalisation of mines and banks or the wholesale redistribution of land. Its approach was one of fiscal responsibility that satisfied the private sector, rating agencies and foreign powers. At the same time, it embarked on a number of projects to transform society, including the transformation of the public sector, the roll-out of water and electricity supply, the building of houses, the broadening of education opportunities and the provision of social security grants. The ANC government achieved a great deal of success in these projects, which I highlighted in earlier research.

On the flipside, the private sector (especially big-business) supported the Government’s policies and were active participants in black economic empowerment and employment equity. Also here, meaningful success was achieved, especially over the course of the 2000s.

During the 1990s the supporters of the ANC as well as their partners in the tripartite alliance were willing to accept the deals that it made with the NP and big business because there was an implicit assumption that the new government would adopt such policies that would improve their plight over time. The problem facing the ANC 20 years later is that 1) it has only partly delivered on its implicit promises to it 1990s constituency; and 2) there is currently a large constituency (the millennials) who were not party to the original deal.

Although much has been delivered insofar as access to housing, utilities and education, the main laggard has been employment. The current unemployment rate based on the expanded definition is c.34% and is skewed towards the youth in the country. It is almost impossible to address the issues of poverty and inequality in our country in an economically sustainable way in an environment where unemployment is so rife. These issues can be addressed through redistribution, but the positive impact for the most vulnerable may be short-lived and cannot be achieved without wreaking havoc with the economy and the tax base. Increasingly the ANC constituency and its partners in the tripartite alliance are posing questions to the ruling party about the lack of delivery on the original deal. They are becoming impatient, they are increasingly looking for a new deal and are willing to look further than the ruling party for someone to deliver this deal to them.

The millenials are most impacted by the high unemployment and in addition, they suffer from poor education outcomes and the high cost of tertiary education. These young people were not party to the original deal and due to the lack of delivery on education and employment feel hard done by. They are increasingly demanding a deal of their own. The #fallist movements that are active on campuses all over our country are the tip of this spear. They are tired of being placated by the incumbents and are intent on agitating and supporting alternatives until they are heard. They will remain restless until they are satisfactorily included in a new deal.

Before the break-away of the EFF from the ruling party, the ANC Youth League could act as a lightning rod for the disillusioned youth and the ANC could placate them and their wider constituency using social grants and other Government programmes. This is not the case anymore. The EFF has become the first effective, undiluted voice in SA for the poor, young and unemployed. The EFF’s policies are clear and are borne from the areas of the Freedom Charter that the ANC stepped away from during the 1990s deals. Front and centre is the nationalisation of mines and banks; the redistribution of land; and free education. These policies are not watered down and they speak directly to the disenfranchised in our country. The EFF’s potential constituency is substantial, including the 34% unemployed, the poor, the youth and urban intellectuals.

Young, angry unemployed South Africans do not care about the state of the economy, the health of the tax base, the strength of the rand, the opinions of the private sector, sovereign credit ratings or how SA is viewed by foreign countries. They care about their own (often) miserable lives. Why would they not vote for a party that will take from the rich and give to the poor? Even if it damages the long-term prospects of the country, it will improve their plight in the short-term. This situation is made even more desperate by the fact that for many of the disenfranchised, there does not seem to be a viable alternative. The track record of the incumbents on employment, education outcomes and equality is poor in their opinions and they do not see light at the end of the tunnel. Without hope, why would they not be willing to embrace the alternative?

It is vital that the disillusioned block in SA is given a new deal to avoid them embracing political alternatives that could be damaging to the future of this country. The time has passed for promises. The time has passed for placating. The time has passed for short-term fixes. The New Deal in 1930s USA involved aggressive steps in job-creation and infrastructural build. It pulled the country out of the Great Depression and created the foundation for a decades-long economic boom and the creation of a vibrant middle class. We do not need to emulate what the USA did in the 1930s, but we should draw inspiration from this.

Unemployment should be the number one priority in SA, followed by education and we should be redirecting our efforts to solve these challenges quickly and effectively. It is unacceptable that we have several portfolios within our cabinet that are responsible for employment, none of which carry the ultimate responsibility or have the necessary power to aggressively change the direction we are moving in. Regardless of which political party is ruling our country, we need a Minister of Employment who is the most senior cabinet member (after the president), who has the power to set policy and redirect budgets and carries the ultimate responsibility for success or failure.

Even though we are in difficult economic times at the moment, we should make a definitive decision to refocus our budget to deal with the challenges of unemployment and education. Even if this leads to economic pain in the short-term, even if it leads to credit downgrades, even if it means we all have to tighten our belts, we cannot afford not to make this investment in the future. We absolutely have to create an inclusive economy and improved education outcomes so that we can look back a decade from now at today being the turning point in the SA story.

If we do not do this, if the business friendly ANC and DA do not join hands to lead us to this future, we are at risk of a populist uprising in SA. We are at risk that populist parties such as the EFF will force redistributive policies down our throats, whether it be at the ballot box or in the streets. Now is the time to give the disenfranchised in SA credible hope. If we expect them to be patient, they have to see a clear path to improved outcomes for them. More of the same will not cut it.

The 2016 municipal elections will offer the first opportunity in more than a decade for the ANC to actively involve opposition parties in the business of governance. There is likely to be no other option when they fail to win majorities in major municipalities. It is time for the ANC to change its direction, it is time to strengthen its leadership and with the buy-in of the DA (and maybe the EFF) to embark on a dramatic and aggressive new deal.

To the ANC I say, stop focusing so much on discrediting the DA and seeing the EFF as a naughty child. Realise that the EFF is a major risk (and rightly so) and that the DA can be an ally in improving governance. However, it remains up to you as the majority party and the party of liberation to refocus our attention on growing employment, creating an inclusive economy and improving education outcomes for all.

To the DA I say, by all means continue the fight against poor governance, but realise that it will become increasingly difficult for you to govern if the serious challenges facing SA are not addressed. Try and be less adversarial towards the ANC because you may have to work together and in the end, your policies are not that different.

To the EFF I say, continue pushing. You are increasingly the voice of the poor majority in SA. You have to ensure that the ruling party implements policies that will improve the plight of the disenfranchised and if they do not, you must defeat them at the ballot box. However, I ask you that if the ruling party is willing to put a new deal on the table, that you will be willing to focus your efforts on the ballot box and avoid being a disruptive influence in the extra-political sphere.

In conclusion, our challenges in SA are monumental and must be faced head-on. We need a new deal and we need co-operation amongst political parties to implement this. If such a deal is done, we will need patience from our citizens, whether it is because they have to tighten their belts or whether they have to wait longer for an improved outcome. And we need a supportive private sector. You have had a good run for the past 20 years, but where we are now is not sustainable. Be willing to sacrifice short-term profit in exchange for a higher price earnings multiple (PE). We need to lift the valuation of SA.

 

Do you think our country in its current format is sustainable? Are we at risk of a populist uprising? Would you support a new deal if it will drive employment growth and a more inclusive economy? Would you be willing to sacrifice today if it means a much better future? I would love to hear your opinions.

In the mean time, keep your talking straight!

 

#Populism #Unemployment #NewDeal #MinisterOfEmployment

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


  • 0

Renewed focus on corruption

Maybe it’s electioneering, maybe it’s a New Year’s resolution or maybe I am being optimistic, but I am noticing a renewed focus on corruption in SA over the year to date. Whatever the reason, may it continue and build even more momentum. Unless actively countered, corruption will rear its ugly head, whether in politics, sport or business. Corruption does not care about income level, political affiliation, profession, race or religion. All that corruption cares about is opportunity, lack of transparency and lack of repercussions.

I would like to reiterate Robert Klitgaard’s corruption formula (which I discussed in a previous blog): corruption (C) = monopoly (M) + discretion (D) – accountability (A). The first term means that in a country or institution where the leadership has a great deal of power, either because it is a dictatorship (no elections being held) or where opposition is weak, corruption is likely to be much greater than in a democratic or free country or institution. The second term means that corruption is more likely in a country or institution where there is limited transparency of processes, where processes are not clearly defined and where there is limited oversight. The third term means that in an environment where corruption goes unpunished or where punishment is light, corruption is much more likely to be prevalent. What I take from this equation is that, especially in large institutions controlling large amounts of money, corruption is the most likely outcome, unless it is actively countered.

We have been speaking about it for a long time in SA, but there does seem to be a renewed focus on corruption in 2016 so far. Not just are opposing political parties going out of their way to identify corruption (or perceived corruption), institutions (including political parties) are speaking out about corruption in their own ranks. There have been numerous examples during this year so far.

According to the Sunday Times, Cosatu and SACP leaders “went public with their growing irritation at the influence the Guptas are said to have” at “the ANC’s NEC lekgotla”, while the EFF called for a “Gupta-linked” minister to be removed from parliament. It will be interesting to see whether the concerns about the Guptas gains momentum.

The DA raised concerns about a letter by Beaufort West mayor, Truman Prince, in which he discussed upcoming tenders and his desire “for these companies to inject funds into our election campaign process”. The ANC in the Western Cape was quick to respond, condemning Prince’s “lapse in judgement” and his “misguided attempts to raise funds” for the party. Whether further steps will be taken against Prince and whether he will be named as mayoral candidate for Beaufort West is still to be seen.

During last week, Cosatu wrote an open letter to Cape Town mayor, Patricia de Lille and Public Protector, Thuli Madonsela about alleged “nepotistic practices” relating to the employment of two individuals in the Provincial Government and the City administration. The DA has yet to respond to this letter publicly.

The EFF has recently stated that it is “ready to take President Zuma head-on again during the opening of Parliament”. In an interview this weekend, EFF president, Julius Malema, said “Zuma will have to explain why he fired minister Nhlanhla Nene before addressing the nation”. The state of the nation address occurs two days after the Constitutional Court hearing which the EFF brought to compel President Zuma “to pay back the money” relating to Nkandla.

Following allegations of “financial mismanagement” against SARU CEO, Jurie Roux, the DA’s shadow minister of sports and recreation called for him to be suspended. SARU has not yet announced any actions against Roux, but have denied any knowledge of “an inquiry into his employment at Stellenbosch” during his appointment process.

Last week Cricket SA imposed a 20-year ban on former Proteas cricketer Gulam Bodi who was charged with “contriving to fix, or otherwise improperly influence aspects of the 2015 Ram Slam T20 tournament”. They stated that “Our attitude to corruption will always be one of zero tolerance”.

On top of all these developments, there was also some good news last week with SA moving from 67th to 61st place on Transparency International’s Corruption Perceptions Index (CPI) in 2015 (out of 168 countries). According to Corruption Watch, “The opinion makers surveyed for the CPI see evidence that key pockets of government are deeply concerned about corruption” and that this was “particularly true of important opinion shapers such as National Treasury”. However, it is not all good news, with 83% of South African surveyed by the Global Corruption Barometer (GCB) believing that corruption was increasing. According to Corruption Watch, “Their perceptions are equally valid. The good work of those serious about combating corruption is overshadowed by those who continue to behave with impunity.” It will be interesting to see what steps the reappointed Minister of Finance, Pravin Gordhan, will take to combat corruption. In my opinion, he is in a very strong position to take positive steps.

We certainly have too much corruption in SA, which reduces the efficiency of our institutions, affects our ability to achieve targeted outcomes and negatively impacts the perception of the average South African. However, corruption remains top of mind and there is a good chance that the situation will improve as the year progresses. There is nothing like elections to focus the minds of politicians on looking for corruption amongst their competitors, but also t0 keep their own house in order. In my opinion, we are heading towards the most closely fought municipal election in SA since the democratic dispensation. May this encourage our ruling party and opposition movements to do just that, to target corruption. And once the elections are a thing of the past, may we retain some of that focus going forward.

 

Do you see an increased focus on corruption in SA? Do you think more is being done about it than before? Do you think the elections have something to do with this? Do you think that increased political competition will lead to reduced corruption? I would love to hear your feedback.

 

In the mean time, keep your talking straight!

 

#Corruption #MyHandsAreClean

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man


  • 0

EFF the main winner from the Racism debate

Racism is unacceptable and needs to be addressed in our country to promote healing. For me, this goes without saying. Instead of focusing on the racism debate itself, this piece considers the potential winners and losers to emerge from the renewed focus on racism in SA. The main losers will be people who are stupid enough to continue with racist comments – they will be shut down, lose their jobs, lose their clients. In the short-term, the poor and unemployed could be unintended losers as attention is diverted from addressing their plight through better policies, improved delivery and reduced inefficiency (including corruption). In my view, the main winners from the debate are likely to be the EFF who are the only party that can aggressively address the shortcomings of Government with regard to poverty and unemployment without being labelled racists.

Since a real estate agent in Durban named Penny Sparrow ignited the racism debate in SA with a vile Facebook posting about people enjoying beaches on New Year’s Day, a number of heads have rolled. Her former employee, Jawitz Properties, took action against her, the DA distanced themselves from her and criminal charges were laid against her. Another beach commenter, Justin van Vuuren, lost a sponsorship for his gym. An internal process has been started against Velaphi Khumalo after calling for black South Africans to do to white people what “Hitler did to the Jews”. Most recently, Nicole de Klerk lost her job after alleged racist comments at the Queen’s Plate Horseracing event. What is surprising and heartening to me is that despite this issue being top of mind in SA over the past week, the instances of blatant racism identified have been fairly limited (despite exhaustive searches by the Twitter Mob, I am sure) .

What has been more interesting and disturbing to many is how this debate has tainted pronouncements by high profile South Africans, which are far removed from racism, but have been considered insensitive in the current environment. Jo-Ann Strauss had her life threatened after tweeting that ““It’s not what you call me, but what I answer to that counts.” an African Proverb #PennySparrow”; Chris Hart was suspended as Standard Bank economist after tweeting ”More than 25 years after Apartheid ended, the victims are increasing along with a sense of entitlement and hatred towards minorities….”; and Gareth Cliff was fired as judge of SA Idols after defending free speech in the context of the Penny Sparrow saga.

It is clear that the main losers from the racism debate will be racists, especially those that choose not to put a guard in front of their mouths. Whether or not racist speech is banned (hate speech is already banned in SA), such racists will be shut down by the people of SA. They will lose their jobs, they will lose their clients and they will become public pariahs.

A more interesting consequence of the racism debate is that it may be used to label critics of Government as racists, possibly reducing the effectiveness of their criticism. Already, the DA has been called racist for a billboard commenting on joblessness under President Jacob Zuma’s ANC government. It is likely that such name calling of critics will continue. Some of the name calling will likely be warranted, but some of it may be used as a diversionary tactic to distract from poor delivery and other issues. As a result, it may become more difficult for an opposition party such as the DA to continue gaining support (in especially black communities) ahead of the municipal elections this year.

If the racism debate is effective at muzzling critics of government policy and if government does not take concrete steps to improve delivery, especially on the employment front, the poor and unemployed could be unintended losers of the racism debate. This would be especially true if the racism debate becomes an important vote garnering narrative ahead of the elections, instead of service delivery, job creation, education, crime and electricity supply.

The weak rand that SA is experiencing post the most recent credit downgrade, the Nene debacle and in the context of low commodity prices and rising US interest rates, could potentially be an opportunity for our country. This weakness could be used to bolster industrial production in our country, boost exports and create much needed jobs. It would be a shame if Government does not make job creation the number one priority in our country immediately (and the number one priority in the President’s State of the Nation Address). What we really need is a Minister of Employment who will stand and fall based on changes in our unemployment numbers and is given the power to co-ordinate across all spheres of government and the private sector. It would be a shame if the racism debate is used to distract from this meaningful opportunity.

Such a distraction would play right into the hands of the main likely winners from the racism debate, the EFF. The poor, the unemployed and the youth offer the greatest opportunity for the EFF to grow its constituency. The EFF is the only party that can aggressively criticise Government and promise delivery on employment, poverty alleviation, land redistribution and nationalisation, whilst at the same time supporting a strong anti racism stance. Whilst Government may use the racism debate to build support ahead of the elections and the DA tries to use criticism of Government, but being labelled racist, the EFF can use both narratives effectively to build support aggressively.

Although an EFF government could do a great deal to alleviate poverty and unemployment in the short-term in SA, there are doubts about their ability to sustain such an improvement in the long-term. There are meaningful risks of spiralling government debt, capital flight and huge reductions in sustainable tax revenues following the implementation of the EFF’s stated populist policies. The best outcome from my point of view is that the growth in the EFF support places increasing pressure on Government to address the elephant in the room, unemployment. If the ANC government (with or without coalitions with the DA in selected areas) are unable to effectively deal with unacceptable unemployment in SA (and soon), we are heading towards a populist future in SA, with all of the associated risks.

I reject racism and I will not tolerate it in my spheres of influence. That is a given. I am a proud and patriotic South African and I want to see the best for its future. I believe we are heading in the wrong direction, especially when it comes to unemployment, but also in areas such as education, electricity supply, crime and healthcare. I urge all concerned South Africans to speak out about problems in our country, but please do this in a sensitive and non-racial way. Do not fuel the flames of racism.

We need to focus our attention aggressively on alleviating unemployment and poverty, unless we want to face a future of expropriations, skyrocketing tax rates, low economic growth, collapsing currency and racial strife. The time is now.

 

What is your take on the racism debate? Are you worried that it may distract from other pressing issues in SA, including unemployment? Do you agree that the EFF will be the main winner from the racism debate? Are you worried about the EFF? I would love to hear your feedback.

In the mean time, keep your talking straight!

 

#RacismMustFall #EFF #Unemployment

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man

Photo by GovernmentZA


  • 2

ANC NGC – the good, the bad and the ugly

The ANC National General Council (NGC) of the past weekend offered a mixed bag to South Africans looking for an improved outlook for the country. There was the good, including correctly identifying problems and taking steps to correct them. There was the bad, a lack of taking responsibility for failures and taking steps that may deflect. And there was the ugly, refusing to address serious concerns surrounding visa regulations and proposing a withdrawal from the International Criminal Court (ICC). On balance, the good prevailed though, in my opinion.

The Good

The ANC deserves credit for doing much needed soul-searching at the NGC and identifying many of the problems it and the country faces. The sharp decline in ANC membership and the electoral gains by the DA and the EFF were key discussion points at the NGC. It is clear that the ANC realises that it needs to take concrete steps to address this trend. As I have mentioned in previous blogs, I believe that political competition is needed to galvanise the ruling party to perform better. It appears as if the increased pressure is starting to shift thinking within the ANC, but delivery will be key.

President Zuma hopefully put an end to uncertainty about whether he will step down in 2019 by stating that he will “never ever” stand for a third term as ANC leader. Unfortunately, much uncertainty remains on succession with Nkosazana Dlamini-Zuma and Deputy President Cyril Ramaphosa remaining frontrunners and other players not ruled out. To ensure stability and continuity, I really hope that we have a much more ordered transition of leadership than in 2009 and that the successful candidate garners wide support.

Cadre deployment and the negative impact this had on delivery was addressed. Although it is unlikely that the strategy of deploying cadres will change anytime soon, there is a recognition that the party must make sure that cadres put in government positions are qualified. I see this as a step in the right direction, but still believe that to fully address delivery issues in our country, the government must look wider than cadres. There are many skilled individuals outside the tripartite alliance that could make a big difference and they are being discounted for positions at our peril.

Another positive development is the decision to allow the ANC integrity committee to deal with members who bring the party into disrepute by making binding recommendations about actions against them. The committee is made up of a group of struggle veterans with strong credentials. As mentioned in a previous blog, one of the drivers of corruption (in general) is a lack of accountability. I hope that the additional weight thrown behind the integrity committee will help to increase accountability within the ruling party.

The way that the police deals conflict and protest was a topic of conversation and a decision was made to train the police in crowd control. This is a positive, in my opinion, especially in the light of a likely increase in protests in the run-up to the municipal elections of next year. It is important that people are given the opportunity to raise their concerns peacefully without being harassed by the police.

On the education front, there was discussion about poor maths and science marks, underperforming teachers and the weakness of rural schools. There was also agreement that the Annual National Assessments (ANA) should not be scrapped. However, what I missed was discussions surrounding raising standards, doing more to empower principals and specifics on how to effectively deal with underperforming teachers. This really needs to be a national priority.

Power generation was mentioned at the NGC, with the focus on increasing generation capacity and maintenance. This is good news in the sense that the ANC has reiterated its concerns with regards to our power generation concerns. However, as stated in an earlier blog, I believe that more aggressive solutions are needed to deal with our power needs long-term, with increased private sector participation and deregulation with regards to the selling of generated electricity needed. These issues were not sufficiently addressed, in my opinion.

What was positive though is the call for the national budget to focus more on investment and less on consumption. To deliver this outcome, the government will have to fast track the implementation of the National Development Plan, whilst at the same time exhibiting better fiscal discipline.

The ANC has decided that e-tolls must be implemented, but at the agreed lower rate. This could fit into the bad category, but in my opinion, considering the meaningful outgo to set up the system and the need to maintain Gauteng roads, there is very little option but to proceed. I hope though that the controversy surrounding this process will lead to valuable lessons learnt when it comes to future toll roads in SA.

The Bad

There were a number of resolutions taken at the NGC that fall in the bad category, in my opinion. As mentioned before, some may feel that e-tolls should fit in here as well. The decision to investigate the feasibility of a media appeals tribunal by Parliament is negative in my opinion. We have a vibrant and independent media in SA and I am not supportive of steps to censor. Instead, in my view, the ANC and government should improve is public relations programme to build and foster a more constructive relationship with the media.

The ANC has launched a study into the feasibility of a wealth tax for rich South Africans. Although the majority of South Africans, many of whom are living in poverty and are unemployed, would file this under the good, I consider this as part of the bad. I am not saying that steps are not needed to address the huge inequality in SA and improve the lives of the poor. I am saying that discussions around a wealth tax are premature, considering the current inefficiencies with government spending and the lack of job-creation within the country. I would like government to get more bang for its current tax revenue buck before looking for further sources of revenue.

I am somewhat cynical when reading about the possible reduction in the number of municipalities in SA as well as a presidential commission to assess a possible reduction in the number of provinces. This may create an opportunity for gerrymandering (a world-wide practice of manipulating electoral borders to favour a particular political party). I hence classify this under the bad until proven otherwise.

Finally, considering the admission at the NGC of the various areas where things have gone wrong, including the reduction in membership, electoral losses, corruption and other, it was unfortunate that no-one was explicitly held responsible. It is good and well to come up with new plans and committees, but in most mature democracies, if political leadership fails to deliver, heads tend to roll. In my opinion, the decision not to even question the current management structure of the ANC has to fall in the bad category.

The Ugly

For me, there were two resolutions from the NGC that were ugly and are likely to be negative for our country. The first is the decision to stick with the new onerous visa regulations, especially for minors. There is little disagreement that these regulations are having a very detrimental impact on our tourism industry, exactly at a time when the weak rand should be supporting it. At the same time, there is wide disagreement on the extent of the child trafficking problem within SA and whether the new regulations will have the desired effect. We can only hope that the inter-ministerial committee on migration, chaired by Deputy President Ramaphosa, will come up with proposals to mitigate the negative impact of these regulations.

The second is the decision by the NGC for SA to exit the ICC. Although it is correct that there are many respected countries in the world that are not signatories to the Rome Statute (including three of the five permanent members of the UN Security Council), I consider the withdrawal as a setback for global human rights and SA’s standing in the world. With this move, our country has chosen self interest and pragmatism over the idealism of the post-Apartheid period.

Conclusion

In my opinion, the good outweighed the bad and the ugly from the ANC NGC. A number of key decisions have been made that, if implemented correctly, could improve the outlook for our country and for the ANC at the polls. However, implementation is key and sustained pressure on the ruling party is needed. Next year’s municipal elections will be important and as I have stated in a previous blog, it is likely to usher in a period of coalition politics in SA. Hopefully this will help to sustain pressure and improve outcomes.

 

Did you follow the NGC over the weekend? Do you agree with me that there were a large number of positive developments? Or do you think that the bad and the ugly outweighed the positive? Do you think the ANC is feeling the political pressure and that this will improve delivery? Will we see coalition politics as an important feature from next year onwards? I would love to hear your feedback.

In the mean time, keep your talking straight!

#ANCNGC #2015MunicipalElections

 

Marius Strydom is the CEO of MLAX Consulting

https://www.facebook.com/straighttalkingstrydom

https://twitter.com/Marius_Man

 

Main Sources: Mail and Guardian; Daily Maverick; SABC


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