Why my hope is springing eternal … once again

One of the strangely wonderful things about writing these little missives to you three times a week is how wonderfully optimistic I can be one day and hopelessly depressed the next.

So many people have made this point about South Africa over the years – that we can be wildly happy one day and have something to cry about the next.

I suspect it has something to do with the nature of our society, with all of our groups pushing and pulling but generally getting along with each other.

Other parts of the world have actually become more like us in the past few years.

The US seems to swing between hope and insanity, while I’m sure there were people in the UK who celebrated Andy Burnham becoming prime minister and then realised the next day nothing will change there for a long time.

There was a time before this when you and I were probably much more optimistic than we are right now, after two months of winter. 

Do you remember those golden days?

The gold price had hit $5,000 for the first time in history (after hitting $4,000 for the first time late in the previous year). Platinum prices were moving up.

The rand was strengthening nicely against the dollar as the “dollar debasement trade” seemed to be taking hold. Oil prices were about $70 a barrel and seemed incredibly stable.

The JSE All Share continued its amazing run, hitting 129,000 points.

It all feels like a very long time ago.

Actually, it was in January, February and March. Just five months ago.

Since then things have been looking rather bleaker. All thanks to you know who.

In the past week I’ve sensed a little bit of that optimism again.

Platinum and gold have surged, pushing up mining stocks and thus the JSE higher. Rassie Erasmus seems to have given the rand a good talking to because it’s recovering and things are suddenly looking a lot more positive. 

So, could we be at one of those moments when all of the reforms that we have been through are about to pay off? Could what we expected in February happen now?

Well, I’m not silly enough to try to predict what will happen between the US and Iran. But if that factor suddenly becomes a lot less important, we’re actually primed for something quite special.

It’s easy, in the dark depths of winter, to forget how much reform there has been.

On Thursday, Glencore said it is considering reopening some of its coal mines here for one simple reason that has nothing to do with coal or coal prices.

It’s that Transnet is improving so quickly that they’re nearly at the point at which it becomes economically possible for Glencore to make money from their assets again.

The point of this is that our reforms are now at a point where reform is building on reform.

So, the obvious first step was to end load shedding.

There has not been a hint of load shedding for nearly 18 months. But now the focus is on reducing what you pay for electricity. If that cost goes down, our businesses will make a lot more money.

Glencore is not the only company to notice the changes at Transnet. Many other coal miners have pointed out that they’re getting a much better and more reliable service.

And Operation Vulindlela shows no signs of stopping.

Last week, in their quarterly report, their head, Rudi Dicks, spoke about how there is still so much to do in the electricity sector and how much progress is being made.

The tough part, obviously, where even the good people at Operation Vulindlela may founder, is in local government.

And while they are keen to make a real difference, and are making good recommendations, I think fixing your local council (if it needs fixing) is a logistical and legal mess. There is no way Operation Vulindlela, or anyone else, can just impose solutions. So many of the problems are political, which probably makes it impossible to make a real change.

In the meantime, it does seem the President is determined to keep going, that our reforms will continue.

I don’t know what this will do to economic growth.

Surely, if our electricity suppliers are reliable and cheaper, if our mines are selling more, if prices stay high, if the rand stays strong and if oil prices go back to $70, then it will be another period of optimism.

I won’t give you hard numbers, that would be silly. 

But I can give you sentiment.

Perhaps, just perhaps, things are about to really turn for us.

In the most important way. DM