Hello and welcome to the So What podcast in which political economic analyst JP Landman
discusses the issues uppermost in the minds of South Africans. You can find a written
version of this content on JP's website jplantman.co.za. I am Ruda Landman and I am your host.
In this conversation, a company's JP's newsletter dated the 18th of October 2024, titled Some
You Win, Some You Lose. It has been a busy two weeks.
Yes, indeed it has been. You know the old saying that there are weeks where nothing
happens and then there are days when weeks happen. And certainly in the first two weeks
of October, a lot of things have happened, both in the policy space and in the political
space.
Let's begin with policy.
Well, first of all, we got a new visa regime and it's a new visa regime that has long been
in the making, but at last it has now been gazetted in the government gazette. So this
is now the law of the land, so to speak, and it provides for two things. It provides for
a point based system when you apply for a South African visa. So that takes care of
a lot of the subjectivity and discretion because there are points for this, points for that
and that is clear and unambiguous. And secondly, it provides for a remote work visa so people
can come to South Africa and live here, but work elsewhere. And of course, that is also
enormously beneficial. We offer it, we have a lot to offer in terms of facilities and
climate and personal services and so on. So for people to work elsewhere, but come and
live here, spend the money here, buy goods and services here is clearly a big plus. So
those two changes give us a much easier and much more modern visa regime.
And that was only the latest in the project Wollend-Lehler's priority list.
Yes, indeed. Project Wollend-Lehler had as its priorities water, electricity, water licenses
really, electricity and a few other items and visas were one of them. Visas can now
be ticked. The other items that can be ticked is spectrum release that was done and achieved
and has unleashed a lot of investment. The electricity regulation reform that was done,
Mr. Ramaphosa signed the bill, facilitating private sector investment into renewables.
So far about 500 billion rand has been unlocked and counting that number keeps on going up.
So that was done. Breaking up ESCOM, transmission has been separated out of ESCOM, distribution
still remains to be done. Ensuring electricity supply, we are now over 200 days of no load
shedding and again counting. It seems as if it's holding and water licenses had to be
fixed and that was done. The bigger problems of water of which we in Gauteng are very well
aware of that will be tackled in Wollend-Lehler 2. Wollend-Lehler 2 has not been announced
yet but it will probably be coming out in the next couple of weeks and it will cover
water security as opposed to water licenses, water security, logistics, more electricity
reform, local government, spatial inequality and digital transformation. Now water, spatial
inequality and local government, those are big and important issues. They are tough nuts
to crack and it will be interesting to see how Wollend-Lehler 2 deals with that.
Since you start with, you captioned this, some you win, some you lose, Transnet's loss
in the court last week was also was a setback. Yes, it was a setback for project Wollend-Lehler.
The port reform is part of logistics reform and what happened there was Transnet has under
government pressure, government guidance, policy guidance, issued a 25-year concession
to an international Philippine company to come and run the Durban port but also to invest
11 billion rand to modernize the new equipment and so on. That went out on tender. There
were about I think 22 people or 22 entities interested in the license. It was then awarded
to the Philippine company. One other international logistics company, Maersk, who is quite well
known in South Africa, one sees the name all over, objected and said Transnet did not apply
the tender conditions correctly and they went to the high court to interdict the concessioning.
The judge agreed with Maersk and Transnet was interdicted. Temporarily, there will now
be a second phase where the case will be heard on the merits and we will then see what the
judge decides. I hope the courts do not take a final decision on this because I don't think
that's the way these things should be handled. You may remember that we've had a similar
situation of spectrum release. When everything was set and gun ready to go, three companies
three big ICT companies brought applications against spectrum release, claiming that it
was prejudicing their particular business model. That issue in the end was resolved
outside the courtroom. Executive decisions were taken, compromises were made and spectrum
release was not only done but was done and dusted. So I'm looking to that example to
be pursued in the case of this port concessioning. That's the way to resolve it, not via the
courts. What's happening in the relationship between government and business? Well, they're
quite interesting. The first phase of government business cooperation, which goes back about
a year or so, has now been concluded with projects finalized and now on the 1st of October
they signed what one can call a phase two agreement where they will carry on working
together and they specialize in three areas particularly. The three areas are energy,
ongoing energy reform, transport and logistics and crime and corruption. Since then, since
the 1st of October, it has become clear that there's a fourth item that has been added
to the list and that is water, particularly in Gauteng. So big companies have stepped
forward and say they would like to play a role or they're capable of playing a role
in resolving the water crisis. So those are the four areas on which business and government
are cooperating and you will notice that it dovetails Willem Lela 1 and 2 almost perfectly.
So the business government cooperation fits into making these reforms of Willem Lela
1 and 2 work. That's really where they fit in. How can business help when it comes to
water because water is becoming an enormous problem? Indeed, absolutely, particularly
in Gauteng. There are two ways. The first way is by way of seconding people and getting
management expertise into the various water bodies, helping with planning and execution.
But secondly, and in a sense more important, investment. Water is underinvested in South
Africa. I'm not just referring to the big capital projects. The private sector is already
involved but we're talking about distribution at local government level. In Johannesburg
something- So pipes next to the road.
That kind of thing. I mean the water infrastructure in Johannesburg, in Gauteng in general, is
old and it has to be replaced and that is quite a member of task. You've got to figure
out new ways of doing that on the construction side but also on the financing side. And that's
where business could play a role.
And to jump to a completely different thing, how do you see our international relationships
at the moment? Is it possible really to be non-aligned?
Yeah, absolutely. There are a number of very successful countries that are very successfully
non-aligned. Think of India. They are probably the prime example. Brazil. Brazil is a very
good example. They're close to the US. US is a big market but they retain a separate
identity. India, as I've already said, is a past master in that. So yes, it is possible.
What we saw in October is that President Ramaphosa went to China to attend the Africa-China Cooperation
Summit but he was received by Xi Jinping on a state visit, which is quite an honour or
a compliment. And it's quite clear that the Chinese are very keen on closer relations
with South Africa. At the same time, last week, the United States Embassy in South Africa
released a statement to say that they will have a bosporat with the South African government
on future relations and they wanted to develop quote unquote a strategic relationship with
South Africa. Now, if you take this US embassy statement and you compare it to the US embassy
allegations around Lady R, all unsubstantiated allegations I must say.
Was that only last December? That was very recent, yeah. Then you can see
how far things have moved. So I think it's quite clear that the Americans would like
to have a better relationship. We're having a good relationship with China. So let's see
where this goes. But I think the fact that the US embassy is participating in this process
and want to create a strategic relationship answers your question that yes, it is possible
to be non-aligned. But you have to be very clever and you must box very cleverly.
We might refer our listeners to a Netflix series we watched last night. It's called
History 101. It's not new. It's been there for a while. But last night we watched a chapter
called The Rise of China. It's 21 minutes and it's fascinating. It's a condensed overview,
very worth watching. Oh yes, absolutely. We misunderstand China
a lot. I think China also misunderstands the West a lot. But it is a reality. You can't
ignore it. And yes, the listeners would benefit from watching it.
Coming back to Home Ground, once again we have to talk about Gauteng. China was a disaster,
is a disaster, as far as Johannesburg can see. What does it mean locally and nationally?
Gauteng has always been a bit of an outlier in the sense that there are or were two centers
of powers in ANC that would have preferred to make a coalition, not with the DA and the
other parties that we currently have in the coalition, but with the EFF and nowadays with
MK. This goes back quite a while. What happened in the election in May was that the ANC and
KwaZuna Natal got thrashed. So they were taken out as a serious player. They only got 17%
of the vote. And well, you know, in politics if you don't have votes, you have nothing.
In Gauteng, the ANC did a bit better here. They got 35% of the vote, still a minority
government, but they do control the province and they're using that power base to shun
the DA and to shun other moderate parties in the current government of national unity.
They would prefer to go with the EFF and also MK. So there's clearly, that's where Gauteng
is an outlier. Has been the case for a while and that is simply playing out in Swanee.
And I think what we see in Swanee is the ANC, Panja Zalasufi, the ANC leader in Gauteng,
is very proud that the ANC has reconquered, so to speak, metros in Gauteng, Johannesburg
Metro, Toronto Metro, that used to be governed by different coalitions and are now governed
by an ANC coalition. It's a political aim and they've succeeded in doing that.
Whether that will pay off? Well, that we will have to see. What happened in Swanee is in
a sense, unfortunate. Action SA withdrew from the ruling coalition, the one that they had
with the DA and other small parties, and then went into coalition with the ANC. Now they
haven't really explained that. They said Michael Beaumont, their national spokesman or national
leader, not national leader, but an important leader, said the election in May created a
new reality and they had to adjust to this new reality of coalitions. Now that's fine,
but why then swap one coalition for another? They claim that it's because the DA coalition
was not willing to spend money on the black townships. I think, well, the DA of course
denies that, but I think more important, they haven't tabled this issue in the coalition
and I think it's just an excuse that they're using afterwards. So Action SA has really
pulled the plug there. That has now resulted in the mayor being removed. It has resulted
in ANC led coalition. And then a further unfortunate thing happens, which shows you that we're
not yet used to coalition politics in South Africa. Alan Zille then said, well, if Suleyya
Brin cannot be a mayor in Twane, then the DA is not going to have any further talks
with ANC about Ekorileini, Johannesburg and now Sommandela Bay. Now that's very unfortunate
because Panjaza Lusufi scored a victory in Twane. By now walking away from Ekorileini,
you in a sense solidify his victory. Why do I say that? Well, the ANC mayor of Ekorileini
is on record that he would prefer to have the DA in his mayoral committee, not exclusively,
but he wants them in his committee, in his mayoral management team. Why? In his words,
we only have two years to go before the elections. It's not time for new ideas or talking. It's
not time for service delivery. And he thought the DA could help with that or having the
DA in his mayoral committee will help with that. That door has now been shut when the
DA said they're not going to talk about further talks. The people in Nelsomandela Bay will
know that the situation there has been precarious for a long time, leading to instability. And
likewise, this statement now has closed that door. So, you know, I think we have a situation
there where some people philosophically do not want to deal with the DA or do not want
to promote the idea of the government of national unity at local level. But other people-
Some people in the ANC.
Yeah. But other people through their style. It's also jeopardizing the government of national
unity or the idea of national unity at local level. So that's where we are. We'll have
to see how this plays out over the next two years.
So what?
Well, I think the so what is that I do not for one moment think that the shenanigans
in Kharteng and Chuanhe and so on, that they are going to affect the government of national
unity. I think the government of national unity will carry on with their program, which
is clearly summarized in the Volandela program of action. That structural reform will play
out. And when that structural reform has taken its course, it will certainly lift the economic
growth in the country. We've got research from the Barofa Economic Research in Sanabas
telling us, showing us that it's quite possible to achieve a growth rate of three to three
and a half percent versus the one maximum one and a half percent we currently have.
Now if we move from a one and a half percent economy to a three and a half percent economy,
that's really a game changer. And that can come out of the Volandela reforms. And that
is firmly in place.
That actually summarizes all the separate points you make in your so what paragraph.
The formation of national unity is a win. Kharteng is unlikely to upset or derail that.
Big win that the process of structural reform at national level is proceeding apace and
it opens the possibility of a return to three percent plus growth over the next few years.
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