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The gift of handcuffs


Steven Boykey Sidley is a Professor at JBS, University of Johannesburg, and the co-author of Beyond Bitcoin: Decentralised Finance and the End of Banks (with Simon Dingle).

Probably the most stupid headline in recent newspaper memory came from a well-known South African newspaper last week. It said “China gifts R370bn to SA”. Oh really? Like a gift of friendship? A birthday perhaps? A reward for a job well done? Let’s not quibble with the warping of the noun “gift” into a verb, but let’s call this what this is. It is an unbreakable set of handcuffs and concrete boots, negotiated by a rich superpower smarter, more wily, more experienced and more Machiavellian than our amateurs could ever imagine as they flew back with the illusion of win-win in their eyes.

Consider this. Sri Lanka was recently forced to cede an entire port, Hambantota, to the Chinese. The Chinese built this port, using their own construction companies and labour. Think about that. They loaned Sri Lanka money. Sri Lanka handed the money back to the Chinese to build the port. Then Sri Lanka defaulted though mismanagement and now China owns the port — and a strategic commercial and naval asset. It cost them, well, essentially nothing.

Consider this. Zambia is now in default on multiple Chinese-funded projects. And so it is now likely that China will take control of… Kenneth Kaunda International Airport. A strategic geopolitical asset. Not to mention that 60% of the Zambian Broadcasting Corporation now in Chinese hands.

Oh, and Ghana. And Nigeria. And Kenya. A tripling of loan capital from China to Africa since 2016, under terms that are entirely opaque, even aggressively hidden.

But let the other countries stew in their own financial naiveté. Let’s talk about South Africa. There are a number of blinding red flags (aside from the Chinese flag) waving urgently above this deal.

The first red flag is that our government will not allow Parliament (and by extension us) to review the terms of the deal, spouting the same sort of hogwash that they did in the Chinese loan to Eskom recently, namely that releasing details would somehow prejudice competitive negotiation leverage for our state power utility. This is utter nonsense and a terrible start to the supposed Ramaphosa era of transparency. It is simple — we the citizens are considered too stupid (or too clever) to analyse the details of the loan. So they are obfuscated and spun.

The second red flag is that we are running around Beijing with a begging bowl because our coffers are dry. And they are dry because three successive ANC administrations turned the other way as their comrades looted. It smouldered under Mandela (starting with Sarafina, excellently chronicled by Ray Hartley in his book Ragged Glory). Then it sparked and fizzed under Mbeki as it became evident that no one aligned with the ANC would ever go to jail for corruption. And of course there was the conflagration under Zuma where the entire country simply burned like a bacchanalian bonfire attended by drunken kleptocrats.

And the third red flag is that if we default, the Chinese will quickly and brutally repo the asset. This is unlike the loans from the IMF and World Bank and Westerners, which while sometime stringent also are reasonably open to restructuring when things go awry. Extended schedules, softened terms, that sort of thing. The Chinese do not have a legacy of softened anything when it comes to these deals. They will take our airline, our mines, our ports, our utilities. Without blinking.

Of course, there is a generous interpretation too. That many countries borrow for large capital projects. That the loans from China are faster and cheaper than elsewhere. That the hole in our fiscus has been dug by unfortunate histories and things are different now. That the Chinese are perfectly noble financial partners. That our fundamentals are good, the loans will be robustly repaid. But one would struggle not to raise a sceptical eyebrow at these bleats.

One could challenge the dark view of this column, and ask, what other alternative is there? And my answer would be — borrow money from people who may actually care about the development of our country (there are many, even the much maligned IMF). And vote this government out of power. And lock up the people who stole for 20 years.

I listened to Ronnie Kasrils at small literary festival recently admit that the ANC’s biggest mistake had been its insistence on unity before all. It was not a mistake. A mistake is not checking your addition in a primary school maths test.

The final irony of course, is that the ANC’s insistence on unity above principle has led to its opposite. Disunity and a fracturing party and a crippled country and the same people in charge and no one accountable for the crimes of the past 20 years. No, not a mistake; it was wilful and felonious neglect and now we are where we are, selling the country to the Chinese for a bent nickel.

So we will take this money from the Chinese and the public will never be told the terms and the money will be stolen and misused by the same corrupt and incompetent cadres still happily embedded in the DNA of the governing party and in the corridors of its protected and coddled parastatals.

And we will start moving our jewels and remaining dignity to another colonial power to the East. DM


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