BNC#8 Piet le Roux Q&A - Economy, policy, and the crisis no one talks about

A hard-hitting conversation with Piet le Roux confronts South Africa’s uncomfortable truths: slowing growth, rising policy risks, and fragile infrastructure. While not yet a full crisis, warning signs are intensifying. The discussion challenges complacency, urging honest language about transformation policies and their consequences. It highlights the limits of politics alone and calls for stronger action from businesses and civil society. With cautious optimism, the message is clear - South Africa’s future can improve, but only through bold reform, active citizenship, and a united effort beyond the state..Sign up for your early morning brew of the BizNews Insider to keep you up to speed with the content that matters. The newsletter will land in your inbox every morning on weekdays. Register here.Support South Africa's bastion of independent journalism, offering balanced insights on investments, business, and the political economy, by joining BizNews Premium. Register here.If you prefer WhatsApp for updates, sign up to the BizNews channel here..Watch here.Listen here.Edited transcript of the Q&A.Alec Hogg (00:20:12 - 00:53:00)Some uncomfortable truths. I remember one of, one of our, speakers here a couple of years ago. Krista Visser, a entrepreneur of great renown. Describe the different types of truths. And there's the there's the truth that you tell easily. There's the truth that you don't tell it as easily, but it's a bit uncomfortable. And then there's a truth that you never utter the Uber truth, and you've actually dropped some other truths there.(00:53:04 - 01:06:45)But I can imagine that there are people kind of squirming a little bit, and thinking, really? Do we have to go there? Is it necessary? Things aren't that bad. How do you react to that?Piet le Roux (01:06:49 - 01:33:46)Things are bad in South Africa. They are not a complete disaster everywhere. We having a wonderful conference in a wonderful place. And all of us planned to be here for generations to come. But there are serious threats. And the earlier speakers today I'm only have to mention Zille explaining the deep risks of infrastructure collapse in Johannesburg. Those risks are not isolated there.(01:33:46 - 02:16:18)And then we have stagnant growth, which, if we continue on this trend will lead to a reverse. We'll end up in a reverse of growth. So I think Alec no, we we do have serious problems in the economy, its ability to solve and produce and support a flourishing society. I've also chosen words today that is the most direct explanation, the most direct description of the policies that we lament that I lamented here.(02:16:22 - 02:20:10)The policies of transformationism.(02:20:14 - 02:31:15)And I have myself for a long time avoided using such direct language.(02:31:19 - 03:02:01)But I think it has become time to do so because the trajectory of baby is escalating. I've seen recordings and transcripts of government meetings. I've seen draft policy documents. Ladies and gentlemen, what I have said about the doubling down is actually happening. And then there's another reason why it is becoming important to speak about this more directly.(03:02:05 - 03:43:25)A new young generation is growing up, generally white children, but also other minorities, and they are hearing their parents explaining or mentioning BEE mentioning employment equity, mentioning, not getting, being appointed to a job somewhere, mentioning, having to do a transaction in such or such a way, or not getting a merger, acquisition or not being admitted to sports teams because of their race, because of a quota system, because of this ideology of reflecting in every aspect of society the racial composition of the country as a whole.(03:43:29 - 04:10:07)We have to figure out a language that is will resonate with that group as more honest and not deceiving them about what is really going on. And in doing so, of course, there is a possibility that not the possibility this will lead to more tension, because if someone is doing something harmful and you tell them that they are doing something awful, and you become more and more explicit about that, it becomes a difficult conversation.(04:10:11 - 04:46:37)But that's difficult conversation needs to be had. Because the runway isn't that long anymore. Alec Hogg What do you think about Helen Zille's efforts, then, to get elected into Johannesburg? Is she wasted her time. Piet le RouxNo, I think, and I'll, I think I even said it like, I think people who use other avenues for change, the political avenues should do all the best they can, but they're facing an uphill battle, and there is no inherent guarantee in the democratic system itself that the outcomes will be good.04:46:41 - 05:06:08And this is not because South Africa isn't doing so well. And like that, MEC of North West said voting keeps delivering the same results. This is even in ANC members say that we've seen this all across the world. It's not a unique challenge to South Africa. So I think a two pronged strategy is very wise, very apt.(05:06:12 - 05:32:26)Maybe there are even other avenues for change, but I encourage, people who, use, you take up the baton of political office, to do the best they can. And I let, let me say one one more thing on that. Politics has gotten a bad name over the years, not only in South Africa, but across the world, but it's actually a very honourable profession.05:32:30 - 05:59:05People let me not mention names, but there are such people in the room here who have dedicated a lot of their life to to conceiving what the common good is and convincing people and exercising power and judgment, even against the odds to achieve something called the common good. Politicians in their best understanding is stewards of the common good.(05:59:09 - 06:25:45)And so I wish them well. But it's not going to be enough if we want to help them. One way to help them is voting. One way to help them is funding, but another way to help them is altering the balance of forces in society, not only within the state apparatus, but outside. A healthy society is one with many centers of power, not one where this with a central state can overpower everyone else.(06:25:49 - 06:56:07)That's crazy. We've got this kind of personality driven philosophy so, many politicians that we know who are in positions of great power are not necessarily the smartest people. Oh, that's not fair. They they not they haven't progressed along the path towards enlightenment, be it in economics, be it in race relations, whatever the case might be. And when they do get to that point, it's like,Alec Hogg (06:56:11 - 06:57:02)You know, neo liberalism isn't such a bad thing after all, as you know, Enoch Godongwana has said after the budget this year, but within the political process, and I don't want to kind of overburden this, but in Argentina, they've got a guy they could(07:14:23 - 07:53:48)have a million who has transformed that country. And we know and certainly when he came in, there was a lot of skepticism around him. Is that not the ultimate conclusion of politics? Is it not that eventually people are smart enough, or they look at AI enough to be able to make different decisions in the political process? Piet le RouxWell, I think the is the exception, and perhaps the exception proves the rule that democracy, doesn't always by itself, serves as a sufficient mechanism for good things to happen then.(07:54:09 - 08:26:35)Besides, they've gone through lots of pains for many decades before Covid. Melaye, took the position he has now, and he even has a challenge to unwind. And so much of what needs to be done is probably still lies ahead. So let's take that, case. Would it have been good if there were strong independent institutions in that country that stabilised or checked government power from outside through its influence, through its authority, through its ability to direct capital or, coordinate, decisions outside the state?(08:26:35 - 08:48:29)I think that I don't don't know enough about Argentina. I would suspect that there were some and to the extent that there were some, if there were more, I'm sure that that would have been beneficial. So I, I have no objection to good political outcomes. I just don't think South Africa I think if we want good political outcomes, let's help by strengthening also the sectors outside the state.Alec Hogg (08:48:33 - 09:11:44)I get the sense from many of the people I talked to that South Africa is a country of lost opportunity. It's got this massive potential, but we get on okay. We kind of bumble along. And if that's the case, you can live with it. The picture you're painting is that that bumbling along is not going to be sustainable.(09:11:48 - 09:31:16)Yes. I mean, and even but even if it's just bumbling along, are we going to accept that? I think I think the risk is worse than just bumbling along. What the kind of policies that we see being conceived of right now, the kind of policies that Sakeliga is fighting through litigation right now, which we have success, that's a good sign.(09:31:20 - 10:04:36)But they are existential. If aviation licenses are tied to be requirements, as they were throughout the course of last year, both for international airlines and domestic airlines, that was being rolled out. We stopped that through a court process that's very harmful if we die. Being a financial service provider to a BEE compliance, that your company somehow has to be certain percentage of black owned, or that you need a certain percentage of black staff, or that you need to pay a certain sum into the transformation fund.(10:04:40 - 10:31:38)If we make if we allow. And this is the this is the precipice at which we are, we are at risk of letting a government roll out BEE as an entry requirement for economic activity. That is the program. It has wrecked mining. Some of our speakers this morning relate pointed that out to us mining and petroleum and fisheries.(10:31:38 - 10:57:27)And there were 1 or 2 others in the late 1990s and early 2000 and said got licensing directly tied to be it typically these natural resource kind of permissions. What's happening now is that those isolated cases are being the, the application to those isolated cases are being broadened to basically every section of society.(10:57:27 - 11:16:13)Alec I don't think it's going to succeed. We are going to fight that. But I think we must understand what the attempt is and we must prevent that attempt from being successful. Alec HoggJa, it's actually very funny.(11:16:17 - 11:45:32)Not funny, but that quite tragic. You mentioned oil, and, we had James Lamont at one of these conferences. James is a, a guy who runs the Democratic Alliance's mining portfolio, has done it for many years, and he took a particular interest in oil, oil and gas. And he points to a very interesting picture on the map of southern Africa.(11:45:36 - 12:17:37)The hottest gas province in the world is Namibia. And Namibia has gas rigs or oil rigs, if you like, all the way down to the orange River and below the orange River, South Africa is not a single rig, but it's exactly the same geography. So that's why I was saying it's lost opportunity. If you can get rid of these people who you have misguided ideas.(12:17:41 - 12:42:24)Then the the, the potential for this country is just ginormous. But it's almost like people here say, well, you know, lost opportunity. This just this does have the power. And please, let's just try and get the water sorted out. It's such basic stuff. But what you talking about is hang on, that that easygoing lifestyle that you've got now, might not be with us indefinitely.(12:42:24 - 12:58:40)And in fact, is it a place where your grandchildren might stay here? So we need to reverse it. That's what I'm hearing from you. So how does one begin to reverse that whole process? Because clearly, it's not going to happen overnight.Piet le Roux (12:58:44 - 13:25:07)Alec, I think the there are probably multiple ways. The advice that we have is the concept of state proofing, state proofing your business and state proofing the public sphere done through the, the, the political process, if that's what you, you, you ask me, I think that.(13:25:11 - 13:51:17)Quite possibly there will be market improvements in the political governance in some parts of South Africa. I think there's a realistic chance of that happening. That's going to be good. But even when that happens, there will be great challenges in changing the staff and the structures. And, the vested interests that have produced the collapse in those areas.(13:51:21 - 14:16:10)So to me, it's a combination of state proofing, non-state activity and then, supporting politicians where they do good. I don't know if that answers your question. Alec HoggI would I would think what you're saying the state prefix is a little bit like an insurance policy, but geez, don't give up hope. We've got a government of national unity. We've got a rand which is stronger.(14:16:10 - 14:36:33)We've got a stock market that's done well. We've got an economy 1.6%. It doesn't sound like much, but it's the first time in a decade that we've grown at the same pace as the population growth rate. I mean, no crises that you see where I'm going with us is to say, come on, let's we don't own a guy and slit our wrists and not come back tomorrow.(14:36:37 - 14:56:20)I would like people to come back and say, okay, I get you Piet, I'm going to do what you, you tell me, I'm going to look after my, I'm going to put that, that solar panel on my roof. But there's got to be more, there's going to be a brighter future to even think about persevering because life is difficult.(14:56:20 - 15:22:22)As Scott picks it up. Piet le RouxI think we have a very good chance. Maybe it sounds like, I didn't, it sounds like I may not have, emphasised the optimism enough, maybe because I wanted to stress the danger, but I think we have a chance. That's why Sakeliga exists. I think many businesses will make great money even during tough times ahead.(15:22:26 - 15:32:07)I think there are, as I don't it's not a question of think empirically. There are important changes in voting patterns.(15:32:11 - 16:00:32)Taken together, I think we have a chance. But we must understand the nature of the bad wave of policy that is coming. We must be forthright, be confronted forthrightly. And so, Alec, I think that so that there is a very sustainable future we can have in this country, it can go much better than it is going.(16:00:36 - 16:32:07)It just it will just require something more than voting. It will require perhaps the most concerted effort ever from businesses in supporting and building and coordinating their decisions, their resources and their support to check state power from outside the state and to complement whatever successes politicians have from inside the state, in local municipalities, in cities and provinces, and at the national level.Alec Hogg (16:32:11 - 16:55:25)I like very much where you're coming from and the message that you've given us because it it it reinforces something Frans Cronje. It you said in the socialist, psychology and that's where, the people have run this country for a long time have come from you push the bayonet in until you hit steel or bone or whatever.(16:55:29 - 17:22:24)And what you're doing is you're saying, you're not going to push that bayonet in anymore. We're going to we're going to meet you. Is still am I interpreting it correctly? Piet le RouxLet's push back. Let's push back like never before. And let's win at it. Let's even though it's difficult to discuss, let's develop alternative language and alternative visions for a future in which all communities of this country can flourish.(17:22:28 - 17:47:20)That vision of a flourishing future is incompatible with the policy direction, currently, of accelerating transformation ism. We are at a important junction, and we must be successful at preventing the further rollout of transformationism. Alec HoggYeah, I guess, and it comes back to that bumbling thing. You know, we live our lives and we don't live with what you live with on a daily basis.(17:47:24 - 18:09:05)Jeanette says to me, how do you me how do you go to sleep at night when you've got all this garbage that gets thrown over your head, which you are experience you are exposed to because of the work that I do, and I dissociate from it from your perspective, I'm sure you dissociate from it. Most people dissociate from it all the time, but that's what you do for a living.(18:09:05 - 18:32:17)So I get that. I get the I get to steal. And I think many people are grateful that I know it, that I know what why they should be grateful to you. But, maybe before we take questions, just tell us your story about expropriation without compensation, what you've done there, the success that you've achieved so far, and what might have happened if you hadn't moved in.(18:32:21 - 18:55:18)You, you're referring to the De Fontaine, matter?Alec HoggI am Piet le RouxSo, our role was, I think, important, but ultimately, a minor role, compared to what the owners of the De Fontaine property, in eKurhuleni, played the, there's a property in a colony. It's in the city area of, I think it's Boksburg.(18:55:22 -19:23:46)And, the city took a decision about 7 or 8 years ago. It's minuted this way to expropriate without compensation as a test case. And, the property owner, of course, resisted and insisted on compensation. And then, but as good businesses do, try not to raise us to the level of, public attention, that's something, an entity like Sakeliga can do.(19:24:00 - 19:46:37)We've pretty happy to be the lightning rod and speak some unspeakable truths. Although, it's become speakable now, to, a contrary to 5 or 10 years ago. But in the case of, of Boksburg in eKurhuleni, currently any the city council wanted to did expropriated. And it's been an eight year fight for the former owner to get compensation.(19:46:41 - 20:17:25)The, since we had raised that to the level of public and international attention the city did in about ten. They don't want they realised, and they've actually been advised that they will get an unfavourable court decision because the expropriation happened under the old Expropriation Act. And, so their plan now is to, reverse that somehow and then use the new Expropriation Act once that is in operation, to do the same.(20:17:29 - 20:40:46)So, unfortunately, as much as the courts currently sometimes do deliver good judgments and victories as Sakeliga ,as we can attest to it. So in this case, the court process and this actually unconscionable legal tactic that the municipality is, is taking means that that process is likely going to be tied up in court for several more years because the municipality has now taken itself to court.(20:41:00 - 21:04:08)It says they want to review their decision to expropriate. They want that nullified, and then the former owner will just get the property back without compensation. And while it's been undermined, there are sinkholes, illegal settlements. It's politically toxic. You can never develop there again. So, that is going and will support the owners if they need us.(21:04:08 - 21:19:41)But they are, a proper operation. And, I think they, they will persevere, which I think is very good. They could also say we don't want the attention, we just want to keep it quiet. Let's step away. But they, they're they're sticking to it. Their guns, which is good. Alec HoggYou gotta wonder what a man from Mars would say about all of this.(21:19:41 - 21:47:36)That we we the people pay these guys in municipalities, and they decide to sue themselves to use our money to go and fuff around and and eight year court cases. You've got to think people like you, people like Michael Lewis, Louis, earlier people like Wayne Duvenage, the the NGOs in this country, the work they do, the perseverance. These people have eight years in a court case.(21:47:36 - 22:18:49)And it's that's standard practice. But without this heaven knows. Right. So we moving on not to some questions. Starting off with Chris Carter who says off ramping doubles up on cost given wasteful tax expenditures. How do South Africans incorporated compete globally with this additional cost burden? Piet le RouxYeah, that's, it's, it's terrible. You're paying twice. But it's amazing that for so long, so many people have been paying twice.(22:18:49 - 22:40:25)And look at how successful so many of you are and so many of your friends and colleagues are. This must be an amazing talent pool in this country. You're able to pay twice, for the state services on your own, and you're still profitable and doing great. So firstly, congratulations on that. The first way to win is to be just even better.(22:40:29 - 23:02:28)The second way to deal with it is, it's well, I don't know if it's the way to deal with it because it's actually something that's happening on the state side. So at Sakeliga, some of our, involvement sometimes is with local municipalities. What what's happening in some of these municipalities is they've lost the ability to keep municipal accounts.(23:02:32 - 23:29:06)They cannot send you a bill for the water, the electricity, the sewage, refuse removal and so on. So, you know, sometimes people speak about a tax revolt, but in this case, it's impossible to have a tax revolt because you're not getting a statement. So I don't know if that's, something to look forward to. But actually some businesses in South Africa are dealing with it, that opportunity, shall we say.(23:29:06 - 23:53:49)But of course, businesses actually want to pay because it's you can't have a public sphere. Some, some common infrastructure needs to be paid and supported. That to me, the, the CEO from Eskom, has a real problem. These municipalities aren't they're collecting money in the in many cases, most cases still, they're collecting electricity money and they're not paying it over to Eskom.(23:54:03 - 24:20:49)And so if we allow that chain of collecting money, but then siphoning it off somewhere, never reinvesting in infrastructure maintenance and, supplementation, we, we will face some kind of other collapse which they are doing their best to avert and and all strength to them. So, for now, be as good as you can, and I'm going to raise any dispute you can when you receive bills or what do you call these statements?(24:21:03 - 24:39:03)When you when you disagree, disagreeing with the statement, there are good processes you can follow. If you have a sufficiently large business, get an attorney or a lawyer, or maybe help your Chamber of Commerce to set you up with a system where they can help all the members to raise municipal disputes so you don't pay more than you absolutely need to.(24:39:07 - 25:06:10)And then eventually this is, I think, a little bit down the line, there doesn't does not exist laws for this currently in South Africa, laws for taking money that were supposed to go into the municipality and actually redirecting that, into, infrastructure maintenance or service delivery outside of the municipality. I suspect that the next few years will deliver some jurisprudence in that regard.(25:06:10 - 25:32:34)I don't expect to see legislation that enables this, but I do think that there is a path to litigation, to open channels for more independent administration of, collective, public funds. So those are three remarks.Alec HoggIt sounds to me like just being a good citizen, be a good citizen, know your rights. But being a good citizen actually stretches a lot further.(25:32:38 - 25:58:05)It means giving a dent. I was at a dinner a little while ago and this guy opposite me, very wealthy guy, said, oh. We were talking about something to do with a visa that was required. And he said, I, I've got a guy, home office in his name is Lucky you're in Pretoria. No problem. Thousand rand.(25:58:05 - 26:15:33)You can get yourself a new passport. And I said to him, how do you know that? No. Well, I had a problem with my niece, and my niece needed to come out. She's actually based in Switzerland, but he does have brought to South Africa. And for a thousand rand, I got the passport organised through Lucky.(26:15:37 - 26:36:09)He did not not he did not when I said to him is you. You don't think there's just something wrong with all of this? It's become part of the system. It's become endemic in us. Hey, if I can get through the system by paying a thousand rand, I'm not doing anything wrong. He said, go on. I'm helping this guy.(26:36:10 - 27:01:12)This guy is. He's efficient. He's he's deserves to get that money. And what you talking about is often people don't give a damn. They just go along with the flow. As I was trying to say earlier with the bumbling. And maybe that's it's starting to be more disciplined, starting to understand more as as citizens. And perhaps being thoughtful patriots means exactly that.(27:01:16 - 27:26:42)Stop paying the 50 bucks so that you can get to where you want to get a little bit quicker. Surely that's the message.Alec I can only emphasise let's be let's be good citizens. Let's let's be good citizens in our community and in for, our neighbouring communities, for our for, for our friends, for our businesses and, and the larger society in which we are.27:26:42 - 28:01:16I can only echo your words. You know, it's four years ago that Robert Hersov. I've stood up at the champagne resort and spoke out. And here's a question that from Johannes Vessels, which I think will be music to Rob's ears, but probably not, does Sakeliga let us see any willingness or awareness among the big 100 companies or business for South Africa that it is time to confront government policies or they so happy to, as he puts it, bend the knee and be praise singers.(28:01:20 - 28:30:03)Well, obviously Sakeliga has a different strategy to, to BUSA. And we have chosen that strategy because we think that is the path to a, sound, flourishing constitutional order. And we think that we need to build authority and influence outside the state. BUSA's strategy is actually the more common strategy, followed by many business organisations around the world.(28:30:07 - 28:56:46)It is to build relations. It is to invest in a close relationship of trust and try and convince the politicians on the other side about what to do next, and even offering, even offering help and so on. I think that that's a hard strategy to be successful within in the larger scheme of things in South Africa.(28:57:00 - 29:27:46)But it has it has not been, it has not achieved nothing. My understanding is that some of the port in port infrastructure improvements we're seeing for example, is some of the work that BUSA's done.I acknowledge that. So let me acknowledge that our strategies differ. I was encouraged, end of last year to I think that BUSA is also going to challenge the Employment Equity Act in court.(29:28:07 - 29:52:15)More challenges is always good. NEISA and Sakeliga already challenged them. Some others as well. It's good that BUSA's already also doing this. I think we're seeing some good pushback at the energy level. But, Johannes, thank you for your question. Obviously, there are differences. I wish BUSA all the best with this strategy. And every improvement is to be welcomed.(29:52:19 - 30:07:34)Naturally, Sakeliga has chosen this strategy because we think it's it's the best bang for buck under the current circumstances. Alec HoggMartin's question is, can one state proof your private life?(30:07:38 - 30:33:16)Now, there are certainly degrees to it, but I don't think there's anybody in South Africa who hasn't. Well, now, there are there are people really exposed to the to the arms of, state failure and pernicious state action, but certainly in this room, I think, step proving is maybe it's not even a new term, I suppose, I even, recently heard during a visit, in another country, someone speak about state proofing.(30:33:16 - 30:52:38)So I think we're actually exporting, a concept here. You don't find the words state proofing in the English dictionaries yet, but mark my words, it's going to be there. And, it's going to be a homegrown export. We haven't reached the world of that world, so, Yeah. But obviously the question was, yes, it is possible.(30:53:00 - 31:18:04)It just doesn't scale very well. There is scale in building a business that help people stay proof. Oh, solar solar panels, a great example of thoughtful bottles and so on. So you can build business around this at scale, but just, remember that I encourage you to stay proof your private life. It's just solving for private problems are not sufficient for a flourishing society.(31:18:04 -31:46:45)So I just need we just need to do both. Alec HoggFinal question, from Dirk van de Walt. Nice to hear Dirk and the whole We Buy Cars team. Fun guys. Lovely to see you. Has the ANC government made good on this social contract with the broader community they serve since 1994, or have they failed that community with things like job creation and education standards?Piet le Roux (31:46:49 - 32:16:05)When I was at the, Black Business Council meeting three years ago, I, ventured a suggestion on what black economic empowerment, in its best understanding, could aim to achieve. I think that still holds. I think the best understanding is a flourishing, the, flourishing black communities in South Africa. We want to see flourishing black communities in South Africa.(32:16:16 - 32:45:20)And in the best interpretation, that is the motive of the, the, the the idea, the intention behind BEE. But I think that that the so and so measured. Coming back to Dirk's question measured against that intention, the government over the last 30 years has not done very well. And bringing South Africa to the point where we are 15 years of no growth and even declining, is certainly taking us further and further away from that.(32:45:24 - 33:06:36)So, I would say that even by the even if we say that the that the government's singular intention is only the placement of black communities, then it would still be a good thing to,(33:06:40 - 33:28:13)Change the policy direction of this country. And so the question, the answer must be it has failed. Both for the black communities of the country and or other minority communities. And,(33:28:17 - 33:53:25)I think that it's I don't see signs of it, moving away from the policies that have brought us to such a problem, not withstanding successes over the years, especially in the early 90s and even into the 2000, there was good economic growth, lots of expansion in per capita income and so on. A lot of that had to do with just getting rid of all the bad and the restrictive policies of the previous government.(33:53:29 - 34:09:18)But beyond that, if we say what has been, delivered in recent years, I think the answer must be, failure. And so stage failure today is a common word in South Africa. And that is disappointing. Alec HoggPiet thank you.

BNC#8 Piet le Roux Q&A - Economy, policy, and the crisis no one talks about

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