November 28th, 2021 | Business, Economics, Practice

November 28th, 2021 | Business, Economics, Practice

Economy

Been there done that: our roiling markets reflect the uncertainty that another lockdown will do to those sectors of our economy affected most by the Covid pandemic. Think travel/hospitality/tourism. On top of this uncertainty are two negatives that also harbour little cheer; the expectation that our economic expansion will slow drastically and the prediction that emerging economies might well experience a debt crisis accompanied by diminishing economic growth prospects.

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I suspect that most South Africans could do without a promise of smart cities, incentives, and the like – we just want mail to be delivered: basic stuff to work. I read an interesting note by Bloomberg, pointing out that our economy is stuck in his longest downward cycle since World War II and that, whatever we do, it is unlikely that we will create sufficient jobs in the country where a third of our workforce is unemployed. Minister Godongwana is going to have his work cut out for him to rein in spending and implement reforms, given vested interests.

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An interesting overview of where we are as country, is provided in a title Demographics 2021, published by the Centre for Risk Analysis: https://mcusercontent.com/fc28875f634942882369b22a1/files/ee9bfd7d-9273-f899-87e3-0f8d61f612c6/00c_2021_22_Demographics_17.11.2021_.pdf

Do look at the following interesting topics:

  • our population growth, (PDF pages – top left) 14 and 27;
  • civil and customary marriages and divorce rates, pages 79 and 80; and
  • human development index, page 81.

What one deduces from this, is that our population growth is probably excessive and that in 2019 only some 1.3% of marriages were custom-based – no wonder lawyers are not really interested in ANCs and divorces involving customary law.

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Another quite interesting statistic may be seen from a graph on Eskom’s tariffs versus inflation i.e.

And, to add to this, Eskom has requested a 20% tariff increase for this year.

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Another SOE? We are set to launch a new state-owned entity next year in the form of the Border Management Authority. The intent is that it will act as a type of law enforcement agency, employing its own guards to control and patrol the borders, modernising these points of entry into world-class one-stop border posts. One can but wonder why fixing the existing system is not preferred above creating another entity which, undoubtedly will require much more funding.

 

Business

Some of the more interesting news snippets are:

  • Local is lekker? I have been waiting months for a bike fuel tank to be delivered from China and was told, this week past, that I would have to wait another two months. This is the precursor of a shift by South African retailers to end their heavy reliance on Asia owing to spiralling shipping costs and supply chain disruptions, and move to source products locally.
  • Increased loadshedding is likely to trigger business insurance litigation once again. Can you hold your insurance broker responsible for a repudiated insurance claim? https://www.golegal.co.za/insurance-brokers-responsible/
  • What happens when you sell movables on instalments and reserve ownership until full payment is made, but the purchaser goes into liquidation? https://www.golegal.co.za/reservation-ownership-instalment/
  • The Competition Authority must act in the public interest and address the inequalities that exist in our economy, when judging requests for mergers: http://www.saflii.org/za/cases/ZACC/2021/35.html,

in particular, look at paragraphs 68 and 71.

  • You might recall that I commented on the proposed Employment Equity Amendment Bill last week. The IR has taken up this issue saying: ‘The argument for race quotas has never been weaker. Since 2015 the white top 10% got 10% of national income. By contrast the ‘black’ top 10%, in the broad definition, got three times as much, according to Stats SA, at 32%. This ‘transformation’ has not ‘trickled down’: the black bottom 40% earned a mere 3.7% of national income, with the EEA only further rewarding the rich while expanding unemployment.’
  • Whilst on BEE; again, last week the business appeal for the implementation of the once empowered always empowered principle had been upheld by the High Court in Pretoria. So, our government now wants to enforce its stance on this issue by changing the governing legislation: it had better do this quickly before the next election!
  • You will recall that the SAPS, when challenged on its performance and inaction of late, said that it was underfunded and had too few police persons in service. Our Deputy Minister of Police now says that, with the support from the National Treasury, the SAPS will take in 10,000 new recruits next year. It is laudable that the police had learnt their lesson from our July unrest, but one wonders whether the called-upon support from Treasury will be forthcoming?

 

Practice

News:

  • An interesting comment on education in South Africa may be found at paragraph 25 in the following case: http://www.saflii.org.za/za/cases/ZAGPJHC/2021/675.html
  • The Investigating Directorate wants to drag the State Security Agency to court to force it to release classified documents, fun.
  • At university, much was made of a pactum de contrahendo, an engagement to be married, but very little, in practice, turns upon this. Nevertheless: look – https://www.golegal.co.za/valid-engagement-terminate/
  • I am my spouse’s curator. A week ago, I received a missive from the Master, Pietermaritzburg, that standard investments would no longer be acceptable but that one had to invest in no-risk portfolios only. I understand the motivation, but the effect is quite dramatic: this instruction virtually guarantees a no-growth portfolio. If you consider a Moneyweb publication this week past and investment of R100k in our largest equity funds five years ago would be worth R236k today. If one follows the Master’s instruction, which one must, the owner of that portfolio will become poorer with the passage of time (do look at the inflation graph above).
  • We often hear reports of the NPA not being up to scratch but, the prosecution having to announce its failure to consult with two witnesses, prior to the perjury trial of ex-minister Bathabile, is an insult. One does that before going to trial.
  • Non-South Africans may not practice law in our country. This ruling is being challenged by three Zimbabwean-born law graduates. Funny, we allow foreign-born drivers of trucks but not lawyers into our country (okay I understand that this is a generalisation, but one assumes that lawyers cause much more harm)?
  • Finally, judges Seriti & Musi has challenged their still being considered judges after retirement, as being unconstitutional. What is not immediately apparent is that this (ducking and diving) follows upon the misconduct complaints against them for the manner in which they oversaw the arms deal commission of enquiry. Of this CJ Zondo had said: “I am satisfied that, in the event of Shadow World Investigations and Open Secrets’ complaint being established, it is likely to lead to a finding by the JSC that Judge Seriti and Judge Musi are guilty of gross misconduct.”

 

Hard news:

 

Property

Emigration-related home sales peaked at 13.4% in the second quarter of 2019. Such sales now sit at around 8% of total sales. FNB says that wealthy South Africans are more likely to sell up and emigrate, as may be deduced from a statistic that 40% of home sellers, in the R3.6m bracket, are selling to emigrate.

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The office market has deteriorated to the point where, at end-September, Growth Point Properties reflected a vacancy rate of 20.9% – an all-time high. Gauteng is worst off in this respect.

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You must love the stats that come out inadvertently: Patricia de Lille says that about 1300 government-owned buildings are illegally occupied and, aside from not being optimally used, her department continues to pay rates and taxes on these properties! Interestingly, by far the most of these, i.e., some 540, are situate in Durban.

Comment

BS: you will recall that, just after the July riots, it was announced that the authorities held the particulars of those who incited that violence. No prosecution has followed and only those involved in “protection” (read Phoenix) has faced the NPA. This has led to speculation whether senior people were involved as it ill suits those in governance to have a go at them. Such a sidestep is wonderfully termed protocol.

In a similar vein, is the nonsense spouted by the Labour Department saying that naming and shaming those who received fraudulent payments from the Covid19 Ters scheme, would be illegal, because the documentation, signed by those who cheated, did not provide for such naming and shaming. If the representative had said that those who were to be charged could not be named before they appeared in court, one would understand. I have little doubt, that those involved, (many of whom are civil servants) will never face the NPA, despite having fraudulently lifted money not due to them.

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More of the same? You have to love this: most of the municipal mayors have been re-elected but they promise to deliver better service this time around; presumably because we deserve this. This nonsense reminds one of the witticism (wrongfully) attributed to Einstein: Insanity is doing the same thing over and over and expecting different results.

 

Quotables

“When disputes arise, she should, if convinced of right, maintain her point, for when the argument has passed, the husband will respect her all the more.”

18voertsek marital advice

 

Lighten up

Love. n. A temporary insanity, curable by marriage.

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Marriage means commitment. Of course, so does insanity.

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Marriage is when a man and a woman become as one. The trouble starts when they try to decide which one.

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Awareness of the insanity of love has never saved anyone from the disease.

 

 

 

Author: Dr Daan Steenkamp

 

 

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

#retirement #gatedestate #luxuryliving #midlandsliving

 

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