Is South Africa still a democracy?

Black Tuesday, as it was known in South Africa, came and went and even my wearing of a black shirt yesterday could not call government to apply reason to their proposed “Secrecy Bill”. It has been approved and it will be enacted into parliament within weeks. Many ask, what does this mean and every person with some sort of platform has rendered an opinion. Some of which to me stinks of ignorance, racism and even worse radical comments on both sides of the scale.

Some see this as a victory for black businessmen victimised by white media. How, my little mind cannot comprehend, as the act seeks to protect government officials and so called secrets.Some see it as the death of democracy in South Africa. How can one single act like this assinate a democracy that so many fought, suffered and died for? Firstly I one has to ascertain the true meaning of democracy.

U.S. president Abraham Lincoln defined democracy as: “Government of the people, by the people, for the people”. Winston Churchill’s opinion said: “No one pretends that democracy is perfect or all-wise. Indeed, it has been said that democracy is the worst form of government except all those other forms that have been tried from time to time”. So in simple terms democracy is the right of the people to elect a government of their choice and to be governed, not ruled, by civil servants that are answerable to the people of the country.

In South Africa we have seen the quick death of the civil servant. Municipal worker, government officials (junior to senior) and ministers have conveniently forgotten their title of civil servant. The new term is Emperor. Once employed in government you are the boss, no one to answer to and the public are mere puppets to you and your seniors will and whims. It seems as if government officials have only one goal or aspiration: To have a job senior enough to be able to manage tenders. Who can blame them, it is the most lucrative job in SA.


So how does this secrecy bill destroy democracy?

It kills governments necessity to be accountable to its people, it allows officials to operate their corrupt business activities with impunity. It fosters and promotes secrets in a society that should be transparent and open. It gives government the ability to limit press freedom, to control mass media and to silence critics with one simple piece of correspondence. It empowers the strong to abuse the weak and hide behind a 20 foot wall with little to no risk. It effectively employs the wolf to protect the sheep and it is a travesty for a country that was once seen as the beacon of democracy.

I am disappointed, estranged and bewildered by the fact that my country is showing more and more of the characteristics of a communist and military state. To see more and more that the government cares less for its weak and its poor than for the corrupt and the evil. My opinion aside, lets leave this post with a quote by one of the world’s biggest icons of democracy and peace.

"Press Freedom will never be under threat in South Africa as long as the ANC is the majority party." Nelson Mandela

Pigs get eaten

As South African investors we are a community that is a bit fatigued. We have been battered by investment schemes, scams, overzealous directors and investment companies that has failed on a scale that makes Bruce Willis’s Armageddon look like a Disney channel movie.

Those of us that still have a bit of cash are sitting on it like old hens waiting for the eggs to hatch and we are tapping our feet on different hotplates everyday looking for an investment that is sound in the market that is driven more by news media headlines than investment strategies. Property used to be the ultimate and safe inflation buster, but with tenants defaulting and property sales and prices slowing that avenue has turned into an electric avenue and none of us are in the mood to get shocked.

We want to look offshore, but let’s face it, we are a touchy feely nation and struggle to deal with telephone operators millions of miles away. Even more the old safe havens like Europe and America are constantly fighting their own recession and are so close to being flushed down the financial toilet only their feet are sticking out. So were to then? Who can we trust with our hard earned money?

I think that anyone that has a simple answer to this is either Nostradamus, Da Vinci or just plain reckless. In a world economy where bank bankruptcy is starting to become as normal as taking a tan on the beach in the summer one cannot be blamed for feeling a bit like a headless chicken running all over. There are RSA retail bonds, but let’s not confuse government with optimal spenders and fantastic asset managers. When dead stadiums and defunct para-statels cannot pay back their debts where will the money come from? TAXES? You and me?

So where to go? Where do we go? Diversification is the answer! There is an age old saying: “In any market the bulls make money and the bears make money. It is the pigs that get eaten” Sadly as a nation we tend to invest like pigs. We place our entire investment capital into one product. Recently with Amatenda most of the investors interviewed by Carte Blanche was left destitute by the fact that all their investment capital was gone. With Sharemax we read and here daily of widows and pensioners that invested all their savings into Sharemax and they are now living in garages and looking at family to support them. We are the pigs that happily get eaten year after year after year.

So in this simpletons mind we need to, hedge currencies, invest in multiple asset classes and within those asset classes multiple promoters. That way if you get conned by one or two, at least you are not destitute. Be logical and think with a sober mind. Anything offering above normal bank interests has a risk to it, no matter what the promoter says. Let’s take charge of our destiny, lets invest as widely as possible and get our funds as diverse as we can. Lets either be bears or bulls and leave the pigs be.

Where is a countries wealth?

In South Africa we are constantly battered with eloquent words of wisdom from our astounding politicians. In a country where 25% of the population is unemployed we are regularly bowled out by news of minister living in luxury hotels and recently R 180 Million again spent on our civil servants homes. Just as we thought that we got used to our governments impotency we see young scholars driven to death by blue light brigades, this blue light was not used to race to an emergency but rather a meeting for a VIP. Very Impotent Person.

Why then with such an impotent government are we as a citizenship then so surprised when Cosatu speaks of more aggressive reform and our ever-so-sophisticated friend Malema wanting to grab farms, mines and even the bottle store around the corner. Is this signs that the very voters for this government is losing faith in their leaders? Is this more radical, grabbing approach workable? Is this approach only viable as a short term erection for impotent government officials?

Categorically NO, it does not and will not work and yes, clearly our officials are in desperate need of something to rise in their favour, no matter how short term or even devastating. How can I be so confident that this grab-a-asset system will not work.

Simple let’s look at examples. In Uganda the leader, Idi Amin, chased many big businesses away and started or rather dismally failed in running them. In Zimbabwe the masterpiece of politics and intimidation, Robert Mugabe, took successful commercial farms and that now produce? Yes you are right, virtually nothing. In our own sunny South Africa there are virtually no success stories of commercial farms that was redistributed at huge burden to the tax payer. Why can successful business not just be transferred and run successfully? Why is it not as simple as just throwing all SA assets in one collective pot and then allowing every citizen a scoop of the pot?


Well putting corruption, nepotism and impotency aside. We are not all entrepreneurs and business tycoons. Some of us relish in a world where we can just wait for a pay cheque. In a seminar Warren Buffet was asked what investment would in any economy give you the best return, his answer: Education, in other words self investment, teaching yourself skills and bettering yourself. The wealty did not just fall on money, the big commercial farmers did not one day wake up to massive agricultural holdings. Surely no one believes the CEO's of our major mines just did a pretty waltz and got the job. No wealth is accumulated over time and there is a reason for it, you need to know how to handle and manage wealth, you need to have the knowledge, aptitude and ability to manage and grow wealth. Wealth, apart from some “tenderpreneurs”, does not just happen. As the saying goes: “A fool and his money will soon part”.

In essence one can argue that wealth does not vest in material things. It is seated in one’s ability to generate money and then manage the money that was generated. It therefore lies within the individual and not the assets of the individual.

So the big question still remains how to we aggressively transfer wealth in a country in desperate need of it. The only logical way in this simpletons mind is by generating more wealth. Develop patriotisms again amongst the wealthy, make SA citizens proud of the country they live and work in. Award tax incentives for development of communities and employing more people. Help the wealthy become wealthier and in turn the country and its economy will thrive.

I would like to leave you with one thought. The DRC made a special place for about 25 large commercial maize farmers from South Africa. In a short period of time, in a unknown country with limited support and structures, these farmers were able to turn the DRC from a net importer of maize into a net exporter of maize. Now imagine if the SA government awarded these same commercial farmers with the defunct land that is lying barren in our own borders and made them feel secure in their own country. That vast and fast economic growth would have been for our economy. Jobs would have been created and communities uplifted.

Africa - The land of milk and money

Many entrepreneurs approach our firm, a specialist firm on assisting entrepreneurs entering Africa, to assist them in obtaining their big dreams in Africa. They all have eagerly wagging tails and eyes that glow like a wild buck in a spotlight. However, sometimes we feel like the evil dream dashers when we find an opportunity of a lifetime to be nothing more than an opportunity to shorten your lifetime.


A key fact to remember is that large corporate companies are attacking Africa like wild dogs with rabies, they are setting up shops and offices quicker than what we can comprehend.Who can blame them? With Europe’s head in the toilet and the US avoiding the enema that has to come Africa with an Annual GDP per Capita rumoured to be higher than that of India and a fast emerging middle class in excess of 400 Million has opportunities a plenty for the astute business man. However gone are the days of buying a product at your local store and selling at twice the price in Africa, at least as a sustainable business.

Yes we have clients making so much money from their African operation that buckets are too small for them to use, they had to switch over to the proverbial shovel and wheelbarrow system. However many fail and do so on a spectacular scale. Why then? Ignorance, greed and unwillingness? People believe Africa’s citizenship to be uneducated idiots walking around with pockets full of cash and that Africa is a cheap market to do business in. The truth cannot be more removed from this piece of fiction. Africa’s people are becoming more and more sophisticated daily and flights, accommodation etc is everything but cheap. Africa wants products and services that add value to their businesses and lives at reasonable rates and there are opposition companies in virtually every African country you go to. Greed or quick buck syndrome is also a big business killer with many entrepreneurs entering the market thinking they can go into a country make a fortune and retire in short space of time by selling at ridiculously high margins or acquiring assets, like land, at cheap rates. No true cost of delivery, market study or cost of developing the asset is taken into consideration. In Mozambique farmers flocked to large tracks of land that was virtually free, but they never looked at the massive lack of resources, spares and so forth . Normal business logic still prevails you have to tackle the pain before you can gain anything in business. You need to develop a business plan and make sure your facts are correct. You must be willing to commit to the country you work in and be willing to spend a lot of ”school fees”, time and sweat in learning how to do business the African way.

Business opportunities in Africa are in abundance, solid business strategies will be rewarded, it is truly that land of milk and money. That said, milk can go sour quickly if not taken care of in the proper way and honey can be sticky even if held in vast amounts. When obtaining advise it tends to more prudent to ask what not to do in Africa than on what to do in Africa. Also choose your partners wisely before that glow in your eye is in fact the light held to you by a hunter.