đź”’ Boardroom Talk – Where Eskom went, Transnet is now following, only worse.

By Alec Hogg

Discovery has created a multinational business by finding ways to incentivise people to stop doing things that are bad for them, even if the impact is delayed. An unfortunate aspect of the human condition is that, while we know certain actions are harming us, the absence of immediate consequences reduces our resolve to address them.

This phenomenon also occurs frequently in mismanaged economies. Much like the lifelong smoker with emphysema, by the time those responsible become fully aware of the destructive impact, it’s often too late. Tragically, this predictability isn’t only apparent in hindsight.

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Those who have followed South Africa’s State Capture crisis are well aware of how figures like the Guptas, Molefe, Singh, and other wrongdoers used Transnet as a training ground for their Eskom heists. Therefore, it should come as no surprise that where Eskom went, Transnet is now following.

Pretoria is belatedly waking up to the collapse of the second leg of its Developmental State fantasy. Corruption and mismanagement at Eskom have already necessitated a direct bailout of R500 billion by taxpayers. Considering the opportunity cost of a nation unable to export its products, Transnet’s impact has been even more significant.

President Cyril Ramaphosa has labeled Transnet a ‘catastrophe.’ A more honest description might be to attribute this label to the SACP/ANC’s obsession with monopolising critical economic levers, despite having little understanding of them. Today’s piece from our partners at the FT is a must-read for those seeking context.

Sterkte.

Alec

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