The point to keep in mind when trying to make sense of the Social Grants Payments debacle is that the privately-owned Cash Paymaster Services is the only game in town. They have grown up alongside the huge increase in beneficiary numbers and are alone in having the institutional memory and in-place capacity needed to tackle this mammoth monthly task. They are not going to share that with any competitor – even SASSA itself. Minister Bathabile Dlamini and the top people in her ministry clearly have known this for some time. Indeed, they appear to have been comfortable with it. They did nothing until way too late to seek alternatives, and even that was very half-hearted. She sucker-punched everyone including parliament and the Constitutional Court into believing there was an alternative to the reviled CPS and that her department was on top of a change over. But it was simply not true and so with just days until the next grant distribution date there is absolutely no alternative. And there probably won’t be for a very long time.
Aside from the beneficiaries, who also wins from the renewal of the contract? CPS themselves will have in mind a substantial fee increase. The scent of all this money will attracted clouds of flies looking for a place to land on the trough. And at least one asset manager has hung onto his Net1 shares and is struggling to hide his satisfaction behind claims of good analysis. It is alarming however that top officials in the Department of Social Development have resigned or taken sick leave. Presumably the learned judges of the Con Court are none too pleased with having been used to hand down opinions that were always going to be ignored but everyone should note that Number One himself this week expressed total confidence in Minister Dlamini, so she might now be bullet-proof. The biggest takeaway from this event however is that this social grant handout program is now all that stands between far too many citizens and starvation so that no government will be able to prune it without triggering a terrible backlash.
The only way out of this problem is for the country to enjoy a huge economic resurgence which gets everyone back to work and gives families opportunity to earn far more than the hand-outs provide. Unfortunately, this week’s GDP growth number for 2016 – a shocking but not unexpected 0.3%p.a. – indicates that such a resurgence is a very long way off. Optimists claim that there are flickers of good news to be found in the thousands of numbers provided by Stats SA in their quarterly GDP publication but they are faint. Also fading is confidence in the quality of the information being provided by official documents such as this. Some of us who have made a living from “interpreting” data feel uneasy with the look and feel of the numbers data which, given their provenance, should move only slowly from one quarter to the next and change direction rarely. For example, what were the major changes in manufacturing activity that could deliver four consecutive quarterly growth figures for the sector of 0.6%, 7.6%, -3.3% and -3.1%. It seems improbable.
Highly probable, however, is that more and more CVs will have a line or two devoted to the candidate’s tenure as a director at a State-Owned Enterprise. There must be few well-connected young men and women who haven’t got their knees under a polished piece of expensive hardwood boardroom furniture in recent years. Only to be turfed out together with some senior executives when the wheels come off their particular vehicle. Entire boards are fired from one social media message to the next. The hiring part often takes far longer and a list of SOEs with acting Chief Executives is quite long. Yet more reason to privatise all these functions the state believes it needs to do for us.
Is there a glimpse of something special from Ferrari from the start of season testing sessions? Testy personal relations seem still to be playing out in the Mercedes camp though. The new 2017 liveries are nice and distinctive however. Meanwhile it’s unpleasant seeing umpires wearing gloves on a cricket field. If a nation can’t provide somewhere warmer to play a test they should stop playing the game!
Friday 10th March 2017
I’m going to listen to music in Wakkerstroom next Friday so the tide will be out.