Every morning South Africans wake up to yet another newspaper article talking about government corruption, misuse of public funds, state capture, illegal procurement processes, mismanagement at state-owned enterprises and so on. To counter-balance that the government fights back with the narrative of radical economic transformation, white monopoly capital, land appropriation without compensation, nationalisation and that ugly word “racism”. There are no winners. Either way, South Africa suffers. Every day we get poorer.
And yet, we do not feel poorer. On the surface, our savings are looking fine and the rand has remained relatively stable somewhere between R13.00 and R14.00 to the US dollar.
When President Jacob Zuma made his first check-mate move by dismissing the Minister of Finance, Nhlanhla Nene, in December 2015 the rand collapsed, the equity markets fell, and the bond yields (or interest paid on government bonds) shot up. The shock to the system of an average South African was so great that people took to the streets and forced change. Zuma retreated, and then regrouped.
When, just over a year later, in a similar move, he dismissed Minister Pravin Gordhan, the shock waves were similar. People took to the streets and protested. But there were two main differences, the rand did not collapse and Zuma did not retreat. This made us all complacent, at a time when complacency is the most dangerous state of mind to have. The latest report issued by the South African Council of Churches is a good example of the fact that South Africa is being raped and pillaged.
What is different this time around?
The dismissal of Pravin Gordhan, perversely, came at the worst possible moment for South Africa. Simultaneously and independently, international investors became disillusioned with the promises of growth punted by US President Donald Trump and lowered their expectations of the pace at which interest rates will increase in the US. Consequently, and fairly indiscriminately, they have redirected their investments to emerging markets which offer high interest rates on their investments. This unexpected and short-term bonanza, known as “hot money”, has propped up the rand and buffered us from the true economic cost of what has been done. Do not be misled. It is a temporary phenomenon driven by indiscriminate investment by foreigners into emerging markets. Their motivation is singular: high interest rates they earn. The same “high interest rates” our government pays means money is deflected away from education, welfare, infrastructure and other basic services that we so badly need. Those investment flows will reverse on either domestic political news, or on something as remote to us as Donald Trump lowering US taxes or reducing the level of regulation, or the US Federal Reserve increasing interest rates. The rand will fall to R16 to the US dollar or below unless we reverse the course of history.
The second difference has been the reaction of Zuma himself. He did not blink. Not in the face of rolling mass protests, nor trade union demands for his resignation, nor the booing on Workers’ Day. He has dug in his heels and plans to stay irrespective of the wishes of 55-million people, of the cost to the once-proud liberation movement, the ANC, and the economic hardship this extracts on South Africa. In fact, his actions have become more brazen.
As it stands, we are at a tipping point. It is either redemption and hard work to get back on track, or two years of limping towards 2019 elections while the country is robbed of its resources.
Right now, the only moat between us and anarchy is our court system which is bravely fighting to enforce the rule of law and the Constitution on our behalf. But court cases cost money. Hence the time has come for all South Africans to contribute to that fight. You do not have to do much. All I am asking is that today, right now, you donate R500 to any one of the following non-partisan lobbying groups and civil society organisations fighting corruption in the public and private sector, such as OUTA, Save SA, Black Sash, the Helen Suzman Foundation, the Ahmed Kathrada Foundation, among others. In a flash we could raise over R1-billion to fight corruption through private prosecutions. Better yet, your donation is tax-deductible. Google their websites and banking details and contribute. Tell your friends, family and colleagues to do the same. Spread the word. Challenge each other on social media or in the workplace. Just R500 can make all the difference.
This is Nenegate in another form. DM
