South Africa isn’t run by a government. It’s been hijacked by a cabal of asset strippers.
South Africa is not being governed to benefit its people. It’s being dismantled and sold off to provide oodles of cash to a small political elite.
Asset stripping is one of the uglier manifestations of present-day capitalism. But the script is ancient — straight out of Aesop’s fable of the industrious ant and the feckless grasshopper.
It starts with a business building its asset base over many decades, rather than declaring huge dividends for shareholders. Like the fabled ant, it’s based on the philosophy of not gobbling the entire harvest but carefully salting away resources for the lean times.
Unfortunately, asset strippers sense juicy pickings like scavengers sense carrion. The strippers grab managerial control, often through the ploy of promising the greedy grasshoppers – um, shareholders – that they will “unlock value”. Meaning, let’s binge on the granary.
Anything that can be turned to cash is sold and soon a once-comfortably solvent business is reduced to hand-to-mouth survival, with nothing to cushion it for the hard times.
And that’s exactly what the ANC and its partners in asset destruction, Cosatu and the SACP, are doing to South Africa (Pty) Ltd. They are hijacking a century of accumulated sovereign wealth and hocking it for dosh to splurge on Blue Label and sushi.
These alliance grasshoppers have financially eviscerated Eskom and SAA. At PetroSA, they sold off the entire crude oil reserve of 10 million barrels at $28 a barrel when the international price was around $40 – straight into the pockets of some offshore investors.
A fortnight ago, the auditor-general told parliament it was uncertain whether PetroSA could continue operating. So, too, the SA Nuclear Energy Corporation, as well as its subsidiary, Pelchem. Finance Minister Tito Mboweni has painted a bleak picture of two state-owned concerns, Denel and Transnet. Both have been chowing their harvests as if there is no tomorrow through a deadly combination of theft and incompetence.
South Africa has more than 700 state-owned enterprises (SOEs) and it’s unlikely the picture is rosier in many of them. But it is not only SOEs. All of the country’s infrastructural assets have been looted or allowed to decay. The rail and road infrastructure has wasted away, except where under control of private enterprise. Almost two-thirds of local government entities are dysfunctional.
This dismal state of the nation is a direct result of the ANC’s grasshopper mentality – a genetic predisposition to short-termism. From this blighted DNA stems the determination of many in the alliance to reap what others have sown, rather than bother growing from seed.
One should therefore take with a pinch of salt the sudden determination of the ANC under President Cyril Ramaphosa to curb corruption. No matter how well intentioned, Ramaphosa’s approach barely commands a majority on the party’s national executive. Within the party’s powerful, policy-determining membership structures, it is a minority view.
South Africa has been there before.
It was to a very large extent because then president Thabo Mbeki championed cautious economic policies and the shrinkage of the SOE sector through privatisation that he was ousted. Worker-ant Ramaphosa may meet the same fate.
Grasshoppers rule, OK?