Sunday, June 25, 2017

It's hard to get rid of the governor of a central bank. Here's why

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South Africa’s former finance minister Pravin Gordhan chats with Lesetja Kganyago, governor of the country’s Reserve Bank.
Reuters/Siphiwe Sibeko

With the continued harassment of South Africa’s Finance Minister Pravin Gordhan, it has become patently clear that no institution will be spared in the wave of state capture that is sweeping through the country.

The finance ministry has been at the centre of this wave for nearly a year. The latest move against Gordhan comes against a backdrop of efforts to wrest control of this particular portfolio. The most spectacular was President Jacob Zuma’s decision in December 2015 to fire then Finance Minister Nhlanhla Nene and replace him with someone more agreeable to his plans.

That plan backfired. President Zuma had no option but to reappoint Gordhan, the previous Minister of Finance. But Gordhan is now back in the firing line after refusing to give ground to Zuma on some crucial issues. Rumours persist that the finance minister is about to be fired or charged – possibly even arrested – by the elite police unit, the Hawks.

Is the Governor of the SA Reserve Bank next? This consideration comes on the back of political attacks directed at the country’s central bank by senior members of the governing African National Congress (ANC) aligned with Zuma.

The Deputy Secretary General of the ANC Jessie Duarte has raised questions about the central bank’s role. She is suggesting that the bank serves partisan interests because it has private shareholders.

It has also emerged that Mosebenzi Zwane, the Minister of Mineral Resources, tabled a working paper to the Cabinet recommending that the power to issue banking licences should be taken away from the SA Reserve Bank and given to the minister of finance.

But can the Governor be removed as easily as a minister of finance? My reading of the SA Reserve Bank Act is that the answer is no. The current legislation makes no provision for the President to dismiss the central bank governor.

Holding central bankers to account

Central banks’ governors need security of tenure once appointed. Security of tenure allows them the opportunity to conduct monetary policy in the interests of the whole country without fear of dismissal.

Imagine a scenario in which a central bank governor was dismissed every time he or she took a monetary policy decision that the government disliked - for example by raising interest rates. This would render the job unworkable.

Because of this, the appointment of central bank governors has been designed to ensure that they can get on with their mandate without political interference.

The Governor of the SA Reserve Bank is appointed by the President of the Republic after consultation with the Minister of Finance and the Board of the South African Reserve Bank. Appointments are for an initial five years. Once the first term is served, the President can reappoint the Governor for an unlimited number of further terms, each of a maximum period of five years.

So much for the appointment. What about getting rid of a governor?

The SA Reserve Bank Act lists conduct that will render the Governor unsuitable to complete any term of appointment. Other than on these grounds, no provision is made for the dismissal of the Governor.

So how would a governor would be removed if he or she was considered to be unsuitable for office? This is open to some debate, but it seems that there might be at least two possibilities:

  • The government (including Parliament) or any other party can take legal action to have the governor declared unfit to hold office. The governor and his deputies serve as directors of the central bank. As such they are bound by rules which demand that they remain fit and proper to serve. The act sets out in some detail what fit and proper entails. It includes avoiding conflicts of interest between personal interests and the interests of the central bank and not working for a bank. If the incumbent falls short of any of these requirements, there is recourse to taking legal action against them.
  • Parliament can amend the South African Reserve Bank Act to give the President power to dismiss the Governor.

My understanding is therefore that the President cannot simply remove the Governor of the SA Reserve Bank. It would require - at a minimum - legal action or a parliamentary process.

Central banks with shareholders

Duarte’s main point of contention is that South Africa’s central bank has private shareholders which means that it cannot act independently. This is not true.

South Africa isn’t the only country with a central bank owned by private shareholders. While most central banks in the world are publicly owned, there are a handful that aren’t. These include Belgium, Greece, Japan, Switzerland and Turkey. In the case of the US and Italy, only shareholding by commercial banks is allowed.

In none of these instances is there evidence that private ownership affects the institutions’ independence. In fact, it can be argued that a private ownership structure adds to the transparency and accountability of central banks. For example, the SA Reserve Bank publishes a comprehensive annual report for distribution to shareholders. In addition it has to hold an annual ordinary general meeting of shareholders at which the Governor responds to questions about the business of the central bank and the conduct of monetary policy.

The link that Duarte tries to make between the central bank’s shareholding and its approach to exchange rate policy simply does not exist. The SA Reserve Bank made this point clearly in a statement it issued shortly after Duarte’s salvo. This points out that shareholders play no role in the formulation and implementation of monetary policy.

On its approach to exchange rate policy, South Africa’s central bank takes a stance similar to most central banks in the world: namely, that any attempt to influence the value of a currency by intervening in the market is futile. China is an exception to this rule. It has a controlled economy and has substantial foreign currency reserves with which to support the yuan in the open market.

The ConversationThe SA Reserve Bank serves the best interests of all South Africans. The Governer’s security of tenure supports the efforts of the central bank to contain inflation. At the same time a structure of private shareholders in the central bank helps to improve monetary policy transparency.

Jannie Rossouw, Head of School of Economic & Business Sciences, University of the Witwatersrand

This article was originally published on The Conversation.

South Africans don't know much about science. Why this is a problem

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Most South Africans don’t visit places where they can learn about science such as zoos and museums.
Reuters/Siphiwe Sibeko

From the microchips in smart phones to the largest jumbo jets, science and technology influences the way people interact with the world around them. It brings them closer to friends and family, enhances health care, secures assets and keeps the world moving forward.

Traditionally, people have turned to science for certainty and confirmation. But in a sea of social media and allegations of fake news, it has become increasingly harder for people to distinguish fact from fiction. As a result, science’s authoritative place in society is being questioned more and more. This has the ability to erode the value and importance of science and technology in general.

One way to tackle this is to monitor people’s understanding of the scientific areas that are trending to establish what their understanding of science is.

We set out to measure South Africa’s understanding of science by conducting a survey looking at how much people know about different areas of science, what their attitudes are, what interests them and how they get their information.

Not surprisingly people know more about areas of science that influence them directly. Personal health, for example, takes precedence over astronomy. But at least 40% of the people we asked had no interest in any area in science. And few people are doing activities where they could learn about science.

Unless these gaps are bridged, South Africans will not see the value that science and technology adds to their daily lives. And the country will not be able to use the power of science to find innovative solutions to its problems.

Where the interests lie

To measure how people understood science, we did six exercises with our respondents.

In one, for example, we gave them nine true or false questions to see how much they knew about science. In another exercise we asked them which areas of science they were more interested in. We gave them a list of sevens areas:

  • technology and the internet
  • climate change
  • economics
  • politics
  • energy
  • astronomy, and
  • medical science

The respondents were more interested in areas such as technology and the internet but less in climate change, economics and energy.

Although most of the respondents had a positive attitude to science, nearly 40% were ambivalent. This is concerning because it means they could be open to questioning valid science in the future.

We also wanted to know how people learnt about science. We gave people 11 options of places they could find information about science. Radio (69.4%) was the primary source of information, followed by free-to-air TV (65.0%) and word of mouth. Surprisingly, online-based information sources like social media, blogs, institutional websites and news websites were at the bottom of their list of information sources.

A scientific way of thinking

Science should be considered as a systematic way of thinking to build knowledge and test experience through factual observation. Not just as a career or qualification.

Rüdiger Laugksch from the University of Cape Town, a researcher in scientific literacy and education in South Africa, argues that improving scientific literacy in South Africa is important for three reasons.

Firstly, it will lead to the country having a pool of people who can drive innovative and smart ways of doing things.

Secondly, it will mean that citizens will have a certain level of proficiency in science and technology. This will help them to make knowledge-driven decisions.

Thirdly, scientific literacy can help people make informed and effective decisions about public policy and nation building.

The ConversationThe products of science – like knowledge, technologies and innovations – can all close the gaps in development and infrastructure. But first, South Africa needs to get to the point of valuing and understanding the contribution science makes to daily life.

Dr Saahier Parker, Chief Researcher at the Centre for Science, Technology and Innovation Indicators, Human Sciences Research Council

This article was originally published on The Conversation.

South Africa's Jacob Zuma is fast running out of political lives

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South Africa’s President Jacob Zuma isn’t blinking despite suffering another resounding loss in the Constitutional Court.
Reuters/Mike Hutchings

Like the proverbial cat with nine lives, South Africa’s scandal-ridden president, Jacob Zuma, may well have escaped yet again with his political life. This despite another resounding loss in the country’s highest court.

The Constitutional Court ruled that there was no constitutional bar to the Speaker of the National Assembly, Baleka Mbete, opting to employ a secret ballot in a no confidence vote in parliament. She’d originally asserted that she didn’t have the authority to make this decision, prompting several opposition parties – furious at Zuma’s increasingly dictatorial project of “state capture” – to take the matter to court.

South Africa’s judicial system continues to hold firm. This is despite the fact that there appears to be a concerted and well coordinated campaign by a group of politicians and businessmen to undermine the integrity of state institutions as well as to exploit their weaknesses to prosecute a project of self-enrichment and rent-seeking. The campaign is pivoted around the now notorious Gupta family.

Zuma has been brought to book repeatedly by the courts. In March last year, the Constitutional Court found that Zuma, as well as parliament, had violated the Constitution. It did so by failing to defend and uphold the constitutional authority of South Africa’s ombud – it’s Public Protector – who had conducted an investigation into the president’s private homestead, Nkandla. She found that Zuma and his family had unlawfully benefited. He was required to pay back nearly R8 million to the state. Yet, following a half-baked apology, Zuma held onto power.

In parliament he’s survived a number of no confidence votes mounted by the opposition. He also dodged two such attempts in the national executive committee of his own party, the ruling African National Congress (ANC) – one in November last year and most recently in late May. He’s been backed by an increasingly slender yet sufficient number of loyalists and nationalists for whom Zuma provides political cover for their populist and self-serving call for “radical economic transformation”.

Tipping point

The tipping point for the latest legal skirmish was Zuma’s reckless and apparently self-interested decision to fire South Africa’s widely respected minister of finance, Pravin Gordhan, on 30 March this year.

Despite a cold war with Zuma, Gordhan had held the line against “state capture” for 15 months after his reappointment in December 2015. And so as night follows day, Gordhan’s removal precipitated an immediate ratings’ agency downgrade. The downgrade added further pressure to an already weak economy, undermining any prospects of economic growth to address the high levels of unemployment and inequality that threaten its precarious social stability.

Once again, in response to Zuma’s ill-considered cabinet reshuffle, the largest opposition party, the Democratic Alliance, tabled a motion of no confidence in the national assembly. There has been an apparent shift in attitude in the ANC’s parliamentary caucus suggesting that the no confidence vote might have a chance of succeeding. Many ANC MPs are now anxious about the party’s prospects at the 2019 national election and their own political future.

But there’s also concern over Zuma’s apparent hold over many backbench MPs. Many of them fear retribution and expulsion should they vote against the president. If an MP ceases to be a member of the party on whose list they stood at election time, they automatically lose their seat in parliament.

Because of this one of the smaller opposition parties, the United Democratic Movement, requested the speaker to use a secret ballot to enable MPs to vote with their conscience. Mbete, who is also the national chairperson of the ANC, refused. She claimed that she did not have the power to make the decision.

The Constitution is unclear. It provides for the president and the cabinet to be removed by the national assembly by a bare majority following “a vote”. In the secret ballot case, the court could have interpreted “a vote” to mean “a secret vote”. Equally, however, the failure of the Constitution to specify a secret ballot in the case of a no confidence vote could mean an open ballot was intended.

So on June 22, the Constitutional Court took neither route. It held that,

the Constitution could have provided for a vote by secret ballot or open ballot. It did neither.

Rather it held that,

the national assembly has … in effect empowered the Speaker to decide how a particular motion of no confidence in the President is to be conducted.

Accordingly, the Court set aside the Speaker’s decision that she lacked constitutional power to order a secret ballot. Notably, Zuma had entered the proceedings to argue, like the Speaker, that there was no power to order a secret ballot and no need to do so.

The court pointedly observed that Mbete has “an enormous responsibility” to ensure that when she decides whether on a “situation specific” case-by-case basis a secret ballot should be employed. She should do so on a “rational and proper basis”, with due and careful regard to a purpose of the no confidence vote. Importantly, the court noted that the primary duty of MPs is to the Constitution and not to their parties.

The implication is that the ability of MPs to vote with their conscience in such a situation is clearly a factor that the speaker should take into account when making her decision. Some critics will regard the court’s “guidance” as insufficiently precise. But the court was clearly anxious not to encroach on separation of powers – perhaps mindful of the virulent claims from some quarters of “judicial over-reach”.

Mbete will have to choose between her loyalty to her president as one of the ANC’s “top six” leadership and her duty to the Constitution as speaker.

Zuma unperturbed

Later on the same day of the judgment Zuma was answering questions in parliament. Judging by his typically thick-skinned signs of confidence, the president is not unduly perturbed by the court’s ruling.

While the court stated the power to decide on whether to hold a secret ballot or not should “not be exercised arbitrarily or whimsically”, Zuma has already made it clear that he expects Mbete to decide that a secret ballot is inappropriate or unnecessary.

Parliament returns after its current mid-year winter recess in August. If Mbete once again declines to hold a secret ballot, her decision will, in turn, then be subject to judicial review application. In due course the court could be forced to order her to hold a secret ballot.

So despite the Constitutional Court judgment, and the lucidity of it’s reasoning, a no confidence vote held with a secret ballot is still some way off. Until then, Zuma lives to fight another day.

But with every day passing, December’s ANC national elective conference gets closer. Then Zuma’s term as president of the ANC expires. Then his power will decline potentially decisively.

The ConversationOne way or another, Zuma is running out of political lives.

Richard Calland, Associate Professor in Public Law, University of Cape Town

This article was originally published on The Conversation.

Friday, June 23, 2017

Alien animals and plants are on the rise in Africa, exacting a growing toll

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The larger grain borer beetle attacks crops like maize and cassava, threatening food security.

This article is the first in a series The Conversation Africa is running on invasive species.

Let’s say you’re travelling from Uganda to South Africa for business. You finally arrive at your hotel after a long day and decide to change before dinner. You unlock and unzip your luggage, but there’s something in your bag that you didn’t pack. As you reach for a clean shirt, a moth flies out. Did that come with you all the way from Uganda? It’ll be fine, right? Surely, something so small won’t cause any harm.

Species are intentionally or accidentally transported by humans between continents to regions where they are not native. With the help of humans or by natural means like flight, these alien species can also spread within continents.

Their spread within continents can be rapid, affecting both the ecology as well as societies and the economy. Unfortunately, it’s really challenging to prevent species from spreading. Given the vast amount of people and goods that are transported between and around continents they can easily be moved across oceans as well as between countries.

The spread of alien species within Africa is increasing. Since 2000 more alien insect pests of eucalyptus trees have spread to other African countries from South Africa, than have been introduced to these African countries from other continents. To manage the spread of these alien species countries need to co-operate, communicate and share information and skills..

The spread of alien species

Many alien plants and animals have been introduced to Africa from other regions and then have spread from country to country, often having devastating effects.

Take the larger grain borer beetle, (Prostephanus truncatus) which is thought to have arrived on the continent in imported grain from Mexico and central America. The beetle was introduced to Tanzania before 1984, Togo before 1981 and Guinea before 1987. It then spread across the continent and within 20 years could be found further south in South Africa.

The beetle attacks crops such as maize and cassava, threatening food security and the livelihoods of the poor. Infestations often destroy maize that’s been stored by farmers, forcing them to buy maize as well as lose income they could have earned from selling any excess.

But alien species don’t just arrive from abroad. Many that are native to parts of Africa have also spread to countries on the continent where they are not native.

An example is the fish commonly known as the Mozambique tilapia (Oreochromis mossambicus) which is native to rivers on the east coast of southern Africa. Fishermen have transported the Mozambique tilapia to other areas and it is now found in river systems in southern and western South Africa and Namibia.

The Mozambique tilapia is a popular species for fishing but it can pose a threat to native fish and has been responsible for the disappearance of native species in some regions.

The spread of alien species within Africa is by no means a new thing. For instance, the bur clover (Medicago polymorpha), a plant from northern Africa, might have been accidentally transported by humans to South Africa as early as 760 AD.

A high and increasing threat

Recently a number of alien species have spread extremely rapidly across the continent, posing a particularly high threat to food security and livelihoods.

The fall armyworm, native to the Americas, was first recorded in west and central Africa in early 2016 and then in South Africa in January 2017.

One is a caterpillar known as the fall armyworm (Spodoptera frugiperda). The species, native to the Americas, was first recorded in west and central Africa in early 2016 and then in South Africa in January 2017.

The moths of the armyworm are strong fliers and the species may have spread through flight to South Africa from other African countries. Although the species attacks a wide range of crops, it poses a particularly serious threat to grain farmers. It is extremely difficult to manage.

Another example is a wasp known as the bluegum chalcid (Leptocybe invasa), which is native to Australia. In 2000 it was detected in Israel and shortly afterwards it was reported in Uganda and Kenya. From there it spread rapidly to many African countries including Zimbabwe, Mozambique, and Tanzania and was finally detected in South Africa in 2007. The insect probably reached Israel on live plant material and spread into Africa the same way, or was carried by people travelling between countries.

The wasp causes swelling or growths on eucalyptus trees, which can lead to decreased growth and tree death. As eucalyptus trees are an important source of income and fuel, this species could have an impact on the livelihoods of locals in these countries.

Preventing the introduction and spread

Once a species is introduced to one African country it’s highly likely it will spread to others on the continent because borders checks are weak.

The introduction and spread of species could be reduced if countries introduced biosecurity systems. These are used extensively in countries like Australia and New Zealand and involve using technology to check for alien species when people and goods enter a country. In Australia this involves inspecting goods, vehicles and luggage before they enter the country.

But even these systems aren’t a guarantee that species won’t spread. African countries would need to work together and share information and skills. This would also allow countries to prepare for the arrival of species, and to draw up plans to reduce their impact.

The ConversationThis is a tall order. But as a country’s defence against alien species introductions is only as strong as that of its neighbours, such action would benefit all of the countries involved.

Katelyn Faulkner, Postdoctoral research fellow, University of Pretoria; Brett Hurley, Senior Lecturer Zoology and Entomology, University of Pretoria, and Mark Robertson, Associate Professor Zoology & Entomology, University of Pretoria

This article was originally published on The Conversation.

The threat to South Africa's democracy runs deeper than state capture

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A protest in South Africa against housing shortages.
EPA/Kim Ludbrook

A recently released report written by a group of South African social scientists, “Betrayal of the Promise”, considers the widespread capture of state institutions by a network linked to President Jacob Zuma and declares it “a silent coup.”

The reference to a “coup” might seem odd given that the democratically elected head of state is described as its patron. But South Africa’s current predicament is not primarily about the individuals in specific offices. Rather, at its root, it’s about a crisis in the country’s democracy.

The report by the academics proposes a dividing line between those committed to social transformation – as set out in the country’s constitution – and those who aren’t. The Zuma-aligned camp is alone on the latter side of this line.

But, even though they don’t have much else in common, almost all the country’s key political alignments – political parties as well as social movements – share what I call a naive view of the state. They think that state institutions must be captured by one or another sector for state action to achieve a desired goal.

This is an analytical and political cul-de-sac. South Africa’s democratic crisis is a result of the unfinished project of remaking institutions first shaped under colonial and then apartheid rule. The challenge now is how to rebuild them so that they have both popular legitimacy and the capacity to achieve the promise of the country’s constitution: to create a more equitable society.

I describe this dominant view of the state as “naive” because it treats institutions as terrain for narrow manipulation by one group or another. In fact the crisis shows that South Africa doesn’t yet have, and desperately needs, effective institutions with the capacity to respond to broader society.

Various views

Zuma’s political allies in the African National Congress (ANC) insist that to reduce the power of “white monopoly capital”, the state must empower black industrialists by transferring public assets.

They envisage this being primarily through state controlled concessions, such as mines, as well as contracts with state owned enterprises such as the power utility Eskom and transport group Transnet. This is complemented by vague pronouncements around land redistribution.

The opposition Economic Freedom Fighters (EFF) take a vanguardist position, arguing that state power can provide for the working class by nationalising private assets and redistributing land.

The Democratic Alliance, the largest opposition party in parliament, advocates the privatisation of public assets. It insists that this will subsidise public projects, although it’s not clear how.

For their part, civil society organisations seem to realise that state institutions, free from narrow private capture, are essential for a more capable state. They are beginning to focus much more attention on the integrity and independence of state institutions. Some are focusing on issues of government transparency and privacy, others on resisting attempts to compromise key ministries, especially Treasury.

But civil society has little influence or connection to formal politics. Trade unions are split. Middle class professionals in the activist sphere have lost their links with trade unions and urban social movements, which proved such a powerful alliance for democratisation in the late 1980s and early 1990s. Protests in urban townships are frequent but localised. They are rarely linked to any city wide agenda or movement.

A failing democracy

Institutional “capture” is both a symptom and a cause of the country’s broader democratic crisis.

The constitution contains some of the most extensive socio-economic rights anywhere in the world. But inequalities have been extraordinarily durable.

Now the constitution itself is increasingly under attack. This shouldn’t be surprising given that many state institutions, especially at the local level, aren’t effective and, therefore, cannot realise the rights set out in the constitution.

Democratic South Africa’s challenge remains how to find a way to remake institutions so that they’re capable of ensuring the rights guaranteed by the constitution are realised.

Comparative insights from Brazil

In this it has lessons to learn from Brazil, which has similar constitutional guarantees. Despite recent political challenges, Brazil has managed to decentralise important parts of administering redistributive programmes. This has led to more capable institutions, especially at the municipal level.

Since 1988 when a new constitution came into force, Brazilian cities have used large federal government revenue transfers for redistributive ends such as health, education and housing.

On top of this, Brazilian cities have a long history of participatory councils, from city wide budgeting to specific policy sectors such as housing and health. In large cities like Sao Paulo, many of the social movements for housing, which helped drive the campaign for democracy in the 1980s, have remained important political and social movements. They’ve helped reconstruct Brazil’s local state institutions, which were previously a global example of weak and clientelistic politics.

Cities like Sao Paulo now have institutions that are able to make big gains for poor people in sectors such as transport, housing and sanitation.

This suggests important lessons for how to address South Africa’s democratic crisis.

Recapturing institutional legitimacy

A positive sum, redistributive agenda is the central promise of the South Africa’s Constitution. This is also a requirement for the success of any dialogue between all sectors of South African society as proposed by the authors of Betrayal of the Promise.

A debate over policy is going to be extraordinarily difficult while the country’s institutions continue to lose legitimacy. This means that a focus on the capture of state institutions will need to go hand-in-hand with a focus on how they can be refashioned to be more responsive to society.

The ConversationSouth Africa awaits the movements and parties with the ideas and organisational strategies to take such a vision forward. Until then, the country will struggle to move beyond today’s anti-democratic precipice.

Benjamin H. Bradlow, PhD candidate, Department of Sociology, Brown University

This article was originally published on The Conversation.

How we can rid ourselves of State Capture and put Zuma in Jail

he Public Protector’s (PP) office should be abolished. Under Thuli Madonsela, the office did brilliant work, even under difficult circumstances and with a lot of obstruction from the ZANC side and the office deliberately being kept underfunded by the ZANC.

That is the reason that Thuli’s State Capture investigation started late, she did not have money to start it. Eventually Pravin Gordhan, as Finance Minister, made money available and she could start. She did not have sufficient time before her term ran out and therefore she made a brilliant move.  

She recommended a full judicial commission of inquiry, chaired by a judge appointed by Judge Mogoeng, not by the main suspect in the investigation, the President of the country.

But as long as Thuli Madonsela was in her office, I don’t think a single significant recommendation was ever implemented and accepted without a fightback and delaying tactics by ZANC. So she investigated, made the correct findings and recommendations, just for that be ignored and not implemented.

People approached the PP, as she was the only trustworthy person in government.

The PP’s office is not actually supposed to do criminal investigations, that is the responsibility of the Police and NPA, but again, those institutions are captured by the very same people responsible for the state capture of SOE’s, which is nothing else than state criminality.

Busisiwe Mkhwebane has now turned the PP’s office into an extension of the Saxonwold Shebeen. Yes, she will tell you that she is not a Zupta puppet, but she is. She is a former spy, and spies act with a sleight of hand, undercover and trying to deceive you all the time. But a puppet she is.

Take Mkhwebane’s finding on the Absa lifeboat.

Mkhwebane is actually recommending state control of banks. She is proving that she is a Zupta puppet on a string because what she is actually trying to do is giving the Zupta cabal access to a State bank, because the commercial banks cut off banking facilities to the Guptas, due to massive criminal activity by them.

So what to do? Get disheartened and accept that things will inevitably go the way ZimBOBwe went?
Not by a long shot. Obstacles like these can be overcome. We privatize the PP’s, Police’s and NPA’s job out to those who have the ability and the willingness to do the job.

OUTA and Afriforum have stepped up. OUTA has begun hiring forensic accountants and lawyers, and Afriforum is supporting Gerrie Nel’s private prosecutions team, which will be strengthened by another two senior prosecutors from the NPA soon. An ex-commander of the SAPS Serious and Violent Crimes unit, Genl Sharon Schutte, is heading up investigations for the team. Paul O’Sullivan and his assistant, lawyer Sarah Jane Trent, are assisting as well.

It can be done, on one condition, that they can be crowdfunded. So join me in these efforts. I have joined both Afriforum and OUTA as a contributing member. You only contribute what you can afford, and at the same time, you become and active citizen. Remember, it is also important that these organizations have a lot of members, to show they have broad support.

You can become part of the crowdfunding and stop the looting of the State, or you can do nothing and get a continuation of the looting and as a result, pay higher taxes and get diminished retirement funds when you retire one day.

Don’t think you can escape the effects of the wholesale looting of the State. We have already hit junk status, with the highest unemployment ever. More unemployment leads to more crime and murders.
So let’s unite and do this. Let us do what has to be done.

Opinion by Daniel Sutherland
Published on South Africa Today – South Africa News

Why is the KZN healthcare system collapsing

When public health institutions cannot assist cancer patients due to lack of essential equipment and lack of doctors, it means we are in trouble. The Kwazulu-Natal Healthcare system is collapsing from the ground up.

Two Oncology specialists were left in KZN, and as of last night, one resigned. It means cancer patients will die or they will have to find another hospital in another province. There is no money, no doctors no equipment and people who need to take regular cancer tests, are at risk. It means people will not be diagnosed early enough to receive treatment.

There are reports that only one doctor is on duty for up to 26 hours on weekends, without a break, and with up to 30 patients waiting at any one time. These patients often have to be left waiting for excessively for long periods of time (many hours), as the same doctor gets called to emergency admissions that take higher priority.

The doctors cannot work under the challenging conditions in public health services and will probably move into the private sector. There is at present, likely to be about 90 percent of physicians working in the private sector, and for many South Africans, access to these doctors is impossible. If one does not have a medical aid, which is expensive, there is no access to specialist treatment. Thus the majority are at the mercy of government hospitals which cannot assist the needy.

Huge sums of money are wasted on futile attempts at repairs that only last two weeks, instead of just replacing this vital equipment. In the outpatient’s departments most life-saving equipment does not exist, the little doctors have to work with is old and broken and practitioners are facing an impossible situation trying to save lives.

During May, staff protested over the collapse of health services in KZN – “A memo, addressed to MEC for Health Sibongiseni Dhlomo, titled “Collapse of Health Services in KZN.” lists 16 problems, such as a shortage of staff, caused by “unfunded, frozen and abolished posts”, a lack of jobs for medical school graduates doing their community service, an overtime policy that SAMA and unions have not agreed to, failures with equipment procurement, shortages of supplies, problems with medical records, and poor management.” Read the story – Medics protest as KZN health care system collapses

And in June reports surfaced of more oncologists leaving the public health care system – Read No oncologist in Durban

Published on South Africa Today – South Africa News

Thursday, June 22, 2017

There are dangers behind giving South African MPs the right to a secret ballot

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South Africa’s Chief Justice Mogoeng Mogoeng making a ruling on secret ballots in Parliament at the Constitutional Court in Johannesburg.
Siphiwe Sibeko/Reuters

Marius Pieterse, University of the Witwatersrand

It happened as many suspected it would. South Africa’s Constitutional Court ordered that, despite the Constitution’s silence on the matter, the speaker of parliament has the constitutional power to prescribe that a vote on a motion of no confidence in the country’s president may take place by way of a secret ballot.

It also found that Baleka Mbete, the speaker of South Africa’s parliament, was mistaken when she decided earlier this year that she did not have this power. The court set aside her decision.

But the court didn’t go as far as the United Democratic Movement, and other opposition parties that had challenged Mbete’s decision, had hoped. It would not force Mbete to order a secret ballot in the upcoming motion of no confidence in President Jacob Zuma. It felt that this would go against the separation of powers, by unduly prescribing to parliament how it should carry out its functions.

Accordingly, the court ordered Mbete to retake the decision on whether to allow the secret ballot. It emphasised that in doing so, she must act rationally. It ordered that she has to take account of all surrounding circumstances, including the possibility that MPs may feel intimidated by their political parties to vote in a particular way.

The court emphasised that parliament has a constitutional obligation to hold the executive to account. Members must therefore act in accordance with their constitutional obligations, their consciences and their oaths of office.

From a constitutional law perspective, the court’s stance is undoubtedly correct. As always, it has shown great respect for parliament’s power to guide its own processes. At the same time, the court has clarified the extent of the speaker’s discretion in a way that aims to ensure that she, and parliament as a whole, exercise their powers in a way that is consistent with their constitutional obligations.

What the opposition asked for was always going to be a long shot. Wanting a court to order the speaker to exercise a discretion that is legitimately hers alone, before she has even applied her mind to the question, would involve a real stretch of the separation of powers.

So, what will Mbete decide? And will her decision, if it was to go against a secret ballot, be challenged? More pertinently, ought it?

Competing notions of accountability

Many believe that a decision not to hold the vote secretly would simply be a thinly veiled attempt to shield Zuma from accountability. Such a decision would therefore, if not irrational and unconstitutional, at least be unconscionable. But, as the Constitutional Court acknowledged, there are different, and perhaps competing, notions of accountability at stake here.

On the one hand, the dominance of the African National Congress (ANC) in parliament and its own internal structures of political accountability have seemingly compromised the constitutionally designed accountability of the executive to parliament. An open ballot could only exacerbate this.

On the other hand, a secret ballot would sacrifice MPs’ accountability not only to their party peers, but also to the country’s citizens.

How can we be assured that an ANC politician who votes differently under a secret ballot than she would under an open one is doing so based on her conscience rather than on some other, less honourable whim? What is to stop a cynical group of Democratic Alliance (DA) opposition politicians from voting in favour of retaining Zuma because they believe that his continued scandal-prone presidency would better serve the their chances in the 2019 election? Would it not make it more difficult for such politicians to subvert the public interest in these ways if the citizenry, and their fellow MPs, could see them?

Perhaps South Africa’s current political crisis is so dire that these seemingly far-fetched hypotheticals don’t matter. Perhaps they represent bridges the country should cross sometime in the future.

But making rules (and rulings), especially for the naughty kid in class, is seldom wise.

South Africa is moving into an era in national politics where the ANC is not nearly as dominant. This means that coalitions will be the order of the day. In this new era, one or two votes in a parliamentary motion may make all the difference. Will the country still think secret ballots were such a good idea?

Danger of destabilisation

Early in June DA mayor Michael Holenstein was removed by a motion of no confidence through a secret ballot in Mogale City, west of Johannesburg. Both the motion and the secret ballot were called for by ANC councillors. The ballot was granted by the ANC-affiliated speaker.

The DA and their coalition partners unsuccessfully opposed the secret ballot. As it happened, the secret ballot provided the opportunity for one of their own to betray the coalition and led to the motion being carried with 39 votes to 38.

Near-comical irony and intrigue aside, this saga illustrates all too vividly how the diminished accountability (to both electorate and party-political peers) afforded by a secret ballot opens motions of no confidence not only to a politics of conscience, but also potentially to one of backstabbing and pettiness.

On top of this, governance in Mogale City is said to be suffering as a result of the successful motion. There are fears that service delivery is being paralysed and that the destabilised, hung council may be put under administration.

The consequences of a motion of no confidence in the president will, of course, be far more destabilising. For one thing, Section 102 of the constitution requires the entire cabinet to resign alongside the president, should the motion pass. A member of parliament deciding how to vote on a motion of no confidence in Zuma is therefore also deciding whether to throw the entire national government into disarray, however temporarily.

The ConversationThis might well be preferable over another day of a patently compromised, Zuma-led government. But there is value in ensuring that such a hefty decision is made only after due deliberation, and is made openly and with courage of conviction. If such courage should prove to be lacking in the members of the majority party, should South Africans not be allowed to see this and to think, in turn, about the vote that in a constitutional democracy can and should matter far more: their own?

Marius Pieterse, Professor of Law, University of the Witwatersrand

This article was originally published on The Conversation.

A public protector's job is to make sure people stick to the law - not to change it

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Busisiwe Mkhwebane, the public protector of South Africa.
EPA/Nic Bothma

Cathleen Powell, University of Cape Town

South Africa’s Public Protector Busisiwe Mkhwebane has directed a parliamentary portfolio committee to initiate proceedings to amend a clause in the country’s Constitution that sets out the primary aim of the country’s Reserve Bank.

As many commentators have pointed out, the Public Protector cannot order that the Constitution be amended. It is not part of her job and it’s outside her powers.

The Constitution gives the Public Protector the task of investigating

any conduct in state affairs, or in the public administration in any sphere of government, that is alleged or suspected to be improper or to result in any impropriety or prejudice.

The focus of her investigation is thus conduct. This is underscored and fleshed out by the Public Protector Act. The Act empowers her to investigate, among other things: maladministration, abuse of power, dishonest acts or omissions, improper enrichment, and acts or admissions which result in unlawful or improper prejudice to any other person.

In this case, the Public Protector claimed to approach her investigation by asking two questions: what happened? And, what should have happened?

The first is a question of fact. But to answer the second question she notes that the focus moves to

the law or rules that regulate the standard that should have been met by the government or organ of state to prevent maladministration and prejudice.

In other words, it is the law that provides the points of reference which tell her whether the banks and government’s acts or omissions constitute misconduct.

But what the Public Protector wants to do is to change the law itself. She is not satisfied with determining whether the Reserve Bank and government obeyed the relevant, current rules: she wants to write new ones.

Indeed, her recommendation goes well beyond changing individual rules to overturning their very foundation, anchored in the Constitution. She has ordered that a major decision of the Constitutional Assembly, which drew up the Constitution following the first democratic elections in 1994, on a complex matter of economic policy, be thrown out.

This can’t be right.

No precedent

We must not be persuaded that there is any precedent for this. In her “State of Capture” report, the previous Public Protector, Thuli Madonsela, found that members of Cabinet had violated their obligations under the Constitution and the Executive Members Ethics Act by failing to prevent the misuse of state funds to upgrade the president’s private residence.

Part of her remedial action was to recommend that the secretary of Cabinet update the policy to provide ministers with more detailed guidance, and to recommend that the minister of police review the Apartheid-era National Key Points Act. This review was required to clarify the Act’s application and to bring it in line with the Constitution.

There are two major differences between these recommendations and an instruction that a constitutional provision be reworded in a specific manner.

Mkhwebane prescribed the exact wording of the new provision. She said that the clause which currently reads:

The primary object of the South African Reserve Bank is to protect the value of the currency in the interest of balance and sustainable economic growth in the Republic.

Should instead read:

The primary object of the South African Reserve Bank is to promote balanced and sustainable economic growth in the Republic, whilst ensuring that the socio-economic well-being of the citizens is protected.

This is quite a different matter. Neither of Madonsela’s recommendation sets out the wording of the new provisions, merely the goal they should achieve. And each is aimed at bringing the relevant provisions into compliance with higher laws to which they are subject – either the Executive Ethics Act or the Constitution itself. And this is because it is the job of the Public Protector to remedy specific misconduct, and the job of Parliament to make laws.

In its judgment on the Nkandla case, the Constitutional Court held that the Public Protector is subject “only to the Constitution and the law”. But she is subject to them. And the Constitution sets out a specific, thorough process for the passing of any law, and particularly a constitutional amendment.

The elected representatives of the people are meant to debate all laws and fashion them into the form they believe is best for the country. If the wording of any law is determined in advance of this process, then the process itself is rendered meaningless. The Constitution’s law-making requirements are discarded.

The Public Protector cannot throw out the Constitution. Her remedial action is therefore invalid.

Effects of the recommendation

If taken seriously, her recommendation has the potential to influence current political debates on economic development in South Africa, supporting the line advanced by groups such as Black First Land First, and reducing the independence of one of the few public bodies which has not yet been tainted by evidence of state capture.

But if this was the intention, it could backfire, because the Public Protector can bring this influence only if she enjoys legitimacy in her own right. She does not, in part due to her hostile treatment of her predecessor and a perceived unwillingness to take steps against President Zuma and his allies.

She laid a criminal charge against her predecessor on receiving a complaint from the president, and then attempted to deny the legal import of her action. Staff closely associated with the former Public Protector or the State Capture report appear to have been forced out of their jobs.

Mkhwebane could have found better ways of proving that she does not have a hidden political agenda than by producing a report which throws her legal acumen into serious doubt.

Her foray into economics is also deeply embarrassing, as she justifies a drastic change in economic policy with eight lines of text, citing no authorities in economics and no evidence that her preferred approach does in fact, uplift the poor.

The ConversationHer report is likely only to reduce the standing of her own office.

Cathleen Powell, Senior Lecturer in Public Law, University of Cape Town

This article was originally published on The Conversation.

Boer Political Prisoners approach the constitutional court concerning illegality of incarceration

As early as April 2002, some of the Boeremag accused were arrested.  The record trial commenced on 19 May 2002, which would continue for the next eleven years in the High Court of Pretoria.  The main charge of which 24 people were found guilty on, was high treason.  While some received bail under the strictest conditions, eleven of them remained in custody, while bail were denied continuously.  All of them (except two who died during the marathon trial) were found guilty of high treason and were variously sentenced on 28 October 2013.  The remark of Judge Eben Jordaan that he has taken the 11 years into account, of which they remained incarcerated or under the most severe bail conditions, seemed only to be lip-service, because he sentenced some of the convicted men for another 25 years effective imprisonment.

The Boeremag men were sentenced on 28 October 2013 and found themselves for the next 4 years in a system effectively depriving them of their right to appeal.  Some of the men were not even able to launch an application of leave to appeal.  All of them who actually could launch an application of leave to appeal, had to bring the application again before Judge Eben Jordaan, who refused all the applications forthwith.  Those who’s application of leave to appeal were denied by Judge Jordaan, still struggle to launch their petition to the appeal court, but without any progress or success due to administrative red tape and lack of cooperation by government officials.  Some of the legal representatives do not even seem to get started.

After almost four years of struggling without success, Dr Lets Pretorius and two of his sons, Drs Johan and Wilhelm Pretorius, decided to petition directly to the Judge President of the Constitutional Court, Judge Mogoeng-Mogoeng.  In the petition they state that the system effectively deprive them of their right to appeal.  It includes their incarceration circumstances created by the Department of Correctional Services, the procrastination and delays caused by the unjust and mal-administration of the Legal Aid Board and the courts.  In their petition the three Drs Pretorius asked for a court order to the effect that Prof. Hercules Booysen, and Mr. Julian Knight, be appointed respectively as their advocate and lawyer by the Legal Aid Board in order for them to contest the constitutionality and legality of their incarceration.  They state that the constitution guarantees the right to appeal and the right of a judicial process which should commence and be completed without unreasonable delays.  The delays caused by the incapacity of the system effectively deprive them of these rights, which renders their trial unfair.  To be incarcerated on grounds of an unfair trial, is unconstitutional and therefore unlawful. The international standard for any court case is 10 years from arrest until all forms of appeal have been exhausted. The Boeremag trial started 15 years ago this month.

The Drs. Pretorius are currently waiting for an answer of the judge president of the Constitutional Court.

Boervin is a non-profit company which endeavour for the freedom of the Boer Political Prisoners.  We support the application of Drs. Pretorius ask the community to support this application in their prayers.  We also ask for the support of Boervin to help us by making us able to expose this injustice nationally and internationally, which still rage against the Boer Political Prisoners, in order to end this injustice, raging for 15 years already.
Published on South Africa Today

Wednesday, June 21, 2017

Second week of mass evictions and violent protests in Port Elizabeth

Police conduct 3am raid, arrest 12 and confiscate petrol bombs and tyres

By Joseph Chirume
21 June 2017
Photo of protesters
Residents gather to meet on Wednesday morning at Wells Estate after mass evictions. Photo: Joseph Chirume
Violent protests have continued in Motherwell following mass evictions that began two weeks ago and restarted on Monday. Hundreds of shacks were demolished in NU29 and NU30 sections this week.

The Nelson Mandela Bay Municipality recently obtained a court order instructing the office of the sheriff to carry out the evictions.

After shacks were demolished in Ikamvelihle, municipal and other vehicles were attacked and torched.

On Monday, police conducted an early morning raid at 3am and arrested 12 residents of Ehlovini settlement in Wells Estate on charges of public violence. According to the police 30 tyres, 18 petrol bombs and a five litre can of petrol were confiscated.

Protesters are demanding houses. Thokozile Soporo, whose shack was demolished in Ikamvelihle, said she has been on the housing list since 2007.

“I don’t like to live the life of a squatter. It is inhuman and very humiliating, because the place does not have toilets, water or electricity. I know of many people who applied for a house after me, but they are already living in their houses,” she said.

“The municipality should tell us the truth. We know that some of the house beneficiaries do not qualify to have houses because they are not poor people but work for government. I will wait for the police to leave this place, then I will have to rebuild again. I have lost nearly R5,000 worth of furniture and building material that the police took away from my shack,” said Soporo.

NU 29 resident Mehlo Jamu, whose shack was also demolished, said, “We fought and defeated apartheid because the government was very arrogant and treated its people like animals. What this administration is doing to its residents is not different to the apartheid administration. I have lost lots of household goods as a result of this barbaric action. I will rebuild and fight for this place. This is my home.”

Nolukho Toyo said she was deep asleep when the police kicked her door in [during the 3am raid on Monday]. “I was sleeping with my 10-year-old son,” she said. “They also fired rubber bullets while we were in the shack. In other shacks, the police pointed their guns to children and old women. I am unemployed so I cannot get the money to pay rent. I will only leave this place after the municipality has given us a better place.”

Mayor Athol Trollip said, “It is a problem when people protest about housing delivery and then turn around and stone vehicles and burn down municipal infrastructure. Nobody in South Africa has the right to assault innocent people. That’s criminal, yet people want to be treated with kids gloves.”
“We have a plan where we are going to build those houses. We cannot do that if land earmarked for this has been invaded. This is a major problem in our city. We also have many instances where people invaded houses whose owners are not there. We need to identify the land and build the infrastructure to service them. We are planning to provide 12,000 houses with title deeds over the next three years.”
Trollip said the evictions had been done with due legal process. “Evictions are carried out by the office of the sheriff with the assistance of the police. If household property is removed, it must be labelled and taken to a place where the owners can claim it back.”

Police spokesman Captain Andre Beetge said the “evictions being executed by the Sheriff of the Court in Motherwell, Ikamvelihle and Wells Estate areas have sparked violence and damages towards innocent motorists”.

Beetge warned motorists to avoid the N2 road between Bluewater Bay and the R335 off-ramp as well as the Addo road passing through Wells Estate.
He said the operation will continue until Friday.
A burnt out truck
A truck torched in the protests. Photo: Joseph Chirume

Published originally on GroundUp .

“This is not a place for human beings”

Blikkiesdorp was supposed to be temporary, but residents are stuck there indefinitely

By Trevor Bohatch and Ashraf Hendricks
20 June 2017
Blikkiesdorpis a bleak, treeless settlement near the end of the runway of Cape Town International Airport. Photo: Ashraf Hendricks.
Blikkiesdorp, also known as “Tin Can Town”, is found tucked away and out of sight in Delft, about a 25km drive from Cape Town’s city centre. It was meant to be a TRA, the City’s abbreviation for Temporary Relocation Area, but it has been housing residents for ten years. It consists of 1,600 to 2,000 households living in tin shacks.
“This is not a place for human beings,” says Jane Roberts, who has been in Blikkiesdorp for eight years. Before, Roberts was one of the Symphony Way pavement dwellers and lived for two and half years on the street. “The road was a good place to stay,” she says.
Jane Roberts has lived in Blikkiesdorp for eight years, even though it is supposed to be a temporary place. Photo: Ashraf Hendricks
Her home in Blikkiesdorp is tiny. A double bed takes up most of the space. She says she lives in constant fear of gangsters and break-ins. “You can’t go out. You can’t leave your house,” says Roberts. “People want to get out of here. They don’t want to live here. They say they don’t care where they are going to live, so long as they can get out of Blikkiesdorp.”
“After eight years it’s not temporary, it’s permanent,” says Roberts.
Maureen Philanders wonders where her children and grandchildren will grow up. Photo: Ashraf Hendricks
Maureen Philanders previously stayed at a shelter in Cape Town, but had to leave after three months. She relocated to Blikkiesdorp and thought that she would be here for only three years. She has been here for six years. She says her health is not good. “I’m so worried, because I think, where are the grandchildren and the children going to grow up?” Philanders asks. She lives with five children; one is her own child.
“You are not safe [here] in your own shack,” she says. Philander said she’d even considered moving into the Belhar graveyard.
Estrolitha van Ballen says crime is high and the police don’t pick the phone when you call them. Photo: Ashraf Hendricks  
Blikkiesdorp has no nearby hospital or police station. According to Estrolitha van Ballen, who has lived in Blikkiesdorp for seven years, the police and ambulance take a long time to arrive. “You phone the police, but they never pick up,” she says. “The crime is so high. During the night you can’t sleep. You must be alert.
We asked the City of Cape Town what plans it has for the residents of Blikkiesdorp, and if there’s a date for when they’ll be moved. Councillor Siyabulela Mamkeli, the City’s Mayoral Committee Member for Area Central, responded: “Any concrete proposals and information would be taken to the communities of Blikkiesdorp, Malawi Camp and Freedom Park first and at the appropriate time. We will follow our normal engagement processes.”

Published originally on GroundUp .

Monday, June 19, 2017

Youth commemorate sacrifices of the past and protest about the present

Celebrations and demonstrations held around the country on 16 June

By Ashraf Hendricks, Bernard Chiguvare and Ihsaan Haffejee
19 June 2017
Photo of a child
Commemorations were held on Youth Day, Friday 16 June at the Hector Pieterson memorial in Soweto. People gathered to pay their respects on the 41st anniversary of the Soweto uprising. Photo: Ihsaan Haffejee
Photo of youths
Youth sang protest songs and danced during a youth day event in Khayelitsha, Cape Town. About 100 primary and high school youth gathered at Site B Hall to commemorate the 1976 Soweto uprising. They also discussed the difficulties that the youth face today. Photo: Ashraf Hendricks
Photo of a protest
In Mitchells Plain, Cape Town, about 70 youth from Tafelsig, demonstrated against high crime rates and child abuse. The march through the suburb was organised by the Eyes of Matroosberg Committee and the Mitchells Plain Crisis Forum. Photo: Bernard Chiguvare
Grade one pupils from Soweto stand ready with white roses which they placed at the Hector Pieterson memorial in Soweto. Photo: Ihsaan Haffejee

Published originally on GroundUp .
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Sunday, June 18, 2017

How investors see South Africa: lots of potential, not worth the hassle

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International investors are still rattled by President Jacob Zuma’s sacking of respected Finance Minister Nhlanhla Nene.
Reuters/Sumaya Hisham

South Africa has narrowly survived a downgrade of the rating of its government bonds. The reprieve, however, is temporary because government has been warned by the Big Three rating agencies – Fitch, Moody’s and Standard & Poor’s – to pull up its socks.

South Africa’s current rating – just about investment grade, heading south fast – puts it more or less on par with countries such as Italy and Spain. And even with a downward trajectory through speculative grade it is still several notches away from outright “junk” or “CCC”.

But a downgrade to sub-investment grade would slow inward investment and the economic fallout could become a self-fulfilling prophecy: as outflows increase, the economy slows.

Such meta-narratives are especially powerful during periods of global turbulence as is currently being experienced, with volatile commodity prices, the oil rout, the slowdown in China and speculative investors moving large amounts of short-term capital very quickly around the world.

Why sovereign debt matters

When governments need to raise money they may decide to do so by borrowing on international financial markets. Such loans, or sovereign bonds, are each assigned a rating by a credit ratings agency. The rating estimates the likelihood of a government’s creditors being repaid against a range of factors. These include hard economic data, political analysis, reputation and sentiment.

The yield of the bond can be roughly understood as the interest rate on a loan. The lower the credit rating, the higher the risk of a default and the higher the yield payable to investors for taking on that risk.

It’s important to note that sovereign bonds are just another asset class investors can consider in a universe of investable assets. A downgrade is not desirable as it may slow down institutional investment and make the economy more vulnerable to speculative activity. But some investors may very well have an appetite for risky sovereign debt if it means they can make a lot of money.

In fact, high-end brokerages such as Charles Schwab advise investors on investing in high-yield, sub-investment grade emerging market debt. This sort of speculative sentiment is exactly what drove the “Africa Rising” narrative. It also drove the introduction of ratings for previously unrated sub-Saharan sovereigns, as investors sought new sources of alpha in the low-growth fallout of the financial crisis in Europe.

Despite this, countries need to borrow to plug the gap between projected tax revenue and budgeted expenditure. However, as debt has to be repaid at some point in the future, any debt raised should be used to finance investment such as infrastructure, which expands an economy’s capacity and therefore potential for growth and increased tax revenue. In addition, the interest government pays on its debt is of paramount importance.

What there’s to like, not to like about South Africa

Rating agencies have cited maintaining investor confidence as one of the critical factors towards preventing a future downgrade for South Africa. So it’s important to know what investors were thinking about South Africa in the run up to the ratings, and what they’re thinking now.

The first point to make is that local institutional investors and financial institutions are also influenced by the global context. The political and economic developments of all countries are viewed proportionately to other markets. For example, in the case of South Africa, Investec Asset Management evaluates the country relative to other emerging markets. It recently did so in relation to Brazil in particular.

Investec’s house view on the two countries is informed by two insights. The first is that South Africa and Brazil have political headwinds that are governance risks to long-term economic development, and may present watershed moments. The other is that the strength of institutions in these countries is often overlooked. An example of this is the South African Constitutional Court’s ruling on President Jacob Zuma’s spending on his private home in Nkandla.

Publicly available international perceptions also matter. An example is the World Economic Forum competitiveness ranking. South Africa is ranked 49th out of 140 countries and only second to China among the Brazil, Russia, India, China, South Africa group.

Investors also like the country’s sound fundamentals. These include a sophisticated financial markets sector, and respect for property rights and the rule of law. And despite US government complaints about infrastructure gaps and the inaccessibility of officials, it still regards South Africa as an important gateway to the rest of the continent.

However, inequality, unemployment, power shortages, policy incoherence around black economic empowerment and labour relations remain risk factors. The UK government, for example, singles out corruption, fronting around empowerment deals and dubious tender processes.

International investors are also still rattled about President Zuma’s unexpected decision late last year to replace his respected finance minister, only to reverse the decision a few days later.

Another bugbear is Zuma’s weakened position and how succession within the ruling African National Congress will play out, particularly the realisation that Cyril Ramaphosa, currently the deputy, may not have enough power to become president.

The competition between Zuma and Finance Minister Pravin Gordhan is also being watched closely, as Gordhan is seen as a business champion.

Overall South Africa, right now, is viewed as a terribly difficult place to do business, with overweening bureaucracy, a collapsing education system, poor policy and militant labour groups. Kenya and Nigeria are increasingly seen as more favourable destinations.

As one investment advisor in London pithily described South Africa:

Lots of potential, not worth the hassle.

South Africa is thus particularly vulnerable with its relatively liquid portfolio flows and sophisticated financial markets. In addition, the rand, with its high interest rate, is a particular favourite commodity currency for speculators in the carry trade. And indeed, both Moody’s and Standard & Poor’s have worried aloud about the combination of low growth, high debt and political risk in the current global environment.

But some healthy scepticism and perspective is also in order. Yes, South Africa’s parliament is out of order, but there have been fisticuffs in South Korea too.

And there is no such thing as “idiosyncratic emerging market risk” – a patently hypocritical concept. South Africa has had its recent share of protests, but the 2011 London riots were intense, with three days of violence during which 450 arrests were made. Nor are emerging markets essentially “corrupt”. Take Italy, for example. And rent-seeking patronage networks and what the Chinese call guanxi – networks of influence – are a feature of politics everywhere.

Economic policy priorities

The sooner South Africans realise they have frittered away the Mandela dividend in a cutthroat global economy, the better. But this realisation does not have to come at the expense of equal negotiating power in trade and investment. By growing the economy inclusively with a focus on human development, the business environment also becomes more sustainable. Investors know this too.

The ConversationEconomic policy requires a shift away from the short-termism of a gross domestic product evangelism that is subject to the vagaries of hot money in a panicked and turbulent global economy. If this continues to be the case, economic development will only ever elicit a Pavlovian response from rating action to rating action.

Desné Masie, Visiting Researcher in International Political Economy, University of the Witwatersrand

This article was originally published on The Conversation.

Khayelitsha backyarders clash with police

People describe their desperation for a place to call home

By Barbara Maregele
19 June 2017
Photo of people living in makeshift tents
People living in shacks in backyards have been occupying vacant land in Khayelitsha. Photo: Barbara Maregele
At least six Khayelitsha residents are expected to appear in court on Monday after violent clashes broke out between police and the group reoccupying vacant land in the area at the weekend.

Those who were arrested are due to appear on public violence charges in the Khayelitsha Magistrates’ Court, SAPS spokesperson Noloyiso Rwexana told GroundUp on Sunday afternoon.

The group were among dozens of families who have begun building shacks on an open field near the court. The occupiers, most of whom rent space in the backyards of people with houses, began living in a large blue and white tent on the open land last week.

This is the second occupation on this property in just over a month. Hundreds of backyarders in Town Two began their occupation on 15 May, demarcating hundreds of sites on vacant pieces of land in Khayelitsha. The land next to the Khayelitsha Magistrates’ Court is one of the sites. The other two sites are in Makhaya and Kuyasa.

On 22 May, GroundUp visited the area where some of the erected structures were being demolished. The occupation was one of the biggest in the city in recent years.

Tensions in the community intensified yet again on Thursday evening after several families began erecting shacks on the property. Residents say that since Friday, the City of Cape Town’s Anti-Land Invasion Unit (ALIU) had returned three times to demolish their structures. This led to the arrests of at least six people.

When GroundUp first visited the area on Thursday, the ALIU had instructed residents to remove their tent from the property. About 40 people including an elderly woman and three young children were seen living on the open land. A woman, who asked not to be named, told GroundUp that she was desperate to find a place to live with her six-month-old nephew. “We are homeless. All of our things were taken away the last time, so even the baby has no clothes or food. We are willing to fight for a home,” she said.

Resident, Philela Gilwa, said the group’s decision to reoccupy the land is because of their frustrations with lack of housing in the area. “We decided to erect a tent after all of our building materials were taken. There are various stakeholders involved here, but we are just tired of being disrespected and our pleas falling on deaf ears,” he said.

“These are all backyarders who don’t have anywhere else to go who have been sleeping [on the land]. [On Thursday] we had a standoff with the ALIU. They are intimidating us,” he said.

Another resident, Ncebisi Fanishe, said he was among the group that first occupied the vacant land about a month ago. He moved to Khayelitsha in 2004 and due to financial difficulties could not afford to buy his own home. “I was living in a backyard in Site C when I heard about the [occupation]. I’m here to build my house because I’m tired of waiting,” he said.

On Sunday, tensions flared again as the ALIU assisted by police removed the group off the land. By the evening no one was occupying the land anymore, and there was barely any sign that an occupation had taken place. But this is unlikely to be the end of the current spate of occupations in Khayelitsha.

Published originally on GroundUp .
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