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17 June ’21 Wrap: Privatising SA’s SOES: a step in the right direction

SAA 2.0?? You heard right. Our national disaster – we mean airline – has new life with some experienced private sector guys buying a controlling share! BUT there are several concerns about the deal – we break it down. Plus: What you can and can’t do under lockdown level 3, and the new driving rules you NEED to be aware of.

So, let’s dive into your weekly simple news update, brought to you by Verashni Pillay and the explain.co.za team. 😄

1. Our take : New wings for SAA

We never thought it would happen. South African Airways (SAA) is pretty much on the road to being privatised after the government sold 51% – a controlling stake – of our national airline to a private consortium with serious aviation industry chops. 

The “p” word – privatisation – has long been considered blasphemy by our left-leaning government and its trade union partners; they’re stuck in a somewhat Soviet time warp when it comes to state-owned enterprises (SOEs). 

This is the end of a long, torturous business rescue process. Most people, including finance minister Tito Mboweni, hoped the process would result in the airline being liquidated. But his Cabinet colleague, the principled though woefully business unsavvy Pravin Gordhan, fought for the airline. So, here we are. 

It’s good news in principle. Large-scale looting and poor governance have wrecked our SOEs and played havoc with public finances. 

Friday’s announcement by Gordhan was met with jubilation by many. After all, no one wanted all those jobs to be lost. The 51% owners are a majority black-owned consortium called Takatso, comprised of:

1. Johannesburg-based Global Aviation, which owns recently launched domestic airline Lift, and

2. Private-equity firm Harith General Partners. 

Global Aviation’s Gidon Novick will serve as Takatso CEO, and has an impressive résumé. He previously co-founded Kulula and LIFT airlines, and served as chief executive officer at Discovery Vitality and co-CEO at Comair.

But no sooner had the news broken than questions emerged about Harith, which was controversially born out of the Public Investment Corporation (PIC), manager of government pension funds. The firm’s co-founder, Tshepo Mahloele, is among the key men in the SAA deal – and he’s a former PIC fund manager. His career in both the private and public sector has frequently raised questions, though he’s denied any wrongdoing. Meanwhile Harith is chaired by former deputy finance minister Jabulani Moleketi, so some are worried about government links. 

Look, it’s not quite enough to cause serious concern. We just need to keep an eye on things, especially because of questions about where Harith will get the money to recapitalise SAA, which is R16.4 billion in debt – the government is all tapped out. For now, this deal is a huge relief. 

2. The big story: Bad news comes in threes

Despite our earlier optimism, the third Covid wave is rapidly starting to look like it will outpace the first and second. In the last 24 hours, 13 246 new cases were reported and hospital admissions are rising. Gauteng is becoming the epicentre this time; its hospitals are close to being overwhelmed 

In case you missed it, on Tuesday evening President Cyril Ramaphosa announced that the country would be moving to lockdown level 3 from Wednesday, as the third wave gets serious. 

Here’s a quick recap of what’s allowed now: 

  • Curfew imposed from 10pm to 4am (restaurants must close at 9pm). 
  • Indoor gatherings are limited to 50 people and outdoor gatherings to 100.
  • Alcohol for off-site consumption can only be sold between 10am and 6pm, Monday to Thursday and until 9pm for on-site consumption. Drinking in public spaces like parks and beaches is not allowed.  

By now you may have also heard that we’ve had to throw away two million doses of the Johnson & Johnson (J&J) vaccine, after a contamination incident at a US manufacturing facility. South Africa’s own J&J vaccine, which is being made at the Aspen manufacturing facility in the Eastern Cape, was then delayed. 

You’re probably asking: “What does the US’s contamination have to do with vaccines manufactured in SA?”. The US plant creates the active ingredient we use to manufacture our own vaccine. 

This obviously delays our own rollout strategy – but this time, it wasn’t our fault. On Tuesday Ramaphosa announced that we’ll receive another two million doses of the J&J vaccine in the coming weeks; these will be administered to teachers and security guards. In addition, SA expects to receive a total of 3.1 million Pfizer doses by the end of June.

Meanwhile, EFF leader Julius Malema said he’d reject the level 3 regulations until Ramaphosa gives us vaccines. Malema said new regulations would only worsen the unemployment crisis, whereas vaccines would enable job creation. We hear you, Malema, but we don’t agree with shunning regulations. The last thing we need is political interference and a call for complacency.

3. Briefs

  1. #Tembisa10: Mum vs Dad 

Remember that record-breaking ten babies we told you about last week? Like many others, we were sceptical. Seems like we were right to be. The story has taken more twists than the road through the Outeniqua mountains. The journalist who covered it, Pretoria News editor Piet Rampedi, seems not to have done his due diligence.

The family of the supposed father, Tebogo Tsotetsi, released a statement calling the babies’ existence into question and telling the public to stop donating money. They say the mother, Gosiame Thamara Sithole, is missing. But (is your head spinning yet?) Rampedi doubled down on the story, posting a video on Twitter of Sithole accusing the Tsotetsi family of ill treatment, adding they were using the decuplets for financial gain.

Meanwhile, hospital authorities who were in touch with Sithole said they have no records of the children, despite her claims to the contrary. And, earlier today, Rampedi tweeted that a “grand conspiracy” was afoot, vowing he and his employers, Independent Media, would get to the bottom of it. We’re not sure a health department that can’t seamlessly coordinate a vaccine rollout in a pandemic is somehow successfully conspiring to hide ten babies from, well, everyone, but hey – weirder things have happened in this strange country of ours! Watch this space. 👀

  1. Footballer Ronaldo costs Coca-Cola $4 billion 

One would swear stock markets are like a freshly pubescent teen: sensitive to literally anything. When soccer superstar Cristiano Ronaldo moved two bottles of Coke from his desk during a press conference and encouraged people to drink water instead, the Coca-Cola company lost $4 billion in market value. The numbers indicate that shares fell by 1.6% almost immediately after his little switch, though some still think it could be a coincidence. Still, imagine being that powerful? If he can move billions (on paper at least) with one comment, it’s no wonder so many opponents fear his fancy footwork on the pitch. 😅

  1. De Ruyter moves the needle 

André de Ruyter is the first Eskom CEO in 15 years who has managed to reduce debt at the ailing state-owned power utility. Eskom’s debt has come down by R90 billion since he joined in January 2020. Some background: In 2005, Eskom was sitting at a debt of R30 billion; by 2020 that had ballooned to R488 billion because of dodgy transactions, financial mismanagement and corruption (thanks Guptas). So that leaves R400 billion remaining debt. That is obviously A LOT but, according to Biznews, De Ruyter plans to clear it by: 

  • Increasing electricity tariffs (eek). 🙃
  • Collecting money that is due to Eskom, notably municipal debt.
  • Reducing illegal connections and electricity theft which costs Eskom about R5 billion a year. 

Thankfully De Ruyter stayed put: there was real concern he would jump ship after the racism charges levelled against him by former chief procurement officer, Solly Tshitangano. De Ruyter was cleared by an independent inquiry appointed by Eskom’s board, but Tshitangano is now asking parliament AND the Auditor-General to look into his allegations. 😬

While we’re here, sad news is that Eskom’s former chair Jabu Mabuza passed away yesterday, reportedly due to Covid-19. He resigned from his position last year citing his inability to reduce load shedding and tackle other operational issues at Eskom, as well as apologising for those shortcomings. Mabuza was an honest business leader and held top positions in several other South African companies, like Net1, Sun International and MultiChoice. 

4. Nigeria bans Twitter 

On 4 June Nigeria announced a Twitter ban after the social media giant removed a tweet by President Muhammadu Buhari which compared the country’s heinous civil war in 1960 – more than one million people were killed – to recent attacks on the national electoral commission’s offices. Buhari threatened to “treat” those who vandalised the electoral offices “in the language they understand,” Deutsche Welle reported, adding that some have likened the tweet to a threat of genocide. 

The government claimed the ban was necessary because people use the platform to destabilise and spread disinformation in the country. The ban has been met with mixed reactions with Nigerians: some agree that Twitter is being used to discredit the government and others are angry about the stifling of their expression. We’re with the latter group: censorship is wrong, no matter where or how it’s imposed.

5. Maimane back in political waters 

A politician leaves his party acrimoniously and contests elections under a new banner. So far so normal in South African politics. We’ve been here with Mosiuoa Lekota, Herman Mashaba and of course Aunty Patricia de Lille, who’s made floor-crossing a competitive sport. So when Mmusi Maimane left the Democratic Alliance in 2019 we thought it’d be more of the same. But we’re interested that he’s opted instead to partner with grassroots organisations. 

Maimane’s One SA Movement will be contesting the October local government elections with independent candidates in 10 municipalities around the country. According to TimesLive, he is targeting smaller municipalities first, with plans to expand to metros by October. His strategy is to partner with community organisations which then elect a candidate to stand in their ward. To ensure that candidates are held to account, he said OSA had registered a body called the Independent Candidate Association. The body will also help channel resources and training to the independent councillors.  

At explain we’re always on the lookout for new and interesting ways to do politics more inclusively, and this ticks the box! 

6. ANC: It’s the battle of the allies! 

It’s time for your weekly dose of polit-tricks. There’s a new proxy battle between the Jacob Zuma and Ramaphosa factions in the ruling ANC, and it has to do with the two versions of the party’s veterans’ league – the guys who supposedly fought in the struggle for independence:

  1. The Umkhonto weSizwe Military Veterans Association (MKMVA): the faction backing Zuma, which has some suspiciously young-looking members. They were the guys who shielded Zuma’s Nkandla home when he refused to appear before the Commission of Inquiry into State Capture, and include the likes of controversial characters Kebby Maphatsoe and Carl Niehaus. 
  1. The MK Council: founded in 2016 in opposition to the MKMVA’s support for Zuma, and called on the ANC to discipline Zuma. 

The ANC’s National Working Committee, kinda like the ANC’s exco if you think of its NEC as its board, has now decided the two bodies should be merged.  

What does this mean for Ramaphosa and Zuma? The NWC has effectively dissolved the pro-Zuma MKMVA. This is yet another signal that Ramaphosa is tightening his grip on the ANC. We’ve now gone from rumours of him being ousted by the Zuma faction before his first term was up to, probably, neatly winning a second term as ANC president. 

7. #Adulting 101: A thousand ways (not) to drive

You have to watch how you drive now: a driving demerit system is kicking in on 1 July and will be rolled out in five phases. This is technically worse than a fine, because if you get more than 15 demerits, you risk having your license suspended for three months! For every demerit after reaching the 15 point threshold, your licence will be suspended for another three months. It gets worse if you choose to drive with a suspended licence. Two suspensions will result in the license being cancelled. Your demerits depend on the seriousness of the offence. There are literally 1 000 ways you can score a demerit. Here are a few of the more common ones: 

  • Failing to stop for a traffic officer. 
  • Driving over the speed limit by over 40km/h.
  • Driving under the influence of alcohol or drugs.
  • Driving a vehicle without the consent of the owner or person lawfully in charge. 

Best to start familiarising yourself with the rules of the road or you might end up having to go through that gruelling process of learning how to drive again – five-point checks included. 😵

8. Berry farming in Barberton

We love an entity that goes above and beyond the call of duty. Bosses at mining company Pan African Resources in Barberton, Mpumalanga, were so aghast at the lack of jobs in the area that they felt they had to do something more, Business Times reported. So they researched the most labour intensive operation that could succeed in the region, and are now starting a berry farm! This is important: while our GDP grew unexpectedly in the first quarter of this year, it was the sectors that aren’t labour intensive, like financial services, that did so. 

We need more jobs in sectors like mining and agriculture to absorb the huge amount of largely unskilled labour in South Africa. So a big “well done” to Pan African Resources and its CEO Cobus Loots, who said conditions in the local community are “so desperate” that he cannot allow his business to run as usual. The project will create 400 seasonal berry-picking jobs from June to October and expects to create over 800 jobs in its second and third phases.

9. Big court win for millions of rural residents

Last week the controversial Ingonyama Trust was dealt a heavy blow by the Pietermaritzburg High Court for making people living on ancestral land pay rent. The court ruled that the policy introduced by the trust in 2012 is unconstitutional and unlawful. That policy saw millions of people go from effectively owning their land, thanks to a “permission to occupy” certificate, to being mere tenants who had to pay rent.

In 2019 alone, the Ingonyama Trust collected a whopping R90 million rand in rent from people living on its land. Many of these people are elderly and poor women who have long been actively excluded from land ownership because of the trust’s patriarchal system.

The court ruling slammed government, which was caught sleeping while the trust pretty much stole from its citizens. Once again, thank goodness for our judiciary and the civil society bodies that took the matter to court.