The Private Sector must transform faster
Cyril Ramaphosa | 25 November 2019
Cyril Ramaphosa says it is wrong that upper echelons are still dominated by white men
FROM THE DESK OF THE PRESIDENT
Dear Fellow South African,
Last week, I met with the leadership of the Black Business Council where, among other things, we discussed issues of transformation. I took the opportunity to inform them about government’s commitment to transformation and non-racialism. Of all the achievements since the advent of democracy in1994, perhaps our most important is our sustained and unwavering commitment to transformation and non-racialism.
When we embarked upon this journey, we aimed, in the words of our Constitution, ‘to heal the divisions of the past and establish a society based on democratic values, social justice and fundamental human rights’.
We knew that we had to build a truly united nation, not merely to replace domination by one with domination by another.
Non-racialism is not the product of a negotiated compromise, but is a fundamental pillar of the new society we are building. It is only through advancing non-racialism that we will be able to reconstruct the fabric of our society and narrow social and economic divisions and build a new democratic society from the ashes of the old that had destroyed the potential of our country. It is a principle we will not abandon.
We know too well what happened when race was used to exclude the majority of South Africans, and we must actively guard against the return of attitudes that presume the colour of one’s skin should confer either privilege or disadvantage.
This is not to say that race can and should be ignored. Our Constitution affirms that we are a nation of diverse cultures, faiths and languages – and protects the right to self-expression and self-identification.
At the same time we also recognise the ‘unfinished business’ of nation-building: which is overcoming the deep divisions that apartheid created in our society.
That is why redress continues to be a crucial pillar of government policy, whether it is in land reform, employment equity or in economic transformation.
Although we have come a long way since 1994, the occasional expressions of racial and ethnic chauvinism shows that many in our society have yet to overcome what Joe Slovo once termed the ‘psychological barrier’ towards true non-racialism.
Whether it is reflected in the internal dynamics of political parties, in the workplace, or outwardly expressed on the letter pages of newspapers, one finds a reluctance on the part of some to accept that Africans, whites, Indians and coloureds all have an equal right to a seat at the table of our society.
As a country, we should not allow ourselves to be led down this dark path. We have witnessed elsewhere in the world the consequences of narrow forms of nationalism based on race or ethnicity. It is not the society we want for ourselves or our children.
Since 1994, we have actively sought to drive transformation through affirmative action and our broad-based black economic empowerment policies, through preferential procurement and initiatives like the Black Industrialists programme.
Within government itself, transformation of the public service to reflect this country’s demography has been critical. As we strive to rebuild the public service – including at our state-owned entities – it is our mission to appoint people who are capable, qualified, ethical and who embody the values of public service, whether they are black or white, men or women.
The significant progress that has been made in the public sector has not been matched by the private sector. The report released by the Commission for Employment Equity in August points, at best, to poor adherence to employment equity legislation, and, at worst, outright disregard for the law.
The upper echelons of management in private companies are still dominated by white men, although they make up just 5% of the economically active population. Africans only make up 15% of top management, despite accounting for 79% of the economically active population.
Business needs to urgently do some serious introspection. Our transformative agenda cannot succeed unless we work together to broaden the participation of all South Africans in our economy, and it begins in the workplace.
Poor labour relations is in part fueled by perceptions – backed up by the Employment Equity report – that black employees are relegated to the factory floor while white employees occupy management roles. This inequity naturally has ugly consequences when it comes to the discrepancy in incomes, where black workers will always earn a fraction of what white workers and managers earn.
Advancing black and female employees must be a cornerstone of any company’s operations. This must move beyond merely ensuring compliance, and towards succession planning, mentoring, training and skills transfer, and towards giving employees a meaningful stake in the companies they work for.
Black economic empowerment and affirmative action are important tools to further non-racial transformation.
As we intensify the work we must do to address the injustices of the past – especially in correcting the skewed race and gender composition of our public companies – we must ensure that all South Africans, regardless of colour, have an opportunity to contribute to building a better, fairer and more prosperous nation.
I call upon South Africans to embrace each other as equals, and look beyond their preconceptions of someone merely by looking at their skin colour
Let us move beyond the psychological barrier in the interests of rebuilding this country together.
In the words of Martin Luther King Jnr: “We must learn to live together as brothers (and sisters) or perish together as fools.”
All the best,
Published by PoliticsWeb and reprinted with their kind permission.
Dear Mr President, I refer to your recent statement that the private sector must transform faster. I imagine that most of your speeches are written for you. But you deliver them, so one then presumes that you are in agreement with what you say. I presume therefore that we can also accept that your new Dawn has passed us all by. It cannot exist any longer in the context of this document. It is increasingly hard to believe that you could still be agitating for more transformation, particularly in the private sector.
Your personal CV is pretty well known and understood by most reasonably well educated people in South Africa; whatever the colour of their skin. You always did believe in socialism, otherwise, you would never have helped to develop the Unions to the level that they reached, thus enabling the tripartite alliance. You then became the ANC’s chief negotiator at the World Trade Centre, where you certainly showed that your rumoured negotiating skill was factual. You succeeded in negotiating a path out of the extremely negative apartheid system with great foresight, perhaps not equalled by straightforward integrity. Nevertheless, our Constitution thus earned the approbation of being the best, democratically speaking, of the modern era.
You then chose to leave politics in order to become a CAPITALIST, where, no matter what people might say about your success been based on opportunism, your consummate business erudition enabled you to reach the heights that you achieved; and by all accounts, most of that success, if not all, was in the spirit of integrity. If you will forgive a small aside here, I believe that I can legitimately point out that the management of the largest proportion all the companies you had as the sole or largest shareholder, were managed by those with that dreaded white skin!
Then back to politics, as the Crooked Man’s apparent unaware, unheeding, and unhearing (= oblivious) Deputy President. Not exactly a plus factor in scoring that CV. Many of us, including the writer, did not feel euphoric, as the nation did with your New Dawn expressionism. No, we adopted a wait-and-see approach, realising the complexity of the mammoth task that lay ahead of you. We wondered, at the same time, whether you could persuade, or even wished to, the Communist inclined wing of your party to give up the regularly disproven Communist ideologies, and allow South Africa to return to being again, the leading country in Africa, with all its peoples of obvious diversity being once again able to enjoy our beautiful land.
Well, by all accounts, reading your article it is not to be, despite this country’s new euphoria following finally the arrest of a relatively minor MP for alleged corruption. It has taken two years for one such arrest. Seeing close to 90% of ANC parliamentarians and elite could face such allegations, how long will it take to deal with all of them, and, in the process, who will govern our country in the manner that might allow it to survive.
I particularly note your paragraph: “The upper echelons of management in private companies are still dominated by white men, although they make up just 5% of the economically active population. Africans only make up 15% of top management, despite accounting for 79% of the economically active population.”
So what Mr President? Where on earth, are you going to find enough members of the African black skinned population with the correct level of education, skills, and experience to fill those positions. À la Eskom, perhaps some will have to be white skinned, or nearly white skinned like the clearly competent gentleman at SARS. What does it matter, in a diverse population, governed by a constitution that emphasises equal opportunity for all, with no reference to racial preference. You call upon “all South Africans to embrace each other as equals, and to look beyond their (preoccupation and) preconceptions of someone merely by looking at their skin colour.” Yet you allow a large percentage of the black population and an equally large percentage of your ministers and parliamentarians, let alone the Malemas of this world, to threaten to chase away, and often to kill, all the whites in your intensity for transformation. This is is now slowly been extended to all other individuals whose ancestors were not 100% black African.
Mr President, verily you speak with a forked tongue, depending on who you are addressing, which is a fatal flaw in any Political Leader. This hardly encourages me, the rest of the White South African tribe, those of mixed race, Indians, many Blacks, and so many others, to accept that you have any chance whatsoever of correcting the ills of this land of ours.
Do you not realise Mr President that you and the ANC have to abandon the principle you both claim to espouse in your third paragraph, though, admittedly, I myself have difficulty in understanding the conflictions therein. As proof of this, you only have to look at your bloated, incompetent, overpaid, and underperforming government employees, all the way from the ministerial top down to its lowliest clerk. You may well claim that every cloud has a silver lining, no matter how small, but at what unaffordable cost. In this article’s context, it is, I suppose, the creation of jobs exclusively for blacks, and an increasing black middle class population because of their overall overpayment. I challenge you to prove to me, let alone the millions of impoverished masses, that even 10% of government departments, government agencies, and supported NGOs, let alone the myriad of State Owned Enterprises, are run efficiently and effectively, delivering all their services at a reasonable cost well within affordable budgets. But they are transformed! But again at what cost?
In your own words of the Constitution, “to heal the divisions of the past, and to establish a society based on Democratic values, social justice, and fundamental human right,” must mean that every person with the required skills must be entitled to ascend the ladder of ability and competence unhindered, irrespective of his/her skin colour. This emphasises that the demand for transformation must never override the situation where, if there are two or more competent applicants, the one with the most skills must be favoured for the position. In government service, that principle must apply without any thoughts of political expediency, nepotism, religion, gender, or the colour of your skin! Simply said, Bureaucratic appointments must not be at the whim of Politicians‼
One thing that the ANC needs to admit and stop using it, together with Apartheid, as a continuing excuse for its failures, is unequivocally the fact that South Africa is not transformed. It is the one undeniable success that the ANC can claim, and you only have to look around you to appreciate the fact, in all that you see and deal with every day of your life. The other unbelievable message that they put out is that standing together as the ANC, is the only stop to the apartheid antecedents taking over again. If every single white, mixed-race, and Indian voted against any competent black party, it would still be a landslide in favour of the previously disadvantaged South African society. I guess the really disturbing factor is that such nonsense is still believed, as is the regular rumour that any other party of the opposition will remove social grants, which is just so much rubbish.
On the other side of the coin, both you and our politicians, both past and present, still promise totally unfeasible and unaffordable developments, such as the number of jobs to be created, houses to be built, and the National Health Scheme. Your rationale is probably that if you don’t, you might not be re-elected. One thing is certain, if you continue to do so, thus failing to deliver, Hong Kong will look like a play park compared to what is likely to be happening here, and you won’t want to be elected again!
The only way social grants will ever stop in the future, would be if the South African government goes bankrupt. Then it would no longer have the money, nor be able to collect same from our dwindling taxpayer base, to cover the cost of government. This includes interest and repayments on loans, Grants of all types, and their day-to-day cash flow for funding the country’s social needs, like Home Affairs, Education, Health, et cetera. The sad thing is that so few ANC supporters realise that, with their current policies, such an eventuality is getting perilously close to being a foregone conclusion‼
Mr President, in the interests of all South Africans, particularly the previously disadvantaged, always apparently dismissed to the bottom of priority list:
· please start telling us the truth, however unpalatable that might be to many of us;
· please do away with transformation legislation;
· please use the few experienced and competent individuals remaining in this country, to strengthen the weaknesses of Government Departments, et al;
· please give up on the SOEs, and start privatising those for whom it would be a practical resolution financially for both them and the Fiscus, those like SAA, and even some parts of Eskom;
· please have the courage to sit down with the unions and stop giving in to their unattainable an unsupportable requests all the time. They surely cannot want again the inevitably of another bankrupt country, or am I just being naive in that respect;
· please leave the private sector alone. You are far too competent a businessman not to see that the centralisation of Private business has inevitably come about because of ANC policies. You surely realise and appreciate the simple fact that they are the glue of the competence in the private sector that pays all their and so many government and other salaries, whilst keeping the economy slowly turning, or, at least standing still rather than collapsing fully. Anyhow, the question of further transformation in the private sector will inevitably evolve.
Eeconomically, it is historically common cause that when new rulers, let alone a new section of the population of the nation, takes over politically, they seek to paint everything, policy, people, equipment, etc., with their particular colour. All that this ever causes is financial stress and horrific waste of resources, money, and skills.
I am reminded of a little story told to me by my father a few years after the 1948 General Election unexpected loss by General Smuts’ SAPS, which allowed the ascendency of the Nationalist Party into Power! Apparently, our next-door neighbour in Oranjesicht was a moderately successful Afrikaner businessman who was, in due course, to become an Icon of Afrikanerdom’s success. He was a hard business leader and noted philanthropist, who lived for three things, his family, his fellow Afrikaners, and South Africa. He was certainly no ‘dyed in the wool’ apartheid supporter, but only wanted what was good for his people and his country, which sometimes resulted in his been painted with that brush.
Some time, after the Nationalist Party’s electioneering shock, he, enjoying a glass of sherry with my father, suddenly said: “Gordon, I want to tell you of Afrikanerdom’s apparently insoluble problem. We have political control. Much of Smuts’ Government structure and personnel are perfectly willing to work with us, and we would not want to change that for fear that our efficiency levels would drop. If, of course, they are not prepared to adopt our policies, we would have to make such changes, but that does not look as though it would be in critical numbers. Anyhow, in many instances, we would not have the trained personnel to take over if too many of the present incumbents deserted us. It certainly does not look like that will happen, though obviously we would like to have more of our own specific supporters controlling things.
Our real problem lies with private business who appear to be initially very anti our establishment and policies. What on earth can we do about it?” My dad said he replied: “Not a great deal, but if I was you I would simply adopt the Patience Solution. Big business does not like change for it fears it will be costly to go down a new road. However, big business has to do business with government, and if you can show them that you are happy to interact with them, willing to try and ensure that their sustainability and profitability is not seriously affected by the change of government, you will, in a much shorter time than you imagine, start gaining success and control in that environment”. “Die Broederbond’ was soon formed and both parties learned that it was in their interests to live together and scratch each other’s backs. My dad said that you may criticise the Afrikaner as much as you like, but nowhere in the world would you find a harder worker and a more determined character.
Time very quickly proved him right. My dad was no business genius, just a very hard worker who liked people and they liked him. I met this man for the first time, some 60 years later, and, to my amazement, he immediately related this story. It begs the question why the ANC never listened to such advice which I am certain was offered up by more than one Whitey. What a different world we might have lived in now, but those who do not want to hear can suffer from the most terrible affliction in that regard!
Come on CR, we all call you that and it is not meant as a discourtesy, your letter is full of the strangest conflicts. Every second line says one thing, which is diametrically gainsaid a few lines later You, are the only person in the position to prove us doubters all wrong, but “drift” politics, a word so neatly coined by South Africa’s premier historian by far, R W Johnson, has no possible ending but failure.
Mr President, I then come to statement that leaves me, and, I am sure, any other sane reader, absolutely “gobsmacked.” It simply underlines all the reasons we may have for doubting your wish or ability to lead our Country out of the morass in which we find ourselves. Did you really write this, or speak this even if written by somebody else, let alone believe a single word of it? “Within government itself, transformation of the public service, to reflect this country’s population demography, has been critical. As we strive to rebuild the public service, including our state-owned entities, it is our mission to appoint people who are capable, qualified, ethical, and embody the values of public service, whether they are black or white, men or women. The significant progress made in the public sector has not been matched by the private sector. The report released by the Commission for Employment Equity in August points, at best, to poor adherence to employment equity legislation, and, at worst, outright disregard for the law.”
Mr President, you of all people must know that, without a doubt, we have one of the worst government structures, delivery and productivity wise, in the whole of Africa, Why? Well, broadly speaking, the problems of transformation and appointment so many people, who lacked business culture, experience, and qualifications. This has ensured their failure with them biting off far more than they could ever hope to chew. In turn, this has condemned our people of all denominations and skin colour to be served by an absolutely incompetent bureaucracy, instead of it being the main engine for any countries’ success.
Are you, Mr President, still prepared, as your letter so clearly points out, to continue this charade, so that the worst fears of all our economists reach the tipping point. Then, when our cash flow runs out, we slip, not into recession where we already sit, but into irreversible bankruptcy. The ANC was handed the golden chalice of opportunity to the future growth of our economy, supported not only by the accolades of this world’s leaders, and the willing flow of more investment into our country, but also the proven quality of a well-oiled Bureaucratic infrastructure whose wheels initially were kept turning comfortably by the hands of the incumbents. They were, furthermore, for the most part, quite happy to train as their replacements, worthy members of your constituency.
Yours very sincerely, Jack Walsh.
Things are about to get a whole lot worse
David Bullard |
06 January 2020
David Bullard provides his prognostications for South Africa in 2020
OUT TO LUNCH
I’d just settled down with my glass of iced water (I’m attempting a “dry” January) to write this column when the power went out. Fortunately we installed solar panels last March and they feed an inverter which runs on batteries. The problem with anything above Stage 3 load-shedding is that the batteries don’t have sufficient time to re-charge from the mains. As a result, despite our rather expensive attempts to remain self sufficient, we hear a loud alarm bleep just before the batteries give up the ghost and we are plunged into darkness for a couple of hours; so we feel your pain as the woke saying goes.
Despite Cyril’s assurances to the contrary, we will not be enjoying a reliable power supply until the 15th January. This is particularly worrying because it was pretty easy for him to swan back from Egypt and promise uninterrupted electricity over the holiday season knowing full well that many businesses had closed. Come this week though those businesses will be re-opening and the demand for electricity will rise dramatically just as many power stations seem to be showing signs of decrepitude or pure neglect over the past decade.
Unless we have all been hideously mislead by the doomsayers in the media it seems probable that we will have to get used to rolling blackouts for most of the year (load-shedding is the term that properly run economies use for such emergency measures and not applicable in SA).
This doesn’t kick the year off on a particularly good note and the traditional midnight greetings at the New Year’s Eve party I attended omitted the “prosperous” bit this time around. Once NHI is introduced we will also be obliged to omit the wish for good health too and will just be left with “Happy new year. May you survive the next twelve months”.
A year ago the Wall St “big swinging dick” firm of Goldman Sachs confidently predicted a Rand/Dollar exchange rate of 13.50 in January 2020 and a growth rate for SA of 2.2% for 2019. Since the boss of Goldman’s in SA (now escaped to a US university) was known to have the ear of Cyril one must assume that the Pres fell for all that bullshit.
There were others amongst us who were not nearly as bullish but we were dismissed as Afro-pessimists and labeled “anti transformation”. Sometimes though you just yearn to be wrong and it gives me no joy to say that if you thought last year was bad well, in the stammering words of the immortal Randy Bachman (who he?)….”bbbbaby, you aint seen nnnnothing yet”.
It’s actually not difficult to be an economic visionary at the moment although one must always be careful not to upset our loyal reader Thomas who likes his experts to come with proven and impressive credentials. As far as that is concerned I am in agreement with The Spectator columnist Lionel Shriver who wrote in the pre-Christmas bumper edition of that fine magazine:
“The columnist doesn’t sweat over every word like a poet. One of the pleasures of the form is knocking a piece out and moving on. By its nature the column is a bit dashed off, a bit hit-and-miss, winning some and losing some. So you compare a woman in a burka to a (morally neutral) letterbox and, big deal, the image doesn’t turn out to be all that funny. Maybe you end up saying you’re sorry, but one incidental misjudgment shouldn’t be the end of the world.”
With the greatest respect to proper economists it doesn’t take much thought to work out that an unreliable electricity supply will inevitably lead to many businesses not being able to function during normal operating hours.
Depending on the severity of the problem (will it be Stage 6?) that will lead to employees having to be paid for part time work because if there are reduced earnings in the business that is the only possible solution to stay afloat and preserve jobs. Eventually it will lead to businesses closing and laying off workers thereby pushing the already horrific unemployment figures even higher.
I don’t accept the argument that unemployed people automatically turn to crime to survive but I do foresee much more poverty and an increasing need for charity as a result of the inevitable economic disaster awaiting us. It’s not a pretty picture I’m afraid.
As if that weren’t bad enough there is this tsunami of foreign investment that we’ve been frequently told is just waiting to come in to SA. The billions that have been pledged at various investment pow-wows (described as a “R363 billion investment haul” by our friends at News24) have yet to materialize it seems. But why would anybody sink their money into a country that can’t even guarantee a reliable supply of electricity?
Even if you’re crafting hand made furniture you still need light and power for tools. Those promised billions will remain a promise unless investors can see a guaranteed return. And that’s not even taking into consideration our pre-deluvian employment laws which are another major barrier to investment.
Finally, there’s the currency which I once described in a column as the share price of the country. Having enjoyed a surprisingly robust December in what I imagine was a thinly traded forex market it now looks set to weaken again. This as we stumble nervously towards our next Moody’s rating.
Some pundits think that the last rating agency to have any confidence in this country will give us yet another stay of execution before joining S&P and Fitch in downgrading us to junk. However, the credibility of the rating agency also has to be considered and how many last chances can you give a country that obviously has a death wish?
What with the forswearing of booze and Eskom’s antics it looks like being a long dry and dark January.
Published by PoliticsWeb and reprinted with their kind permission.
EXTRACT FROM ANOTHER ARTICLE
Back to South Africa, whose Government is standing on the edge of the cliff of Bankruptcy, like Eskom, SAA, Petrochem, PRASA, etc., nearly all Government Agencies, many Ministerial Departments, like Health, and many, many, more!
Easy you say, as CR knows he must reduce the wage bills. Does he really want to, and if so, a big if, how, may I ask you? You cannot dismiss a government employee or one from an SOE just like that. If he/she fails to do the job, that may not be enough, and the resultant enquiry could take years, especially if there are thousands of them, whilst they must first be suspended on full pay. The same goes for corruption, and there are still the Unions to deal with and threatened strikes. The only way is natural attrition, and that will take years and years. Voluntary attrition is not an alternative as the costs are much the same as keeping them employed for a number more years.
Of course, any future appointment based solely on merit would at least help delivery and productivity, as well as ‘Privatisation.’ Both will also take time, which we do not have. But, can you see the slightest sign of that change of policy happening within the ANC?
The nett result of our failing economy is the perilous position in which we find ourselves, where for years now our annual spending commitments exceed every year our income, resulting in a steadily increasing deficit. The business of government is just that, a normal business, which can borrow to see it over a short period of no excess cash flow. If it cannot, bankruptcy follows. It might possibly dispos of some meaningful assets, providing the balance still generate adequate profitability with the extra capital injection from their sale. Alternatively, you can approach your shareholders for additional capital, providing you can show that will do the trick, and ensure a return to profitability.
Government can do the same, but lenders want the same assurances as shareholders, an unlikely available scenario. Certainly, Government selling assets, which it is clearly unwilling to do, will reduce the outflow caused by them having to reinstate continually the lost cash flow. However, the only assets it has are loss-making SOEs, which will not likely generate much needed cash to offset the growing difference between income and expenditure. Expenditure will continue to grow due to inevitable inflation, and, as I see it, the only opportunity to generously increase income would be to raise Sales Tax substantially. This would have devastating effect on the political situation of the ANC.
To complicate Investors’ perceptions further, it looks as though new Legislation to enable “Property Expropriation without Compensation” is a certainty. It will be challenged in every manner within the Country, but almost certainly will be the last straw to keep them away!
Our next worry is our Country’s Credit Rating by the relevant agencies. Here we hang, thanks only to the biggest and most influential, by the thinnest of threads just above outright ‘Junk,’ and it is almost a racing certainty that we will descend to that level by mid-2020. The result will again be higher interest on any new or maturing loans, which probably will not be available to us anyhow! China, possibly our Finance Minister’s last hope, signalled the other day that firstly a loan, perceived by Government as already granted, did not meet with their Central Bank’s loan criterion so was withdrawn. China’s loans are very costly condition and interest wise, so internationally are often considered amongst those of the last resort, together with loans from the International Monetary Fund. This latter’s loans carry conditions diametrically opposed to ANC non-negotiable policy. As a result, a loan from them, if sought, which may well have to be the case, will probably signal that party’s final demise!
Many non-ANC members, and even some of them, deem that this would be a good outcome. Would it? Can one really think that? Unequivocally, I think not! Circumstances, developing in such a scenario, would lead to utter chaos, whether it arose from the far left of the ANC ultra-communist factions, the Unions facing loss of jobs, the workers themselves, or the poor when, almost unavoidably, the money ran out!
Presently, we have no viable opposition party to try to step into the breach. Nor any sign that Coalition politics would be any sort of possibility. And who or what could keep control of matters as they progressively got out of hand. I fear that both our corrupt, unstable, and incompetent Police and Defence forces would never stand a chance of being cohesively led other than for their own enrichment.
All that seems left is prayer for a miracle, and our faith in the inborn resilience of the human race, particularly us South Africans, who are to an extent renowned for it. With it, a real leader must arise, unlike CR, the oblivious with his delusional long game. He only leaves one with the uncomfortable certainty that he has deserted neither his political communist socialist roots, nor his determination to hold the ANC together, not for its “UNITY,” but to ensure his continued Presidency!