Economy and business
The PIC says that blackouts has reduced the size of our economy by a fifth since 2008. This ,and other policy and political issues (naturally in this country!), has resulted in our GDP growth forecasts for this year, ranging from an optimistic 0.7% (Nedbank), through 0.3% (Reserve Bank) to respectively 0.2% and 0.1% (Fitch and the IMF respectively). In fact, the word recession is whispered, but softly.
Our consumer confidence is low: the agribusiness confidence index is at its lowest level since the advent of the pandemic, retail confidence is at 34% with the general consumer confidence level sitting at a negative 23 points.
The above (and to be fair other issues) has led to a flight of foreign capital (R100bn of SA shares and bonds have been sold in just this year); interestingly, the dearth of cash is finally coming home to our politicos: witness the privatisation by stealth introduced by Patel in asking for private sector assistance in funding infrastructure plans and the PSP partnerships envisaged for Durban and Nqgura’s Container Terminals.
On a kinder note – perhaps our Ministers are coming round to the understanding that business can solve social problems better than can the state: https://www.ted.com/talks/michael_porter_the_case_for_letting_business_solve_social_problems/transcript?
One of the most favoured recent initiatives (think next year’s general election) that politicos wish to introduce for the benefit of all… is the expanded BIG scheme. The amount of balderdash sprouted by all, and sundry is increasing. The fact is that we are short on income and are borrowing R350bn just this year. Those who advocate increased grants, say that increasing grants is easily affordable as they will pay for themselves. Definitely…but only if you do your sums their way.
But, we are doing great compared to those with whom we might compare ourselves: Zim has entered an advanced stage of monetary dysfunction with businesses extending credit notes and the Zim$ sitting at 900 Zim$ to the US$. Zim’s inflation rate sat at 230% in January and Argentinian inflation at 100%.
On the positive side, Old Mutual has said that our economy is starting to head in the right direction.
Business doing well: the annual Business Awards went to:
- Woolworths – company of the year;
- Investec – bank of the year (it has 20 million clients);
- Sanlam – long-term insurer of the year.
- OUTsurance – short-term insurer the year.
- Bonitas – medical scheme of the year,
and, whilst on the topic, PSG was awarded manager of the year at the Raging Bull awards.
More random economic/business news is:
- If you are not in favour of your company restructuring, you may be bought out at fair value in terms of section 164 of the Companies Act. On how fair value is interpreted try: https://www.cliffedekkerhofmeyr.com/en/news/publications/2023/Practice/Dispute/dispute-resolution-alert-28-march-2023-all-is-fair-in-section-164-appraisal-rights-much-needed-clarity-on-the-meaning-and-methodology-for-determining-fair-value.html
- Businesses often need employees to work overtime. Can this be enforced and is a refusal to do so insubordination? https://bv-inc.co.za/overtime/
- An apparently easy way to circumvent the difficulties in exporting cash from SA is via crypto investments. So, if you lose your access codes and cannot retrieve your investment, is the developer of the system liable to you? https://www.webberwentzel.com/News/Pages/developers-vs-owners-who-does-the-fiduciary-duty-of-cryptocurrency-lie-with.aspx
- The PIC took a bath in its AYO investment saga – fortunately using only public service pension money. Much has been said about the lavish lifestyle of our bloated cabinet. Yet, the PIC does not stint when it comes to salaries: https://www.linkedin.com/posts/daan-steenkamp-48a42520_pic-alpha-and-executive-remuneration-activity-7046313919249850368-u8de/ Similarly, neither does those who hold our purse strings: https://www.linkedin.com/posts/daan-steenkamp-48a42520_wages-at-sarb-nt-and-pic-activity-7044502816136044544-sSRN/
- An annual pain in the ass is the renewal of vehicle licence discs. The cost of renewal options are discussed in this: https://mybroadband.co.za/news/motoring/484159-cheapest-vehicle-licence-disc-renewals-in-south-africa.html
- SARS will be engaging with us via a new service termed USSD – this allows personal information to become available via a phone. Dial in *134*7277#
- PwC says that ESG implementation will benefit your business; will it really? Take a look at the stats: https://www.linkedin.com/posts/daan-steenkamp-48a42520_takeaways-from-sanlam-esg-survey-activity-7044612068930404352-PMey/
- It appears that the Competition Commission will take Investec, Standard Bank and Absa (amongst others) to the Competition Tribunal for price-fixing of the Rand.
And lastly – do you hire someone who fits into your business or look for someone who might bring new perspectives, despite such a hire bringing in boardroom dissent? Awkward question; the worst results bringing yes-men or, on the other extreme, perpetual boardroom strife. This issue is worth looking at as there does not seem to be a one-fit solution to the problem. Try looking for the phrase culture fit.
Practice
News
- The RAF will appeal the ruling that it is required to refund medical aid schemes for accident-generated medical claims.
- In our belated attempts to comply with FATF requirements to lift our grey listing by that entity, both CIPC (think companies) and the Master (think trusts) will keep registers of the beneficial ownership of these entities. This move caused quite a flutter in commercial law circles. Furthermore, non-compliance with this ruling by such entities, will be very expensive.
- Colleagues’ impropriety:
- an Eastern Cape attorney has been arrested in respect of the R103m Absa fraud case in which the IT specialist who masterminded the scheme, has already been “taken out” … gotta love our style of doing business!
- Advocate Mpofu, he of the eye for an eye argument, has once again announced that his representation of our besieged former Public Protector is suspended, owing to her office not setting aside further funds (current cost R24m and counting) to defend her insistence that she is being victimised.
- Zim’s Anti-Sanctions Movement sought an order from the Johannesburg High Court to the effect that the US sanctions against Zimbabwe are unconstitutional and unlawful (aiming at shooting out the lights!). The US reacted by claiming that it was not subject to the jurisdiction of our courts. One wonders why that Movement did not approach the Zimbabwean courts – then the US would not even have bothered to respond!
- Samwu is reportedly to approach our Concourt regarding the ban preventing municipal workers from holding party political positions.
Hard news
- The transfer of what assets are necessary in the sale of a business, in order that section 197 of the LRA applies? https://www.ensafrica.com/news/detail/6816/section-197-of-the-labour-relations-act-a-shi
- I was recently reminded that, with ANCs, a future equitable distribution of assets on divorce is hardly possible, especially when dealing with a potentially high net worth individual who cannot reasonably be expected to place a heavyweight company value into the accrual sharing basket. The cost of making this payment could destroy the company.
- Whilst on this bent; assets kept in trust for protection against, amongst other things a divorce, can often become the subject of very unpleasant wrangles: https://www.golegal.co.za/trusts-divorce-proceedings/
- A recent Johannesburg High Court case went against the conventional wisdom that shareholders (not its board!) of a company should provide reasons when seeking the removal of a director: https://www.saflii.org/za/cases/ZAGPJHC/2021/352.html (ex Go Legal).
- The eviction of a non-paying tenant from a property, given the provisions of ESTA, can be problematical – look:
Conveyancing
- Circulars 2 and 3 have been issued by the Pietermaritzburg Registrar of Deeds. Both deal with procedures which affect only local conveyancers.
- Is the non-availability of an occupation certificate a latent defect? http://www.saflii.org.za/za/cases/ZAKZPHC/2023/33.html (courtesy of West).
- If you occupy the property as a true owner and claim acquisitive prescription – would a true owner illegally connect the property to municipal services? In other words, does such an action disqualify you as true owner? Http://www.saflii.org/za/cases/ZAKZDHC/2023/10.html (ex STBB)
Property
Trends
- Every week we read news about this or other province’s property astounding growth trends – which are often conflicting. Take the following, in just the past 14 days’ offering:
- Businesstech reported on 18 March that, in the South Coast of KZN, we have a new hotspot, which is set to drive up the property market prices.
- PropertyWheel reported on 14 March that the North Coast of KZN reflects an ongoing migration of wealthier buyers into that area, whilst the South Coast is stymied by lack of delivery service and so on.
- Surprisingly, PropertyWheel, on 22 March said that the Eastern Cape (of all places) tops a housing chart in terms of property price growth!
- Stats on house sales are available from Lightstone, which hold that the present average annual property inflation rate is some 2.51% and, when broken down result in the following:
- annual property inflation remained steady in the Free State, KZN and Mpumalanga;
- Limpopo (the highest at 8.57%) and the North West, saw an increase in property inflation, whereas
- the Eastern Cape, Gauteng (the lowest at 2.51%), the Northern and Western Cape, saw a decrease. As an aside, compared with the PropertyWheel report above.
- The doyen of property statistics is still Loos @ FNB who says that our average February year-on-year house price growth was 2.3%, with buying activity declining. He says that the average time that properties are on the market has lengthened to 75 days, which is still shorter than the long-term average of 91 days. The Western Cape has the lowest time-on-market at 55 days.
- All of this is quite confusing but the following graph speaks for itself:
Going solar is the only long-term effective way of beating Eskom woes: be wary of erecting solar panels on sectional scheme houses, as the roof of such a property belongs to the Body Corporate and body corporate insurance will not necessarily cover such an installation.
Speaking of schemes: I have seen the rules of several schemes limit access to sales by estate agents of such properties to a pre-determined agency or requiring accreditation fees from an agent, by the body corporate. Both are not okay; the latter has been declared an illegal practice by the Property Practitioners Regulatory Authority.
Comment
I had, above, commented about privatisation by stealth. Privatisation, of course, is anathema to fundamentalist socialists. Yet those that govern us, seems to have come to the conclusion that they cannot swing, what needs to be done, by themselves. The Resource Mobilisation Fund was launched by Business for South Africa in response to a request from Ramaphosa. Essentially our government is asking for expertise and money from business for projects, despite its mistrust of that sector – because it has to. Yet, despite being funded and run by the private sector, the RMF will report to Necom (the state). My money is on the State claiming the successes and any failures will, of course, not be its problem. But, hell’s teeth, this is progress of sorts.
Lighten Up
On quacks:
How does the receptionist at a urology department answer the phone?
“Urology office – can you hold?”
How many doctors does it take to screw in a lightbulb?
One to find a bulb specialist, one to find a bulb installation specialist, and one to bill it all to Medicare.
Still looking for your dream home, or wanting to sell? Feel free to give one of our developers a call today.
Tom Eastwick – The Gates, Hilton and Garlington, Hilton | 072 297 2699 | tom@devdirect.co.za
Janet Channing – Waterford Residential Estate, Howick | 082 570 5834 | janet@devdirect.co.za