Forbes Africa :: Editor's Letter
May 2017
   Forbes Africa

Junk Begets Junk - Senzeni Na – in the vernacular of one of the most sophisticated economies of Africa it means simply: “What have we done?”

I am wondering that as I return to my editor’s chair tonight after another day running through the
streets with more than 100,000 of Africa’s angriest people. That is the reason why I changed my editor’s picture this month to nod to the fact FORBES AFRICA went among the people to report on one of Africa’s most crucial and fast moving stories first-hand – always the best way.

In short, South Africa made an attempt at economic suicide by reshuffling its cabinet and firing the respected finance minister Pravin Gordhan who had been working hard for 14 months to save the country from a downgrade to junk by the ratings agencies. I read somewhere that if he stayed in his job beyond March the markets would rally in celebration; the next minute I was thinking: Sezeni Na.

Clearly, President Jacob Zuma couldn’t manage the kind of leadership that would allow a person he didn’t get along with to do a job for the national good. Gordhan may not be everyone’s cup of tea, but I would have kept my worst enemy in the job if it meant my people didn’t have to suffer.

No, not a chance, the axe came down in a trice in March. Maybe the problem was Gordhan was trying to guard the national money chest. It was no surprise that the expensive nuclear program – long disputed by Treasury – got the green light days after the reshuffle.

Out went Gordhan and in came a relative novice, Malusi Gigaba, a man who is a sharp dresser but has never been involved in the country’s economic cluster. The way it was done stank. President Zuma summoned Gordhan back from London where he was – wait for it – about to meet with foreign investors to reassure them that his government was open for business. You can only imagine what those hard-headed investors must have thought as the finance minister bid them a premature farewell and rushed back to the airport.

Then there was a cock-and-bull story about Gordhan attempting to overthrow the country during his trip to London. Please. Why didn’t the intelligence people come up with something more credible, like Gordhan had been abducted by aliens? If the overthrow story was true, why have there not been arrests and treason charges?

The ratings agencies clearly saw through all this and downgraded South Africa’s economy to the dreaded junk status. Almost $6 billion was wiped off the markets overnight. The only quicker way to jettison that amount of money so quickly was load it on a fast train to the Indian Ocean and pour it into the sea. The people in power believe the markets will sort themselves out – they will, but to the detriment of South Africa.

It means one of Africa’s biggest economies will struggle to borrow money, face higher interest rates, a falling rand, rising prices of imports and the poorest of the poor will hurt the most.

All business across sub-Saharan Africa – through the many links with Johannesburg – is likely to suffer and struggle to raise money because of this junk status. The myth being kicked around in political circles is that only so-called “white monopoly capital” – whatever that is – will suffer. The fact is business owned by all creeds and colors will struggle raising finance and winning confidence.

More than that, capital sees no creed nor color; it merely flows to the places it can reap returns and steers away from places where there is too much risk or political turmoil.

The fall-out from the reshuffle and downgrade has been crude and defensive politics. I have covered liberation movements up and down sub-Saharan Africa for more than 20 years and seen this often when once all-powerful ruling parties feel threatened.

For example, African National Congress Youth League members heckled Gordhan at a memorial service – yes, I said memorial service – in Durban for the genial Ahmed Kathrada, one of the greatest activists of the ANC. I was sick to my guts when I saw it on TV, with ANCYL hotheads being pushed out of the hall shouting: “sell out”; those two words for a man who carried guns and gave most of his life to the struggle?

It is hard to believe sometimes that a party that gave the world Walter Sisulu, a razor-sharp intellectual who could tear any false argument to shreds with words, could sink so far. What would he have thought about his successors in Parliament who shout at the opposition: “Shut up and get out”?

I doubt whether the massed marches are likely to bring about change in leadership South Africa. I can only think of one place where it did work, in Zambia in 1991, where Frederick Chiluba’s MMD took to the streets to hasten the end of would-be president-for-life Kenneth Kaunda. Even then it only worked because Kaunda was daft enough to think he could win the election that the protests forced.

What is clear is that whatever happens in the corridors of power, by this time next year, all the people who marched for change, and their country, are going to be much poorer.



 

 
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