South Africa’s weakening currency means that foreign investors lose money
YESTERDAY was Super Tuesday in the primaries of the US presidential election. But for South Africa and our continent, it might be dubbed “Gloomy Tuesday”.
And yesterday Barclays Bank, which has been knocking around our neighbourhood on and off for the past 100 years, made official a long-trawled rumour: it is upping sticks and exiting South Africa and Africa as a whole.
There are, of course, many legitimate and strategic reasons for banks and other corporates to reverse course and leave regions. Barclays in London gave a core one: it wants to refocus on its core markets of Europe and the US.
But in the weekend chatter prior to this public declaration was a sombre note on the role played by our shrinking rand in this decision. It sank over a quarter of its value against the British pound.
This means that, in terms of its decade-old acquisition of 63% in Absa Bank here, the London-based company has lost about £400-million (about R9-billion) in its holdings.
The Financial Times noted: “The recent contribution of the African business to the overall group‘s profit has been hit by the devaluation of the rand against the pound. The rand crashed against leading currencies late last year.”
Just for those who have been hiding under a rock or in outer space (perhaps visiting Planet Zuma), the newspaper then went on to recount the four days of madness when our president, in December, went through three finance ministers in just four days.
The price tag on that decision is still to be fully costed, and doubtless the latest chapter in the SARS Wars saga will add even more to the final bill.
Raised interest rates, higher borrowing costs, further lack of business confidence and souring of overseas business sentiment will be part of the future harm.
Also yesterday, the man at the centre of it all and at the apex of political power here had a busy day — or at least his legal and political representatives did.
When, back in 2007 Jacob Zuma beat Thabo Mbeki for the presidency of the ANC, there was divided counsel among commentators as to whether he could ever be elected to the country‘s presidency.
Not for the first time I was among the naysayers and, not for the first time either, I was proved to be wrong.
I happened to be in northern California days after the ANC conference made its momentous decision to dump Mbeki.
I confidently assured some inquiring journalist that Zuma‘s prospects of becoming state president were unlikely.
I quipped then: “It will be difficult for him to be the criminal accused in the courts in the morning and the same afternoon to be president in parliament.”
I had in mind, then, the fact that the ANC president — just elected by a landslide — was to face in August 2008 hundreds of counts of fraud, corruption, money- laundering, racketeering and tax evasion.
Of course, a helpful, and profoundly wrong, single-judge decision the next year disposed of both the initial charge sheet and Mbeki himself.
I also could not know then, but the world knows now, that the forces behind Zuma would suborn the National Prosecuting Authority to withdraw the charges entirely, never to reinstate them.
The merits or rationality of that fateful decision is what finally commenced in argument in the Democratic Alliance court application, which began yesterday.
Meanwhile, yesterday afternoon in parliament legislators again debated a motion of no confidence against Zuma.
He at least had a built-in majority to defeat that.
But judges are more independent-minded than the party faithful. The outcome of the court proceedings remains far less certain. But they will drag on, and Zuma‘s reputation alongside, for a long while yet.
Thus my initial prediction of balancing criminal charges with the weight of state leadership duties remains, at least, valid and ever more current.
On the subject of leadership, tonight in Johannesburg, former general Colin Powell — the first African American to serve as chairman of the joint chiefs of staff in the US military and later as secretary of state, will address an audience.
Aside from his distinguished career as both America‘s top soldier and pre-eminent diplomat, he is also a Republican.
He must be pretty horrified at the race into the gutter of his party‘s leading presidential candidates, not to mention the quality of the top contenders themselves.
But his view on leadership is contained in a primer he presented in the form of lessons.
Given the dire state of some of our leaders here and abroad, I was struck by his lesson 18, which he entitled “Command is Lonely”.
He elaborates on this point: “The essence of leadership is a willingness to make the tough, unambiguous choices that will have an impact on the fate of your organisation.”
The fate of a nation, no less, depends on such decision-making as well. In its absence, as we are witnessing everywhere right now, lies another destination.
In the spat between Treasury and SARS, in the decapitation of the NPA and a range of other key institutions, lies the path to stagnation, a way station on the road to decline and ruin.
But it‘s not all gloom and doom! Other metrics point in a happier direction.
On Monday, the Institute of Race Relations published the findings of its national survey. Miraculously, and not to be noticed from the Twitter wars or the professional race warriors, ordinary South Africans rub along pretty well.
Seventy-six percent thought race relations had either improved or stayed the same since 1994, while only 15% thought they had worsened.
Appropriately, institute CEO Frans Cronje advised that the title of the report was “Race Relations in South Africa: Reasons for Hope.” Amen to that.
This article first appeared in The Times