In the words of Pravin Gordhan, we need to organise. Here's how.
- Magda Wierzycka
- 01 Apr 2017 07:59 (South Africa)
- Credit rating agencies are likely to rate our government debt as “junk” as consequence of high political risk and lack of sound economic policies. This means that the cost of borrowing for South Africa increases significantly. The government debt currently stands at R2.2 trillion. The country pays R169 billion in interest every year. We need to borrow R149 billion this year. If our cost of borrowing increases by just 1% that interest bill goes up by R1.5 billion. The rand depreciating adds to that. So expect your taxes to go up. A lot.
- International investors are pulling their money out of the country at a rapid rate. The fallout started on Friday. The immediate effect is a fall in the value of equities and bonds, while the rand depreciates. In practice, this means that the value of all your savings, investments and your pension fund goes down. You will have less money to retire on. Much less. For every 1% reduction in investment return over your savings lifetime, your retirement pool at age 65 will reduce by 60%.
- A weaker rand means everything that the country imports, including food, fuel and clothing, goes up. You pay more. You have less to support your family.
- With inflation on the rise, the ability of the SARB to reduce interest rates decreases. Your bond, car loan and credit card debt will continue to cost you more than it would otherwise.
- There will be no new foreign investment in South Africa. This means no new factories, no new businesses, no new initiatives. We need that investment to create jobs for the 48% unemployed youth. This will impoverish generations of people, contributing to the social problems we are all experiencing, including crime.
- An ineffectual government which cannot pay down its debts, has no money to invest in badly needed infrastructure. Think water, electricity, roads, police services and transport.
- Little attention is likely to be paid to sectors such as tourism, manufacturing and mining – all the sectors that have the potential to create jobs.
- The skills drain will continue. The best and the brightest young people will leave to pursue their lives elsewhere...
… The list goes on.
The concept that this will all pass once Jacob Zuma has retired is living in fools’ paradise. Make no mistake, Zuma will aim to stay in power beyond December 2017 by seeking a third term as president. He has the entire National Treasury purse and the Government Employees’ Pension Fund to pay, sorry, play with. South Africa has ceased to be a democracy, and has started on the slippery path to a dictatorship.
What can we do? As part of corporate South Africa, we can do a lot. But we only have April to achieve this. We need to ensure that when Parliament reconvenes in May, the vote of no confidence in Zuma passes. That means we need 70 ANC MPs to hear our voices and vote with their consciences.
Here are some practical steps that can be taken to start making a difference and, in the words of Pravin Gordhan, “organise”.
- CEOs of South African corporates must stop hiding behind corporate veils and “business organisations” and speak out in their personal capacities. Motivate, inspire and educate people who work for you by becoming visible in your criticism. Encourage your staff who are members of the ANC to work within the structures to become active in voicing their criticism through the month of April.
- We need to organise a visual virtual chain letter of voices and photos of public figures speaking out. Social media platforms can help.
- The asset management industry can withhold funding from captured state enterprises until the boards of directors are replaced with people with untarnished reputations. Again, the asset management industry are custodians of South Africans’ savings. Use those savings in the manner in which ordinary South Africans would want their savings to be used.
- Civil societies will organise public protest marches. Allow and encourage your staff to participate. For as long as it takes.
- Donate money to campaigns which educate ordinary South Africans about the implications of what is happening. Donate money to organisations such as the Black Sash, OUTA, Save South Africa. Every rand counts.
- Our courts need to fast-track all dockets which involve state officials. Bring them to court now. As fast as possible. Do not allow legal maneuvering to delay proceedings.
- The legal profession should provide its services on a pro-bono basis to civil organisations fighting corruption in courts.
- Banks should freeze the accounts of anyone accused of or suspected of corruption. With immediate effect. The legalities can be sorted out later.
- Speak to your family, friends, colleagues – continue the dialogue. Let it spread as wide as it can.
We have a chance to reclaim South Africa for all South Africans. The time to act is now. We have one chance.
As for Jacob Zuma, in the words of all those who stood up against Donald Trump - Not My President! DM