South Africa: Undermined potential

Here is an excellent article from the Financial Times on South Africa’s mining industry and how, for various different reasons (a primary one being the talk about nationalisation), this sector has failed properly to take advantage of commodity booms. And, despite having missed the last one, all indications are we will miss the next one too. 

There are some brilliant facts and figures in here and it constitutes a fairly devastating analysis of how we are failing properly to capitalise on our potential. Here is the definitive stat: “During the 2001-08 commodities boom, the world's top 20 mining countries achieved an average mining growth rate of 5 per cent a year, but South Africa's sector shrank by 1 per cent a year, according to the country's Chamber of Mines. Only Venezuela, where leftwing president Hugo Chávez is nationalising large swatches of the mining industry, came close to matching that poor result.” 

Certainly, if we want to generate serious economic growth, there is enormous work to be done - both by the state and the private sector - to realise our potential. (The article compares Australia and South Africa and how, despite being equally competitive in terms of resources, Australia’s greater efficiency is leaving South Africa in the dust.) A really excellent article for anyone interested in the economy and the role of the mining sector. 


Click HERE for the full article at the Financial Times.

Buffalo City Metro 100 day report

In our capacity as the official opposition in the Buffalo City Metropolitan Municipal Council, the Democratic Alliance (DA) has compiled a report focusing on the first 100 days of office.

This report provides an overview of the ANC’s governance since the local government elections on 18 May 2011. It also highlights the positive impact that the DA has made during the same period.

Council Meetings

The ANC’s current schedule of council meetings on a quarterly basis is counter-productive to service delivery. For example, the delay in the approval of development and planning issues seriously slows down economic development and job creation.

The DA has proposed that Council convene bi-monthly meetings. More frequent Council meetings will significantly improve debate, service delivery and oversight of the municipality’s administration.

To date, BCMM has not responded to our proposition.

Council Standing Committee Portfolios

To date, not one Portfolio Committee has convened. The composition of said committees was finalized in late June. The DA has written to the Speaker enquiring when committee work will commence, and are left wondering how decisions are being made in the absence of regular meetings.

Allocation of Councillors to Committees, Boards and Other Roles

On several occasions, the Mayor and/or the Speaker has unilaterally appointed DA councillors to committees, hospital boards and the like, without consulting the DA caucus leadership. Recently Executive Mayor Zukiswa Ncita instructed a DA councillor to report to, and attend a board meeting for the Frere Hospital without discussing the matter with either the councillor concerned or the DA caucus leader. The Democratic Alliance objects strongly to this practice, as we are best placed to determine the suitability of a particular councillor for a specific role. We have written to both the Speaker and the Mayor in this regard, and will continue to demand the right to select our own representatives to committees, boards etc.

Corruption & Maladministration

The delayed interrogation and response to the controversial Ernst & Young report, which investigated corruption and mismanagement in the previous Council’s term of office has left a dark cloud hanging over the heads of a number of officials and ANC councillors.

The Democratic Alliance was instrumental in ensuring that the MEC for Local Government returned the report to Council, and has played a leading role in bringing those accountable to book. We anticipate releasing a comprehensive statement on this matter in the very near future.

The poor controls (especially in Supply Chain Management) highlighted by the Oversight Committee and the Audit Committee have been confirmed by the latest Auditor-General’s report.

The DA has submitted motions to the Speaker for debate at the next Council meeting calling for a thorough review of both the Supply Chain Management policy and the operation of the Supply Chain Unit. Transparency of the tender process is a critical element in the success of this Unit and the DA will call for such during the debate.

Service Delivery Issues

Despite Council’s approval of the annual Budget and Integrated Development Plan at the end of May, it comes as something of a shock when senior municipal officials advise that there are no funds available for pothole repairs. On investigation by the DA, it appears that this is an excuse to avoid having to address the countless problems caused by the recent rains.

DA councillors are currently inspecting the state of roads, ward by ward and are assessing the needs for repairs to roads, storm water drainage, sidewalks, street signage and road markings.

Refuse remains a major issue, both from a collection and general cleanliness perspective. The Democratic Alliance is concerned that Buffalo City must rate as one of the dirtiest in South Africa. In addition, our landfill management leaves much to be desired. The Roundhill and Stoneydrift landfill sites have both caught fire recently, causing distress and health problems for nearby residents. Poor refuse collection/street cleaning has also resulted in a number of stormwater drains becoming blocked during the heavy downpours experienced in June and July. This has had catastrophic consequences for residents, particularly those in informal settlements.

The DA proposed that council should consider outsourcing this function to private contractors. The proposal was met with antipathy from the ruling party, who stated that outsourcing is not the policy of the ANC.

The maintenance and ongoing improvement of public facilities and open spaces is another area in which Buffalo City is short changing its residents. The degree of infrastructural decay is affecting all segments of our society. The DA has initiated an audit of parks, clinics, cemeteries, libraries, sports facilities and other public amenities to determine their status and needs, and to identify priorities requiring urgent attention and remedy.

Economic Development and Tourism

The abrupt termination of funding for Tourism Buffalo City (TBC) has far-reaching consequences. The DA has requested an urgent Special Council Meeting for the Executive Mayor to present her proposals for filling this void. Tourism is part of the economic lifeblood for the region, and a failure to address this issue will negatively impact on our economy for years to come.

The DA proposes that a properly funded, well-run public-private partnership between the municipality and tourism roleplayers be established as a matter of urgency to promote the region and coordinate conferences, events, sports tourism under one umbrella.

Appointment of Municipal Officials

In stark contrast to most other municipalities, Buffalo City has been decidedly slow in filling critical gaps in its organizational structure. At this point, a large number of senior officials are operating in an “acting” capacity, with no certainty as to their long term prospects. The failure to appoint permanent senior managers has an enormous impact on service delivery. The Democratic Alliance has grave concerns about the delays, and has written to the Speaker and the Mayor to enquire when the posts will be advertised and/or filled. To date, no response has been forthcoming.

In addition, the lack of certainty has resulted in a great deal of fluidity in the organization, and staff members appear to change roles on a daily basis. The municipality has failed to provide all councilors with a proper directory and organizational chart of various departments’ directors and general managers, despite repeated requests. This has seriously hampered enquiries, complaints and suggestions by the public and councillors.

Acting Municipal Manager’s Security Detail

Mr. Andile Fani was deployed to BCMM as the acting municipal manager by the Department of Cooperative Government and Traditional Affairs without a proper performance contract, or clarity as to where the funding for the deployment would be sourced. Mr. Fani’s commendable attitude towards corruption has allegedly resulted in threats being made against him and his family, thereby requiring a sizeable (and costly!) security detail. No threat analysis or other tangible proof of risk has been presented to either the current or previous Council. The DA has written a letter enquiring about the cost of this security detail, without a response to date.

Establishment of Ward Committees

The demarcation of wards and the date of the election were known well in advance. It is therefore completely unacceptable that no provision was made for the establishment of new ward committees immediately after the elections. This means that the city is still without ward committees. Buffalo City Municipality hopes to have these established by the end of October. This has reduced the public’s participation in the governance of our city to that of mere bystanders.

Since the induction of the new council, the DA has been instrumental in influencing the terms of reference for the establishment and operation of ward committees, to ensure fairness, representation and good governance.

Metro Law Enforcement

The establishment of Buffalo City as a metropolitan municipality has not resulted in the amalgamation of City Traffic and Law Enforcement into an integrated entity (e.g. Metropolitan Police). This has resulted in a failure to enforce by-laws and a lack of 24 hour law enforcement/ control. The allocation of resources to this vital function appears to be misdirected and lacks proper planning and forethought.

The Democratic Alliance has previously questioned the mandate of BCM law enforcement, and the efficient use of manpower. More recently, questions have been raised over the purchase of BMWs for traffic and other law enforcement functions, and it appears that style has taken precedence over function and value for money.

Political Friction

Political tension in Ward 10, Egoli, between DA Ward Councillor Irene Brauns and the ANC’s ex-councillor Antonio Carels persists, and the ANC’s failure to intervene and bring its members to order appears to lack political will. Mr. Carels continues to foment tension in this ward. The DA has written various letters to the ANC Whip and the Chief Whip of council without any concrete results or feedback.

Public Participation

The 2011/12 council IDP & Budget road shows were conducted in a very unprofessional manner, as timeframes were extremely tight and, as a result, no real meaningful input was received from the broader public. The DA believes that the role of public participation in government cannot be underestimated, and that strong, vibrant societies are created when government and the people work together in partnership. Independent civil society must be appreciated as they work for best-practice governance, social justice and environmental protection in the City of Buffalo City. The DA will be calling for a comprehensive roll-out plan for public participation prior to the next Budget and IDP process commencing.

Preparedness for Industrial Action

It is clear that the lack of proper planning during the recent strike action rendered the municipality unable to deliver essential services. In particular, the city was awash with refuse, and collections were sporadic. The collection of business refuse was an issue of major concern, and many organizations reported that their refuse was not collected for almost two weeks. Additionally, in King Williamstown, striking workers allegedly shut off water mains leaving much of the town dry. No security personnel were on hand to prevent looting, rioting, sabotage or other actions on the part of striking workers.

The DA will be investigating the city’s contingency plans to ensure that we are better prepared for future strike action. A specific area of concern is the municipality’s failure to engage third party contractors to deliver the services it was unable to provide.

Conduct of Municipal Workers during Recent Strike Action

The trashing of Buffalo City, burning of tyres and general lawlessness of the South African Municipal Workers Union members without any form of accountability is the type of behaviour that hardens attitudes against their demands. Instead of demonstrating why they deserve the increases, SAMWU’s members resort to violence and looting (as evidenced in the City of Cape Town) to pressurize municipalities into surrender.

The Democratic Alliance has, through its national spokesperson on labour issues, Ian Ollis MP, proposed that unions and union leaders be held responsible for any damage, injury and illegal acts proved to have been committed by their members while on strike.

It is time the unions and their members learned that they are employed at the employer’s pleasure. The right to strike does not imply the right to destroy property or intimidate and assault those who do not share their views.

The DA respects the rights of workers, but such respect is a two-way street, and we cannot, under any circumstances, condone the behaviour of union officials and striking workers.

In Conclusion

The ANC has become apathetic to the point of paralysis in responding to the needs of the citizens of Buffalo City. Our metro readiness was shambolic, and the situation, three months later, is little better. The Democratic Alliance has repeatedly shown that it has the interests of all the people of Buffalo City at heart, and has demonstrated that it has the capacity to govern better.

In light of the above, we call on the African National Congress in Buffalo City to explain publicly, fully and fairly, how they intend to improve the lives of our people.

From press statement released on 5 September 2011 by the Democratic Alliance’s Buffalo City Caucus

Handouts do not improve your self-esteem: doing it for yourself does

Nationalisation and land grabs - with or without compensation - are dead-end policies. Nationalisation without compensation will result in sanctions being re-introduced against South Africa by the US and EU, as it will be perceived that their citizens - the ones who have invested here - will have had their assets stolen from them by the South African government. International travel restrictions on members of the Cabinet will probably be applied as well.

Nationalisation with compensation at fair value will mean that a trillion rand will have to be diverted from health, education, welfare and law and order to purchasing the targeted assets. In other words, the opportunity cost will be enormous. The only alternative is for the government to borrow the money - if they can - which will send South Africa's national debt to GDP ratio through the roof.

Land grabs, on the other hand, will in the worst case scenario precipitate a civil war.

Neither being a pariah or highly indebted state in the case of nationalisation nor being a country driven by civil war in the case of land grabs will sort out the problems of unemployment and living on desolation row. The only way the problem can begin to be resolved is to follow the philosophy of Steve Biko, an equally charismatic character, who before he was cruelly murdered in the 1970s basically expressed the view that handouts do not improve your self-esteem: doing it for yourself does.

Government must engage with Business Leadership SA and AgriSA as to how a more inclusive and participative economy can be created and how one can transfer an appropriate proportion of land from white to black farmers without diminishing agricultural productivity. All of this will take time. It cannot happen overnight in one quantum leap.

Selected extracts from article by Clem Sunter.

Mogoeng too conservative for Constitutional Court

The appointment of a new Chief Justice for the Constitutional Court isn’t a topic that is very interesting to most South Africans... however it is something that we should all be concerned with, as it has important far-reaching consequences.

President Zuma has controversially nominated judge Mogoeng Mogoeng to take up the office of Chief Justice. Many experts have said that Mogoeng’s inexperience and conservative religious views make him an unsuitable candidate. Several of Moegeng’s judgements are deemed unsympathetic to women and to homosexuals. Commissioner Krish Govender has challenged Mogoeng over a reference he made to “minor injuries” suffered by a young girl when she was raped. “To me, you can’t have something as a minor injury when it comes to rape,” Govender said.  Mogoeng conceded under questioning by parliamentary delegate Koos van der Merwe that he had told a colleague that God wanted him to be South Africa’s next chief justice.

Gareth van Onselen writes that religion is everywhere in SA politics today, and increasingly it is coming to influence those public institutions and servants who should serve the public interest dispassionately and without fear or favour. When those beliefs run against the Bill of Rights (such as judge Mogoeng’s views on homosexuality) the results can be profound and far reaching, and to the detriment of our democracy. You might recall Zuma’s 2006 pronouncement that “same sex marriage is a disgrace to the nation and to God” - is his nomination of Mogoeng a consequence of this belief? Even our elections - the pinnacle of democratic free choice and individual agency - seems to have been reduced to nothing more than an exercise in carrying out God’s will. Very little is written on this subject. Most people are too scared to cause ‘offence’. But the Bill of Right demands much more than that. The line between church and state needs to be fiercely guarded and, at the moment, it is being torn down. As a result, religious prejudice, inconsistent with the Constitution, has found a home at the highest levels of the government and God is being used to instil fear in those who do not support a particular political agenda, all of which is to the detriment of our democracy.

The beast could get bigger!

If current proposals at the Municipal Demarcation Board are successful, we could see the Buffalo City Metropolitan Municipalities’ size grow further but having outlying (non-rate paying) villages incorporated into our boundaries. At current, the institution of BCMM is a beast that is proving difficult to tame, and increasing its size would simply exacerbate the situation. Where would the money and manpower come from to provide services in these areas?

ANC outmuscles opposition on secrecy bill

The highly controversial Protection of Information Bill was muscled through Parliament's ad-hoc committee on Friday as the ruling African National Congress (ANC) outvoted opposition parties. ANC MPs said they believed the bill was constitutional, even though it omitted the "public interest defence" that could be crucial for investigating allegations of state corruption and abuse of power by journalists and other citizens. In my opinion, this is possibly the biggest blow to the fight against corruption we have seen in years! People found in possession of classified information would face a minimum sentence of five years in terms of the Bill's sanctions.

Opposition MP Dene Smuts of the Democratic Alliance (DA) said: "The omission of the public interest defence particularly in relation to the possession and disclosure of classified information, will have a chilling effect on freedom of expression, including the freedom to receive or impart information or ideas."

The right to classify information is now limited to the defence force, police and intelligence services, with a provision for other departments to apply to classify information on the grounds of national security. This could mean that the Department of Defence could cover up corruption in future arms deal tenders... we all know how many billions were misspent last time round.

Smuts' colleague David Maynier, DA Shadow Minister of Defence, said that the party would be taking legal advice on the bill and petition the President under Section 79 of the Constitution. Steve Swart of the African Christian Democratic Party endorsed this step as well. At least one extra-parliamentary group, the Open Democracy Advice Centre, was already preparing for a Constitutional Court battle saying that they have already received opinion from legal counsel on some aspects that they believe are unconstitutional and are waiting for the final draft to be made available on Monday to hand over to counsel.

I hope and pray that the PIB goes to the Constitutional Court and gets thrown out, as the consequences of its implementation could be disastrous.

Graphic: Daily Dispatch
Research: Business Live

Questions raised over luxury car purchases

I have written before about the purchase of 10 new BMW 320i luxury motorcars by the Buffalo City Metropolitan Municipality at a cost of R3,2 million. I do not dispute the fact that traffic and law enforcement officers need speedy vehicles in order to respond to complaints quickly, however these entry-level BMW vehicles are not “high performance” as claimed, and many other vehicles of a similar or lower price have much better performance. Secondly, if luxury vehicles were chosen, why did we not purchase vehicles from Mercedes Benz? Mercedes Benz plays a major role in the economy of BCMM, and therefore the council should show support to them over other luxury German brands.

A major concern I have is that BCMM has failed to hold standing-committee meetings to date. If this issue came to a standing committee, it would allow councillors to perform their oversight role mandated by the constitution and question the choice of these cars. Without these standing-committee meetings, the role of councillors as public representatives becomes eroded.

As I believe the ratepayers of Buffalo City have a right to know why these vehicles were chosen, I have submitted a formal question on this matter to the Municipal Manager and Mayor and request that this question, and any answers provided, form part of the Agenda of the next full Council Meeting.