Global South African News Wrap 14 June 2012

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Global South African Weekly News Wrap Up 14 June

2012

Contents

Confident Zuma rings the changes in Cabinet .......................................................... 3Numsa ready to take to streets to alter constitution .............................................. 5Government rejects swathe of amendments to secrecy bill ..................................... 7Saudis in R20bn deal with SA ..................................................................................... 8Stiglitz calls for R2bn Walmart jobs fund ................................................................. 8Gordhan warns of taxpayers getting impatient with low value for money .......... 10Power to the youth, shape a better tomorrow ......................................................... 12Durban to grow tourism fastest in Africa ............................................................. 14Khayelitsha mob rule raises fears ............................................................................ 15Zuma busy sacrificing youth to get re-elected ...................................................... 16Premier keen on youth wage subsidy ....................................................................... 17Policy uncertainty scares foreign investors away ................................................... 18Zuma demotes 'loose cannon' Sisulu ........................................................................ 20Key political risks to watch in South Africa ............................................................ 21Angola oils campaign to secure AU vote for SA...................................................... 24Governance limbo holds SA back ............................................................................. 26City and Cosatu on collision course over Obama ................................................... 28Zuma speaks in riddles .............................................................................................. 28300, 000 new jobs to be created: Molewa ................................................................. 29Cartoonist Zapiro scoops world prize ...................................................................... 30Tide is turning for Zuma re-election camp.............................................................. 31Zuma cops flak ........................................................................................................... 33Zuma continues with his re-election efforts............................................................. 36SA needs more power to accelerate growth .......................................................... 37Tshwane has bold vision for development ............................................................... 38Bad policy drives away good firms ........................................................................... 40No Telkom payout after Korea snub ........................................................................ 42The Thick End of the WedgeThe Editors Notebook....................................... 43

Zuma meets 'fired' Cele ............................................................................................. 45SA 'already like Zimbabwe', says Numsa's Jim ...................................................... 47Cele did meet Zuma ................................................................................................... 48Celes likely successor no career policeman ............................................................ 49DA is closing in on ANC, says Vavi .......................................................................... 51Mandela film wins big in US ..................................................................................... 54ANC leaders firm on Malema sentence ................................................................. 56Independent must go into SA hands ...................................................................... 57Zuma calls for tough conference approach ............................................................. 58We need to be tougher: Zuma................................................................................... 60Modise warns ANC not to buy votes ........................................................................ 60All too familiar scenario ............................................................................................ 62


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Corruption on the rise............................................................................................. 64


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13 June 2012Business Day

Page 1

Sam Mkokeli

Confident Zuma rings the changes in Cabinet

Third reshuffle shifts Transport Minister Sbu Ndebele after e-tolls debacle

Transport Minister Sbu Ndebele has taken the fall for the governments chaoticmanagement of the e-tolls project, as President Jacob Zuma yesterday shifted himfrom the crucial state department in his third Cabinet reshuffle in three years.

Yesterdays reshuffle came shortly after a political victory for Mr Zuma on Mondaynight, when the national executive committee of the African National Congress(ANC) dismissed a call to overturn the expulsion of Julius Malema, who has beencampaigning for a change in the partys leadership.

Mr Ndebele and his deputy Jeremy Cronin have been shifted to new portfolios,opening up an opportunity for new leadership in a frontline ministry at the centre ofthe governments ambitious infrastructure programme.

Ben Martins, who was deputy public enterprises minister, was promoted to transportminister.

The shuffle also shows Public Enterprises Minister MalusiGigaba s influence hisformer deputy is now in a portfolio that will work closely with his. Mr Cronin movesto the Department of Public Works, again as deputy minister.

The shifting of Mr Ndebele and Mr Cronin comes after court action halted thecontentious Gauteng highway e-toll system.

A task team, headed by Deputy President KgalemaMotlanthe , was appointed to sortout the mess that followed Mr Ndebeles capitulation at a meeting between the ANCand the Congress of South African Trade Unions, at which he agreed to suspendtolling.

The government is concerned that delays in its implementation will bring down creditratings of SA and the South African National Roads Agency (Sanral), making itdifficult for the country and state-owned enterprises to raise funds on the internationalmarket.

Moodys downgraded Sanral in March due to uncertainty over the repayment of

bonds raised on international markets to pay for the highway upgrade, despite a state-guaranteed R20bn loan to the agency should the tolls not be implemented on their duedate.

The countrys infrastructure and energy investment drive relies on international loansand foreign investment.


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A Presidency official said yesterday Mr Ndebele was blamed for not"enthusiastically" pushing for the implementation of the e-tolls. He was associatedwith Cabinet ministers who rejoiced when the tolling was interdicted.

Mr Ndebele is now correctional services minister, hardly a frontline department.

LindiweSisulu has been moved from defence to the Department of Public Service andAdministration to replace Roy Padayachie, who died in April.

NosiviweMapisa-Nqakula has been moved from correctional services, and goes to thedefence portfolio, a senior post.

Ms Sisulu joins her new department in the middle of salary negotiations with tradeunions threatening a strike, and pressure on Finance Minister PravinGordhan fromratings agencies to cap the hikes.

Her move is seen to be a demotion, considering the importance of the defence force,and SAs role in peacekeeping on the continent, and fighting piracy and terrorism on

the east coast.

Mduduzi Manana, a national executive committee member of the youth league, hasbeen appointed deputy higher education minister. This is seen as a reward for MrManana, who recently stood up to Mr Malema. He was an MP, and is closelyassociated with Mr Gigaba.

Mr Mananas dramatic rise could also be attributed to Mr Gigabas growing influence

in the ruling party.

HlengiweMkhize, deputy higher education minister, is now deputy economicdevelopment minister, filling a vacancy created by Enoch Godongwanas resignation

in December.

SindisiweChikunga, chairwoman of Parliaments portfolio committee on police, is thenew deputy transport minister, and Gratitude Magwanishe, deputy chief whip of theANC, has been appointed as deputy minister of public enterprises.

Asked about Mr Zumas reshuffle, presidential spokesman Mac Maharaj said: "It ishis prerogative to reshuffle his Cabinetobviously he intended to make theexecutive function better."

He defended the frequency of Mr Zumas reshuffles, saying the latest was prompted

by death and resignation, among other reasons. When pinned on the changes in thetransport ministry, Mr Maharaj said: "Well, you check out your rugby teamyouknow what happens with a rugby teamsometimes they have to shift positions. Areyou happy with how your captain played? Or do you think he was put in the wrongposition?"

The reshuffle was widely welcomed. The South African Communist Party waspleased that Mr Martins, a central committee member, was appointed.


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The Congress of South African Trade Unions was cautious, sending out a shortstatement which welcomed the changes, and wished the new appointees well.

While Mr Zuma satisfied most ANC allies and leagues in the reshuffle, none of the

new appointees are linked to the unions.

There were rumours that Mr Zuma would fire Human Settlements Minister TokyoSexwale, who has criticised his leadership of the ruling party and the government.

An official said Mr Sexwale had expected to be fired, having taken on Mr Zuma inthe ANCs political battles.

Insiders said he heavily criticised Mr Zuma for stifling debate in the ANC, when heargued for Mr Malemas expulsion to be overturned during a special meeting of the

ANC national executive committee on Monday.

Mr Sexwale could challenge Mr Zuma during the ANCs Mangaung elections in

December.

He has support in the Eastern Capes branches, which are expected to nominate himahead of the December elections. A dismissal would have boosted Mr Sexwales

campaign, as he would be seen as a victim.

Mr Zuma benefited when Thabo Mbeki fired him as the countrys deputy president in2005, as many in the ANC saw him as a political victim and rallied behind him.


Page 4

Natasha Marrian

Numsa ready to take to streets to alter constitution

The National Union of Metalworkers of SA will lobby for a national strike to compelthe government to scrap South Africas macroeconomic policies

The National Union of Metalworkers of SA (Numsa) has called for a review of theconstitution, and will lobby for a national strike to compel the government to scrapSAs macroeconomic policies, its general secretary, Irvin Jim, said yesterday.

Numsa is the Congress of South African Trade Unions (Cosatus) second-largestaffiliate, and a powerful voice in the federation. Under Mr Jim the union is quicklygaining notoriety for its radical and provocative proposals to transform the economy.

Fresh from Numsas national congress last week, Mr Jim said only drastic changes to

SAs economic trajectory would address poverty and inequality.


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"We would want to do everything possible to convince our African National Congress(ANC) in the policy conference and towards December that the macroeconomicframework adopted in 1996 has failed the country," he said yesterday.

"That macroeconomic frameworkits name is Gear (Growth, Employment and

Redistribution), was about growth, employment and redistribution. It has failed allthose targets."

Numsa would lobby Cosatu to issue a strike notice and "take to the streets" to compelthe government to abandon its policies. It resolved to review the property clause in theconstitution to allow for the expropriation of land, mines, the Reserve Bank andmonopoly industries.

"The Freedom Charter said mineral wealth, banks and monopoly industries must bereturned to the people as a whole, and this is not for manipulation by black or white,and on this we are not narrowly pursuing now another race ticket," Mr Jim said.

"Equal access to the economy of this country is in the best interest of both black andwhite."

The ANC requires a 70% majority in Parliament to change the constitution.

"I can tell you this, if the ANC were to take a resolution both in its policy conferenceand its national conference and say it wants to review this constitution, our peoplewill vote for the ANC, they will deliver more than the two-thirds, because that will beexactly in their best interests," Mr Jim said.

Numsa president Cedric Gcina said if the ANC did not receive the required majority,it should lobby smaller parties in Parliament such as the Pan Africanist Congress tovote along with it.

Numsa wants the leadership emerging from the ANC in December to take forward itsproposals, and would pronounce on its preference at the "right time". Mr Jim said theunion wanted Cosatu to pronounce on its preferred leadership at the federationsnational congress in September, as it did in 2007 when it endorsed President JacobZuma over former president Thabo Mbeki .Cosatu has taken a decision not to do sothis time around.

Unionists should also continue to swell the ranks of the ANC and the South AfricanCommunist Party (SACP), including occupying seats in their highest decision-makingbodies.

Numsa received a tongue-lashing from the SACPs general secretary, BladeNzimande, at the unions congress last week over its criticism of his holding a keypost in the party while also serving as a Cabinet minister. Numsa was unmoved andreaffirmed its position that to build a strong SACP, key positions in the party had tobe filled full-time.

13 June 2012


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Business DayPage 4

Wyndham HARTLEY

Government rejects swathe of amendments to secrecybill

The Department of State Security has disagreed with a swathe of amendments to theso-called secrecy bill made by a National Council of Provinces ad hoc committee

Acting director-general Dennis Dhlomo went through the suggestions of thecommittee yesterday and tried to persuade the members that they should not beincluded in the bill.

Opposition parties have been using the council stage of the bills passage throughParliament to effect changes. In addition to the inclusion of a limited public interestdefence, they sought a tightening of the definition of national security.

The department did not agree, with Mr Dhlomo saying the reason national securitywas broadly defined was to create the space to respond quickly to developing threatsagainst the state.

Democratic Alliance (DA) MP Alf Lees said the score after a discussion of the firstchapter was 16 to the department and nil to the committee, with one "maybe", and"the department wants to persuade this committee to abandon its amendments".

His scoring earned him the ire of ANC committee chairman Rasiriti Tau, whoemphasised that some of the departments arguments might be accepted while on

other issues the committee might well stand firm and keep its amendments to the bill.

On a limited public-interest defence to protect whistleblowers and journalists, thedepartment said "the requirements of the rule of law, and the duty it imposes on allcitizens, including the media, are to respect classification decisions until they are setaside. To make special provision for the media and whistleblowers, would place themin a special category ".

Mr Lees said the DA would raise the concerns of members of the United NationsHuman Rights Commission about the secrecy bills "potential dampening effect" onpress freedom.

"Deputy Minister of Justice and Constitutional Development Andries Nel tried toallay these fears by saying it was not the purpose of the bill," Mr Lees said. "Whetheror not it is the purpose of the bill is debatable. The fact remains that the bill in itscurrent form still poses a significant threat to human rights and fundamental freedomsenshrined in the Constitution."


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12 June 2012The Times

Page 10Sapa

Saudis in R20bn deal with SA

South Africa and Saudi Arabia have created a joint holding company thatcould see at least R20-billion investment, Trade and Industry Minister

Rob Davies said on Monday.

He said Saudi Arabian SA Holding would spend the initial capital onfeasibility studies for investment in South African agriculture andSaudi Arabian mining and petrochemicals.

"Saudi Arabia has identified gold mining and other base materials.

They've chosen not to exploit those previously ... but are now movingtowards expropriation and looking at South African technology andexpertise," Davies said.

The Middle Eastern country was also looking at investing in SouthAfrican agriculture for food security and stimulating local job

creation.As a first option, it could be a major shareholder in joint ventures,

entitled to free 5% equity in projects initiated and promoted by it.

It would also act as a "government-endorsed" facilitator for businesseslooking to invest in large-scale projects in their counterpart

countries.

Davies said he hoped investment by Saudi companies would run "into tens

of billions of rand" in the next few years.

Saudi Arabia-SA Business Council chairman Iqbal Surve said SaudiArabian crown prince Nayef bin Abdul Aziz had formally endorsed the

company.

"We are ready to tango and waiting for South Africa to join the danceas well."

He said South Africa could benefit from investment through SaudiArabia's sovereign wealth fund, "one of the wealthiest in the world".

12 June 2012

Business DayPage 1

Amanda Visser

Stiglitz calls for R2bn Walmart jobs fund

Two reports on remedy for ill effects of merger between Walmart and

Massmart as experts differ


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THE R100m fund proposed by the Competition Tribunal to mitigate theharmful effects of Walmarts entry into the South African market is

inadequate and should be increased to up to R2bn, says Nobel laureateJoseph Stiglitz.

The Competition Appeal Court has approved Walmarts takeover of

Massmart on condition that an "investment remedy" be found to empowerlocal suppliers to respond to "the challenges posed by the merger".

The size of the proposed supply chain development fund was one ofseveral differences of opinion among three experts appointed to assistthe court. This led to two reports being prepared.

Prof Stiglitz and Genesis Analytics managing partner James Hodge wereappointed by the government and the South African Commercial, Catering

and Allied Workers Union to craft a remedy. Massmart and Walmartappointed Mike Morris, research professor at the School of Economics of

the University of Cape Town.

The Stiglitz-Hodge report said a supplier development fund equal to"many multiples of the proposed R100m" would be needed to ameliorate

the effect of the Walmart transaction on the economy. They proposed afund in the range of R500m-R2bn, allocated over five to 10 years.

In his ruling at the Competition Appeal Court, Judge Dennis Daviscriticised the tribunals acceptance of the condition of a supplier

development fund of R100m.

He said there was "inadequate interrogation" of this proposal, giventhe concerns raised by the opponents over increased imports and, in

turn, the potential for a negative effect on the economy.

The Stiglitz-Hodge report said a large fund would "materially addressthe concerns of the court and provide sufficient incentives to Massmartto implement a serious programme to empower local suppliers".

Prof Morris said in his report that throwing large amounts of money ata problem seldom solved it. "When too much money is floating aroundunder these conditions the chances of corruption and waste increase

enormously."

He believed a smaller, but "highly focused and well-managed fund" was

likely to have a greater effect than a large, unfocused and overmanaged programme.

Prof Stiglitz and Mr Hodge examined the supply development fund set upby Massmart and said because of its narrow focus on small and medium-sized enterprises (SMEs), it "effectively becomes a form of corporate

social responsibility programme".

Their report asked that recipients of the fund should not be limited toSMEs or businesses owned by historically disadvantaged persons,

although they may be afforded greater emphasis.

Prof Morris asked for a grading of firms which will require capacitybuilding, but focused on small and medium-sized suppliers.


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The experts agreed the desired outcome should be "sustainable supplier

development" outlasting the fund and that the concept be adopted byother retailers. Also, the programme "must not simply result in a

squeeze on wages or employment at supplier firms".The experts agreed that the fund should have a high level of public

oversight and accountability and that the key to success would beMassmarts "buy-in" to ensure changes in procurement.

Lawyers representing Walmart and Massmart said yesterday all partieshad a month to prepare their responses before heading back to theappeal court.

The governments legal representative, Heather Irvine, said theStiglitz-Hodge report gave some practical guidelines for the fund.


Page 1Paul Vecchiatto

Gordhan warns of taxpayers getting impatient withlow value for money

Private sector must show more integrity in tendering for government business

Finance Minister Pravin Gordhan warned yesterday taxpayers were losing patiencewith the misuse of public funds, but also pointed a finger at private sector costs ofproducts and services supplied to the state.

The auditor-generals report for last year found fruitless and wasteful expenditure inthe public service had reached R30bn.

Speaking in the National Assembly during the debate on the Appropriations Bill, MrGordhan said: "We need to constantly remind ourselves that this is taxpayers money

that we are talking about and that taxpayers are becoming impatient with the fact thatwe are not adequately providing value for money."

However, he then turned his attention to the private sector, and said that a higher levelof integrity was needed in the way it tendered for government business.

"There is ample evidence that there are two sides to every story," Mr Gordhan said.

He said the European crisis meant that expectations of future government budgetsshould be lower. Even if the euro zone found a solution to its problems, there was noevidence to suggest growth would return there soon.


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Power to the youth, shape a better tomorrow

If young people are not creating their destiny, who is?

The history of the youth in South Africa is one of playing a critical role in drivingchange and moving this country forward.

Today, South Africa's youth are at the forefront of calls for economic equality and forbasic service delivery.

They are also affected by the country's biggest challenge - that of unemployment -more than any other section of our society. Of a population of 49million, 7.5millionSouth Africans are out of work; and young people are worst affected.

Statistics South Africa's Quarterly Labour Force Survey for the third quarter of 2010showed that about 42% of young people under the age of 30 are unemployedcompared with less than 17% of adults over 30. It is a grave situation and isthreatening to become an overwhelming challenge.

Well into the month of June - Youth Month - we are once again confronted with thereality that youth unemployment is one of the biggest stumbling blocks in our growthplans.

There have been discussions and debate around the value of development agencies,

funding models and how accessible our economy is for budding entrepreneurs andsmall businesses.

But none of this makes a difference unless the youth takes an active interest indevelopment and policy matters.

As a young person, you need to ask yourself - do you really understand the policiesthat drive your country's development? Those unemployment figures and statisticsand percentages - do you fully understand their impact on a microeconomic scale andthe difference they make to your pocket?

When you talk about starting your own business, do you know how to start and whereto go?

Do you really understand what BEE means, how broad based it must be, and how youcan most benefit from it?

How should you be pursuing the ideal of economic equality?

It starts with a simple action - being involved. That means understanding theprinciples, policies and instruments at your disposable and using them to reach allbenchmarks.


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The challenges and issues around employment are as diverse and historical as they aremultifaceted. Diminishing interest in education from both teachers and pupils,minimum to zero skills, and a continuing cycle of inter-generational poverty are justsome of these challenges.

Even though our country is considered a middle-income economy, if you scratchbeneath the surface you will see the true state of things for most South Africans -inter-generational poverty largely determines how far we get.

Even for those young people who are lucky enough to have jobs, many support a largenumber of people, meaning that access to education and opportunities becomelimited.

Entrepreneurship and enterprise development become distant dreams, because if youare living from hand to mouth, how can you afford the luxury to go after greaterpursuits?

Solutions cannot be reached if we do not concede the truth, no matter howuncomfortable it might be.

As a developing economy, we rely on partnerships between government, the privatesector and civil society for a truly tangible difference - and so far we have seen thatmost of these partnerships have failed to bear fruit because of contradictory agendas.

For the most part we've seen growing profit margins in companies and a reduced rateof talent and skills development, as well as entrepreneurial effort. So we needinspiring new ways premised on policies that are implemented and collective interestin how far we can go as a nation.

What South Africa needs to do, what we need to do, is to start rewriting our own storyand formulating our own rules. The youth, especially, needs to realise, acknowledgeand accept their power to change the country.

This country can only be shaped by you - so shape it for a better tomorrow for you.

See the value that comes with being an innovator and get rid of the mindset of seekinginspiration in the "well-resourced" parts of society.

Innovation, business development and the creation of new industries are not limited toresources - they also require ambition and boldness.

Corporate South Africa should open up its doors to those who demonstrate new andcreative energy for their industries - but this can only ever take place if the youth arean inspired generation that demands change.

What corporations need to ask themselves is: if we are not playing our part ingrooming the young to lead, who will? And the youth should be asking, if I am notactively participating in shaping my future, who is?

12 June 2012


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Business DayPage 1

Ntsakisi Maswanganyi

Durban to grow tourism fastest in AfricaA new survey identifies Durban as the city that will grow its touristmarket the fastest in Africa this year

A mastercard index released yesterday identifies Durban as the citythat will grow its tourist market the fastest in Africa this year, in

terms of visitor numbers and expenditure.

Tourism Minister Marthinus van Schalkwyk said recently SAs tourismindustry had bucked international trends and had survived the worst of

the economic downturn. Tourism accounts for 9% of employment in SA.

The MasterCard global destination cities index, which surveys visitorand expenditure numbers across 132 cities, found most visitors came toDurban for work and business.

The index included 12 other African cities Johannesburg, Casablanca,

Accra, Nairobi, Beira, Cape Town, Dakar, Kampala, Lagos, Maputo, Cairoand Tunis.

"The Durban International Convention Centre provides the largest flat-floor, column-free exhibition and conferencing space in Africa,attracting many international exhibitors to the city," Dries Zietsman,

manager for MasterCard Worldwide in SA, said yesterday.

The index was compiled using advance flight schedules from several

airlines to estimate actual passenger departures and forecastdepartures for the coming year.

Johannesburg was tipped to be the second-most visited destination in

Africa behind Cairo with a projected 2,5-million foreign visitorsexpected this year. The index estimated they would spend about $3bnthis year, an 8% increase on last year s spend.Cape Town was still a favourite destination, particularly for visitors

from London, with their expenditure forecast to be $361m this year.

On the global destinations index, London which is hosting the Olympic

Games that kicks off next monthtopped the worlds cities by visitornumbers for the second consecutive year.

Paris took second place, followed by Bangkok, Singapore and Istanbul.

A compiler of the report and global economic adviser for MasterCard

Worldwide, Yuwa Hedrick-Wong, said that the changing global dynamicswere reflected in the index through the inclusion of emerging-marketAsian cities among the top 20.

12 June 2012The TimesPage 6


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police. But we are saying continuously murdering people based on thekangaroo courts ... we will never allow this," said Mnisi.

He said the police would bring to book officers who did not do their

work. But first they would need to investigate.

Mnisi singled out Khayelitsha as a hot spot but last month nine menwere sentenced to 15 years' imprisonment for their role in the murder

of a man accused of stealing a cellphone in Du Noon.

Police spokesman Captain FC van Wyk said: "We will not allow thecommunity to take the law into their own hands; we cannot allow thepublic to be punishing suspected criminals."

Makhaza residents would not be drawn on the weekend's killing.

8 June 2012Business DayPage 3Paul Vecchiatto

Zuma busy sacrificing youth to get re-elected

DA leader Helen Zille accuses President Jacob Zuma of bowing to pressure andstalling the implementation of the R5bn youth wage subsidy

Democratic Alliance (DA) leader Helen Zille accused President Jacob Zuma

yesterday of bowing to pressure and stalling the implementation of the R5bn youthwage subsidy to boost his chances of re-election.

Speaking at the Western Cape provincial legislature, Ms Zille, the provinces premier,said: "The tragedy is the president is prepared to sacrifice millions of young SouthAfrican lives to get re-elected in Mangaung."

In contrast, she praised Finance Minister Pravin Gordhan, saying the subsidys designwas "perfect".

The debate was called by the DA, to press home its demand that the province should

have its share of the subsidy that Parliament had already appropriated the funds for.

The proposed subsidy was meant to have come into effect in April, but it has stalledfollowing strong opposition by the Congress of South African Trade Unions (Cosatu),which argues that the subsidy would prejudice older workers who would be let go bycompanies in favour of younger and cheaper employees.

Ms Zille quoted Mr Zumas recent reply to a parliamentary question stating thatCosatu had blocked the subsidy in negotiations at the National EconomicDevelopment and Labour Council.


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DA parliamentary leader Lindiwe Mazibuko said that a memorandum meantfor President Jacob Zuma was handed to Mr Mkhizes representatives

yesterday.

"While President Zuma has dithered and bowed his knee to Cosatu,KwaZulu-Natals African National Congress (ANC) leadership has said the

right things about the youth wage subsidy," Ms Mazibuko said.

Mr Mkhize urged political parties to engage the legislature on issuesof youth development instead of "playing with emotions of vulnerablemembers of our society in order to advance narrow party-politicalinterests".

He said the province now had many youth development programmes. Forexample, KwaZulu-Natal had awarded 2743 student bursaries worth more

than R112,2m so far this year.

Last year, it supported 4877 bursaries for poor students at a cost

estimated at more than R500m. The province had also allocated R55mtowards a youth ambassadors campaign.

But Ms Mazibuko said the youth ambassadors programme was mostly asource of ANC cadre deployment.

There are 4445 youth ambassadors recruited as peer educators for youngpeople.

11 June 2012The Times

Page 15Justice Malala

Policy uncertainty scares foreign investors away

The ANC has been in power for 18 years. It is therefore reasonable to expect that itsleaders know a thing or two about what domestic and international investors look forin a country.

These leaders have been on numerous road shows across the globe. They are not

greenhorns. So why is the South African government acting in such a shambolic,haphazard and suicidal way that many business commentators are now declaring thatwe are a country that is closed for business?

Why is it that President Jacob Zuma's government has zig-zagged so wildly on policyover the past year that many people across the globe are looking elsewhere to investinstead of in South Africa?

The dream of creating jobs for the more than 7million people walking the streets isslowly diminishing and the culprit is our own government. We are turning moneyaway, sending mixed signals to investors and damaging our own brand.


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we needed to pay tolls for the Gauteng highways, ANC secretary-general GwedeMantashe and Cosatu's Zwelinzima Vavi were unilaterally taking the decision that thetolling would not go ahead.

What message does this kind of flip-flopping send to investors? That the government

does not follow its own clear policies and is run from Luthuli House and CosatuHouse?

Then there is the shocking Massmart-Walmart deal. Economic Planning MinisterEbrahim Patel led a cabal of ministers to block the deal, while Zuma, Motlanthe,Gordhan and others were saying we need this deal to happen

Who is running this place? Crucially, what is the government's stance on foreigninvestment?

The key role of the government is to create a climate in which investors are able to

establish, fund and expand businesses. Investors do not demand much: the rule of law,consistency in policy, and certainty that things will not change from one day to thenext.

Under Zuma, policy changes from day to day. Leadership sits in 30 different places.Investors do not know who is in charge.

The result is that we will not create jobs. Incompetents will continue to lootparastatals. South Africa will become an also-ran.

The ANC needs to wake up and smell the coffee. The house is on fire.

13 June 2012

The Times

Page 2Staff reporter and Sapa

Zuma demotes 'loose cannon' Sisulu

Along with the axing of national police commissioner BhekiCele, President Jacob

Zuma on Monday, announced changes to his cabinet.

One of the key announcements was Defence Minister LindiweSisulu's move from thepowerful portfolio to Public Service and Administration.

According to ANC insiders, Sisulu had become a "loose cannon".

"She is not easy to deal with and has stood her ground most of the time," a seniorANC insider said.

Her replacement, NosiviweMapisa-Nqakula, according to sources, was happy to

remain in the cabinet and would "accept anything she is given".


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Adding to policy woes at home are troubles in its two most important overseaspartners - China and Europe.

China is South Africa's biggest single trading partner and the main destination for itsmineral exports. Signs of slowing growth in the Asian economy could translate into

sluggish growth and job losses for South Africa.

The European Union, mired in debt woes, is South Africa's largest trading blocpartner. Europe is also the main destination for its exports of manufactured goods, asector accounting for about 15 percent of South Africa's economy.

What to watch:

- Shock moves of the rand currency caused by a volatile euro.

ELECTRICITY

The near-collapse of the electric grid in 2008 forced mines and smelters to shut fordays and deterred new mining and manufacturing investment. Electricity supplyshortages still worry businesses and households.

State utility Eskom's capacity margin will remain thin until a massive new powerplant comes on stream next year, but construction delays have raised worries onwhether it will be operational as planned.

Large tariff increases over the next three years are helping Eskom plug its fundinggap, but industry leaders complain the extra costs are likely to stifle growth.

What to watch:

- Blackouts caused by system overload may undermine Eskom's assertions that therewill be no repeat of 2008, deterring long-term direct investment.

TOLL ROADS

The government may be stuck with a $3 billion bill to upgrade its busy highways inJohannesburg after unprecedented protests and a court decision forced the state road

agency SANRAL to suspend its tolling plans.

Without tolls rolling in, SANRAL may be forced to default on at least 20 billion rand($2.4 billion) of debt unless the Finance Ministry steps in to pick up the tab. The billis more than the country pays each year to run its court system.

Economists have warned if toll plans collapse, this could deter infrastructureinvestments, which use the same bond funding model as SANRAL.

What to watch:

- Greater difficulty for state-owned enterprises in raising funds through the bondmarket.


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"Neither she nor Jean Ping could get the majority needed to win. Further electionswill take place in Malawi and what took place in Angola was a reaffirmation of MsDlamini-Zuma as a candidate," he said.

Trevor Maisiri, a senior analyst at the International Crisis Group, said there were

demands to bar Ms Dlamini-Zumas candidature, which he described as "covertattempts" by Nigeria and Kenya to muscle SA out.

"SA stands a very big chance this time around. Mr Ping is stepping up to the gauntlet,but from a perceived background of bungling in Libya and Ivory Coast. He standsaccused of failing to react to their crises," Mr Maisiri said yesterday.

"But on the other hand, SA has made its presence felt outside of its own borders,despite criticism levelled against it that its foreign policy is skewed.

"It is part of peacekeeping efforts, the Brics group of nations and, come the AU

summit, it could mark the rise of SAs diplomacy on the continent."

Persistent speculation in political circles was that President Robert Mugabe wouldvote for Mr Ping as punishment for President Jacob Zuma over his hardened stanceagainst the 88-year-old veteran ruler.

But Simon KhayaMoyo, Zanu (PF) national chairman and former ambassador to SA,yesterday confirmed his partys support for Ms Dlamini-Zuma.

"Zanu (PF) fully supports the position of Sadc. We are part of a family, the Sadcfamily, and as a family we have assumed a common position around the AUcandidate and Zimbabwe will stick to that decision," Mr Moyo said.

8 June 2012Business DayPage 12Editorial

Governance limbo holds SA back

Planning Minister Trevor Manuels comment that the state cannot go it alone inexpanding essential infrastructure will be welcomed

PLANNING Minister Trevor Manuel s comment that the state cannot go it alone in

expanding essential infrastructure will be welcomed by a private sector that has beengetting a cold shoulder from the government of late. However, while Mr Manuel isclearly more in touch with the real worldor perhaps just less ideologicallyblinkeredthan many of his left-leaning Cabinet colleagues, that in itself isbecoming something of a problem for SA.

His questioning of the Cabinets controversial decision to veto a deal between Telkomand South Koreas KT Corporation, which had the potential to speed up the rollout of


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broadband in SA and cut data costs, echoes the consensus among sector analysts, whohave been scathing in their criticism of the short-sightedness of the decision.

But Mr Manuel is a member of the Cabinet and, as such, shares collectiveresponsibility for its decisions. He presumably expressed his opinion and was

outvoted by his colleagues for reasons they have chosen not to reveal.

His options were therefore to grit his teeth and defend the decisionin much thesame way as Transport Minister Sbu Ndebele has had to defend the Cabinets

decision not to give up on the Gauteng e-tolls project despite his known personalantipathy towards the toll-road conceptkeep mum on the subject or, if he feltstrongly enough, to resign as a matter of principle.

It is hard to fathom why President Jacob Zuma tolerates such open dissent either. Fora C abinet to function properly, it needs to be, if not united on every aspect of policy,at least pulling in the same general direction. But therein lies the rub. There is no

consensus in the Cabinet, and precious little visionary leadership, on where SA isheaded and especially how to get there.

There are fine goals, such as full employment, better education, less poverty and thelike, and myriad plans, including those produced by Mr Manuels laudably forward-thinking ministry. But the political and ideological divide in the Cabinet is now toowide.

The result is general confusion, an inordinate amount of the executives time spent

fighting internecine battles and undermining colleagues, and a stupefying paralysis.Its little wonder SA has been slipping down the global competitiveness rankings,attracting a paltry share of Africas foreign direct investment and generally

underperforming its economic potential.

Goldman Sachs Asset Management chairman Jim ONeill, who coined the Bric

(Brazil, Russia, India and China) acronym to describe the worlds leading emergingmarkets and was initially bullish on SAs prospects, despite believing it was too small

to be a member of the club, now believes it does not even deserve to be part of the N-11, the next 11 most-promising developing countries. He has told The Economist SAhas lost its focus and can no longer be considered the continents superpower.

This was, of course, entirely predictable after Mr Zuma pulled off the Polokwaneputsch and deliberately put together a Cabinet with representatives from all the variedfactions that rescued him from the political wilderness. That they had little in commonideologically was neither here nor there: the primary aim was to prevent the AfricanNational Congress (ANC) from disintegrating and to hang on to power.

Now we are in limbo, with a president who is afraid to lead in case he offends anyANC faction that may retaliate by doing to him at Mangaung at the end of the yearwhat they did to then-president Thabo Mbeki in 2007. Mr Zuma has to keep thealliance together, even if it is at the cost of SA treading water indefinitely while therest of the developing world surfs past us, because if he doesnt, he could find himself

in court facing those pesky corruption charges he has put so much effort into makinggo away.


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8 June 2012The TimesPage 5Quinton Mtyala

City and Cosatu on collision course over Obama

While Cosatu is gunning for Cape Town mayor Patricia de Lille to withdraw herintention to bestow the freedom of the city on US President Barack Obama and hiswife Michelle, the city is adamant it will go ahead.

De Lille made the announcement last month, but opposition to the plan only surfacedrecently.

Cosatu provincial secretary Tony Ehrenreich said there had been no consultation.

"The process was flawed,'' said Ehrenreich.

''When they came to the standing committee [responsible for name changes], Patriciade Lille had already made the announcement."

Ehrenreich said Obama did not deserve the honour and that he had done nothing forCape Town.

"Cities can't do things outside of national protocol," he said.

Spokesman for Cape Town Priya Reddy said all parties had been consulted before theannouncement was made on May 28.

"Given that council has approved the recommendation, with the support of a numberof political parties and that all necessary democratic processes have been followed,there is no need to review the decision," said Reddy.

Brian Denver, acting spokesman for the US embassy said the US was honoured by therecognition bestowed on the Obamas.

"We appreciate the fact that there may be internal debate and feel open dialogue iscritical in a healthy democracy," said Denver.

11 June 2012

The Times

Page 4AndileNdlovu

Zuma speaks in riddles


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Asked when will the department create green jobs, Water Affairs Director GeneralNosipho Ngcaba said 150 000 jobs of targeted 300 000, have already been created.

We have already created 150, 000 green jobs that are currently benefiting young

people in the country and we encourage more young people to participate, said

Ngcaba.

13 June 2012

The TimesPage 7

AndileNdlovu

Cartoonist Zapiro scoops world prize

South Africa's best-known cartoonist, Jonathan "Zapiro" Shapiro, has won theInternational Publishers Association's Freedom to Publish prize.

Shapiro will collect the award from the association's president, Young Suk Chi, at theclosing ceremony of its 29th congress in Cape Town tomorrow.

"I'm thrilled. I really am because, when this sort of thing comes along at a particularlyright moment, it does seem all that more meaningful.

"It comes at a time when I'm being sued by the president and when my fellow artist,

Brett Murray, has come under savage attack and other artists, such as Zanele Muholiand Andries Botha, have also found themselves under attack," Shapiro said.

President Jacob Zuma's defamation lawsuit against Shapiro, over the 2008 cartoontitled Rape of Lady Justice, is set to be heard from October 25.

Zuma says in court papers that the cartoon is degrading and suggests he is abusing thejustice system "in as vile ... a way as the raping of a woman".

Despite attacks by government officials and others, Shapiro is not deterred.

"[I'm not], because when I wake up in the morning and I'm listening to the radio andreading the paper, there are so many things that still make me want to blow my fuse.They get my creative juices going."

The IPA's Freedom to Publish committee has called on Zuma's lawsuit to be dropped,saying the government must not "stifle" freedom of expression.

Bjrn Smith-Simonsen, the committee's chairman, said Shapiro was one of the bravevoices speaking out against the dangers of corruption and authoritarianism.

"Jonathan Shapiro exemplifies everything that the IPA Freedom to Publish prize

stands for," he said.


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Page 3

Sam Mkokeli

Tide is turning for Zuma re-election camp

When President Jacob Zuma is emboldened politically, he gets the confidence toshake things up in Pretoria

EVENTS of the past two days show President Jacob Zuma firmly in charge of thepolitical game. First, he personally put the lid on the Julius Malema hole on Monday,making sure the former president of the African National Congress (ANC) YouthLeague cannot come back to harm his chances of re-election at the Mangaungconference in December.

Before the dust could settle, he moved on to reshuffle his Cabinet. This is the thirdreshuffle since he became president three years ago. There is a pattern with reshuffles:they tend to follow important victories in ANC battles. When the president isemboldened politically, he gets the confidence to shake things up in Pretoria. Its

almost rule by reshuffle, by the man who has been criticised for not leading thegovernment from the front.

On the ANC front, Mr Zuma could not be more comfortable. Having thwarted a bid toreview Mr Malemas disciplinary hearing, Mr Zuma and his backers can now focus

on his re-election. And they are dictating the terms.

A party official, speaking on condition of anonymity, says the failure of the attempt toexhume Mr Malema from the political grave eases Mr Zumas path towards re -election. The question was now about who would be elected into the other toppositions. Kgalema Motlanthe , the deputy president, has been touted as a possiblechallenger, but there are doubts over whether he would stand against Mr Zuma.

Mr Motlanthe could be re-elected as Mr Zumas deputy if he does not stand againsthim. Secretary-general Gwede Mantashe, who has been a target of Youth Leaguemissiles, looks set to return to his position in December.

For too long Mr Mantashe has been the subject of attacks by Mr Malema and theYouth League. Mr Malemas demise is seen as a victory for Mr Mantashe, who stood

firm against a campaign by the league to discredit him and undermine his leadership.The Youth League has been campaigning for its former president, Fikile Mbalula, tobecome the secretary-general.

An ANC source said yesterday there were also moves in Mr Zumas camp to retain Baleka Mbete , the party chairwoman.

If the drive by the ANC Womens League to have gender parity in the top six

succeeds, that will mean three of the officials must be women. That also means thecurrent team of six cannot come back as it is. At least one of them would have to


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While Zuma portrayed Phiyega as the ideal antidote to the internal strife plaguing theupper echelons of the police, senior researcher at the Institute for Security StudiesJohan Burger labelled the appointment as a slap in the face of police management.

"Clearly, once again, Zuma has not learnt from the previous two mistakes inappointing civilians and politicians to head the police service," Burger said, referringto Phiyega's predecessors - the jailed Jackie Selebi and now-fired Cele.

Burger said though in principle the reasons for firming up management and financialsystems of the police service might appear to be good, Zuma's stance on informationsecurity within the police was "extremely worrying".

"While I have nothing against the new appointment, this crackdown on informationleaks is something that needs to be guarded against.

"Instead of welcoming the public airing of financial abuses, Zuma is shutting downthe avenues for information to become public."

Burger said there was a "need for more openness, not less" and that the newappointment was an indictment on police management.

"It shows what the president really thinks of those good hard-working members, ofwhom there are many.

"What we need is another commissioner, like [Nhlanhla] Mkhwanazi, who is preparedto stand up and show the country and the world that there are good, hard-working andhonest members within the core of the police," he said.

DA leader Helen Zille described the appointment of the new commissioner as an actof "desperation" designed to muster support for Zuma ahead of Mangaung.

Zille said Zuma should have appointed someone with a demonstrable ability to fightcrime.

Mthethwa, the ANC Women's League and police union Popcru welcomed Phiyega'sappointment, saying she brought with her a "wealth of experience on strategic

leadership and sound management background" .

Phiyega's experience within government has been limited. Her only real exposurecame when she was appointed by Zuma as chairman of the Presidential State-OwnedEnterprises Review Committee in October 2010.

The committee was appointed to review all entities including SOEs, agencies, utilitiesas well as companies within which the state has significant shareholding. It was givena deadline of September 2011 to submit a final report but had failed to deliver byMarch this year.

Before this, Phiyega spent her time in the corporate sector until she fell foul of AbsaCEO Maria Ramos.


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The two had worked together at Transnet, where Ramos had been appointed as CEOand Phiyega had occupied various positions, including running the TransnetFoundation.

But, according to sources, she and Ramos had "personal difficulties".

Phiyega then moved to Absa. But Ramos was then appointed CEO at the bank andPhiyega knew she "would be squeezed out".

But Mthethwa insisted that her "vast" experience in both the public service andprivate sector would place her on perfect ground to steer the police towards "bettercompliance, systems integration, effective and greater accountability".

"We believe that her appointment is well-deserved as her CV speaks volumes and thather previous achievements in various management echelons are not coincidental but

achieved through dedication and hard work."

The ANC Women's League also endorsed Phiyega's praises, saying it believed that a"strong woman at the helm of the police service will bring a renewed focus toovercoming the scourge of gender-based violence, such as rape, which has become agrowing concern across the country".


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Page 2

Wyndham Hartley

Zuma continues with his re-election efforts

President Jacob Zuma will make a number of public appearances this weekculminating in National Youth Day on Saturday

President Jacob Zuma will remain on his "charm offensive" this week with a host ofpublic appearances culminating in National Youth Day on Saturday.

Mr Zuma spent much of last week on the road trying to woo supporters, particularlyin the trade union movement, but according to weekend reports, failing in some andsucceeding in others.

Tomorrow the president goes to Butterworth to switch on the connection for Eskoms

4-millionth electricity customer. The Eastern Cape is a key constituency for Mr Zumaif he is to gain re-election at the African National Congresss (ANCs) electoralconference in December.

On Thursday, he will be in Soweto to monitor public transport and interact with thecommunity while on Friday he will deliver the ANC centenary lecture in theJohannesburg City Hall. Then Mr Zuma is off to Port Elizabeth for the

commemoration of the June 16 uprising where he will speak at the National YouthDay celebrations.

Deputy President Kgalema Motlanthe will face his colleagues in the NationalAssembly on Wednesday during questions to the deputy president. Inkatha FreedomParty MP Narend Singh will ask him if his recent visit to Ghana was in pursuit offinding alternative oil resources in view of the United Nations threat to call for a banof oil imports from Iran and whether he intends to visit more oil producing nations tosource alternative sources of crude oil supply.

African Christian Democratic Party leader Kenneth Meshoe will ask Mr Motlanthe if

SA will join the US, France, Britain, Canada, Germany, Italy, Spain, Australia andBulgaria in expelling Syrian envoys from their countries as an expression of theiroutrage at the recent massacres in Houla.

The official opposition Democratic Alliance (DA) will also be on the road, literally,with parliamentary leader Lindiwe Mazibuko leading a march in Pietermaritzburgtoday protesting against youth unemployment. The last time the DA marched for anational youth wage subsidy it ended in disarray with Congress of South AfricanTrade Union members breaking up the march in Johannesburg. Todays march willend at the office of KwaZulu-Natal Premier Zweli Mkhize who will be called on tosupport the subsidy idea publicly.


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On Wednesday, Patricia de Lille will address the Cape Town Press Club on theanniversary of her election as mayor of Cape Town. In Parliament tomorrow, all eyeswill be on Finance Minister PravinGordhan when the National Assembly has the firstand second reading debates on the National Budget, or appropriation, Bill.

Also up for debate will be the Financial Markets Bill and the Rates and MonetaryAmounts and Amendment of Revenue Laws Bill.

The controversial Protection of State Information Bill will feature on Wednesday asthe ad hoc committee from the National Council of Provinces receives and considersproposed amendments to the bill.

Opposition parties and civil society have been arguing for a public interest defence tobe inserted to protect whistle-blowers and investigative journalists from prosecution ifthe classified information they reveal is clearly in the public interest. The ANC hadproposed a limited defence clause which will offer protection to those who divulge

classified information if it can be shown that the classification was intended to hidecriminal activity.

The Department of State Security is apparently opposed to even the ANCs proposedclause. The intelligence committee will on the same day be holding a meeting but, asalways, this meeting will be closed to the public and the media.

Another ad hoc committee, that on a code of judicial conduct and regulations onjudges disclosure of registrable interests, will meet on Wednesday and Thursday to

continue its deliberations. In January, a senior delegation of judges submitted thatmany of the regulations drafted to regulate judicial disclosures were unconstitutional.

11 June 2012

Business DayPage 3

Evan Pickworth

SA needs more power to accelerate growth

Analysts warn that economic growth of 6% is a far-off dream if power capacity orefficiencies are not expanded faster than current rates of just 2,7%

While President Jacob Zuma on Friday celebrated Medupi moving a step closer togenerating its first power to the national grid next year, analysts warned that economicgrowth of 6% is a far-off dream if power capacity or efficiencies were not expandedfaster than current rates of just 2,7%.

SAs gross domestic product (GDP) growth tends to match requirements in power

capacity and even with the new Medupi and Kusile plants coming on stream in 2020,a long, slow growth path of just less than 3% can be expected unless more energy is

found.


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Tshwane will soon compete with Johannesburg, Cape Town and Durban by buildingits own international convention centre in Centurion and is also planning to build agovernment boulevard to house government departments in the central businessdistrict (CBD).

By building the convention centre, the city wants to attract the lucrative conferencemarket in the city, which is home to 132 embassies and four universities. By investingin infrastructure, the city aims to attract more businesses, and prevent governmentdepartments from moving into other areas such as Lynnwood and Hatfield.

In an interview on Friday, mayor Kgosientso Ramokgopa said previously the visionof the city was short term and not long ranging.

He has identified a number of multimillion rand capital projects, including therehabilitation of Centurion Lake as part of a larger Centurion SymbioCity project.

His most ambitious plan is the Centurion node, which is positioned within thedevelopment corridors linking Johannesburg and Ekurhuleni and therefore will be amajor player in the proposed high intensity developments which are destined to takeplace in the region.

The project on 10ha of prime land near the Gautrain Centurion station, includescreating the tallest building in Africaat 110 storeys high. The proposed CenturionSymbio City will feature two office towers, and include hotels, retail facilities, aconvention centre and residential space. The project could take anything up to eightyears to complete.

This would position the city to be the best among the three metropolitanmunicipalities in Gauteng.

Mr Ramokgopa said Tshwane, Johannesburg and Ekurhuleni were the extremities ofthe "golden economic triangle of Gauteng" and the metropolitan municipality neededto claim its rightful place.

"We are now changing that by having a long ranging vision and we have taken adecision to invest in the rejuvenation of the city. We want to create a governmentboulevard and move away from our previous conservative approach to investment and

be aggressive and maximise opportunities that are available."

In the Pretoria CBD, plans are already under way to stop vehicle movements aroundChurch Square by creating pedestrian sidewalks, bus rapid transport (BRT) andimproving security. The section of Paul Kruger Street between the Pretoria RailwayStation, passing through Church Square, and the Pretoria Zoo, would be upgraded todemonstrate how the city intends to adapt, shape and improve the inner city to bemore accommodating for nonmotorised commuting.

The first BRT station would be constructed in Hatfield by the end of next month andthe process of procuring buses is in progress.


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"What people dont realise is that security is very important for any city to operate

efficiently. We are also a seat of four universities and there is a huge demand forstudent accommodation, so we want to provide family units in the CBD for mastersstudents who are studying here."

11 June 2012

Business DayPage 10

Editorial

Bad policy drives away good firms

Deep frustration over inefficient bureaucracy and red tape in the country

THE decision by Resilient Property Group to end its development operations in SA isjust another example of good business being driven away by bad policy. ResilientCEO Des de Beer said last week the company plans to stop developing shoppingcentres in SA as a result of inefficient bureaucracy and red tape in the country, insteadchoosing to move the operation to Nigeria.

It is bad enough when international investors are discouraged from bringing theirmoney into the country, but far worse when our own companies are forced to lookoutside SA for opportunities. We can no longer ignore the extent to which the Zumaadministration has been distracted by internal party politics to the detriment of the

economy and the country as a whole.

Resilient is not the only company to have expressed frustration at the effectgovernment inefficiency and obstructiveness are having on the ability to do businessin SA.

Redefine, SAs second-largest property group, has faced similar problems and, partlyas result, has chosen to direct more of its activities to the Western Cape than toGauteng, the countrys economic heartland. The company has also chosen to limit its

exposure to government-tenanted buildings due to inefficiencies associated with thestates black economic empowerment requirements.

It is a reality that interactions between the government and the private sector in SAhave become characterised by ineffective, time-consuming regulations, rules andadministrative procedures, and even open hostility. Yet, as much as the governmentlaments the slow pace of economic development and job creation in SA, it remainsdeaf to the complaints of business. Much of this attitude seems to stem from anunfounded belief that SAs economic and political dominance of the continent is

unshak able, and that it is doing foreign investors a favour by allowing them to bringtheir capital into the country.

Yet, while SA remains a key entry point into Africa for foreign corporations,

perceptions of rising corruption and government inefficiency are starting to take theirtoll on confidence. In the face of high taxes, a poorly skilled workforce, and rapidly


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increasing real wages, SAs appeal to foreign investors has been declining.

International corporations are increasingly looking to Nigeria, Kenya and even Egyptas alternative locations to set up operations and to use as springboards into Africa.

The consequences of the governments indifference to the effects of overregulation,

inefficiency and corruption on investment in SA are plain to see. In comparison withour northern competitors for investmentKenya and Nigeriawhose growth ratesare close to 4% and 7% respectively, SA has barely managed 3% over the past fewyears. In 1995, SA accounted for almost half of sub-Saharan Africas gross domesticproduct, yet today it can lay claim to less than a third. Considering our considerablemineral wealth and relatively well-developed infrastructure, it is shocking that SA isnow one of the slowest-growing economies in Africa.

A big part of the problem is that the government is inclined to favour politicallymotivated policy options over economically prudent ones. This is particularlyapparent in the mining sector. Proposed changes to the regulation of the sector include

a tax on so-called "super profits" and the implementation of recommendations in theAfrican National Congresss State Intervention in the Minerals Sector study.

Anglo American CE Cynthia Carroll warned recently that further changes to the fiscalregime in SA would create a grave risk of making the country internationallyuncompetitive. SA has some of the richest and most varied mineral deposits in theworld, yet our attractiveness for mining investment has sharply declined in recentyears as concerns over regulatory uncertainty and constant threats of nationalisationhave increased.

Ms Carroll is not alone in warning about the effect of party-political wrangling onSAs economic outlook. Ratings agency Moodys cited concerns about heightened

political risk in the context of increasingly constrained public finances as a reason fordowngrading SAs risk outlook. It has previously raised concerns over rising pressure

to give in to populist demands. Even if the real risk is small, for many investorsperception is akin to reality, and they would rather invest in a country with a morepositive outlook.

The regulatory environment in which business operates directly influencescompetitiveness, so it is not hard to understand why a growing number of domesticbusinesses would rather invest elsewhere in Africa than at home. The biggest

difference between these countries and SA is their can-do attitude and willingness tofacilitate investment rather than put obstacles in its way, even if other businessconditions are not optimal. The Kenyan government has in recent years enactedseveral regulatory reforms to simplify both foreign and local investment, for instance.

In response to the rise in negative perceptions about doing business in SA, theWestern Cape government has been trying to reduce red tape. The launch of acomprehensive plan to remove statutory and systemic blockages to investment andgrowth in August last year has yielded positive results, but there is a limit to howmuch the province can achieve in a vacuum. A national framework to reduce red tape,and above all to change the official attitude towards business, will be required if

further progress is to be made.


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It is not hard to understand why a growing number of domestic businesses wouldrather invest elsewhere in Africa

11 June 2012

Business DayPage 1

Thabiso Mochiko

No Telkom payout after Korea snub

Telkom has paid dividends each year since 2004, with special cash payments in fiveof the six years until 2010

THE collapse of the proposed equity investment by South Koreas KT Corporation in Telkom and a slump in full-year earnings are behind the fixed-line operators decisionnot to pay dividends for the first time in years.

KT Corp planned to buy 20% in Telkom, a sale that was expected to bring a cashinjection of just more than R3bn. But the deal was rejected by the government,Telkoms majority shareholder.

Telkom faces many challenges, including declining voice revenue, and continuederosion of the traditional fixed-line business by the rapid adoption and use ofcellphones. The company is operating in a highly competitive fixed and mobile

market, and extensive capital investment is needed to renew and expand its network,it says.

According to Bloomberg, Telkom has paid dividends each year since 2004, withspecial cash payments in five of the six years until 2010. A final payout of R1,50 wasexpected, according to Bloomberg dividend estimates.

"Telkoms strategic objectives of network transformation and the building of its

mobile business will see dividends being considered on an annual basis based on theperformance of the group," the company said on Friday.

Analysts expect Telkom to start paying dividends again if and when its strategy startspaying off, which could take up to two years, or when its mobile business 8 ta reachesbreak-even.

Telkom will use internal cash to fund its network infrastructure project and has anoption to raise debt. But no plans exist to go to the market for funding.

Telkoms chief financial officer Jacques Schindehtte said that "without KT, there is

certainly no reason for panic we will need to find an alternative to find the requiredexpertise". He said the "reality is that the capital market and rating agencies wouldhave found comfort in the additional capital (from KT) and the fact that Telkom has

experienced partners in the execution of its strategies". This also would have allowedTelkom to comfortably tap into the debt market to a moderate level, he said.


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and Malusi Gigabaarguing that they know better, that Telkom is a developmenttool and not merely a company.

And, obviously, the more foreign ownership in state-owned enterprises the lessflagrantly they can be milked to fund the ANC. It isnt that South African Airways

(SAA) or Transnet or Telkom pay money directly to the party, you understand. But ifyou want to do business with them youll find every contract comes with a politicalpremium. Fund this conference, take 20 tables, hire these comrades...

So Manuel has to shut up. To his credit, he did find a way last week to express hisdisgust at the Telkom decision, but it barely stirred the political tree. President JacobZuma , of course, should fire him for breaking the "collective responsibility" code.But he wont. He needs Manuel inside the tent even if it is not always convenient to

listen to him.

And Manuel could himself go, but where? If he left out of exasperation with the

government thered be nothing in the private sector for him. Business is relentlesslybullied by the state and the ANC and they would be too scared to hire an outcast. Aninternational job? Where? How? His wife, Absa CEO Maria Ramos, makes moremoney than he ever will and her job is in Johannesburg.

All that means he has to stay in government and most people I know think thats

probably a good thing, even if he loses some big battles. Thing is, he wont lose them

all and it is so important to have at least one voice talking sense to the president, nomatter how distracted he might be by his personal issues.

Finance Minister PravinGordhan is another voice of reason, but he is a Zuma loyalistfrom way back and would never rock the boat.

But there is work for both men to do. Zuma has been duped into thinking that the statemust play a central commercial role in the economy. But that is the road to ruin.Telkom will need cash. So too will SAA, Transnet and Eskom, and they are the kindsof demands that have led countries such as Portugal, Greece and, now, Spain, tobankruptcy.

The new line distorts policy and strategy. As former competition tribunal head DavidLewis argues in his absolutely brilliant new book, Thieves at the Dinner Table

(Jacana), competition rules are still in place and working, thanks to the competitioncommission and tribunal. But, thanks to the states rediscovered taste for monopoly,competition policy has been blown away. Naturally, this forces prices up rather thandown, which the president just cannot see, or, worse, thinks he can control.

"Had the privatisation of Telkom been more carefully considered or had the state notpermitted Iscor to own the Saldanha steel mill we would not today be confrontinga notoriously uncompetitive telecommunications sector, nor would we be worryingabout excessive pricing of steel products. Those are the consequences of a nonexistentcompetition policy," he writes.

In a swipe at Patel, who now controls the competition regulators and blatantly usesthem for political outcomes (Walmart), Lewis writes of his own realisation of the


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A highly placed insider who saw the three-page letter told the Sunday Times it madeno mention of businessman Roux Shabangu, despite his name featuring prominentlyin the Moloi commission's report.

"The letter mentions two things that Zuma feels Cele failed to do. It says his decision

to withdraw delegation powers from his subordinates for the procurement of goodsworth over R500000, while at the same time relying on them for advice, wasnegligent of him. Zuma says if Cele was so concerned about possible corruption in theSAPS supply-chain management division as to request a Special Investigating Unitinvestigation, then his stated reliance on the same people was negligent," said theinsider.

Zuma then points out how Cele flouted the provisions of the constitution, the PublicFinance Management Act (PFMA) and Treasury regulations.

Zuma said while he gave regard to Cele's crime-fighting imperative as the top cop, he

had decided to "relieve you of your duties as national police commissioner forthwith".

Cele's firing followed days of speculation over whether he was planning to resignfollowing publication of the report.

It has been learnt that he was planning to resign and even had a letter drafted, but wastalked out of the plan by his close advisers, as it would diminish his chances ofsuccessfully challenging Judge Moloi's findings.

Cele is expected to approach the court this week to challenge the findings against him,but not his firing.

Zuma's letter came a day after the ANC's KwaZulu-Natal provincial executivecommittee (PEC) decided on Monday to send its top five leadership, led by premierand provincial chairman Zweli Mkhize, to meet Zuma regarding Cele.

It is understood that the matter came up during the PEC meeting, at which somemembers even suggested that Zuma should reinstate Cele. However, the view thatwon the day was to send the leadership to meet Zuma and ask him to "redeploy" Cele.

The provincial ANC leaders believed that a "redeployment" would win over party

supporters who believed the axing was too harsh a punishment.

The matter is expected to also come up during KwaZulu-Natal's special provincialgeneral council later this month.

Asked about Cele's plan to go to court, Mkhize said: "While Cele accepts that it is thepresident's prerogative to appoint and fire the national police commissioner, he alsobelieves that nobody - Judge Moloi and President Zuma included - has a right to makelegally unsound and defamatory claims about his character and conduct. This is thereason why he will go to court if the president upholds Judge Moloi's report. His courtbid will be to clear his name, not to fight to hang on to his job."


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Maharaj said the presidency would not comment on the issue "until we issue astatement".

He would not even say if Zuma had started looking for Cele's replacement.

Labour Department Director-General Nathi Nhleko, a long-time Zuma ally, is widelyseen as the frontrunner to replace Cele, despite growing pressure from within andoutside the ANC for the next police chief to be a career policeman.

Nhleko yesterday denied that he had been approached for the job.

"I've heard of the rumour and all the speculation that accompanies the rumour itself.You will appreciate that it is a rumour and it remains a rumour," he said.

Asked if he would accept the post if approached, he said: "That's an unfair question.It's like asking somebody, 'What would you do if there was a thunderstorm? Would

you run into someone's house or get under a car?' For me, we rather deal with thatwhich is scientific, that which is factual. It has not happened."

10 June 2012Sunday Times

Page 4Sibusiso Ngalwa and Sibongakonke Shoba

SA 'already like Zimbabwe', says Numsa's Jim

The levels of poverty and inequality in South Africa were no different from those ofpoor Zimbabweans because of the country's macroeconomic policies, which continueto stifle the creation of jobs.

This is the view of National Union of Metalworkers of SA (Numsa) general secretaryIrvin Jim, who said the leadership of President Jacob Zuma had not helped theworking class in this regard.

"People say we will be like Zimbabwe. South Africa is [already] like Zimbabwe interms of levels of poverty, unemployment and inequality. The only difference is that,

in Zimbabwe, there is [President Robert] Mugabe, whom the West is presenting ... asa monster and everything else. In South Africa, we are in trouble equal toZimbabweans in terms of poverty, unemployment and inequalities."

Jim was speaking to the Sunday Times on the sidelines of Numsa's ninth nationalcongress at the Chief Albert Luthuli Convention Centre in Durban.

He said the workers remained exploited and that the ANC had yet to implement theresolutions taken at the 2007 Polokwane conference, which resolved to review thecountry's monetary and macroeconomic policies.

Their congress required of the leadership to be "brutal and honest" about the state ofaffairs in the country, government and ANC-led alliance.


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Presidential spokesman Mac Maharaj said yesterday Mr Zuma would make hisdecision known "when he was ready".

One of the many criticisms of Mr Nhlekos predecessorsJackie Selebi and GenCelewas that they were not career policemen.

Mr Nhleko, however, does have some experience in law enforcement. Before beingappointed to his current position as director-general in the Department of Labour, heheaded the anticorruption unit in the Department of Public Service andAdministration.

He also served as a regional commissioner in the Department of CorrectionalServices.

Mr Nhleko had been involved in the trade union movement before SAs first

democratic election in 1994. In 1993, he was appointed as an election co-ordinator by

the Congress of South African Trade Unions. His job was to organise how to getpeople to the polls.

He admits being aware in 1994 that he was on an electoral list somewhere, but wasstartled to realise after the elections that he had been elected as an MP. It was herethat he began his rise to prominence in the ruling party.

He served on a number of parliamentary committees, including transport, publicenterprises labour and agriculture.

He was then appointed chairman of the portfolio committee on the public service andwas also elected chairman of the African National Congresss (ANCs) parliamentary

caucus.

It was while serving as caucus chairman, during a caucus meeting in 2002, that it wasannounced, to his complete surprise, that he was to succeed Nosiviwe Mapisa-Nqakula as the chief whip of the ANC in the National Assembly.

Ms Mapisa-Nqakula had been appointed deputy minister of home affairs.

He had only been in the job for two years when he was surprisingly dumped,

reportedly after having incurred the displeasure of then president Thabo Mbeki .Apparently that was over his handling of a public protectors report into thenprosecutions boss Bulelani Ngcuka. It was an action based on a complaint laid by thendeputy president Jacob Zuma.

He reportedly gave the report, which found that Mr Ngcuka had abused his office bysaying there was a prima facie case of corruption against Mr Zuma, to Mr Zumabefore Mr Mbeki had seen it.

Several political parties this week criticised Mr Zumas silence on the future of Gen

Cele, again raising concerns over the effect of this uncertainty.


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Leaders accused of wrongdoing should step down rather than be forced to aftermonths of bringing the name of the (ANC) down, Vavi said.

He referredbut not by nameto Gauteng MEC Humphrey Mmemezi, still in hispost despite allegations that hed abused his government credit card on hotel stays a

few kilometres from his home, on suits bought in India and to pay McDonaldsthousands of rand, not for food, but for a painting.

He also referredagain, not by nameto Northern Cape ANC provincial chairmanJohn Block, facing numerous fraud and corruption charges, yet who was likely to bereelected at its conference this weekend and whose court appearance had seenmembers of the provincial government present in his support.

If we dont change here, so that a person like that can know hes guaranteed of no

support knows that he must resign and stops us all the pain of committees of

inquiry and months of bringing the name of (the) organisation down, if he can leave

on his ownif we cant do that then we will continue to face own goals, Vavi said.

Unless we change that, we are gone because our battles are about hands off and not

about unemployment, poverty and inequality.

Leaders did not have to spend hours waiting for a Panado at a public hospital becausethey belonged to medical aid schemes. Its a distant issue for them, they are not

affected immediately, Vavi said, to loud applause.

With their children in private schools, too many leaders were unaware of the pain ofdysfunctional schools and an education system that each year marginalised

thousands more young people entering the labour market without hope of attaining askill.

And what do we do? We come to conferences and make speeches that sound so niceand yet the situation of the working class does not change.

Year in, year out, people remain trapped in their poverty yet we clap hands, we

sing the praises of our leaders, Vavi said.

Most divisions in unions today were not ideological or political. Fights at congresses

were about a battle for resources, said Vavi.

So we go into this (Cosatu) congress, comrades, to say one big and central thing,

there has to be a mindset change among the leadership and the activists of thefederation as a whole and in the leadership of the ANC and the SACP.


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"We indicated that there was consensus in Parliament on 90% of thecontents of the bill." On the public interest override, Mr Nel said the

National Council of Provinces was looking at proposals to address theconcerns of interested parties.

The parliamentary process would take its course and the Constitutional

Court would be the final arbiter if there were concerns about anyaspect of the legislation, he said.

12 June 2012Business DayPage 3Setumo Stone And Sam Mkokeli

ANC leaders firm on Malema sentence

ANCs top leaders reject a call to review the process that led toJulius Malema being expelled

Julius Malemas attempt to have his expulsion from the African NationalCongress (ANC) reversed failed yesterday when the partys top leadersrejected a call to review the process that led to him being expelled,

it was learnt last nigh

Documents

Global South African News Wrap 14 June 2012