February 16, 2020 | Business, Economics, Practice, Property


The BER announced that it expects our GDP growth to arise to 1.2% next year, double that expected for this year. The fact is that the triple challenge of poverty, inequality and unemployment will not be addressed with economic growth at this rate.

̃The so-called Dornbush rule was introduced by a German economist who argued that volatility of the foreign exchange rate will overreact to monetary policy and create equilibrium in the short term. Thereafter the price of goods, being sticky, will gradually respond to the financial market prices and again balance out. I only partially understand this theory, but the suggestion that South Africa, like Mexico would implode after resisting such implosion for a while, as predicted by the Dornbush theory, piqued my interest. The writer suggests that there are key aspects of ANC policy that will keep pushing our country into financial trouble: an ongoing attachment to state-led development; appointing people into critical positions who do not have the appropriate skills or who approach their tasks as if satisfying the ruling party were the sole criterion of success; a failure to improve basic education and build a skilled workforce; and the deep-rooted suspicion of business and competitive markets.



On the face of it, hardly a topic for an economic debate: the fact is that the corona virus outbreak may well be one of the most prominent factors shaping the world economy this year. The Spanish flu pandemic of 1918 infected some 500 million people worldwide and killed an estimated 20 to 50 million persons: a kill rate of between 5 and 10%. More US soldiers died from that flu than were killed in battle during the war. The coronavirus is more infectious than ordinary winter flu but less infectious than theSARS virus. It’s kill-rate has yet to be established.


Political policy misdirection is upon us: Cosatu’s take, via a PIC board member and general secretary of SADTU, of the GEPF funding of Eskom, is that such would be an investment with a guaranteed investment return. It says that privatising Eskom means that neo-liberalism would be the winner because power supply would be unaffordable. It wants guaranteed profits but not higher prices or a slimming down of the organisation. A street-trader in Sophiatown would do better at economic advice.


We apparently have excess money with which to fund the intended Sovereign Wealth Fund announced by our president. Perhaps he knows of a little something tucked away…


BNP Paribas says that SA has a 30 – 40% chance of recession this year: if we have more than 20 days of stage II load-shedding, this might actually come to pass. It appears that Eskom’s energy availability factor may drop as low as 56% this year. Any business that pushes out 50% of what it could potentially do would go broke…


It’s not just us: Two academics published a paper on aid -dependent countries, showing that infusions of aid from foreign donors was invariably followed by a jump in their deposits in foreign financial havens. These leaks averaged at about 5% of the aid granted to these countries. That’s great news; I am virtually sure that our politicians will do better than that!


The promise of a new science and technology University for Ekurhuleni and the establishment of another 9  TVET Colleges, was made during SONA. I confess to being sceptical: the August 2019 joblessness rate for South African graduates stood at 31% (another statistic places this at 12%), our SETAs are in disarray, and the Department of higher education and training is broke–as may be seen from dozens of schools which have virtually no facilities. Surely one should fix what one has first; furthermore, pushing out more highly educated people who have no jobs seems pointless?


The WTF Global Competitive Report has ranked our workforce skills 101 out of 141 countries. This points to a view that our graduates don’t have the skills required by business for people with tertiary education. It is hard not to agree – we perpetually shoot ourselves in the foot: take a look below at the intent to admit unqualified estate agents into the profession.


The South Africa United Business Council (SAUBC) has been founded as an alternative non-racial advocacy voice for business. Doing the same thing but better (if these guys were Afrikaans I would understand, om af te stig is an Afrikaans thing).


I have for some years attempted to foist a Maslowian take upon those who work for me: aiming at recognition and self-actualisation in order for them to enjoy/look forward to working. In a small office this works to a degree – in larger offices generally not. Most bosses simply do not have the inclination to attend to the self-actualisation needs of employees… Possibly workers work irrespective of (as suggested by Lussier this week past) how many beers bosses place in the fridge.


A note by Property Professional published on 13 February, says that it will be easier for black people to become estate agents from 1 April this year as PDIs may then apply for exemption, for a maximum term of five years, of fees for FFC renewals, submission of audit reports and more time to meet educational requirements. The stated aim of this would be to introduce more black agents into practice. I am horrified; in the name of race parity, the body charged with the protection of the public against unscrupulous/ill trained operators in the property industry, will let loose upon that very public, hundreds of agents who have not been able to qualify and who will not have their accounts scrutinised.



How do you know that something exists when you do not know what it is? The Zim government has unilaterally decided to withhold publication of its inflation figures. If we don’t see it, it is not there!


The legal circus of senior judges exchanging accusations in the Western Cape High Court continues: a recently enrolled case deals with an allegation that the practice Parker and Khan Inc, had a trust shortfall of about R8.2 m and that judge Khan had stumbled upon this prior to being appointed to the bench in 2017. If true, one wonders about the trust audit that was carried out in that firm over the past years and the rigour brought to the task by the JSC in its selection of judges?


The Times reported on archival problems at the Johannesburg High Court: it appears that digitisation, announced by our Chief Justice some years ago, is going nowhere. The official reaction was huffing and puffing about members of the public being allowed into the archives and speak of challenges. Sure…


The Ilungelo Lethu Human Rights Foundation has lodged a class action against all the major banks as well as the National Credit Regulator for, reputedly, R62bn based on the sale of properties in execution at substantially less than market value. Yes this did happen but has largely been curtailed. One suspects that this is going to be a difficult case to prove. If successful, the impact on our financial sector could be dire.


Renunciations of inheritance: a bête noir of mine is the use of ancient examples in practice. One such is the standard renunciation form used by many: this form does not make provision for the spouse of an heir to sign. In intestate inheritances, a spouse, married in community of property to the heir, should also sign the renunciation, as that spouse inherits together with the descendant.


Can the mandament van spolie be used to restore possession of a container that had been removed and destroyed? No; to do so would be tantamount to order the restoration of necessarily a different structure. Could an appeal on section 38 of the Constitution (containing the right to adequate housing) come to one’s aid? Take a look (courtesy of stbb) https://stbb.co.za/wp-content/uploads/2020/02/stbb_plu03-2020_s2.pdf


Death duties: Section 4(p) of the Estate Duty Act begs the question whether it is the shareholding in the company which attracts estate duty (making the executor liable therefor) or the policy (thus placing the liability in the hands of the company/policyholder): if this interests you, I hold an article by v/d Poll on section 4(p) and the apportionment of estate duty; ask me for a copy.

Divorces: in much the same vein, I hold an article by de la Harpe on the effect of section 2B of The Wills Act.  If this interests you ask me for a copy. For the uninitiated; if you don’t change your will within three months after getting divorced, your ex might well inherit from you.


A recent Concourt judgement is indicative of the laxness of those governing our justice system: http://www.saflii.org.za/za/cases/ZACC/2019/44.html


Old hat but worth noting: an agreement to agree cannot be enforced by a court.



“Presidents, one year after the next, stand before us and describe a country that leaves most of us wondering which country they live in. Members of Parliament swan around in their matric dance outfits, walking down red carpets like Hollywood stars,”

Herman Mashaba


I disapprove of what you say but will defend to the death your right to say it: this phrase is mistakenly attributed to Voltaire but sums up the dilemma we face with, for instance, the EFF. Re-reading the EFF Twitter record of Mr Malema’s remarks to a press conference last Sunday, the sound-good bytes of half-truths and vitriol verging on hate speech pervade by this grouping, is truly unsettling. This party garners support of the hungry on the back of accusation and promises of better. The difficulty was what is said, is that such speech advocates action which is abhorrent to what we perceive as a civil society. You may wish to take a look at the following: https://www.nationalaffairs.com/publications/detail/the-insoluble-problem-of-free-speech


The origin of the word quarantine is attributed to the Venetian term quaranta giorni applied to ships entering the city-state of what is now Dubrovnik. That practice harks back to hospitals termed Lazarettos (named after the beggar Lazarus, the patron saint of lepers) in the 14th century which again goes back the treatment of lepers in biblical times.


There be dragons (apparently derived from 16th century map where the unexplored portions of Asia was marked Hic sunt Dracones): there are whispers of a unity referendum in Ireland. High time: Germany was divided by outside interests, similarly Ireland, the latter with a decent dollop of religious intolerance thrown in.


In touch with your emotions? The tyranny of positivity holds that moral correctness equals being positive (The Power Of Positive Thinking springs to mind). Psychologist Susan David says that the price of admission to a meaningful life is the admission of discomfort. Take a look (women will love you for this) 😊:


Lighten up

Nothing is more nerve wracking than agreeing with your wife not to do valentines gifts

Simon Harland


Q: Isn’t it a fact that you have been running around with another woman?

A: Yes, it is, but you can’t prove it!


Q: What did your sister die of?

A: You would have to ask her. I would be speculating if I told you.

Still looking for your dream home. 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

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Author: Dr Daan Steenkamp – Attorney