SA facing a confidence crisis

2011-12-12 19:18

Johannesburg - South Africa is facing a confidence crisis after the ANC-dominated parliament rammed through a state secrecy bill critics said would make it easier to cover up corruption and punish those who try to expose it.

President Jacob Zuma, already on the hot seat for perceptions his ruling African National Congress government is fostering cronyism, has seen his spokesperson dragged through the media for suspicions of receiving kickbacks and lying to investigators.

His plans to create jobs and revamp Africa's largest economy have mostly been failures, with analysts saying he is not willing to push through the necessary reforms to make the country more competitive with its emerging market peers.

Meanwhile, the rand has weakened severely against the dollar, stoking worries of inflation as imports become more costly for a country that relies heavily on overseas producers for many of its goods.


South Africa has slid in the Transparency International gauge of perceived corruption in recent years from 38th in the world in 2001 to 64th in 2011, with many worried about the government tunring a blind eye to sweetheart deals that benefit the politically connected.

Transparency International said about 60% of respondents in a survey replied corruption had increased under President Zuma while 12% said it had dropped.

The protection of state information nill approved by parliament allows any government agency to apply for classification of information that is "valuable" to the state, and criminalises the possession and distribution of state secrets.

Critics say the bill harms the nation's already weakened credibility and intimidates those who try to expose graft. The ANC said the bill is essential for protecting state information and keeping spies at bay.

The press has criticised the legislation as an attempt to silence whistleblowers and muzzle investigative journalists, who now face up to 25 years in jail for revealing state secrets.

What to watch:

- Court filings aimed at having the bill struck down

Economic struggles

Rising costs of imports would likely drive annual consumer price inflation above the upper end of the Reserve Bank's 3%-6% target range in the final quarter of 2011, and inflation would peak at 6.3% in the first quarter of 2012, slightly higher than the 6.2% seen in September, the bank said.

Debt troubles in the euro zone and United States have scared investors away from assets seen as risky, including the emerging market currency, the rand, which in recent days has weakened to levels not seen in more than 2 years.

South Africa needs to increase the rate of economic growth to an average 7% a year to make a meaningful impact on unemployment that is at 25% of the labour force.

But the economy grew less than expected in the third quarter, hitting 1.4% on a seasonally adjusted and annualised basis.

More than a million have lost their jobs since 2009. The slowdown will make it even harder for the legions of unemployed to find work, probably keeping the unemployment rate above 25% and fuelling social tensions.

Meanwhile the ANC is trying to pass a raft of legislation that a presidential commission said would ratchet up unemployment and greatly increase labour costs for employers.

What to watch:

- Mounting pressure on the central bank to cut rates

- ANC movement on the labour bills, which could undermine sentiment

Political fights

Zuma may have derailed one of his biggest rivals, ANC Youth League leader Julius Malema, who is facing expulsion from the party for five years for bringing it into disrepute. 

Malema has appealed but prospects for reinstatement are dim.

The knives are out for Zuma as the ANC heads into a major meeting next year where it elects its leaders with many in the ruling block wanting him out.

But with Malema sidelined and rivals biding their time, Zuma is poised, for now, to win re-election as ANC head, which also means re-election as the country's president given the party's stranglehold on politics.

Rivals may try to discredit Zuma by exposing embarrassing secrets for the politician who has faced corruption charges but has never been convicted.

They could also try to attack his inner circle already weakened by the suspicions swirling around spokesperson Mac Maharaj.

What to watch:

- Dirty laundry being aired to score political points

- The final decision on the Malema appeal. If Malema wins, Zuma's political future could be in doubt.


After the near-collapse of the grid in 2008, electricity supplies continue to worry businesses and households, even though state utility Eskom said it has secured enough cash to build new power stations.  

However, supply in the world's top platinum producer is likely to remain tight until the first of the new units comes on-stream in 2012, and the country will not be fully in the clear until 2015.

The 2008 power crunch forced mines and smelters to shut for days and deterred new mining and manufacturing investment.

Large tariff increases over the next three years have helped Eskom plug its funding gap but industry leaders, complain that the extra costs are likely to stifle growth.

What to watch:

- Additional tariff hikes to pay for power station that could fuel inflation.

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

  • Mantsho - 2011-12-12 19:50

    How can the people vote for a criminal to become the President and then eccept the country to do well? Impossible!

      Steward - 2011-12-12 20:00

      No one voted for a criminal to become president. They voted for the ANC that apparently gave them freedom. Would have voted in a cannibal pedophile if he was a zulu and of the ANC. That's democracy for you.

      Tc - 2011-12-13 11:49

      The ANC is now publicly supporting ZANU-PF. Godness, what message is that sending into the world. Who will still want to invest in this tail-spin SA with that in mind. The ANC is the problem.

      baudoux1 - 2011-12-13 13:33

      Africans get the governments they deserve. No amount of anything will change this, not when the majority are too dumb to understand that food parcels and T shirts are not going to change their lives once they have wasted their vote!!!

      John - 2012-02-14 23:13

      ANC = Association of National Criminals, Abortion Murder Genocide. Destroying SA since 1957.

  • TheWatcher - 2011-12-12 21:51

    So to sum it all up: The ANC are a bunch of money-grabbing cronies who have run the country into the dust, failed to provide for their own people and forced legislation through parliament to try cover it all up. All arguments to the contrary please provide proof in the form of url references or a means to track down hard copies of the information you are using.

  • Tony - 2011-12-13 06:30

    Pre 1994 - we produced more than we imported, today we import from China en masse and have huge unemployment. Pre 1994 the NP were corrupt too, but were discrete about it, today the ANC are openly corrupt. Pre1994, those who could vote made the adjustment to allow the ANC to run in the polls. I wonder how long it will take the masses to make their adjustment to vote out these thieves?

  • Neil - 2011-12-13 10:09

    It's a shame the ANC has an army of (mostly non-tax paying, I might add) mindless fools keeping them in power by voting for them. They could raze the country to the ground and they will stay in power because of them. I say, have votes counted by actual contribution to the economy & tax paying. Hell, the average voter pool would then be geniuses compared to the current one, and are more likely to make actual informed decisions when voting time comes.

      baudoux1 - 2011-12-13 13:35

      Fantastic Idea but wishful thinking. I think Africans actually like being poor, unemployed and uneducated!!

  • Randomhero6661 - 2011-12-13 10:55

    Our Country In A Nutshell! - F@ck i hate this injustice lets revolt!

  • Jacqui - 2011-12-13 11:36

    Come to think of it, Zuma wants a second term in office. Maybe we will have to start growing vegetables in stead of flowers.

      Johnson - 2012-01-26 20:54

      Not a maybe perhaps compulsory - even as it is now with the cost of living in SA its impossible to keep head above board. This country will see it's ass - All ANC controlled provinces are bankrupt - overdrafts to the tune of billions, EC, GP, KZN, LIM, NW, MP - all of them

  • Pieter - 2011-12-13 13:20

    An identity crises will eventualy lead to a confidence crisis.

  • acsteyn - 2011-12-13 14:39

    Chickens have come home to roost.

  • valerie.barras - 2011-12-13 20:12

    Used to live there, must say that it breaks my heart to see what is happening. There good people across the board, but it's always the corrupted that get into power, are the people so blind that they cannot see for themselves what is happening to their beautiful country, or it is a case of they don't mind being the 'underdogs' to a black government, after all now they are free of colonialism, imperialism, capitalism etc. makes them feel good, so they suffer!

      sean.redmond3 - 2011-12-16 16:13

      Ditto, Bulawayo and Wankie. Left before sh#t hit the fan.

  • Gavin - 2011-12-13 20:50

    What 'spies' .. what a load of B_LLSH_T! I suppose Jacob Zuma's bed is also on bricks because of the TOKOLOSHE? ANC must go, FULLSTOP!

  • Louella - 2011-12-13 21:12

    ok what must we do to secure contracts with govt so we can install solar street lights and also indoor solar lights for the less fortunate who cant afford high electricity bills , we have been knocking on govts door for the past 2 years now .

  • Butch - 2011-12-17 16:33

    Looters using scaretactics - the wrath of the ancestors ? What nuts !

  • Tanie - 2011-12-18 20:32


      Johnson - 2012-01-26 20:59

      I tend to agree with you - it took Zim 365 months - we are now at 216 months and we are just over half way - All ANC Provinces are basically bankrupt with billions in overdrafts

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