“We have not reached our destination unless we’ve taken people less fortunate than us on our journey,” said the late Dr Nthato Motlana, a prominent Soweto businessman, physician, and anti-apartheid activist.
There are very few countries in the world that can survive even a fraction of the vortex of the multiplicity and ferocity of catastrophic failures that are plaguing South Africa, certainly in the last 15 years.
The country has not even begun the recovery from state capture that has cost the economy no less than R1.5-trillion in five years; the more than 10 known mafias that have terrorised communities and businesses and murdered multitudes in broad daylight; the economic recession that has robbed us of at least a cumulative 25% had we continued on the trajectory of the 43 consecutive quarters of positive GDP growth of the second administration of our democracy; economic downgrades from all three ratings agencies; the 750 days of national lockdown in response to the Covid-19 pandemic; the July 2021 failed insurrection and rampant looting that went unchallenged and unchecked for eight full days; the KwaZulu-Natal floods in April and May 2022 – mainly due to the unmaintained and hence blocked storm water drainage system – the lack of a stable, reliable and predictable energy supply that has now led to persistent load shedding with increasing frequency and severity where total grid failure has become a possibility that might lead to consequent looting; poor performance of most of the more than 743 state-owned enterprises and companies (SoEs/SoCs); grey listing by the Financial Action Task Force for having failed to implement anti-money laundering, counter-terrorism financing (AML/CTF laws; Standards & Poor’s downgrading of our outlook from stable to negative; etc.
The Department of Energy (DoE) and the National Energy Regulator of SA (Nersa) use a measure called the Cost of Unserved Energy (COUE). This is currently estimated to be about R85/kilowatt per hour (KWh). Based on this, the cost to the economy of an hour of stage 6 load shedding during business hours is about R500-million.
Load shedding cost the South African economy R560-billion in 2022, according to the Council for Scientific and Industrial Research’s (CSIR) latest load shedding data. Which means there was a total of 6,400 GWh of unserved energy in the country. At Stage 6, the cost is about R4-billion per day. There were 208 days of load shedding that reduced economic growth by about five percentage points on top of the nearly three percentage points of GDP growth lost in 2021.
The current Transnet management inherited many of the problems they are now trying to solve from previous management and have shown improvements in some areas but the under-investment in maintenance and infrastructure built up over the years is not easily reversed. The inflexion point comes when, instead of slow decline, you get a total collapse.
The economy lost close to R400-billion in 2022 due to logistics problems at Transnet – R300-billion of that was because we could not get mostly coal and iron ore to port and the other R100-billion was a cost incurred because we end up over-paying for logistics using trucks instead of rail, with the resultant deterioration of road infrastructure.
The tragedy is that this happens at a time when South African coal was in high demand around the world over the past two years, when prices surged above $300/tonne and now it has softened to $130/tonne. The rail and port networks were unable to handle demand when prices were at their peak, thereby South Africa missed the full benefits of yet another commodity boom.
The Richards Bay Coal Terminal (RBCT) has an annual export capacity of about 90 million tonnes, but the most ever handled was 81 million tonnes. In 2022 the terminal only handled about 52 million tonnes with the resultant loss to GDP, coal miners’ profits (production dropped by 9% year-on-year and the industry lost an estimated R50-billion), tax revenues and job creation potential. Compounding the pain was the 11-day strike at the country’s ports, which left goods worth R65.3-billion sitting in warehouses or quayside instead of on ships. This underscores the urgency in finding quicker and less destructive resolutions to matters that impact the national economy. The Johannesburg-Durban rail corridor, which used to handle well over 107 trains a day, now only handles about 10 a day.
The mafia state has been allowed to thrive for decades, with very little response from the security cluster. The illicit products, mainly tobacco and liquor; illegal mining; construction; cash-in-transit; hijacking; ransomware; coal; copper; and railroad mafias are all thriving and uninterrupted. The Drugs/Nightclub mafia is probably the oldest and is into selling drugs and “cleaning” money that was acquired via illegal means. International fraud, credit card scams, romance scams, human trafficking, and prostitution. They all use the nightclubs to “wash” dirty money for a fee.
The scrap metal mafia is the most destructive, and they have harnessed an army of drug addicts, desperate young people, and professionals to strip public assets such as rail, transformers, lithium batteries, and copper.
They are credited with having stripped the rail network during the 2020 Covid-19 pandemic. The Chop-Shop mafia is big business with their daily car hijackings and about 70% of the car theft and hijacking is actively financed and facilitated for stripping and for secondary stolen car sales. The Minibus Taxi mafia is a ruthless, brutal, and well-oiled criminal group that probably pioneered the “izinkabi” (hired hitmen) culture, are the biggest and most violent with well-targeted and specific murders, and innocent passengers are often caught in the crossfire during these killings. They have since branched into the “inkabi-for-hire” business at about R250 000 per hit.
The Zama-Zamas (illegal miners) are heavily armed and ruthless to the core, and their operations range from hijacking entire mines to pillaging redundant mine shafts. Citizens who live in their areas of operations are accustomed to seeing dead bodies.
The “Amadelangokubona” or Construction mafia are relatively new entrants to the underworld syndicates and extort money from mostly public infrastructure contractors and operate a “protection fee” racket. This group disguises itself as a local business forum and often works with some unscrupulous local ward councillors. Those who refuse their offer are usually killed and/or violently forced to abandon the site.
These are extremely troubling times where service delivery failures are now giving way to state failure. This is the epoch of wartime that requires South Africans to put their collective shoulders on the wheel – for nation-building and social cohesion – for inclusive socioeconomic growth – to give effect to the South Africa of president Rolihlahla Nelson Mandela, South Africa we have been praying for.
South Africa should learn from Mauritius, which got off the grey list by strengthening anti-money laundering, and counterterrorism financing laws and implementing regulations – having only been on it for less than two years (February 2020 – October 2021), and with it came the automatic removal from the EU’s “Blacklist” and the UK’s list of “High-risk” third countries. Among others, Mauritius has improved the process of detecting threats of fraud, prosecuting criminals, and confiscating illegal proceeds, has enhanced the transparency of legal persons and enlisted national coordination, as well as regional and international cooperation, increasing training, capacity, raising awareness and ensuring that all stakeholders are working in accordance with AML/CTF obligations.
To ultimately deliver quality services to our citizens, we must defend our hard-won democracy; improve the legitimacy of our electoral system; deliver inclusive socioeconomic growth; do the right things; apply expertise and knowledge; nurture a diversely skilled team; embrace digital technology; live our values and culture; communicate the “common purpose and greater good” imperative more effectively through the independence of thought, objectivity in assessment, ethics, and integrity.
It is esteemed scholar E’l Rooi who reminds us: “Don’t wait until conditions are perfect to begin, it is the beginning that makes conditions perfect.” It is not about perfect – it is about effort, and when you bring that effort every single day, that is where transformation happens – that is how change occurs. Let us remember that farmers who wait for perfect weather never plant – if they watch every cloud, they never harvest.
• Professor Mohale is the president of Business Unity South Africa (Busa),chancellor of the University of the Free State, Professor of Practice in the Johannesburg Business School (JBS) College of Business and Economics and chairman of The Bidvest Group Limited
