Nhlanhla Nene has twice in his career abruptly disappeared from view. The first was the occasion when as mere deputy minister of finance his studio chair collapsed during a TV interview. The other was this week.
There are many appalling developments that will follow from the president’s decision to replace a finance minister who has been trying to tell him the facts. But the saddest and most alarming is that Number One appears to believe that a cabinet reshuffle will conjure up the money that Nene insisted was not available. The sheer crass stupidity of this is desperately bad news for the country and its few remaining friends. Having a president who is financially clueless and innumerate is no longer amusing and now he is surrounding himself with acolytes equally as ignorant and uninformed. Or perhaps they are all wilfully and an uncaringly determined to loot and pillage for sole personal gain. Public service has ceased to exist.
South Africa is not exceptional in having an electorate which objects strongly to paying tax yet welcomes any and all hand-outs of government money. Hand-outs of course include salaries, grants and spending on infrastructure. However, for most folk, the fact that the two flows are inseparably linked is poorly appreciated. They feel lost and unwelcome in what they imagine is a maze of corridors and hallways filled with loathsome and rapacious capitalist bankers bustling between the national treasury, the central bank and the mint. In their minds few of the decisions and initiatives emanating from those faceless buildings are helpful to the poor. This perception is also widespread amongst the leaders and the civil servants. Even the employees of parliament went on strike the other day.
The impact of this totally calamitous cabinet reshuffle has been that the share price of the country has plunged. That is, the exchange rate between the rand and other currencies has dropped severely. In Britain one can buy a rand for less than four and a half pence. In the USA its price is only slightly more than a nickel. The sycophants have gushed that this is a terribly good thing for increasing demand for our exports without noting that for many reasons and despite the weakening rand, SA does not appear to export much more of anything very valuable these days. Simply making it cheaper may not help a great deal. That there is pretty much a global slowdown happening is also inconvenient.
Assuredly the new man, David van Rooyen, has already been told to find the keys to the strong box and to start dishing out cash to everyone on JZ's Christmas present list. And when they find just moths and old crumpled IOUs in that box, history tells us that the bandits will turn their attention to the money in the state pension fund and the national reserve fund. The paths are well worn. It is highly unlikely that Des, as reportedly he is known to his comrades, will turn out to be a success. In his first speech as minister he said that he wanted “the Treasury to become well known to people living in rural areas.” What exactly this means is unclear but maybe it has something to do with buying votes for JZ.
Share prices on the JSE of companies that collect a sizable chunk of their earning in other currencies have risen. There is a desperate scramble to play the rand hedge game. One notable winner is the Exchange Traded Fund (ETF), called DB X USA which tracks the US stock market indices. Also the imported liquor shelves at the local bottle store were being rapidly emptied yesterday. The dividends from this investment are of course quite different. Feliz Navidad.
The local rugby stars who secured overseas contracts will be among the few South African sportsmen to be pleased with the way the year is ending. The unhappiest must be the EP Kings players who haven’t been paid for months and are becoming the poster children for the poor state of sport administration in SA where politics has insinuated itself to a totally unacceptable extent.
Friday 11th December 2015