Weekend news wrap up with Bob Mabena – 13 December 2015
The City Press put together a well crafted timeline on our finance potfolio and it reads like this:
May 25 2014 – Nene takes over from Pravin Gordan, after serving as deputy since 2008. Sept 2014 – Russians involvement in a proposed reactor deal is scantily announced through Russian nuclear agency Rosatom at an estimated tag of $50 billion. Speculation is that Tina Joomat Petersen has approval from Treasury. Quickly thereafter Rosatom back paddles. March 2015, Nene tells 59 badly run municipalities that he will not release their monthly equity share grants because of their failure to pay creditors like ESKOM. April 2015, Tender system is amended as advised by treasury. July 2015, Nene paints a bleak picture at the ANC National Executive Lekgotla by insisting that public service department put a moratorium on new posts because of fiscal constraints – this was prompted by the need to fund public sector wage increases. Project Spider web – a fake intelligence dossier details a plot that claims that white leaders wanted a tight control of treasury since 1994. Nene dismisses it as a joke but later reconsiders looking into it. August 2015; treasury is finally included in the new nuclear deal talks and Nene says he will not sign it off because it was unaffordable, unless it was aligned with the PFMA and constitution. Last month, Nene reveals in a parliamentary report that for the sake of austerity, treasury had declined to approve about 39 of 56 requests by government departments for luxury spending – including flights, luxury cars etc. Still in the month of November, after Nene’s tight austerity moves back in March, municipalities sign repayment agreements with ESKOM and other similar suppliers. December third, Nene rejects Dudu Myeni’s plan to renegotiate the Airbus aircraft acquisition deal. Accusations fly to and fro and treasury threatens SAA with Financial misconduct violation. the next day; Standard & Poors downgrades SA’s sovereign credit rating to BBB status – one rung above “junk status”. Besides the downgrade, most agencies praise Nene’s composure and posture. December 9, President Jacob Zuma removes Nene.
Those are the facts as recorded by history. But I beg that as South Africans we look at the hard facts and shun speculation and innuendo. Lets not forget that the rand was on a slippery slope before Nene was moved and we had just been downgraded as well. I announced on Thursday that retail sales had gone up 3.3% yoy. Civil summonses issued for debt had fallen double digits by 20.3% yoy – that’s on the upside and before the Nene removal. The downside had our current account deficit widening to 4.1% of GDP in Q3. Headline consumer inflation had risen by 4.8% yoy and our Achilles heel – manufacturing output had fallen 2.1% yoy. We were not doing that great anyway BUT there was market confidence in Nene. What we can say about the post Nene fallout is that The JSE slipped to multi-month lows and our currency hit record lows against the Dollar, Euro and British Pound. The All Share index settled 2.47% weaker for the week. Our banks were at the dead centre of the market storm by plummeting 17%.
This is going to be a tough week as we expect certain data and fiscal announcements from home and abroad. Monday – liquidations data, Tuesday – business cycle indicators from SARB and quarterly employment numbers from STATS SA. the US FED makes its decision on rates this Wednesday, PPI on Thursday.
This, my fellow Afropolitans is the Perfect Storm that President Jacob Zuma and his Top six have unleashed on us. This country has cut this president huge slack even when he was deputy president. He slept with a woman who considered him an uncle; has had an extra marital affair; his conduct has been unpresidential when he mixed with undesirable characters such as convicted fraudster Shabir Sheik; improvements to his Nkandla homestead are under deep scrutiny; he has been unable to correctly assess the complex economics of South Africa; the Waterkloof landing of the Guptas may have been somewhat within the ambit of the law but that incident was also unbecoming of a President; he has presided over the weakest rand since 1994. In parliament, he is evasive when answering question and at best he obfuscates. The ultimate question then becomes – what was so gravely nefarious or undesirable that it warranted former president Thabo Mbeki to be redeployed, whereas we have a sitting, giggling president with a myriad of self inflicted and juvenile mistakes who is till in power? when will the ANC realise that under Zuma COSATU weakened, under Zuma Andries Tatane was murdered, under Zuma, we had the Marikana massacre and shameful Xenophobia, under Zuma, we also had a weakened tourism sector a few months ago. DTT was delayed under this president as well. The list is rather long and it includes issues with gender violence, transfer pricing, Omar Al Bashir and on a lighter note, The Boks, Moroka Swallows, Proteas and Bafana’s less than desirable performance. and let’s not even talk about rumours of a love child with Dudu Myeni. The overwhelming answer soon after Nene’s removal from Zuma supporters was simply that it was the President’s prerogative and he didn’t have to consult or co-govern. Well then; on his sword he must fall and never rise again. His legacy is already tainted and I for one, don’t think he actually cares. Let HIM eat cake – oops; he has already done that!!!