South African’s nuclear pipe dream has been extensively debated on Biznews with many suggesting that not only is it unaffordable, but it may also fast-track the country to junk status. Community member Peter Loudon below expresses his concerns around nuclear (govt sneakily approved this over the festive period) but is more concerned with the negative trend-line SA currently finds itself in. This is compounded by Zuma’s Nenegate debacle and a maize crop that won’t fulfil the country’s needs. All the issues revolve around currency. The nuclear project’s initial ‘perceived’ cost of R1 trillion has sky-rocketed. The need to import maize crops (dollars) is slowly getting more expensive, both initially spurred by the Nene dismissal but there are bigger problems at play. Loudon calls on the Constitution and anyone with the required means to put an end to this madness as everyone’s basic Human Rights are being affected. Will 2016 bring with it any change? – Stuart Lowman
By Peter Loudon
Any rational person can see that the nuclear pipe-dream is going to bankrupt South Africa. It was unaffordable when originally spoken of at R1 trillion and a USD exchange rate closer to R10 than the R16 towards which we are now trending. This makes the probable start cost closer to R1.5 trillion. It will continue to rise as overruns are encountered and the currency slides. In the extreme, no hedging strategy would have protected such a project in the context of the Zimbabwe Dollar. No matter how it was hedged, a currency with no value can buy nothing.
Zuma’s little Finance Minister shuffle has probably cost us the equivalent of one annual budget (look at lending costs, bond prices and yields, currency devaluation, equity devaluation, etc. and it is not difficult to get beyond the R 1 trillion mark). Having Pravin Gordhan back has not restored values or confidence fully. We possibly clawed back half of the initial losses and are now trending negative again on most indicators. The damage won’t be repaired soon.
It seems we are going to have to import at least two thirds of our annual maize requirement, using our newly devalued currency to do so. (I bet nobody hedged against that.) I heard recently, from someone who should know, that our ports do not have the capacity to handle the volume of maize required in the timeframes required. We do not have the infrastructure to bring the food in as fast as it is needed, by a country mile.
On top of all of this, we face junk status. Everything we have experienced so far will seem like a picnic, as you well know.
The Constitution places Human Rights above all other issues and considerations. Human rights certainly include the right to food and shelter, and arguably extend to the provisions we all make to secure food and shelter in the future (e.g. through retirement provisions). It is not even going to require a combination of the above factors to render the country unable to fulfil these rights. Nuclear build, drought, junk status, and economic incompetence / plundering each has the capacity to do it alone. Present delivery becomes impossible and future provisions are wiped out.
This is surely a time when the Constitution must be invoked to protect the country.
I do not have the money to prosecute the action. I don’t know anybody who does (or, if they do, it’s not in SA and it isn’t coming back). Can you call upon anybody who can call this madness to a halt, using the Constitutional mechanisms we have, or are we literally in the equivalent of that jet which was deliberately crashed in France?
If we are, our Constitution is worthless.
