The State of the Nation Address on February 12, 2015, must
give pause for thought. Any
international investor, be it an industrialist, planning to invest
$100 000 000 in a new plant, or an individual, planning to buy a
house in the sun, was given a rude warning.
The planned new legislation regarding property ownership will prevent
ownership of property by ‘foreigners.
The explanation given by the President during a discussion the day after
the chaotic address is that the Blacks have been dispossessed of their land
over centuries. They do not own the majority
of the land, and the ‘best parts of the country’ are now in the hands of
foreigners. Ownership will be replaced
by a system of leasehold, which may be for very long periods. Of course, this new idea, borrowed from its
communist neighbors, will enable a man from Soweto to buy an apartment in Camps
Bay. The simple fact that there is
nothing preventing him doing so under the present system, apart from finding
the money to pay for it, seems to have escaped the inspired central planners of
the ANC. The new proposal is simply a
mechanism to keep investors away from the country. Experience with the Government has shown that
it uses every mechanism available to benefit the favored few, the leaders of
the ANC. A foreign-owned mining company
was the subject of pressure to hand over 50% of its shares at no cost to a
shortlist of persons. When it refused to
accede to this demand, citing its legal rights, the Department of Minerals and
Energy summarily canceled its mining license.
Of course, the company had expected that, and was able to win a Court battle
for reinstatement of the license.
However, it is clear that, when an ANC leader wants your holiday home in
Cape Town, you can expect the lease of the land to be canceled. Investors, get the message, sell your land
holdings in South Africa now!
That message was reinforced during the somewhat bumbling discussion
conducted by the President on the Address.
He made it clear that South Africa belongs to the Africans, a policy
started by President Thabo Mbeki, the man who demonstrated the extent of his
intelligence by proclaiming that AIDS is a syndrome, and syndromes don’t become
diseases. The President, assisted by the
smiling sycophant who moderated the discussion, also made it clear that any
non-African is considered a foreigner.
To the perceptive listeners, this was a clear warning that Whites are
not viewed as South Africans. The
writing has been on the wall a long time.
Whites are not welcome! Of
course, the fact that the South African economy is crumbling slowly, rather
than collapsing, is due to the fact that intelligent businessmen are losing
hope gradually, and departing slowly, rather than in a precipitate flight, as
the Indian businessmen did in Uganda, when Idi Amin, another lunatic African
politician, declared that the Indians were responsible for the ills of the
Ugandan economy. The lesson there was
very clear. If the Government chases
away the people with skills and drive, the economy falls apart. Unfortunately, that is happening in South
Africa, more every year.
The President read from the prepared speech (in a
presentation that even one of his numerous wives alluded to as sleep-inducing)
that the plan to force commercial farmers to hand over 50% of their farms to
the workers was now proceeding, with the first 50 farms already identified. Under this scheme, the amount that should
have been paid to the farmer as compensation for the loss of, sometimes,
centuries of work in developing the farm, will be paid into a fund for the
benefit of the workers! The ANC has
already shown its willingness to remove the property rights of its (White)
citizens by simply expropriating the ownership of minerals, replacing the
ownership by granting effectively a lease to mining companies, which it feels
free to revoke at any time, or to transfer to another (favored) person. Perceptive investors will recognize the
pattern. Real rights are no longer
sacred. How long will it be before the
ownership of banks or insurance companies, of IT companies, or of any other
form of business will simply be removed and transferred to some other
person? If you doubt that this is
likely, please consider this story. The
writer was personally present at a meeting between a representative of the ANC
Military Veterans Association investment company and Minister Stela Sigcau. That morning, a headline item in the country’s
newspapers had announced that the fishing quotas of the (White-owned)
commercial fisheries had been reduced by a third. Sigcau asked the ANC man whether they had
received the quota handed to them at no cost.
He replied that they had. The
Minister then asked whether they had the funds required to operate the fishing
fleet under the quota (a requirement that had always needed to be satisfied
before a quota would be allocated). The
ANC man replied that he thought that they had, but, if their negotiations for
this were not successful, they had already almost completed the sale of the
quota to a Spanish fishing company for R6 000 000. Sigcau expressed her pleasure at that
news. The withdrawal of the quota from
the existing operator had some interesting consequences. Three processing factories were closed, and
3 000 employees were retrenched.
The fishery company, which owned the only two modern trawlers in the
South African fleet that with international hygiene regulations for the export
of fish leased the boats to a new company established in Argentina (rumored to
be in the ownership of the same foreign shareholders), which then continued to
operate them in the same area. South
Africa was deprived of the jobs and the foreign exchange earnings under the
quota, and the ANC was enriched to the tune of R6 000 000. Can you spot who were the winners and who the
losers?
Another point made by the President, alluding to the rolling
load-shedding by Eskom, the country’s monopoly electricity supplier, was that
the problem was a challenge, not a crisis.
That view is totally opposed to the view held by the majority of South
African industry and commerce. He said
that the Government ‘is doing whatever it can’.
The performance of the Government in this arena has been abysmal, to say
the least. The current repeating
blackouts, recurring at least two or three times each week for up to six hours
at a time, is costing billions in economic performance. The problem has been known to exist since at
least 2003, when the Government was alerted to the need for more generating
capacity. In the nature of the ANC
Government, planning for the future is way down on the list of priorities, particularly
when the investment required does not produce votes for the ANC at the next
election. No new investment was
made. Indeed, in 2008, when Eskom warned
that maintenance requirements would reduce the capacity of the plants below the
minimum required, it was decided to reduce the maintenance schedule by
80%! It does not require a rocket
scientist to understand that this situation was certain to induce a terminal
disease, which is now in its final throes of bringing the country to economic
collapse. The cost of such electricity
as is actually delivered is slated to increase by nearly 13% in April, an
increase that is likely to bring many industrial users to their knees, and to
drive away foreign investors who planned to establish industrial plants in the
country. The President hopes that the
electricity woes will be solved by the construction of nuclear plans (almost
certainly by the Russians, who have already announced that they have signed the
contract with South Africa) for completion in 2025. The construction of the power plants at Medupe
and Kusile (both projects already five years late on a five-year project plan!)
show no improvement in the possibility of them coming on line any time
soon. The President skirted the subject
of the lack of nuclear skills in South Africa, saying that the country had such
skills in the Apartheid years, and those skills would be revived after the
abandonment of the nuclear weapons program.
He carefully omitted mention of the fact that the ANC Government had
dismantled the center of nuclear excellence that had been built up by the
Apartheid Government, reducing the employment of 1 800 nuclear doctorates
to a supervisor and cleaning staff, which were stripping the copper cable of
the buildings for sale in order to pay the bills. The abjectly poor performance of Eskom in
planning and maintenance of its existing power infrastructure, and the
instruction given by the Eskom CEO to disregard the requirement to blow
high-pressure steam through the turbine feed pipes at Medupe, a necessity to
ensure that no foreign objects are present which might damage the turbines, and
a requirement of the warranty on the turbines, in order to save a week in the
coming into operation of the first phase of the plant, must give any thinking person
pause at the prospect of Eskom or the ANC Government operating any nuclear
facility, which is, in essence, a controlled nuclear explosion. The thought of scientists from Chernobyl
training the South Africans to do the work is equally frightening.
The opening stages of the State of
the Nation Address, when the Opposition parties had to demand the reinstatement
of the cellphone signal before they could participate in the address, a demand
which had to be repeated three times before the Speaker reluctantly agreed to
attend to the matter immediately (the switching off of the cellphone signal
constitutes a serious breach of the Constitution as well as other laws),
followed by the interference tactics of the Economic Freedom Fighter MPs,
demanding to know when Zuma planned to ‘pay back the money’, which resulted in
the Speaker calling in the ‘Parliamentary Security’ to expel the EFF MPs,
including the many of them who had not participated in the interference (both
the expulsion of all Party members and the use of armed ‘security’ personnel,
presumed to be Police, being serious breaches of the Constitution and other
laws). The refusal by the Speaker to
inform the Chamber whether the ‘security personnel’ were Police, after she had
been questioned several times, led to the Opposition Parties walking out. What followed was a more-than-usually
bumbling and inept speech by the President, repeating his election speeches and
plans that have been on the agenda since he ascended to the Presidency.
Zuma has displayed convincingly
his inability to lead the nation.
Indeed, he has demonstrated convincingly that he has ‘lost the plot’. The fact that other members of the ANC, who
might have been considered possible President material, are willing to go along
with this dishonest and incompetent President must be taken as a serious
warning of the inability of the ANC to continue to manage (if that could be
considered to be an apt description of their stumbling from crisis to crisis)
the once-powerful South African economy.
In the words of Alan Paton, we cry
the beloved country.
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