🔒 Members Only Ep1 – Witnessing SA’s ‘second transition’, a political watershed

In this new feature Alec Hogg and Bronwyn Nielsen unpack the most important developments of the past week, identifying and adding value to topics being discussed in South African boardrooms. This week’s conversation is devoted to South Africa’s new political era – ‘the second transition’ – with particular emphasis on KZN, where both of them were raised. Hogg is editor of BizNews; Nielsen runs The Nielsen Network.

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Highlights from the interview

Alec Hogg and Bronwyn Nielsen reflect on a week of significant developments, marking the start of their exclusive conversations for select viewers. They delve into the political landscape of South Africa, emphasizing the critical question of what lies ahead politically. Alec highlights the contrast between financial journalism, grounded in facts, and the narrative-driven world of politics. He recounts learning from a Northwestern University professor about the importance of understanding political scenarios before economic conclusions.

Alec introduces R.W. Johnson, a prominent anti-apartheid activist and scholar, who offers valuable insights despite being unpopular with the ruling elite. Johnson’s analyses have been instrumental for the business community. Alec expresses concern over Russian interference in South Africa’s politics, emphasizing the influence of external powers like Russia and China. The struggle between multipolar and bipolar worldviews, with the US and China as key players, plays out significantly in South Africa.

They discuss KwaZulu-Natal (KZN), a potential hotspot post-election, with suggestions to cut it loose due to its volatility. Alec mentions Dr. Anthony Turton’s view that the 2021 riots were a precursor to future unrest orchestrated by Zuma. The middle class in KZN, better prepared and armed, now stands as a balance of power. Alec stresses the impact of political uncertainty on economic decisions, causing hesitation in spending.

Alec and Bronwyn explore the emigration dilemma, assessing whether to stay or leave South Africa. Alec sees promise in South Africa’s potential for entrepreneurs despite the high risks, highlighting the shift towards coalition government as a positive development. He praises President Ramaphosa’s consensus-driven leadership, fitting for a future with shared governance responsibilities. Alec underscores the importance of governance, explaining how better governance in areas like the Western Cape contrasts with risks in regions like Gauteng.

Bronwyn celebrates the progress in South Africa’s noisy democracy, citing Pravin Gordhan’s views. Alec reflects on BizNews’ journey, emphasizing their role in bringing independent journalism from The Economist and Financial Times to their audience. He stresses their mission to serve their community and support democracy by speaking truth to power.

In conclusion, Alec and Bronwyn express optimism about South Africa’s future, despite challenges. Their collaboration aims to share knowledge and insights, contributing positively to the country’s evolving democracy.

Edited transcript from the interview 

Alec Hogg (00:05.102) Welcome to our first episode of Members Only. This is just for Business News Premium members and our premium YouTube subscribers. Ron Wilson, a long-standing colleague and friend, and I will be going through what’s happened in the past week and what you should make of it.

Alec Hogg (00:30.99) It’s been an incredible week, hasn’t it, Ron? Almost the best possible time to be launching some new private background conversation for an exclusive group of viewers and listeners.

Bronwyn Nielsen (00:47.563) I can’t tell you how excited I am to be working with you, Alec. As you said, we go back a long way. I’ve had many different iterations in our relationship over the years. I just can’t wait to get into your mind today. So I’m going to jump right into it. There is one question being asked around boardroom tables in South Africa: what next on the political front? What should we be saying to weigh in with some credibility? Your team has been surveying the political landscape. Please tell us what we should be saying around the boardroom table about the political status quo in this country.

Alec Hogg (01:39.15) It’s interesting, both of us are financial journalists. We come from a world where facts are important. You can’t really trust the narrative. Go and look at what the numbers tell you. Politics is completely the opposite. It’s all about narrative. So, it’s been a very steep learning curve for me. We’ve been to Davos many times. I met a professor from Northwest University in Chicago who told me years ago that in a developed country like yours, politics is greater than economics. Don’t talk about business and investments in isolation. Understand the political scenario before you can make any conclusions about economics. That’s really the basis that I worked from, slowly but surely, gathering information and trying to educate myself.

Now we’ve got R.W. Johnson, who is just off-the-charts brilliant. He was an anti-apartheid activist, grew up in Durban, was about to be arrested, and only discovered that a week after he left the country. He applied for a Rhodes Scholarship, and although the chairman didn’t want him to get it, the rest of the board gave it to him. He went to Oxford, did his Rhodes Scholarship there, and then they asked him to stay on and teach, which he did for 26 years. In 1994, he looked back at South Africa and decided to return. He’s made a huge contribution. Unfortunately, speaking truth to power has drawbacks, and he’s very unpopular among the ruling elite. But he has been a wonderful source of information for the business community and for me.

Alec Hogg (03:59.054) He’s been providing a measured, sober, and very truthful base of what’s been happening without giving away confidences of people who are telling us stuff deeply off the record.

Bronwyn Nielsen (06:00.811) So Alec, having tapped into R.W. Johnson, Peter Croniers, and others, how do you see the current landscape?

Alec Hogg (06:20.846) It’s a dangerous time. There is Russian interference in our political system. We’ve got it from far too many sources. Andre Pina, co-founder of the Scorpions and now a private equity manager in Washington, has a website called National Security News in London, with top journalists working for him. There is a distinct world outside of what we, the public, are exposed to. The Russians and Chinese are doing their utmost to dominate Africa. We’ve seen it with the Wagner Group in West Africa. Here in South Africa, there’s a fight between those who propose a multipolar world and those who believe in a bipolar world with the US and China. This needs to be better appreciated because we’ve become one of the arenas where it’s being played out. We saw this with Jacob Zuma, who got significant support in KwaZulu-Natal and nationally in a few months, likely due to substantial funding.

Bronwyn Nielsen (08:38.891) We’re both from KwaZulu-Natal originally, so it’s worthwhile spending some time on what many see as the potential hotspot going forward. How do you see KZN in this post-election phase as the coalition comes to fruition? Is it just a matter of time, or has the danger passed?

Alec Hogg (09:14.734) There have been suggestions that KZN should be cut loose from the rest of South Africa because it’s that dangerous. Dr. Anthony Turton, a real polymath and part of the security apparatus in the new South Africa, is very open about the Russian involvement in this country. His view is that the 2021 riots were just a curtain raiser to what Zuma will attempt in the future. The good news is that the middle class in KZN stood up during the 2021 riots and is now better prepared. Certain communities, especially the Muslim community, are very well-armed and prepared to protect their businesses. There’s a balance of power there that’s probably not fully appreciated.

Bronwyn Nielsen (12:32.811) There’s still a nervousness despite people being poised for potential violence. The bigger discussion is about whether to stay or leave South Africa, given the uncertainty. The question is also about what this level of indecision means for the economy. Both the public and private sectors are holding back on spending due to the uncertainty, which could be our biggest challenge. The economy cannot handle deferred spending decisions.

Alec Hogg (15:02.286) It makes a lot of sense. The big story is the emigration. Should I go or should I stay? If you’re in KZN, you will reassess. We’re all rational beings, and our subconscious gives us the answers. If you’re an entrepreneur, South Africa is a great country. If you want to live as a corporate animal, there are better opportunities elsewhere. South Africa is a developing country, and we’ve fallen behind in many areas. But if you believe in living and learning, you can’t learn more lessons than you can here. The risk is high, but I sense that this country has finally turned. The 1994 constitution was written for coalition government. We’re finally seeing that come into play.

Alec Hogg (17:24.782) and the late Nelson Mandela and all of those around them and their advisors. We are now finally, after 30 years of misgovernance—most of it misgovernance—you’ve got to give credit to Trevor Manuel as a finance minister. He did a very good job, but mostly it was misgovernance. We finally got to the stage where if you’re in power, you’ve got to listen to other views, opinions, and voices.

You’re not in a room where the big man makes all the decisions, and unfortunately, it is a man, with everyone else saying, “yes, sir.” Leaders like Mbeki, Zuma, and unfortunately, Cyril, have taken us down roads not in the best interest of society. Now we’ve got the perfect president in Ramaphosa, who’s a consensus guy. He doesn’t like making decisions and has been criticized for it, but he excels at listening to others and synthesizing their input. He’s perfectly placed for the future government, needing to work with the ANC at 40%, not over 50%. I’m very hopeful and excited about it, though early to the party.

There will be turbulence, ups and downs, but at least we’re on the path to recovery rather than decline. Like every good story, you start in a good place, hit rock bottom, then improve again. We’ve hit rock bottom. Now, more people will be listened to for the first time. You can’t have your blue light brigades’ cabinet making all the decisions because you’ve got partners in the government who will call you to account if you overdo it. Governance is crucial.

Alec Hogg (19:45.422) When you move from Gauteng to the Western Cape, you pay double, then triple in London. Why? It’s all about risk. Your risk in Gauteng is that your home will be worth less due to excessive rates and poor governance. In the Western Cape, risk is lower due to better governance. In London, it’s excellent. This affects your wealth directly through your home and indirectly through exchange rates and share prices, like in the Rand.

Governance is crucial, as a professor from Northwest University told me. For the first time, the political situation is on the right trajectory. There will be bumps, but we’ve got some smart people, some adults in the room, guiding the process.

Read more: Dr Anthony Turton – Zuma-inspired 2021 Looter’s War mere ‘taster’ of MK’s plans

Bronwyn Nielsen (21:02.57) Alec, you’ve summarized how people should approach boardroom discussions: we’ve hit rock bottom but are now on an upward trajectory. Democracy is noisy and there will be bumps, but we need to celebrate them. Pravin Gordhan always talked about this noisy democracy. This is our current reality. Let’s take that as the positive from our conversation.

I’m glad you’ve shared your thought process. As you mentioned, you have insights from many experts. On entrepreneurship, I’m not going anywhere, and I see opportunities blooming. For six years, I’ve run a business in South Africa beyond traditional broadcast, but business news is the heart of entrepreneurship. You’ve built this platform for a decade, correct?

Alec Hogg (22:44.334) Yes, we turned ten last August.

Bronwyn Nielsen (22:47.531) I saw two things in an email about The Economist and the Financial Times. You’ve taken on another dimension from a news perspective, being the exclusive partner to both The Economist and the Financial Times from an Africa perspective.

Alec Hogg (23:13.966) Yes, we’re the only partners and licensees for both products. Others could also become partners, but we see the value. We’ve been partners with the FT for a few years, and we nailed down The Economist when we were in London for our conference. Credit goes to Sean from KZN, a world champion surfer and successful businessman. He said, “Don’t build a business, build a tribe.” That’s what BizNews is about. We’re here to serve our tribe, which gives us challenges but supports us in return. Thanks to Sean’s advice, we focus on serving rather than profit.

Bringing the incredible work of The Economist and the FT to our audience is crucial. They are independent, financially strong, and speak truth to power. If we can do that in our developing country, we play an important role in democracy. We don’t serve vested interests but our tribe. This makes a substantive difference in democracy.

Alec Hogg (25:36.142) I’m happy we can make a difference and look forward to the future. Our democracy is maturing rapidly. The Americans were corrupt for decades after the founding fathers, and the UK and Germany had their struggles. Here in South Africa, we’re making significant progress after 30 years. I’m proud of being South African and optimistic about our future.

Bronwyn Nielsen (27:20.043) I agree with the glass half full approach. Alec, I’m excited to be part of your tribe. One recent contribution was the two-part retirement system starting on September 1, 2024. I look forward to more boardroom conversations and insights on this platform. Thank you for having me as part of your tribe, and I look forward to our weekly chats and contributions.

Alec Hogg (28:13.102) Fantastic, Bron. I’m thrilled to work with you again. Your interview this week opened my eyes to the two-part system. If we can share knowledge and help fellow South Africans understand better, we’ll achieve a great deal. Michael Cardo’s book on Peter Brown emphasizes opening people’s eyes. Our role is to educate, not criticize. If we can do that, even in a small way, we’ll have achieved a lot. Bronwyn Nielsen, founder of the Nielsen Network, and I’m Alec Hogg from BizNews.com.

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