There were
scenes of shock and horror on Tuesday when Stats SA revealed that GDP in the
first quarter had slumped 2.2% (annualised) from the previous 3 months. The
wonks were soon out there waving their hands trying to explain such a dreadful
number. The idea that Q1 figures are always down from Q4 (Christmas season) doesn’t
really fly because, in recognition of just this phenomenon, Stats SA makes
seasonal adjustments to the data. Whether or not this adjustment and equally
the companion correction for inflation are doing their jobs properly is the
subject for a far more boring publication than Tidemarks. What we can say
however is that these large swings of a parameter measured in several trillions
of Rands and the general “look and feel” of all the numbers makes seasoned data
diggers uneasy as to the quality and accuracy of much which is so diligently published.
It should be noted, however, that the
highest growth was recorded in the Government sector, while Manufacturing,
surely the cradle for job creation, showed the largest contraction. And there
is the nub of the nation’s real problem.
Unsurprisingly
the two most sensitive indicators of what the big money is thinking, the
currency and the bond market, have weakened quite badly; for the most part
setting new lows for the year.
It’s nearly
impossible to get someone to change their mind about matters of political
philosophy despite truck loads of evidence that suggest they are plain wrong.
The third iteration of a so-called Mining Charter is on the table and
reportedly government is very excited about identifying people who without any
investment or contributions, but because of who they are and even where they
live, should benefit from any upside created by a mining operation. Barring a
very few spectacular examples (including perhaps our current president)
socialist legislation and regulation has been disastrous for the nation’s
mining industry and the ordinary people who have tried to make a living from
it. Mining’s share in the economy and the number of people it employs have
shrunk enormously since these interventions started taking place. The nation
has a long list of other fading and failing areas where central planners have
destroyed value and hope. Frustratingly, nothing has yet managed to elicit an “Ah-ha”
moment that perhaps something is not working. Well, it is working for the
select few who have been able to get the keys to the national treasury safe and
clean it out.
Minister
Pravin Gordhan is down as the keynote speaker at tonight’s Gala Dinner being
hosted by the Black Management Foundation. His speech is entitled “Ethical
Leadership as a Catalyst for Transformation and Inclusive Economic Growth” And
right on cue, after a period where the country has definitely not been enjoying
“ethical leadership”, the dreadful growth results are published. The speech
will write itself! However, it is doubtful whether the racism inherent in the membership
criterion of the host organisation and also implicit in the current meaning of
the terms transformation and inclusive are legal, let alone ethical. But it’s
worth trying anything to try and fix this mess we are in. Charts showing how
much of the fuel price is being siphoned off by government to cover the shortfalls
caused by their negligence, incompetence and corruption have raised the general
levels of awareness and dissatisfaction by several notches.
It’s that
time of year when in a spirit of comradeship, thousands of people run between
Durban and Pietermaritzburg. This time it’s the “down” run and for the first
time will finish at the now iconic beach-front soccer stadium named after a long-forgotten
worthy. [Politicians spending money the nation doesn’t have to find a recent
rogue to name the Cape Town airport after, should take note.] In the meantime,
the junior ‘bokke are taking the long way around to get to the knock-out rounds
at the U20 Rugby World Cup in France. Watching this tournament does raise the
question of just how familiar many of the participating players are with their date
of birth. It also makes genuine South African sports fans wonder if this
country will ever be able to select national teams based solely on merit. Also
diverting in slow moments at the Canadian GP is watching the St Lawrence
flowing strongly past the track and wondering how long a river like that would
take to solve Cape Town’s water shortage.
James Greener
Friday 8th June 2018
