Friday, 7 July 2017


Some bears are undoubtedly starting to waken from their hibernation. Folk are perhaps starting to become concerned about the astonishingly high valuations that many companies emjoy. Particularly ones with terrific products but scant revenue. Bonds too are being revalued and yields are firmly shifting higher. The total amount of debt in many important economies, nations and industries has long been expressed in units too large for the average investor to grasp and so has been ignored because those who should have been expressing concern didn’t seem to be worried. But maybe now at last words like trillion are starting to be understood. This may not be just another bear trap. It could well be the start of a full-blooded correction and shake out. Tread carefully now.
Finance minister Gigaba told an audience that the bail-out of SAA with R2bn was “fiscally neutral”. Just what this means is uncertain but what is known is that tax payer’s money has been transferred to an offshore bank to settle a debt. The press dutifully recorded the distinction between repaying the loan from the National Revenue Fund (NRF) because SAA had “defaulted” and the NRF providing funds to SAA under instruction from a minister authorising “exceptional expenditure”. Oh yes? Is this the fellow who will defend the Reserve Bank from the forces of nationalisation?
Grammar fiends should soon start to get worked up about the latest purveyor of deep fried chicken. Popeyes (sic) Louisiana Kitchen has just launched in South Africa, eager to benefit from this country’s insatiable demand for this kind of fast food. It will take a great deal of very skilful marketing to shift KFC from its near iconic status as both a food and an incentivising agent but Popeyes arrival is a great confirmation of free market action. Students of colonial history are wondering if a further four dozen flavours of fried fowl are still to come.
Presumably the example set by an innumerate president is the basis for the education bureaucrats to suggest reducing yet further the required standards of maths in the nation’s schools. This and similar earlier decrees are frankly criminal and deny children any chance of entering a workforce. There is only a limited number of vacancies for presidents unable to add and subtract. At the same time, the quite reasonable idea that most pupils would benefit from learning an African language (of which of course Afrikaans is one) was weakened by not being accompanied by an explanation of where and when suitable teachers would be available. The state really is not the right organisation for delivering education.
Even the name raises concerns. Dongfang. This is the outfit that shaved a billion off their opening price to supply Eskom with a huge piece of kit and yet was still way over what the opposition quoted. Nevertheless, they got the job and a “secret” R800m to be getting on with. No prizes for guessing where most of that contingency fee is going to end up.
Definitely none of it will have been used to pay for the tea and biscuits served at the “launch party” for the 2018 income tax season. South Africa must surely be alone with this bizarre idea made all the more so by the Soweto venue. How many taxpayers do you know who were invited? The added insult is that the nation is in the midst of an ongoing deluge of revelations about the serious misuse of government money.
All manner of big name international firms are discovering that despite looking and acting like a 3rd-world dictatorship, SA still has a wonderfully free press and dogged and excellent investigative journalists. And, of course, a vituperative social media community. Outfits like KPMG, Bell Pottinger and now McKinsey must be having second thoughts about their foray into Africa. There are many citizens in this nation who don’t like others pretending not to notice that they are supporting and abetting dangerous, hurtful and malign activities.
There is a lot of excitement about tomorrow’s series-deciding clash between the All Blacks and the British and Irish Lions (such an unwieldly name). But it’s definitely not a world cup final as some claim but a great way to start a very full weekend of couch surfing. Super Rugby, Wimbledon, Le Tour, a GP and a test match at Lords where we have some local interest I believe. Oh dear, who can fix the Proteas?
James Greener
Friday 7th July 2017