The Middle Child

What a Year 2022 has been. Where do I start? So many things to ponder on and yet so Little Time.

The above as stated by Charles Darwin himself carries so much meaning.

China’s recovery from the Covid-19 outbreak and resultant lockdowns remains uncertain. The much-needed resumption of international travel and tourism will take time to generate large benefits. Taking these and other factors into account, the Sarb’s forecast for global growth in 2022 is revised down from 3.5% in the May meeting to 3.3%, and is lowered to 2.5% (from 2.7%) for 2023 and 2024.

The International Monetary Fund has signaled a lower global growth forecast for 2022 and 2023 in its upcoming World Economic Outlook Update.

We all know this, the economy matters.

In the wake of this, three members of the MPC (Monetary Policy Committee) voted for a 75bp hike, one for a 100bp hike and one for a 50bp increase.

While many economists originally predicted a 50bp hike for the Sarb’s July Monetary Policy Committee (MPC) meeting, that was before the higher-than-expected June headline inflation figure of 7.4% was published on Wednesday. Fast forward, SA’s prime lending rate (of commercial banks) will increase to 9%.

Finally the our president throws out the gauntlet at tackling load shedding. Something that has slaughtered our day to day lives like a hot knife through butter. Much anticipation is waiting with regards to the licensing of the Independent Producers (IPP) which may add additional capacity to the falling grid.

An obvious conclusion when placing the AG’s (Auditor-General) municipal findings alongside StatsSA’s non-financial census is that more people are receiving services, but at a huge financial cost to the country. What is not disclosed in the StatsSA census is the quality of the services delivered, which the AG has started to include as part of its audit opinion. Fewer municipalities are receiving clean audits, and budgets are being cannibalised to cover rising staff and councillor salary costs. That leaves less for maintenance and other expenses essential to service delivery.

The number of people employed by municipalities decreased from 333 412 in 2019 to 311 364 in 2020, a decline of more than 6%. StatsSA says there were 23 230 people occupying posts at the management level (including mayoral and councillor positions) in all South African municipalities, excluding vacancies, with 14 209 of these posts filled by men while women occupied the remaining 9 021 posts. There was a 43.2% decrease in the number of funded vacant posts from 53 569 in 2019 to 30 426 in 2020 (including mayoral and councillor’s positions).

Interestingly enough, less municipal workers were employed so therefore the budget for local government wages should free up additional funding, less of course we have people higher up the value chain wanting more abnormal salary increases.

Let us eat some chicken, congratulations to the KFC (Kentucky Fried Chicken) franchise for going more digital and more hungry in Pinelands, Cape Town. What a new way of innovating chicken in the digital world, maybe soon we can purchase chicken wings with Bitcoin. Digital menu boards in its drive through — lanes will definitely ensure the hungry peeps that, chickens can be digital and tasty too.

South Africa’s former President Thabo Mbeki warned that the country faces the danger of protests similar to those that toppled governments in the Arab world a decade ago unless it addresses growing lawlessness and inequality.

“There is no national plan to address these challenges of poverty, unemployment, inequality — it doesn’t exist.” as per former President Thabo Mbeki warns. These are words and pills that are hard to swallow, and yes it is something we are ignoring for too long.

South Africa is grappling with a 34.5% unemployment rate — the highest on a global list of 82 nations monitored by Bloomberg. The Thomas Piketty-backed World Inequality Lab ranks South Africa as the world’s most unequal nation for which wealth data is available. That’s a legacy of the apartheid system that limited economic opportunities for Black South Africans, who make up about four fifths of the population. Whites-only rule ended in 1994.

To turn our economy around and create the millions of jobs needed is something that cannot be achieved by government alone. A comprehensive programme will require the mobilisation of all social actors. For the first time I am going to agree with President Ramaphosa on this one. We cannot expect government to create jobs for the millions alone and expect government to achieve this alone. That is literally a suicide road of hell for all.

On the sidelines we have massive corporations lying in wait to pounce on a opportunity where the state can no longer provide capacity. The skilled people are leaving, taking their taxes and income abroad. In all fairness you take your skills, take your taxes, take your value and most of all, deny your African identity elsewhere. That has to hurt any individual, it is like a sad man being dumped by his girlfriend. I am not justifying and saying, leaving the country for all the wrong reasons are wrong in context, however, when you do not attempt nor try anything different how can you expect the end result to be anything better?

There are many people in this country that wish not to teach, share knowledge, accept a different way of thinking or let alone want to be challenged. You have companies huge massive companies stuck on generational traditions of doing things. No diversity, no new injection or thinking, let alone evolving. Ever wondered why shareholders, boards, investors, etc., seem to be all from the same club? Now exactly this thinking and generational pompous is what is adding to the disaster of unemployment.

With all of that happening why on earth do we not blame ourselves for getting here or being here?

On a much more wonderful note, revenue in the year to March 31 was up 1.8% at R68.5 billion, compared to R67.3 billion last year. Transnet on Wednesday reported a full-year profit of R5 billion ($296.8 million), recovering from a loss of R8.7 billion in the previous year, thanks to higher port and pipeline volumes. The improvement came despite capacity problems at its flagship rail unit.

Transnet CFO Nonkululeko Dlamini said improvements in petroleum and container volumes as South Africa’s economy recovered from Covid-19 lockdowns had helped offset lower freight rail performance. “The significant increase in profits is mainly attributable to the improvement in the Ebitda (earnings before interest, taxes, depreciation, and amortization), a decrease in asset impairments and an increase in fair value adjustments related mainly to investment property,” the group noted in a JSE Sens statement to bondholders. These improvements are impressive from our once tainted and probably most hated state infrastructure company, however I have to give it to the employees, management and the clean up process. Once again I can be proud of a state owned enterprise such as Transnet. Many might be unhappy when the state owned enterprises start performing much better as this goes against a lot of private interests.

Let us celebrate some Black Excellence, congratulatory messages are pouring in for Professor Tshilidzi Marwala who has been appointed as the next Rector of the United Nations University headquartered in Tokyo. The first African of its kind.

Marwala is currently the Vice Chancellor of the University of Johannesburg and holds a PhD in Artificial Intelligence and Engineering from the University of Cambridge.

Prof Thuli Madonsela, the law trust chair in social justice at Stellenbosch University, has meanwhile been elected chairperson of the management board of the Cities Alliance. This is a global partnership fighting urban poverty and supporting cities to deliver sustainable development, hosted by the United Nations office for project services.

Let us not become that middle child.

Sources used:

Statistics SA, Moneyweb, South African Reserve Bank, United Nations, Auditor-General South Africa, Transnet, AZ Qoutes, KFC, Eskom, Bloomberg.