Blogs

The South African Petroleum Industry

Download and share our free infographic on The South African Petroleum Industry or buy the full report here: The South African Petroleum Industry strategic business insights   Like what you see? You may also find this historical report of interest: The Manufacture, Wholesale and Retail of Petroleum and Lubricants / June 2015 …

Nationalising the South African Reserve Bank (SARB)

There is much speculation on the ANC nationalising the SARB and the consequent impact on the banking sector. Although the central banks of the US, Belgium, Greece, Italy, Japan, Switzerland and Turkey have private shareholders, this is unusual and South Africa remains the only central bank in Africa with private shareholders. It has been pointed out by a number of commentators including Hilary Joffe of Business Day that the 660 private shareholders have no say in determining or implementing the mandate of the SARB and therefore the benefits of nationalisation are questionable. There are 2 million shares in issue at the prevailing price of R10 per share although some shareholders claim the value to be much higher, up to R7,900 per share. The law limits dividend payments to 10 cents per share so it is not a great investment and one can imagine that shareholders are silently egging on the nationalisers. The SARB was listed on the JSE until 2002 and in the 1980s my late father, Robin, purchased a single share in every listed company to secure shareholder rights to access company records. To this day our SARB share certificate hangs on the wall of the Who Owns Whom offices. Should the proponents of nationalisation prevail, we shall hang on to our certificate and save the taxpayers some money.

Land Restitution

The ANC’s land summit decision to expropriate land without compensation has raised concerns for a negative impact on property valuation and a consequent risk to the banking sector, but it should be viewed in context. Land restitution in South Africa is an imperative if we are to live in a just society. When South African soldiers returned from World War 2, the white soldiers were given farms and the black soldiers received bicycles. The forced removal of black people from areas such as District Six and Sophiatown shredded the social fabric of those communities and is one of apartheid’s greatest crimes. The formal opinion of both Justice Albie Sacs and former president Kgalema Motlanthe is that no change is required to the constitution to effect land reform. The ‘fair and just’ clause allows for the state to decide on the level of compensation. A spectacular example of the failure to exercise this clause was the R1bn market related payment in 2013 by then Land Reform Minister Gugile Nkwinti to the Rattray family to return the game farm Mala Mala in the Sabie Sands to the Mhlanganisweni community. Much of the frustration around land reform is a result of policy confusion, weak institutions and corruption which has been conceded by the ANC and it is the task of the new minister Maite Nkoana-Mashabane to address these issues. The unfounded anxiety is that the ANC will resort to Zimbabwe-style banditry. The statement from the ANC land summit clearly states, “We must ensure we do not undermine the future investment in the economy or damage agricultural production or food security” and a material deviation from that sentiment would undermine President Ramaphosa’s aggressive foreign investment initiatives. …

Tunnels and Ferries

We recently returned from a trip to Norway. It was a poor rural agricultural and fishing nation until the discovery of offshore oil in the early 1970s and it now has the second-highest GDP per capita in the world after Switzerland. The country has used its oil wealth to develop expertise in the building of tunnels and ferries which makes getting around Norway a largely stress-free experience. The transport sector in Africa and particularly Cape Town City should possibly take a leaf out of Norway’s book. A tunnel from Hospital Bend to Wynberg Hill and another from Silvermine to Glencairn would ease the now near-impossible traffic congestion as would ferries from Simon’s Town and Milnerton to the Waterfront. Perhaps when the DA city managers start to think clearly again they should make an exploratory visit to Bergen.