Bernard Swanepoel is at the peak of his powers, a highly successful business leader who has himself transitioned into entrepreneurship after building Harmony Gold from a single low grade shaft into a global player. Swanepoel, straddles big and small business – he hosts the high-powered Joburg Mining Indaba, serves on a handful of JSE-listed company boards and apart from his own private companies also chairs the SMME-focused AHI. He is a forthright speaker, and the ideal person to address last week’s Biznews Club London launch. In this edited version of his contribution, he offers a rational perspective of where South Africa is today; offering some very powerful alternative views, including criticising Big Business’s approach on Nenegate and specifically its blind support of fired finance minister Pravin Gordhan. A tour de force. – Alec Hogg
We pick up Bernard Swanepoel’s presentation where he offers some views on the battle between SA business and the presidency – as a former mining industry leader, he shares some of his own experience…
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I think mining unashamedly has had to engage with Government and despite what you may believe or may have been told the mining industry has made a lot more progress in transforming by all metrics. I donāt think I can think of a mining company in South Africa that doesnāt have at least a black chairperson (sorry, not chairman), most of them will have black CEOs. Most of them would have more than 50% of senior management, black South Africans. So the mining industry have tackled the challenges. Of course if the economy grew, it other parts of the society got it right then the mining industry would have been celebrated for leading the way.
Right now, whether you listen to Julius Malema or Jacob Zuma ā you canāt tell the difference. Itās the same rhetoric of we must nationalise farms and mines. I use to joke with Gwede Mantashe that I have a few mines I would love to give to the Government and anybody who knows Harmony knew. I mean Sibanye has taken over some of Anglo’s old mines that Iām sure Barry Davison (former Anglo Platinum CEO who was in the audience) would have loved to have donated to the Government at some point in time.
You are fully invested in South African companies, you have a farm, you have mining interests. That’s not the kind of thing you can pick up and take somewhere else. So, how are you, as a person deeply invested in the country, seeing what is happening now?
Now, I have to disclose, Alec and I, weāve argued over the years. Normally his wife tries to sit close to him to kick him under the table. Now, he doesnāt drink, so itās never alcohol induced. I donāt drink a lot but I always get blamed because the guy had a glass of wine and therefore, Iām the unreasonable guy. My beautiful wife kicks me, so we donāt agree on a lot and over the years thatās just it. Iām always right and heās never been right but this is a 23-year gradual decline. I think people who are surprised by recent events are just surprised by recent events because they were not paying attention. This is where I go back to where Alec and I, perhaps from time-to-time disagree, is last yearās great intervention by big business after Nenegate ā it was a step backwards and not a step forward.
I say that with a pragmatic, realistic approach of if you think you can make a Minister untouchable by a President, you live in a non-democracy. You donāt live in South Africa. Our Constitution is clear. The Minister serves at the prerogative of the President and for business to interfere like that is a dangerous game. Itās very dangerous to say the one department in the country that oversees economic destruction that soar lack of growth, that soars highest unemployment in the world. To make a case about defending that was not the smartest move business had made, in my opinion. I know I sit here amongst people, who like me, hold Pravin Gordhan up as a face of honesty but we need to move in South Africa, where we celebrate we have an honest Minister to have competent Ministers.
There are not many countries in the world where Pravin Gordhan and the ANC would not have been replaced for the economic performance of the country. So, we made a battlefield, which weāre always going to lose. We are today picking battles, which, not we ā one of your other great fans which you are a fan of and Iām not so convinced ā āMevrou Zille.ā
Leave Helen out of it….
Whatever her Twitter handlersā¦can you imagine her and Donald Trump getting into a Twitter war? My god, that would be hilarious hey, and today we move the battlefields of democracy into the courts of South Africa. Yes, we almost have no choice but no, it canāt be smart because if we make the courts the defender of last resorts, like it is, then the next battlefield is going to be the courts of South Africa ā the Judiciary and its broader definition. I can you those of us in South Africa should worry about, so that we need to actually redirect our efforts to democracy. If we canāt win at the ballot boxes, then we canāt take our battles to all these sort of this. So, making Pravin this flag-bearer of good and honest and centralised all procurement under him.
You and I had a conversation. I thought it was the stupidest thing we do because that means if you were Treasury youāve got the keys to every vault in South Africa (weāve just seen that play out), so I think there is amazing opportunities in South Africa.
Letās just dwell on that for a minute.
Opportunities, yes please. I donāt like this negative thought.
What happened was that Pravin how many years, 5, 7 or 8 years before he was fired the first-time round. He wanted to centralise all of the purchasing within Treasury under control of the Treasury people. There is now R500bn that goes through one central point. I remember Bernard saying to me youāve got it wrong because what happens if the Guptaās get their hands on that, wellā¦Whoās got their hands on it now?
Yes, I donāt know but remember Gigaba (the new finance minister) got corrupted by Brett Kebble. We forgot about Brett, but Brett was the original Gupta and he wasnāt on a temporary permit. He was there for keeps. So in the ANC Youth League Days things started going wrong. Again, I donāt think our young democracy can quite honestly have individuals ultimately. If more than 50% of South Africans continue to vote for the ANC we have a problem. Julius Malema, I personally had the privilege of spending some time with the brains behind him. Not that he is not intelligent but there are much smarter people behind him. In the run-up to the election and the view of those of people were that if we donāt get to 12% to 15% – weāre just another failed breakaway party. Now the press in South Africa celebrate Julius Malema way beyond the electorate. Thatās another failed way breakaway party and it was a good breakaway. It served a purpose but itās not getting the traction thatās going to see the EFF, in my opinion, ending up in Government.
Helen Zille has got every white vote in South Africa, and every coloured in South Africa or whoever sheās put forward to lead the party on her behalf. Thereās no growth left there, so the battle for South Africa is black voters that must vote beyond the āfreedom partyā of the past. Thatās the real challenge and we can have lovely conversations about that and until that doesnāt change and move I think this incremental slope may have some down side to it.
Okay, so youāre in business, you would be exposed to the realities of corruption. In most of Africa corruption is endemic. When you go into Nigeria the guy asks you for $20 please, otherwise you donāt get your passport back, and Mozambique and Zimbabwe, etcetera. How deep or how strongly has corruption grabbed the country?
It is very deep but you all know that because probably, if youāve been in South Africa, you probably have participated. If you have a white South African friend or family member they probably drive with R1000 in their cars to pay a Joburg Metro Police person a bribe, but we see that different to Nkandla, and I have a problem with that. I do have a problem with facilitating smooth business transactions through a gatekeeper and criticising. For me itās much more black and white and I donāt like grey areas because it makes life very complicated for me. So, a lot of people who are very critical, and even try and march, although thatās quite hilarious when white people march. We donāt know what the hell to do and whether you should keep this thing up or whether you should toyi-toyi – we look uncomfortable.
At least we can say āViva!ā
I believe you can. That should go viral ā Alec with a loud hailer. But corruption is so endemic that if you open up business there are so many regulations, so many points where people can be a gatekeeper and unless you pay it doesnāt sort of happen. I mean, at the AHI’s small business indaba last week, David Lewis of Corruption Watch was telling the story of his son trying to open a business in Cape Town. I say Cape Town because somehow the narrative for the moment is Cape Town, the one place where everything works. Potholes there are historical excavations and not potholes ā the lights that donāt work is because weāre green and we donāt want to use electricity and whatever. He was telling the story of how his son had to either bribe people or take 3-months, 6-months, 9-months, in some instances longer, to get the necessary permit licenses, etcetera.
That is every South African experience and I am uncomfortable to say I think 80% of South Africans therefore pay the bribes. Now, if that is what society has become ā if the job of a teacher is for sale, the job of a speed-cop (if you guys know what speed-cops are?). We now call them Metro Policy. Apparently, you buy that according to your then future ability to extort bribes out of South Africans. Now, thatās endemic and weāre all march against Jacob Zuma. For goodness sake surely, if South Africans were honest we would have had honest politicians.
Find some upside.
Thereās only upside thatās why Iām in the country. My 11-year-old son is growing up in the country. Itās a choice. I mean, itās a choice to participate in āthatā South Africa or to live a different life in South Africa. Again, last week we had two things in succession and you would think I do nothing but speak in public but the one was a Joāburg Indaba, the Mining Conference, we had a breakfast and people are ready to slit their wrists. I think the day before that we had a small business indaba and right at the end, after everybody were getting to slit their wrists, we had a panel of two entrepreneurs, (real businesspeople) ā as Jacques would define them, āpeople who pay their own salariesā
You guys may know right now in South Africa, we had our first Shark Tank copy of the BBC’s Dragon’s Den and one guy, Marnus Broodryk, speaks with an even more Afrikaans accent than me, if thatās possible. I mean that guy canāt wait to get out of his presentation to go back and grab these opportunities that exist. I can tell you, heās not corrupt. Heās not a tenderpreneur – heās not black enough to get a government contract. He canāt wait to get out and go and do business. Annie Malan, another South African entrepreneur, whoās doing amazing business and finds South Africa the place to be by choice. So, have we become a sort of Valli Moosa who would say have we become like a frontier economy where itās frontier capitalism? But there are amazing opportunities.
Clearly, if you want to operate in an economy like that, a country like that ā you need to back yourself, you need to do proper risk/reward calculations. I mean is a Ā£100 invested in a bank in the UK safer than Ā£100 invested in a project in South Africa? But ultimately, thereās a risk/reward equation and a lot of people who sit here would have money exposed to emerging markets. They would have money exposed to higher risk environments because thatās where we get our return from ultimately. Itās very difficult for a white South African to not pretend that the good-old-days were better. I can tell you, as a young student, on a Chamber of Mines bursary, I went to America on a study tour. and police had to protect us because we were the evil people from the apartheid regime. We seem to have forgot how bad that was.
On the 5th May 2004, at the Cipriani Hotel, a fancy hotel in Italy, we were asked to come and co-present at a conference, where our then President Thabo Mbeki who would sound like the voice of reason. He totally embarrassed South Africa with 100ās of thousands of people dying every year because of AIDS denial. We must keep context. There are lots of things in South Africa that today are better. This is a country that comes from in the eyes of the world, the most horrific system, weāve gone through a honeymoon period with the President that we all adore. Weāve had Thabo Mbeki mismanaging our country, weāve had 20-years of bad economic policy implemented and the rest of the world have been a lot less surprised by the most recent events than us white South Africans.
For the rest of the world, well if you look at the Rand and a few other metrics, it wasnāt a big surprise that we would have loved it to be, so yes, of course we need to toyi-toyi and we need to march and we need to do all of those sort of things and we need to fight for the soul of our country that the honest people need to stand up and be counted. There are people who say itās going to happen in the run-up to the end of the year election of the ANC next sort of President. I am in South Africa by birth, yes, of course, Iām there by choice, and I unashamedly and comfortably raise my kids in South Africa because I think itās a country with amazing opportunities but if you want to work for the Government or if you want to work for a big, mining company or you want to work for a big bank ā I wouldnāt do that. But if you want to be an entrepreneur in South Africa now ā amazing times.
How do you encourage entrepreneurship when you take all the risk, 80% chance of failure, and then if you do finally make it, some person who happens to be less melanin deficient than you are is going to enjoy the benefit?
Yes, I wouldnāt go into those businesses, so I mean you actually do have a choice. You do have a choice. I donāt look for a Government tender. I donāt try and play there where Government has got influence. Now, if youāre a white person and you want to play where the Government rules extend then youāre going to have to play by the rules but there are amazing opportunities outside that sphere. You choose your gap and if you want to play in the game where Government has got influence over your inputs or your outputs, youāre going to have to play by the rules of that country. But if youāve been in mining and youāve gone to other countries itās no different. There are indigenisation rules, there are local ownership rules, there are anti-expat rules and if you play in that game, those are the rules by which you play.
So, I very comfortably operate in South Africa. I have black partners in businesses but they are my partners because they bring skills, I still want to find people who bring money ā anybody here who wants to bring their money? So, I donāt suffer too severely. I can tell you, us Afrikaners, the best thing that happened to us was that we got kicked out of Government. In my lifetime every single family of mine who were too lazy to work their asses off, who ended up going into Government because that was the cosy jobs. They all got helped back onto their feet, in the good old way, where somebody took your car away. I certainly live in a support group and a family group and a group of people who, if you ask me, are we better off than 25-years ago? Thereās not a single one in my family or extended group who arenāt better off, but you would expect to hear that from somebody who lives in South Africa by choice.
QUESTION FROM DEREK LUBNER: When mining went down the drain, in 2009 or 2008, and then all of a sudden it just came back up. Itās not you, Iām not accusing you personally, but the industry. How come they didnāt predict some of that? It just seemed like they were, it was not good, the price has gone up ā we can now celebrate. If the price has gone down ā we are in trouble.
Yes, Iām so glad Iām not in the industry but if ever thereās been an industry who gets it wrong, so itās the ultimate cyclical business. They would think on the way up we would know this time thereās going to be a top but we do regional inventors of this time itās different and it tried to confuse us all. On the way down this time itās fatal. The platinum industry of South Africa, and again, completely acknowledging Barry and other people knows itās a lot better but this time itās the end of the world. Clearly it canāt be and it wonāt be and it is cyclical. The sort of who conspires to do bad capital allocation? Again, I mean, thereās much smarter people in the audience than me to discuss it but I can tell you that in the current Governance framework for a mining executive to make a big investment decision there are lots of people who participate in that. Ultimately, the shareholders, the fund managers, and afterwards we all stand back and we blame Barry. It was his stupidity to expand into the Eastern limp or whatever.
But I can tell you, if you donāt talk growth in the time and environment where everybody talks growth then you get left behind. So, we amplify the misallocation of capital. Deep down I do think our governance structures and, ultimately, our quarterly results obsession and so on, contribute to that but I certainly have never made an investment inconsistent with my personal views which tells you, if you go and look at my record of investments ā I must have had the wrong personal views often. Please keep that in mind when we talk about my views of South Africa. Barry, Iām sure you will remember some 10 to 15 years ago we would have a board meeting and we would all turn to the black director, to hear his or her views on South Africa. Clearly their views are more relevant than ours.
Now, please remember that I have a view and everything I express is a personal view and Iāve been wrong or twice at Alecās expense. Heās been right 100 times at my expense, so the mining industry, I think inherently, because of the lag times, the lead times, the 20-year investment cycles ā I think we will continue to amplify the cycles. The creation of ETFs, the role of traders, China ā itās all amplified that effect but I can tell you in boardrooms today we are underinvesting in industries that clearly are about to go into another boom phase and those are rational people coming together to make rational decisions. With full consultation involvement of the current bunch of shareholders, and we are getting it wrong, is my honest opinion.
Bernard, before I forget this question. What happened in South Africa in the last week, in your opinion?
Today was more exciting. I didnāt like last weekās confusion with politicians trying to score political points because that was always going to end up embarrassing, you know. Remember the DA, famously, was going to march on Luthuli House, for Godās sake. They should drive there in their chauffeur driven cars once and see where Luthuli House is before they plan to march there. That was completely ill-conceived, bad thinking and in the end, they had a march somewhere. Today was, I think, significant. I donāt think itās significant that a 100 thousand South Africans marched because if you look in the world where people are really aligning and combining and focussing ā the marches are close to millions of people and not 100 thousand.
Today is a step towards an expression of dissatisfaction. I think itās a good step but guys, if we had to have a fair election today in South Africa, if you think the ANC will lose the popular vote, I donāt think you understand the country that a lot of you are from. In Africa the Liberation Movement ā I mean one of the young ladies who led the Fees Must Fall Campaign, an impressive woman who speaks powerfully, I think she is now 23. When she recently spoke at one of the many memorial services for Kathrada, she spoke about the ANC that needs to be saved. She didnāt mention South Africa but once, we come differently at this. This, to us, is about South Africa, about our view of democracy and thatās not a commonly held view yet. I think todayās march of what I saw on Twitter and on YouTube, I think itās much better than last weekās noise. But if this doesnāt become broader and wider and less anti-ANC, if you attack the ANC you are just being stupid for a moment.
We must get the ANC to come to its senses and enough South Africans, with enough influence, and it canāt be you and I, need to speak the truth to the ANC for the ANC to do the honourable thing in December, when itās the first time that they can possibly do that, and thatās to elect their new leader, with less baggage and a new start in 2019. If you canāt take a 3-year view on South Africa, you should ignore us for a bit. Switch off your TV, cancel your travel plans, talk to us in 2020. Then we either are clearly on the road to Zimbabwe, as South Africansā think, or we have prevented us from being on that road. Iām an optimist, I donāt think weāre going to be on that road but itās when itās going to happen, in my opinion.
Sipho Pityana, whoās the Chairman of Anglo Gold, for those of you who arenāt from South Africa, so heās also in the mining industry. Heās the man whoās been waving the flag for āsave South Africaā and not save the ANC. Has he got it wrong?
Well, heās actually about saving the ANC. Again, if you listen to his most recent speeches at the memorial services, he still speaks about āus ā the ANCā and thatās actually good. So, I think save South Africa itās again, itās another great initiative. Heās a very credible person to carry that flag. I can proudly say he launched the āSave South Africa Campaign at the Joāburg indaba, but thatās just a bit of freeā¦
Thatās basically, your conference.
Yes, what can I say. He had a standing ovation from a bunch of people, including the Deputy Minister of Mines, all good stuff. But the real battle has to be and will be for the soul of the ANC, because if the ANC doesnāt come to its senses then we will not only lose the Courts. Weāll lose the Independent Election Commission. Again, if the ANC doesnāt reinvent itself then the game plan is obvious. Then forget about nice court rulings, thereās always an overrule that the judicial commission is currently being changed to the like of Zuma and his cronies. I mean, the Independent Election Commission, even when we thought it was a good, capable organisation, the Chairperson was corrupt and the Deputy Chairperson was a union steward at Beatrix, when I was there.
So, our institutions arenāt in safe hands and, so making them the battlefield is like making Pravin Gordhan the battlefield. Weāre going to lose that battle. The country needs to win the battle for the heart and the soul of the good people in the ANC. Listen, I mean we all have our own preferences, we all have our own people we like, people who we think are good. White South Africa thinks Cyril Ramaphosa is the saviour, etcetera. In the end we need more than 50 people in the NEC to be prepared to stand-up. Thatās the real battle, so letās march, letās toyi-toyi. I mean these Bell Pottinger people are so spineless that when you guys want to march on them in London they cancel a contract (bunch of wussies), I mean there was a good march coming.
That was going to be fun.
Iām sure it was going to be. I was going to join it. This is all good fun and I donāt want to say weāre totally irrelevant. How can we be irrelevant? But my contribution, as a white South African is very different to the real battles that are taking place in South Africa now.
QUESTION FROM AUDIENCE: Do you think if Ramaphosa wins the Elective Conference in December, Zuma will see his term out?
I donāt think Ramaphosa will win the election and I donāt think Zuma will see his term out. That wasnāt the answer to your question butā¦
Pray continue.
No, thatās justā¦I donāt think Ramaphosa carries enough weight. Heās got no constituency. He has, at a critical part in his career made money instead of played the game, and heās back from retirement after he made his money. I donāt think he will be the elected person but I donāt think Zuma will see out his term either. I think December is quite critical. I donāt know on what basis a Ramaphosa grouping can win.
So, who is going to win?
I donāt have an ability to predict. I do agree that we must choose our battles a lot smarter. I can tell you the DA is making the Judiciary the battlefield. They take everything to the Courts. Itās stupid. It is selfishly stupid to the level where the Courts are becoming the battlefield. We should not do that to our Courts. Our Courts are not there to rule the country. If you canāt get more than 23% of the votes of the country, then you canāt win the battles in the Court. It is the wrong tactic, Iām very critical of that, and it does worry me that if we make the Courts the battlefield in the country like today itās aā¦
I mean Zuma, for better or for worse, I mean we all like to think heās not smart. Heās the only guy playing the long game. Heās not playing āmust I fire my predecessor for a Twitter war or not game?ā Heās playing a long game. Heās played a long game, heās outsmarted much smarter people than him, and he continues to play the long game. I really do think that for the ANC to lose an election is inconceivable for them, whether itās a statement that we will rule until Jesus returns. All those statements indicate that they have no contemplation of losing an election, clearly so. I think losing a Metro and losing a Province ā itās sort of good but the ANC has got no ability to be an opposition. You guys are far removed. You donāt see the chaos in the Pretoria, Tshwane Chambers when the ANC has to be an opposition. Theyāve got no such ability. Theyāve got no intellectual ability to be second fiddle anymore.
Those are the things that should worry us and I just think the players need to be a bit smarter. I personally donāt like the possibility but I do think we have a 10-year period where Julius Malema probably delivers control of the Government back to the ANC. Those of you, like new, momentarily thought perhaps a populist as a president isnāt all bad after an intelligent idiot like our previous president. If you get sucked into the charisma of Julius Malema, you would worry me. I mean thatās a dangerous young man. Charismatic politicians have caused all the shit in the world. We had a few of them in our country. The world has had a few and Julius Malema is a lot more dangerous than Jacob Zuma, in my personal opinion. I donāt know, I canāt predict the future. I donāt think the ANC has ever thought of themselves as a political party by choice, and yet that is the painful rebirth of our country somewhere. Again, Iām not a political analyst but liberation movements take countries down paths that never end up pretty and until they become a political party, ready to play by the political rules ā we face these challenges.
QUESTION FROM JACQUES BASSON: Going back to entrepreneurship and the hope and the light at the end of the tunnel, which it represents in South Africa, so my question is that entrepreneurial growth is going to come from the existing SMEs, itās going to come from the new generation, the millennials are coming through, and of course in conjunction with that, I only see the world of the banks because again, or the lack of the VA culture, what we call in South Africa, which again the bank as we know, they donāt understand entrepreneurship.
Yes, I find it very hard to think as myself as an entrepreneur. I know your definition says if you pay your own salary you tick a big box, so by that definition, yes, Iāve been entrepreneur for 10-years. But when Iām in the presence of a real entrepreneur I mean I like the energy, I like the positive attitude, I like the ācan doā attitude. These are not the people who try and get the rules skewed in their favour. Iām very critical of big business in South Africa. Itās never competed ā itās always been a favourable environment. Today we call it collusion and in the good old days we called it by different names. So, I donāt think the banks are going to be net employers of people. Whether itās the Fintech revolution or whether itās just the fact that weāve got more lawyers. If your economy is driven by legal or new buildings, and bank new buildings, so the economy is stuffed. I mean go to Sandton, and the last 10-years, with the exception of Discovery and Sasol, those have been the new buildings, so they wonāt be net employers.
The mining industry is never going to employ more people next year than this year, even if hereās a super cycle, it will slow down the process, so we are totally dependent on small businesses creating jobs. Now, we donāt know the data and I now head up an organisation that supposedly should know the data. Depending on who you ask, weāve got a million small businesses, youāve got six-million small businesses. The official version of the Department of Small Business is 2.9 million small businesses. That may or may not include the people who buy bananas in bulk and sell them ā I donāt know what is included. All I can tell you if you do a survey amongst small businesses, a big survey that was done some 25% of small businesses are optimistic enough to say theyāre going to employ up to six people and then theyāre clear. Clearly, thatās hogwash but I like the optimism because if they donāt employ six and they employ two ā that is the potential for a million, two million, or three million more jobs.
Now, small businesses donāt have Audit and Risk Committees. Small businesses donāt have a set of quarterlies, which is linked to their bonus and incentive. Small businesses actually, can make decisions, can create jobs, and if they do then we take a significant step forward. The small businesses of South Africa, the real ones, (Iām talking about the entrepreneurial ones), I donāt think theyāre on this investment strike that big corporate South Africa is on. So, I donāt think our economy, I mean Barry said it better than I can say it, and a āno growthā environment is not fun, so letās stop celebrating the party that gave us no growth or the Minister of Finance that gave us no growth. We need to grow the economy and we need to create jobs and that can only ever come from small businesses, in my opinion. I donāt think corporate South Africa can do it.
Now, Tracey (Swanepoel’s wife of ThinkSpiration) and I love storytelling. We do it for a living. We teach leaders how to tell stories. What our country needs is a positive narrative. What our country needs is a Nelson Mandela who makes us feel better than what we are. We were never the people he made us out to be. We lied to the whole world ā what a lie! I was so proud to be part of that lie hey! I even tried to live up to the expectations of that lie. We need a positive narrative and for the moment, Stellenbosch has especially got one and itās all in Afrikaans. Itās a beautiful narrative in Stellenbosch but in reality, Iām not so sure about it. Having said all of that, I do think we need to tell ourselves we can be better than the people who need to pay a bribe or tolerate a President who clearly is potentially corrupt.
(Question) After Brexit, after Trump, nobody cares what happens South of probably Cairo, so what impact does that have in South Africa? Does that rob the good guys of a moral supporter or does it just give the Russians more entrĆ©e into the nuclear business or does it have any effect at all? Does South Africa just go on as it was, like it was before, a moral crusade for the rest of the world, which it isnāt anymore?
That is such a good question and again, I donāt know. I feel vulnerable as a South African that nobody cares and they donāt care. I mean here, thereās 60 of us that care but there are not thousands of people. Look at the Rand through all of this. We were surprised but the world saw this coming or has factored it intoā¦ I donāt like that. I donāt like that because I grew-up in an environment where we were told that if you come from the wrong side of the globe you are automatically evil. I donāt know if Iād like the Russians to become influential in South Africa. But I can tell you, a lot of South Africans think more positively about Russia than about America. China as a miner. I see the Chinese everywhere and again, I donāt know whether thatās good or bad but China is definitely closer to South Africa politically and economically now, than Donald Trumpās America. I donāt like that but then Iām a white South African helpfully indoctrinated by a Western view of the world. Iām not the majority and I donāt think my views are the majority views in South Africa, so personally, I completely concur with that view.
QUESTION FROM GLENN ZAHN: I have no connection with your country. Iāve never been there. Iām not South African. The only connection I have is Iāve lost a lot of money there and some of my clients of mine whoās lost a lot of money, and theyāre probably going to lose more over the next couple of months. If you look at your ratings right now ā the BB on one side and below investment grade, theyāre going to probably get the other side is going to get probably downgraded, so theyāre going to fall out of the indices and youāre heading right now, youāre probably level with Turkey, youāre going to head to Ukraine and then Venezuela. Then after that itās just like every other emerging market really, it just critters the bottom. The thing is that weāre 10% of the foreign debt ā of all the debt only 10% of it is foreign, so even if the Rand collapses by 50% Zuma and his buddies and the Guptasā are getting all the commodities and theyāre selling the commodities in Dollars ā theyāre going to be able to fund them. So, in other words thereās going to be no bailout. This isn’t Greece. Ā [So, one thing that this guy said over here, and this guy over here ā itās the first time to see somebody really talk rationally about this. Thereās a chance that the international community is just not going to care and Iām just kind of thinking what are your thoughts on that?
I think we are there. I think we played this Nenegate, when the previous Minister of Finance got fired, we made this the big stance. If the Treasury falls the world is over and 18 months later the rest of the world has played according to the risk, we put in everybodyās mind. I donāt think the rest of the world cares. I think that means one thing for South Africans and that is we need to care differently. So, yes, letās march but 100 thousand people marching is not changing the world yet. Millions of people need to march, so the ANC and the majority of the people in the ANC has to accept that the ANC needs to become a political party. This is the stuff you canāt even relate to, because this happened in Boston and āTea-Partiesā and stuff so long ago. But weāre a 22-year-old democracy and we behave like the flipping teenagers or the young adults we are. We behave badly and weāve taken the wrong drugs, and weāve got the world pregnant with, you knowā¦Ā And the world doesnāt care.
I donāt think the world cares. Thereās no Margaret Thatcher, who incorrectly cared for the old apartheid South Africa. Thereās no Tony Blair who cares for a relationship with Madiba. Thereās nobody who cares. I canāt think of a politician in the world who, on behalf of that nation, cares about whatās going on in South Africa.
COMMENT FROM PETER ATTARD MONTALTO: So, I entirely disagree with the binary choice between the Zimbabwe scenario or the Cyril Nirvana as I call it, and in that sense, I think very little happened in the last two weeks. We had a marginal shift that South Africa is doing, as the President tries to solidify the status quo, basically. Which means you want just enough access to industry and not too much. You want just enough of a functional economy. You want a certain level of corruption but not too much and itās about this balance I think, between the two ends of the spectrum. Of course the problem is if you go too far, if you erode institutions too much, as you have access now of that R500bn flowing through Treasury. Things can go wrong. You can get greedy and want too much access to the judiciary etc. Thatās where those downsize risks can come from but I think coming to this point of does the world care? I think to a degree, as you have a story, as South Africa is dropping out of indices and downgrades happen but once you get beyond that point then people wonāt care as much. There will obviously be money, who wants to buy South Africa at a price but I think this is the trouble, and going back to your point of Pravin Gordhan. Pravin Gordhan had tried to sort of spin this narrative that somehow foreigners owed something to South Africa. I always got very cross with him and I said, āWe owe you nothing. You have to make a case of why people should invest in South Africa?ā And it was not clear that’s there when you scratch beneath the surface and I think that will become more clear as we move through the year.
Thanks, Peter, your response?
No, I wish I said that right up front. We could have gone home. I do think white South Africa struggles with this, this was just incremental, this was just the continuation. We would love to think this was bigger than what it was. I donāt sense that in the world of the investors. I think it has been quite incremental. I think itās been unavoidable, I think it was always going to happen. I stayed up a few nights to wait for the announcements. I saw at least five-list lead of Cabinet reshuffle. Some of them came from very credible sources, or so I thought. So this was in the making for a long time and I donāt think weāve got any right to expect anybody in the world to care, to demand that we are special. Like I say, he said it very well.
QUESTION FROM GEOFF JOHNSON: We’re mainly South Africans in this room. Around the world itās estimated to be 3, 4, or maybe 8-million South Africans. Some of whom have been enormously successful in industry, business, banking, entrepreneurship, possibly their net-worth is far greater than the GDP of the entire South Africa. What do you, as a South African, you said you are a committed South African, living in South Africa. What do you want us to do, as a collective of South Africans living outside South Africa, but are still passionate about South Africa, what do you want us to do, to help you guys in South Africa?
Can you please pray for us? Iām more serious about that but do that anyway. Then I honestly donāt know or think that we can expect people to irrationally spend money on the country, but I donāt think our problem is that yet. I do think, (Alec tells the story) ā I do think instances like Madiba going to the World Economic Forum. Coming back with Trevor Manuel and others thinking differently, is what our country needs more of. I honestly, unashamedly think, especially South Africans living abroad should not withhold your influence and your intellectual capacity.
I can tell you, Barry Davidson when he spoke 15 years ago about the mining charter. People said, āOf course he would say that.ā Heās the flipping fat cat at the top of Anglo Platinum that would be his views. If Barry Davidson today speaks on the issues facing the mining industry, heās a well-respected South African, who speaks the truth to power or whatever. Now, Iām not picking on my colleague and friend but thatās what we can do and I can tell you, I get a lot more attraction for some of my views, and you would now worry because youāve heard my views but I get a lot more attraction today than what I got when I was one of the CEOs of the top-40 listed companies.
Please, I think, people who care for wrong reasons, for good reasons about South Africa, should not disengage. Whether you take on Pravin Gordhan and help him understand that we owe you bugger all, you need to make your case. Whether we speak to the new Finance Minister, whether we spoke up against corruption ā I mean thatās really, for me, thereās a bit of a battle soul of our country taking place. I wish I had credentials as a freedom fighter of the ANC because I would then have better credibility. I actually spent two-years in the apartheidās governments army, we canāt say we fought against the ANC because there was no war per-say but I was on the wrong side of history. Therefore, I donāt have that credibility but you know what? Iāve dealt with my shit. Iāve put that behind me. I unashamedly, as a South African, have a right to have a view and sometimes I have some really good meetings with really influential people ā you donāt see a difference but I at least feel I continue to make a contribution and, as you say, if millions of South Africans all over the world continue to do that then we can keep āthe should I buy a bribe or not?ā We can keep that private, we can leave that as a private conversation.
We must influence the young people, when Robin Renwick brings Julius Malema to London to show him that if you lose a bit of weight his tailored-suits fits you better. Itās all actually part of helping us to grow-up as a country and the country consists of individuals and I promise you, despite everything Iāve said ā 95% of the South Africans Iāve had the privilege of knowing are good people, they care about their kids, they care about their own future, they are not greedy. They are not corrupt and they want to live there for much longer. So, thatās the only thing I can ever ask of somebody else is please keep on engaging. Use your influence. Alecās platform alone ā irks politicians to the point that I know it makes a difference. Hereās a friend whoās doing exactly that. Now, if all us do that then the countryā¦You know, letās not give up without a good fight.