Plans, speeches, public-private partnerships, business working with government, crisis committees ... none of this will come to any good until we grow up and dump our obsession with race.
For a country so badly scarred by successive lashings of the acid of affirming one racial group’s rights over another, the lessons are obvious. But clearly the addiction is proving impossible to break.
I read with a heavy heart the weekend reports that attempts to replace misfiring Transnet CEO Portia Derby with acting CEO Michelle Phillips are floundering because some politicians don’t see her as black enough. This issue, more than any other, runs to the very heart of the darkness enveloping SA.
I sat in the audience at the Investing in African Mining Indaba watching a black CEO of a coal mining company, July Ndlovu, lament the slow progress the national logistics crisis committee has made in getting Transnet back on track. Ndlovu has responsibility for many thousands more black employees whose lives depend on Transnet being able to rail coal to Richards Bay and then ship it out of our ports,
Meanwhile, sitting on the same panel, Gerard Rheinberger, MD of Rio Tinto’s giant Simandou iron-ore project in Guinea, told delegates that legislators there have finally approved a co-operative development agreement for the project, which involves the junta-led government, Rio Tinto and Winning Consortium Simandou (WCS).
Simandou is the world’s largest and highest-grade new iron-ore mine, and it has been the focus of protracted talks for more than a decade because of its convoluted ownership structure, delays brought on by legal fighting, Guinea's political unrest and construction-related challenges.
As part of its Simfer joint venture with China’s Chalco Iron Ore Holdings (CIOH) and the Guinean government, Rio Tinto holds two of the four Simandou mining blocks. CIOH holds the remaining shares, with Rio Tinto owning 53%. There are lessons in this if anyone in the SA government actually cares about growth and development.
Rio is collaborating to jointly create the infrastructure required to ship mined iron ore from the far southeast of the nation to Guinea’s marine boundaries and beyond, with the government of Guinea and WCS. These consist of a 600km rail network that runs the whole length of the nation, and port facilities on the Guinean coast in the Forécariah prefecture. The railway will eventually also transport passengers, opening up tourism for the region.
La Compagnie du TransGuinéen (CTG) was formed in March 2022 to do this. The government of Guinea has a 15% free carry equity ownership in the CTG, which is divided between development partners Rio Tinto Simfer and WCS at a 42.5% equity share each. The focus is on co-development, not racial bean counting.
If in SA the national logistics crisis committee is to continue working with the ANC government to solve our rail and ports crisis, it must insist on this as the foundation for its terms of agreement. Co-development above cadre deployment.
Yet President Cyril Ramaphosa’s state of the nation address offered precious little in new ideas or information, apart from the fact that a pitiful R10bn of the more than R210bn in Just Energy Transition Investment Plan funding has been dispersed or allocated thus far.
“We are on track to resolve the most important constraints on economic growth by stabilising our energy supply and fixing our logistics system,” the president said. “As these obstacles are removed, the true potential of our economy is unleashed.”
Yet according to the Integrated Resource Plan 2023 we are unlikely to see an end to load-shedding before 2027, or even 2030. Growth is severely constrained by the acute power and freight crises, and the president said nothing about moves to open this up to the private sector. No wonder businesses’ attitude towards the speech was more “meh” than “amazing”. No announcements were made that might accelerate growth.
All this will make for continued tepid tax takes, and ratchets up the pressure on the finance minister as he prepares to deliver his annual budget speech next week. And what about corruption, which is ultimately what the racial beancounters use their smokescreen of feigned social justice to enable?
Ramaphosa said in his speech that “for a decade, individuals at the highest levels of the state conspired with private individuals to take over and repurpose state-owned companies, law enforcement agencies and other public institutions... There is much more work to be done to eradicate corruption... [we] will not stop until every person responsible... is held to account.”
Yet the recommendations of the Zondo state capture commission have not been implemented, including doing away with cadre deployment. The latest Transparency International Corruption Perceptions index found that SA has slumped to its lowest score yet, now wallowing in the category of flawed democracies.
For all the bluster about fighting corruption, SA’s score has fallen to 41 over the past five years on the president’s watch. Below 50 means you’re deep in the smelly stuff.
A mixture of sincere incompetence, arrogant incompetence and lack of understanding, combined with cunning, powerful special interests and people drunk on unchecked power, equates to an accelerating economic and social tragedy in SA.
• Avery, a financial journalist and broadcaster, produces BDTV’s Business Watch. Contact him at badger@businesslive.co.za.
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