Lintrac
DODGE RAM

ADVERTORIAL

OLD MUTUAL

FAMILY BUSINESS

South Africa heading for an economic collapse

Whether you pour one litre of water into a bucket riddled with holes, or a thousand litres, the outcome will be the same: there will be no water left.

The bottom line of Finance Minister Tito Mboweni’s interim budget speech is that there is no longer enough water to pour into the bucket – mainly because we’ve borrowed too much money already. However, the availability is irrelevant, because failure to adjust the policy environment (fixing the bucket) will result in South Africa’s economic collapse.

This is exactly what happened in Zimbabwe.

The South African economy has been robbed blind, and almost two years after the start of the Zondo commission – which heard damning evidence about state capture and looting – not a single person has been sent to prison. As long as the demon of fraud and looting is allowed to roam freely in the civil service, the size of the budget will make no difference.

 State interference in the economy under the guise of BBBEE, cadre deployment and other race-based schemes such as the COVID-19 emergency relief programme, had far-reaching consequences and there is no scope for fixing or expanding the economy, regardless of whether it is budgeted for or extorted from the private sector.

 The R3 billion lifeline that was extended to the Land Bank was essential, because South Africa has never needed the Land Bank more than it does now. Unlike commercial banks, the Land Bank doesn’t have clients in the tourism, manufacturing, retail, mining or transport industries and the fact that the bank focuses solely on the agricultural sector makes it entirely dependent on land as surety. Expropriation without compensation erodes the bank’s collateral. Mboweni is correct in saying that job creation is very important at this stage, and especially in the rural areas where it is needed the most. However, it requires investment and financing that are reliant on policy certainty. No one in their right mind will invest in property-based businesses while the threat of expropriation hangs over their head. The policy environment is too uncertain for that to happen.

Agriculture can create more sustainable job opportunities over a wider area and in a shorter time than any other sector of the economy. This is not happening, though, because labour laws and administration are too stringent. No farmer is willing to employ extra workers only to realise later that they don’t comply with his business ethos – knowing that labour laws make it extremely difficult to let them go. Even if it is possible to dismiss an employee after an extensive and expensive process, tenure law makes it difficult to get such a person to leave a farm. Policies will first have to change.

Despite a hostile business environment, South African farmers are still competitive in world markets and managed to maintain South Africa’s food security under very difficult circumstances during the COVID-19 lockdown – while still being able to produce and export large surpluses. Commercial farmers, who supply food to the majority of the urban population, received no emergency relief – not during the lockdown, not for the drought and not for the recent massive surge in theft. If agriculture’s potential is allowed to be released in a more policy-friendly environment, it can create the type of wealth needed to eradicate hunger and poverty, create jobs, bring in foreign currency and fill the state’s coffers, but the bucket needs to be fixed first. 

Suid-Afrika op pad na ekonomiese ineenstorting

Of jy een liter water in ’n emmer vol gate gooi of ’n duisend liter, die uitkoms is dieselfde: daar sal niks oorbly nie.

Die kern van Tito Mboweni, Minister van Finansies, se interimbegrotingsrede is dat daar nie meer genoeg water is om in die emmer te gooi nie, hoofsaaklik omdat ons nou al te veel geld geleen het. Dit maak egter nie saak hoeveel daar is nie, want sonder om die beleidsomgewing te verander (om die emmer reg te maak), is Suid-Afrika op pad na ekonomiese ineenstorting.

Presies dieselfde het in Zimbabwe gebeur.

Die Suid-Afrikaanse ekonomie is bankrot gesteel en amper twee jaar ná die aanvang van die Zondo-kommissie wat verdoemende getuienis oor staatskaping en plundery aangehoor het, het niemand nog daarvoor tronk toe gegaan nie. Solank die demoon van bedrog en plundery in die staatsdiens los is, maak dit nie saak hoe groot die begroting is nie.

Staatsinmenging in die ekonomie onder die dekmantel van BBBEE, kaderontplooiing en ander rasgebaseerde skemas soos die COVID-19-ramphulpprogramme het verreikende gevolge gehad, en daar is geen potensiaal om die ekonomie reg te ruk of te laat groei nie, ongeag hoeveel daarvoor begroot of uit die privaatsektor afgepers word.

Die R3 miljard-reddingsboei wat na die Landbank uitgegooi is, is noodsaaklik want Suid-Afrika het die Landbank nog nooit so nodig gehad soos nou nie. Anders as kommersiële banke het die Landbank nie kliënte in die toerisme-, vervaardiging-, kleinhandel-, mynbou- of vervoerbedryf nie, en omdat die bank net op die landbousektor fokus, is dit in geheel van grond as sekuriteit afhanklik. Onteiening sonder vergoeding vreet die bank se kollateraal weg. Mboweni is in die kol as hy sê dit is noodsaaklik om nou werkgeleenthede te skep, en veral in die platteland waar dit die nodigste is. Dit verg egter belegging en finansiering wat van beleidsekerheid afhanklik is. Niemand met gesonde verstand belê in grondgebaseerde ondernemings terwyl die swaard van onteiening sonder vergoeding oor hul kop hang nie. Die beleidsomgewing is te onseker daarvoor.

Die landbou kan meer volhoubare werkgeleenthede oor ’n breër gebied en in ’n korter tyd skep as enige ander sektor van die ekonomie. Dit gebeur egter nie omdat die arbeidswetgewing en -administrasie te verstikkend daarvoor is nie. ’n Boer wil nie nog werkers in diens neem, om later uit te vind dat hulle nie by sy besigheid-etos inpas nie – omdat arbeidswetgewing dit baie moeilik maak om van sulke werkers ontslae te raak. Selfs al kan die werker deur ’n omslagtige en duur proses ontslaan word, is dit bitter moeilik om onder verblyfregwetgewing so ’n werker van ’n plaas af te kry. Die beleid moet eers verander.

Ten spyte van ’n vyandige sake-omgewing is boere in Suid-Afrika steeds uiters mededingend in wêreldmarkte, en het hulle onder die moeilikste omstandighede tydens die COVID-19-inperking Suid-Afrika se voedselsekerheidstatus in stand gehou, en groot surplusse geproduseer en uitgevoer. Vir kommersiële boere, wat kos aan die meerderheid van die verstedelikte bevolking voorsien, was daar geen ramphulp nie – nie vir die grendelstaat nie, nie vir die droogte nie en ook nie vir die weghol-diefstalsyfers nie. As landbou se potensiaal in ’n meer vriendelike beleidsomgewing losgelaat word, kan dit die soort welvaart skep wat honger en armoede kan uitwis, werksgeleenthede skep, valuta verdien en die staatskas kan aanvul, maar die emmer moet eers reggemaak word.

 

 


ADVERTORIAL

OLD MUTUAL

CORONA VIRUS

Farming Diary

Jul
15

07.15.2020 - 07.17.2020

Aug
11

08.11.2020 - 08.14.2020

Sep
9

10:00 am 09.09.2020 - 11:00 am 09.11.2020

Travel Brand Africa

Don't cancel your African Safari! Postpone & Travel later.

www.travelbrand.co.za