I wish I could be writing about positive news, but these days there is very little positivity in South Africa. They have been trying to hide things way from the rest of the world and now everybody is aware of the reality going on.
This week the World Bank rejected a R29 billion or $1.6 billion loan for South Africa. The World Bank said the SA economy is stagnant which I would call that kind words as it feels like it is shrinking. The problem is there are no investments happening and money has been leaving the country and the future outlook is looking very negative.
The problem is rather obvious and the World Bank for once suggested to the SA Government to do away with the racist policies of Black Economic Empowerment. For once the issue of racism is being faced head on and this is way over due. When you consider the government has been in power for 31 years and they have changed very little when it comes to the balancing of the country's wealth.
The BEE rules were put in place to help those who had very little and readdress the past injustices and all they have done is help enrich party officials and their friends and family. Using the guise of helping the masses they helped the elite get wealthier by cheating and playing the system they created.
What this stat really tells you is that there are no new jobs being created ad combine that with a overall unemployment figure of 34%. The 60% youth unemployment is 16-34 year olds. The problem of having open borders does not help either.
It is no wonder the country finds itself at the top of the global unemployment charts because investments have dried up and businesses have closed down and left. Shell shut up shop last year after a government consortium wanted to cash out their shares when the book value was no longer in their favor. They tried to hustle Shell by including the refinery which was no longer active in the valuations and Shell shut down and left leaving them with nothing.
When you consider the playing field rules a company has to adhere by it is a miracle any are left. Firstly you have to allow for 30% of the company to be owed by BEE, plus give them directors title positions even if they are not capable. This is to make the books look good and know of black directors in the past who never even visited the company they were employed by. This was theft on another level and companies just have had enough.
On top of this companies were told who to employ by the color of their skin and not by selecting the best candidate for the position. Many companies would still be around if their hands were not tied when it came to employment. In some extreme cases you had to employ contracted workers to do the jobs of employees who were incapable of doing the work. Contractors were deemed temporary so by passed the BEE regulations so a top position could have double the cost implications. This was one of the major factors why South Africa Airways was never profitable besides the corruption.
As an outsider looking in you could see the chaos and these were once top companies in South Africa who no longer exist. I could see on many occasions how much was being lost out the back end of businesses and when that happens it is already far too late and it is down to management who have no clue. I had 3 of my large clients disappear this way and one company had been running for over 60 years.
Only if they change does SA have a chance of turning their economy around and with world sentiment in the negative for SA these days that may be a tall order. Why has this taken so long to get to this point as this racist policy has been kept out the news and now everyone knows. I am just grateful that I can move my family elsewhere and have a plan outside SA.
