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

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.

How confident are our professionals

PPS, a South African insurer focused on the graduate and post graduate market recently released their confidence survey conducted with about 3000 of their members. This survey is aimed at showing the levels of confidence that graduate professionals, ie. Doctors, Lawyers, Accountants and Engineers have in South Africa and its economy.

84% remain confident about staying/living in South Africa. According to this report the successful hosting of the world cup, the sovereign debt crisis in Europe and the massive skills shortage in SA are the massive contributors.

In contrast 56% of graduate professionals are confident about SA's economic outlook over the next 12months, down from 64%. Also down from 64% to 56% is the confidence in the local equities market. With only 59% believing that the Rand will strengthen over the next 12 months against other major currencies.

There is also a clear indication that professionals do not believe the worst of South Africa's economic times are over with only 45% of respondents believing the worst has hit us and 71% believing a double dip is on the way.

Government's ability to address unemployment is also a major concern with only 29% of professionals believing that it has the capacity to bring change in this important facet of our economy.

The massive hurdles in the SA economy are Crime, Health care and Education, and here professionals are clearly not very confident.On health services sentiment under graduates was low with only 46% believing that health service provision will be better under the NHS system. Only 45% believe crime rates will drop over the next five years and 48% expected better education levels over the next 5 years. The very interesting statistic that came across as that 89% of the top earners in SA are worried about the sharp escalation in costs of education.

In conclusion. One can extract that there is optimism about South Africa, its people and the private sector's ability to grow under tough circumstances, however the ability of government to address critical issues in our economy does not bolster much confidence.

Necessary "Evil"

In an article posted in the New Age Newspaper on the 14th of December 2010 unions are purported to seek a total ban on Labour Brokers in South Africa and that the demands are building in strength and momentum. So much so it has been dubbed “The Mother of all Battles”. The method to be used by the Unions is the demand for Section 189 of the Labour Relations Act to be repealed. This section directly deals with temporary employment. Although one does have empathy for the plight of the Unions, in the article they specifically mention Labour Broker’s unwillingness to do salary deductions for unions, and the so-called extorted workers one has to review the impact that such critical changes will have in the job creation front.

One has to understand that life has to occur in balance. Once the one side of the scale is packed to heavy life responds by acting “aggressively” to balance the scale. A typical example of how life and people in South Africa has responded to heavy handed government intervention is in the illegal cigarette market which, at least according to British American Tobacco’s advertising campaign, is spiraling out of control and has suddenly become the largest funder of other more violent and “less profitable” crimes like robbery, gun running and drugs. Is the assumption that this is like a gateway crime.
We cannot at all be surprised by the growth of this “market segment”, as approximately 50% of cigarette turnover (not profit) is passed on to government in the form of exorbitant sin taxes. These excessive taxes make it virtually impossible for competitors to enter into the market with cheaper alternatives, without breaking the law. Therefore heavy handed government involvement has created an economy conducive to trading, smuggling and selling illegal cigarettes whilst protecting and building a monopoly state in this R 25 Billion per annum industry.

Indulging me to use the above as an example, one has to ponder if such over protectionism in the labour market will have a positive or negative effect and what the direct effect will be on job creation. All our major job creation industries are currently shedding jobs at a massive scale. In Novembers figures an approximate 18,000 jobs was shed in the formal industry(Banking and Manufacturing the largest culprits). However agency work or labour brokering (governed by Section 189) has been creating jobs at a rate of 5%+ per annum. Is this not already a sign that an over regulated environment is creating opportunities for business men in South Africa? Is it not proof that additional regulation may, as in the cigarette industry, cause a form of illegal labour operations? Before you laugh out loud, be prudent in considering the fact that the Mafia controlled US Cities and even states, due to the ”ownership” of unions.

It cannot be ignored that about 7% of South Africa’s workforce is currently employed in the Labour Brokering environment and that this amount is only set to grow, if left to operate. However if this industry is going to be declared illegal would the Private Sector, in reality, absorb these employees? What would business to do repair the scales of balance? Another point that is prudent to investigate is true and honest temporary employment. If Project Management, the agricultural industry or contract based businesses are not going to be allowed to align their staffing strategy with their actual demands, which by default varies from time to time, it may very well cause these industries immense damage and, at least in my mind, cause these industries to seek alternatives to employing people. Items like mechanization, automation and technology deployment would become the leading factor in business success and not staff deployment and training. This does not show a rosy picture for the blue collar worker the union is so set to protect, or at least protect salary deductions from.

In conclusion, it should be considered whether the “evil” of labour brokering is not a “necessary evil” to stimulate our economy’s most dire demand, job creation. Maybe better and focused regulation of temporary workers and labour brokers would be a more viable option. Maybe more emphasis on training and social investment by these firms may protect our economy from the short term damage of job losses, whilst encouraging future growth for our unemployment figures.