COMPLACENCY IN THE SOUTH AFRICAN GOVERNMENT - SOUTH AFRICA ON A PATH OF SELF-DESTRUCTION

COMPLACENCY IN THE SOUTH AFRICAN GOVERNMENT

SOUTH AFRICA ON A PATH OF SELF-DESTRUCTION

Stes de Necker

Domestic issues, such as labour disputes, xenophobia, corruption, and economic stagnation, are hampering  South Africa's growth to the point where we will soon be as hopeless as the rest of Africa.

Iraj Abedian, chairman of Pan African Advisory Services told CNBC Africa on Tuesday 10 February 2015 that,  “At the moment, South Africa is going through a very self-destructive path of complacency.”

This follows after the International Monetary Fund rated South Africa as the worst performing out of the BRICS (Brazil, Russia, India, China and South Africa) countries in terms of economic growth.

“South Africa’s growth has come from a high of five percent to a level going below two percent and policy makers just have their heads in the sand. It’s very unfortunate,” he said.  

The International Monetary Fund have stated that the country cannot blame its poor performance on international volatility as domestic issues such as labour disputes and policy uncertainties have been proven to be some of the key challenges holding back investment and growth.

“Ten years ago, Africa was the hopeless continent and now South Africa is rapidly reaching that point where everybody can criticize it,” said Abedian.

Within government for instance, the introduction of 'nonsensical' legislation that is changing the economic space of the mining industry is hampering the country’s national interests.

Earlier this year, the government amended the Mineral and Petroleum Resources Development Act, resulting in tighter and stricter regulations within the mining industry which has raised concerns that the new law could exacerbate negative investment sentiment.    

“Introducing some nonsensical, vague and indeterminate legislation, these are elementary mistakes which ministers and policy makers should stay out of. If you do make pronouncements in this environment, you must make absolutely sure that national interests are not compromised,” explained Abedian.

Leadership in government is not the only poor performing sector, business leadership has also been lacking as they have not been voicing their concerns over government policies in fear of losing business.

Instead, they have been reduced to complain silently.

 “Businesses have been muzzled by government from time to time. When they did stick their heads out once or twice, it was chopped off.” (Abedian)

"The role of business is not to keep quiet, that’s the way business in a global environment operates, when the going gets tough in one country, they take their capital and go to the rest of Africa.”

This is a major concern because if businesses aren’t happy in one country, they can easily move their investments into a better performing country.  

“For the first time in our modern history, our neighbor is no longer poorer and unpromising. You can take your capital anywhere north of Limpopo and you’ll get a fantastic return. The environment is much more favorable now,” Abedian said. 

 

“If you want direct investment, you need to make sure that the environment is right.”

Moeletsi Mbeki, 66, the brother of former President Thabo Mbeki, a refined and charismatic man who prefers to speak rather than listen to others, is seen as the voice of the critical upper class within the ANC.

"There is something very wrong with South Africa," Mbeki says, "in particular with how the political elite are managing the country." 

He wrote a book about the corrupt ruling class on his continent, as if he himself were not part of the caste of the powerful. He refers to many other black politicians as "architects of poverty" whose "main objective is to maximize their own consumption and the consumption of those who keep them in power."

Economic Indicators

The black majority still lives in informal settlements. South Africa's schools are just as miserable as the health care system, and youth unemployment exceeds 50 percent.

The gap between rich and poor is now even wider than in the days of ‘apartheid’. 

   

"We all know that land reform is one of the trickiest and most emotional issues facing South Africa. If handled badly, it could even create civil war. It could certainly lead to food shortages, prices going through the roof and an increase in food imports we can ill afford." - Clem Sunter

South Africa’s credit risk is rising relative to emerging-market peers on investor concern the nation may get downgraded as economic growth sputters and borrowing costs increase.

Moody’s Investors Service and Standard & Poor’s have a negative outlook on the nation’s debt.

"South Africa’s default swaps are the fourth-highest among 25 emerging and major markets monitored by Bloomberg."

The rand again plunge against the dollar this year, the worst out of 16 major currencies tracked by Bloomberg.

This is threatening to inflation and reducing the central bank’s room to stimulate the economy.

After more than a century as the world’s biggest gold producer, South Africa has slumped to sixth position.

Prior to 1994, despite apartheid, South Africa’s HDI (U.N. Human Development Index) ranking was steadily climbing upward, and the nation was ranked well above most of Asia and the Arab world, and far ahead the rest of Sub-Saharan Africa. It was also higher than the world average.

Today, the ranking – which takes into account life expectancy, health, education, income, poverty, economy, equality and more – is 134 out of 187 countries, and significantly below the world average.

South Africa is in a serious moral crisis. We became a violent society disintegrating by the day.

One child raped every three minutes; three children murdered each day; farm murders committed almost weekly.    

South Africans have become delusional, forgetting that life is absolutely intrinsic and inviolable.

Our country is awash with demonic monsters and human garbage, savages fit only for the wild, and satanic beasts ill-equipped for civil society.

However, South African policy makers are not seeing this as a concern.

They remain complacent.