I recently took part in an exercise. What, the question was asked at a Zoom meeting, should the perfect South African company look like? This is what I wrote:
"The perfect South African company is run by a Hungarian immigrant named Istvan, an electrical engineer who immigrated to SA in 2022 under an ambitious scheme to encourage skilled immigrants to employ South Africans in return for permanent residence and, ultimately, citizenship.
"Istvan decided to live in East London, drawn by the fact that a model of his favourite car, Mercedes-Benz, is manufactured there. He plays golf, has children at good former model C schools in the city, and within three years was employing five local staff, qualifying him for the residence programme. Now in his 10th year, Istvan employs 63 local people and supplies intricate plastic and metal alloy components used in the remote controls of car rearview mirrors both locally and abroad. He has also begun to supply his gearing technology to the defence and medical equipment fields, businesses with attractive export potential.
"As an immigrant manufacturer, Istvan has two advantages. While local wages are relatively uncompetitive, the rand is very competitive in export markets. Second, while valuable skills and networks have been lost to SA through emigration, Istvan and other immigrants arrive with their own skills and networks intact.
"Prior to emigrating from Hungary, Istvan worked at the Dacia plant outside Budapest. A mixture of populist politics and restricted opportunity in the wake of the Covid pandemic tempted him to look for other opportunities. A big South African drive to attract skilled immigrants caught his eye.
"Istvan’s company turns over R150m a year. It is not listed but, as the immigration programme requires, his business is built around sound stakeholding principles.
"He makes solid profits and pays personal and corporate taxes. His board of six people includes two nominated by the biggest union in his West Bank factory near the airport. His chair is nominated by the regional head of Standard Bank, his largest creditor. Labour representatives sit on both his audit and social & ethics board subcommittees.
"The latter subcommittee also nominates which medical aid(s) may be used and selects by whom the staff pension contributions will be managed. He has never had a strike. The workforce is regularly updated on the company’s finances and strategies, into which it is welcome to make contributions.
"As part of an expansion three years ago, Istvan added 15 new jobs. A Johannesburg investor was persuaded to invest R47m in the company for a 25% shareholding. Provided he stays with the investment for more than 10 years, under 2021 tax reforms he will pay no capital gains tax on any profit he makes upon selling his shareholding.
"In all more than half a million people took advantage of the immigration programme. They came from all over the world, including other parts of Africa. Benoni has become a hub for ethnically Ethiopian entrepreneurs engaged in the export of machine components. Some migrants did not succeed and returned home but many have stayed and become settled employers, though not all as successful as Istvan. The scheme is credited with stanching SA’s skills gap and creating more than 3-million new and sustainable private sector jobs."
An innocent little fantasy to be sure. Imagine an immigration policy to replace lost skills, company law that encourages economic inclusion and tax reform that rewards long-term shareholding? Couldn’t happen here in SA. We don’t want foreigners here. I sometimes think nothing cheerful can happen here and I’m in good company. A read of last Sunday’s newspapers pretty much confirms that we are done for as a country. Why bother? Blacks are mad as hell. Whites have their collective head in the sand. The government is missing, replaced by a Galactic council whose composition almost no ordinary citizen knows.
We have become not so much a place of fun, hope, argument, accusation, victory and loss, love and despair, as a sort of laboratory experiment where we are not merely the subject of examination but controlling the Bunsen burner at the same time.
White people, City Press editor Mondli Makhanya wrote in his irrepressible leader page column, think they are the victims of a sort of post-apartheid oppression. And he’s right. The worse the ANC handles the coronavirus pandemic the more I hear white people say it’s all deliberate, that the alcohol ban is there to drive whites off their wine farms, or out of their restaurants or whatever activity white people do that is subject to some Covid restriction or other.
What is amazing about that is that on the one hand we all know that the ANC is almost incapable of any co-ordinated action, yet when its actions or regulations touch us it’s somehow now deliberate. Cyril Ramaphosa gets mentioned yet again in social media where people talk about putting white people in blenders, like frogs, and heating up the water. That is just insane. The fact, the fact is that it is an incoherent, incapable, utterly useless entity. Internal dissent and international sanctions brought apartheid SA to its knees, not the exiled ANC. The only person in the rapidly warming blender in SA is the man leading it, Ramaphosa himself.
What is interesting is that he knows exactly how dysfunctional the ANC is. More important than knowing it, though, is leading it. The ANC could spend between now and the next general election in 2024 communicating only in Apache and still win it handsomely. That is the measure of its legitimacy. It is, as I have said before, apartheid’s parting gift to SA. Elected as its leader by a razor-thin majority in December 2017, Ramaphosa saw off the near certainty of a continuation of the kleptocratic presidency of Jacob Zuma, ousted said Zuma from office early, threw out half his worst cabinet ministers and was doing well until he suddenly, and maybe fatally, hesitated.
What it was is hard to say. He went into 2018 riding high but then found himself hurried into a calamitous agreement to seek to change the constitution to allow the expropriation of land without compensation. No matter that nothing has since happened and that Ramaphosa would do everything he could to finesse it, if not avoid it, South African politics, always a theatre of the hysterical, has not settled since.
That land time-bomb, planted by Zuma supporters at the very end of the ANC elective conference Ramaphosa had won, has wrought a terrible price. It alienated the country’s political middle just months after it had rejoiced at his December 2017 victory. Countless skilled people have simply packed up, sold out, and left for good, believing an invisible line had been crossed. They were employers and cannot be replaced internally.
Ramaphosa though, fought gamely on. He won the 2019 general election for the party and even held on to Gauteng but life has not become any easier since that victory. If anything, it has become harder. The economy has tanked. It took him nearly six months to appoint a new CEO of Eskom (and he has had a completely inappropriate interim chair at the power utility for virtually all of this year) and at the end of 2019 the national airline, SAA, finally swallowed the last of its last meals and went bankrupt, or into business "rescue". It has yet to come out of it.
And yet, while Ramaphosa’s inaction on economic policy continued to dismay or enrage the business community his popularity soared among the wider public. Had the country gone into a general election at the beginning of this year, in the middle of what we now know was a recession, Ramaphosa’s ANC would probably have increased its vote.
But he has been caught horribly short by the coronavirus. It has exposed weaknesses his general geniality might have hidden a little longer. The virus, which is thankfully killing inordinately fewer South Africans than it is infecting, has nonetheless exposed the president and the ANC as muddled, frightened and confused.
I had always assumed that Ramaphosa truly understood what a mess the ANC is, how deeply corrupt and incapable it is. He has taken some knocks at the national executive, where he maintains a theoretical slender majority but which can go against him at times. When that happens he tends to take it in his stride, comforting himself that the ANC, big as it is, cannot simply always get what it wants.
But I doubt even he would have expected his provincial premiers to oversee the utterly lamentable response to the virus that we have so far experienced from both Gauteng and the Eastern Cape (the premiers of which were strong Ramaphosa supporters during the ANC leadership race and who, as a reward, asked for and won a re-imposition of an alcohol ban when the virus finally finished with the DA-controlled Western Cape and turned its baleful gaze on them).
Neither provincial health service had managed, by the time the surge of infections hit them, to erect a single new hospital bed capable of delivering oxygen to its occupant. In the Eastern Cape the job was done by Volkswagen while the local government handed out wildly corrupt and inflated tenders for protective equipment. In Gauteng a large quarantine centre at the Nasrec complex was being hastily converted into something that might be called a field hospital (a few beds having hastily been kitted out with oxygen tanks) as hospitals in Joburg were turning away patients struggling to breathe.
The next site of disaster will be the ANC’s biggest stronghold, KwaZulu-Natal, which promises to be a disaster as well. KZN ran out of public sector oncologists last year and some of its major hospitals closed down months ago when staff caught the virus. The next few weeks will not be pretty.
Part of the game Ramaphosa has had to play is to nod in earnest agreement as the party presses forward not only with land expropriation but the creation of the national health service as well. With the ANC in its current condition, there is little danger of either happening, let alone working.
But for the first time the outlines of a new challenge to the president have begun to take shape. It is not Jacob Zuma. Its form is that of health minister Zweli Mkhize who, while he might not have had much effect, has worked hard throughout the epidemic, appearing in all provinces and endlessly on television. Mkhize’s problem is that he cannot stop talking once he starts. This means he often fails to say anything anyone can remember.
But ANC politics is about appearances and there’s little doubt that, in ANCLand, he has had a "good" epidemic and must represent a potential threat to Ramaphosa come the next party election. A former member of the ANC "Top Six" under Zuma (he was treasurer-general) he failed to secure nomination in 2017. Earlier that year I attended a dinner with him and other journalists and clearly remember him saying that remaining in the Top Six was for him a priority. So we can assume it remains so, and that his ambitions will have grown through this Covid ordeal.
The only other vaguely visible challenge to Ramaphosa in the party would come from Nkosazana Dlamini-Zuma, whom be narrowly beat in 2017, but it is hard to see her, from this distance, making much progress.
Part of her problem, and Ramaphosa’s problem, is that the response to the pandemic has been clumsily handled and they are the two people most closely identified with it. In a strange way, Mkhize escapes that particular arrow, as if the infrastructure of the response is theirs and not his. Both she and the president will be damaged when the real death toll becomes apparent and when the scale of the job losses they have inflicted becomes visible in food queues and rising, measurable, starvation. It was Dlamini-Zuma who authorised large funerals under lockdown, creating arguably the primary disease vector from the original Western Cape to the Eastern Cape
Still, the ANC will elect a new leader in December 2022 and that is just over two years from now. As is usual, the incumbent, should he lose, can expect to be ejected from the Union Buildings long before the following general election in around June or even July 2024.
Which means that if you’re Ramaphosa you may have just over two and a half years left in office. I thought the editor of the Sunday Times, S’Thembiso Msomi, wrote a fantastic column on his leader page on Sunday, pushing Ramaphosa to act like a one-term president and get moving on all the reforms he has promised, instead of waiting for a second (and final) term where, in theory, he might not need to be so cautious.
But he may not even have a full first term if the party turns on him in 30 months’ time. Which, obviously, is why he doesn’t lead with any force. Ramaphosa is an open door — push and it opens for you. It is how he survives. Msomi is right — Ramaphosa is idling through his first term in order to get to his second before doing anything remotely dangerous.
If a week is a long time in politics, 30 months is outrageous. For a start, the virus is not yet done with us or Ramaphosa. How many more political debts does he pay off by closing schools or whole industries as with alcohol or tobacco? Restaurants and tourism generally. How does he ride a second wave in the summer? Does he cancel Christmas? How does he tell the ANC he can’t save SAA despite it having instructed him to do so?
In a way the virus is a convenient dodge for any politician but the longer the virus stays with us the more it is going to cost us. Where, with the debt to GDP ratio rapidly reaching more than 100%, industries shut, skills leaving, public sector unions sulking because their pay deal cannot be honoured, does the money come from? This is the Big Fight and for a politician in Ramaphosa’s position it is hard to see how it can be won.
The political Left, the party generally, some of the Zuma remnants in the leadership and cabinet, see the government spending its way out of trouble, dipping into pensions and persuading (forcing even) the Reserve Bank into a full programme of quantitative easing so that it begins to buy government debt in the primary market. They want money for programmes that keep the poor and the masses onside.
The Reserve Bank and the National Treasury and, to an extent, Ramaphosa, stand against that. The government is this week finalising help of more than $4bn from the International Monetary Fund (IMF) specifically under a Covid relief programme that the IMF has. It has been a long negotiation because the IMF knows what is happening here and is wary of the extent of corruption.
But that negotiation might also serve as a rehearsal for a full-blown bail-out should we fail to haul in our widening fiscal deficit. Finance minister Tito Mboweni has promised to stop the debt surge at 87% of GDP by the 2023/2024 fiscal year but if Ramaphosa is no longer in office then (see above) it is highly unlikely Mboweni will be either.
Scary huh? The Treasury is readying for a fight as the Left, extremely well-funded and with breathtakingly easy access to the media, punts a fiscal stimulus into our weakened economy. Modern Monetary Theory they call it. Easy money. We can print it ourselves and there’s not the slightest risk of inflation.
To which the acting head of the Treasury’s economic policy division, Duncan Pieterse, recently and succinctly responded: "A fiscal stimulus is inconsistent with recent evidence, especially when taking debt dynamics into account. A fiscal stimulus cannot help SA’s post-Covid recovery."
There, it’s that stark. The Treasury (and the IMF for that matter) wants economic reforms outlined in a policy paper managed by Pieterse’s department years ago. Ramaphosa has supported those reforms but would he stand and fight for them or, under pressure, get himself a central banker he can push around.
Because he has just appointed Lesetja Kganyago to a second term as Reserve Bank governor we must assume Ramaphosa knows what he has done. Kganyago won’t budge and he would expect the president to back him.
We can’t see the virus that’s killing our people but we can see our debt rising. Ramaphosa’s answer to all this is a programme of infrastructure projects to get business moving and job numbers climbing. There’s about R800bn in them all but funding is hard to come by and SA is no longer that desirable a destination. It might be better to narrow the targets down to a few "nation builders — a highway, a high-speed train from Joburg to Durban or something we can all see and be proud of.
Whatever. Ramaphosa desperately needs something to happen. In my book that would be the arrests and trials of six top corruption suspects, politicians among them. It would require the National Prosecuting Authority (NPA) to get off its butt and take some people down.
There has been new management at the NPA for nearly two years now yet they have precious little to show after a decade of grand theft under the Zuma presidency. For Ramaphosa they need to take some chances and prosecute even where they cannot be certain of victory. The strategy, surely, should be to take a Brian Molefe apart bit by bit. If you don’t get him 15 years for fraud at Transnet then there might be something later at Eskom. The same applies to his favourite accountant.
You may lose a few but just start prosecuting. Get your people into court, up against the fancy lawyers the culprits will be able to afford. Harden them.
Ramaphosa can’t be faulted for the NPA’s aversion to risk. It’s a South African thing anyway. We can’t bear the thought of being found wanting in public.
But he is responsible for himself and the way he has conducted himself. He is responsible for not pressing ahead with reforms when he had some space. Now that the space is gone and re-election is a factor we can expect little other than reaction to events.
But even that might be fun. In the meantime, many of Ramaphosa’s supporters in the media have turned their backs on him now and have given up. Even I despair. But not quite as much as my friend Tim du Plessis, the former editor of Beeld, who now writes a fabulous column in Rapport, the Afrikaans Sunday paper. I would advise Ramaphosa not to read the one this last Sunday.
Would Nelson Mandela, who once fancied Ramaphosa as a successor, have chosen him if he had watched him as president these past few years, asked Du Plessis. "Ramaphosa will be remembered as the president," he wrote, "who figuratively ‘died’ of Covid-19 without ever coming into contact with it. His diktat on Thursday on the closing of schools blew away the last remains of his credibility. Like a ship’s captain afraid of the sea, or a surgeon with a blood phobia, Ramaphosa is clearly a leader afraid of his own people."
Ja, well, we can all look around. But how do you get the ANC out of power? Me, I’m probably cured of endorsing anyone but any threat to the ANC is damned hard to spot. Herman Mashaba is making a noise and gathering support on social media for a proposed new party. The DA is in a tough place, though its management of the coronavirus in the Western Cape has been a model of good sense and execution. I see almost no news about the Freedom Front Plus.
Perhaps new leadership in the DA can find common ground with Mashaba but they would have to fight local elections first and take each other’s battle pulse. Even then, what could they possibly shoot for in 2024? Even 30% would, from this distance, be a miracle. Old Uncle Cyril may not be a dynamo but he’s not a fool. Yesterday he dealt with the Covid corruption allegations against his spokesperson’s husband with cold efficiency, placing her on special leave.
The political action that really matters ahead of that election is going to be inside the ANC, like it or not. Ramaphosa reached out to both Dlamini-Zuma and Mkhize after his election, immediately drawing them into his cabinet, where he has given them both wide latitude to pursue the projects that turn them on — a new rural municipal model for Dlamini-Zuma and national health insurance for Mkhize.
The virus has, however, thrust both into new and powerful roles and they would be less than human if they did not begin to see themselves as real contenders for leadership in December 2022. Perhaps I might show my short essay on the perfect South African company to one of them should our paths ever cross.
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