Is the youth league doing Mugabe’s bidding?
What do you do if you’re one of the poorest countries in Africa? In the case of South Africa’s northern neighbour, Zimbabwe, you tell foreign investors to go to hell. That’s effectively what President Robert Mugabe is doing in telling foreign firms who do
The South African reader will probably struggle to separate Mugabe’s rant from recent utterances by our very own ANC Youth League President, Julius Malema. “They say we want nationalisation because we are in the pockets of the mines; that mine owners – hyenas – are giving us shares and money,” he growled, after critics lambasted his organisations ongoing call for nationalisation. The youth league is driving the call for the nationalisation of South Africa’s mining assets despite repeated denials from the ANC top brass… Until the latest national general council! At the council the ruling party’s national executive finally agreed to “investigate the viability” of the state playing a greater role in key sectors of the economy.
A short walk to poverty
This obsession with skimming the cream from South Africa’s economy could turn Mandela’s long walk to freedom into a short stroll to poverty. Government has more than enough report cards from its existing state run institutions to back this assertion. Nothing better illustrates the point than the South Africa Broadcasting Corporation’s (SABC) 2009/10 Annual Report. The state-owned broadcaster halved its losses last year. And it’s hardly an unfamiliar refrain from a company where board battles take precedence over profitable business practices most days of the week.
To make matters worse, SABC radio reports: “The SABC has failed to meet performance targets associated with its R1bn loan guarantee from the government...” So a typical “nationalised” asset cost taxpayers R851 million in 2008/9 and another R414 million in the latest year. And that’s despite a whopping R1 billion of our tax money parked unproductively at the institution to boot! But taxpayers shouldn’t despair – management is apparently working on the problem and hopes to restore profitability by as soon as 2012.
Time to “do what you do”
It’s time for government, the ruling party and its youthful cohort to set aside thoughts of nationalisation and focus on their primary functions. South Africans will gain more benefit from an effective and functioning government rather than a mismanaged state-owned company. Government has to learn to run its own departments before snapping up companies! Just look at what’s happening at Home Affairs.
I-Net Bridge reports the Department of Home Affairs is being sued for around R6.8bn by victims of identity fraud, wrongfully detained foreigners and unsuccessful tender companies. The department’s latest Annual Report lists the lawsuits as: “Immigration claims arising out of unlawful arrests and detention of illegal foreigners, as well as damages arising out of failure by the department to make decisions on permits,” among others. The bulk of the court cases brought against the department related to tenders and contracts, the latter accounting for R5bn of pending legal claims against home affairs. Including GijimaAst Holdings, which had a major contract cancelled after the controversial "Who am I online" project was canned.
Should we be concerned? Not if the department’s DG is to be believed. He says successful “claims” will tally up to a fraction of the R6.8bn. Unfortunately the likelihood of successful legal action doesn’t excuse the state department for making such a hash of things. There are bigger challenges. South Africa Inc is suffering because of Home Affairs’ failings. The borders are shot to hell and any immigrant wandering onto our soil need only a couple of contacts to secure a passport or identity document with which to milk the SA social services system for life. And Home Affairs’ failing is felt every time a South African citizen applies to travel abroad. We’re not wanted because our documents simply aren’t trusted anywhere.
Time for an attitude adjustment
It’s time for the politically connected to adjust their attitudes. We can no longer tolerate the “we don’t know them, they don’t help us, but if they did there’s nothing wrong with it” response to allegations of corruption. The message to government is clear: You can nationalise whatever you want; but given your track record of running and governing you’re only going to shoot your shareholders – each and every citizen of South Africa – in the foot.
Editor’s thoughts: The process of seizing assets “for the State” is a bit of a misnomer. The State already “owns” every productive resource in the country through its ability to legislate taxes… They take 28% of every rand earned at private companies already. Under this scenario government is best served by the ensuring these assets are run appropriately, by profit driven private sector CEOs rather than politically appointed pawns. Do you support the nationalisation of assets in so-called critical sectors? Add your comment below, or send it to gareth@fanews.co.za
