The unintended consequences of Ramaphosa’s billions – Daily Newsletter

Published on:

27 May 2014, 10:55 am

Hi there,

Many in the business community have put their hope in the country's new Deputy President Cyril Ramaphosa. A member of the elite Riverclub Golf Club; some-time buyer of the rich's ultimate gamble, buffalos; a billionaire many times over. The former trade unionist is favoured by the business community because he's "one of us". But is he really?

Last night Ramaphosa announced he would be divesting from Shanduka, the vehicle created in 2001 to house his business interests. Shanduka's annual report detailing assets accumulated by the Ramaphosa name is sobering. It possesses a treasure chest of Ali Baba proportions ranging from 1% of Standard Bank (worth R2.3bn) to a slice of MTN Nigeria (bought for almost R4bn) and 9% of Lonmin (worth R2.5bn) through to one of SA's four Coca Cola bottlers and the master franchise for McDonalds SA. Forbes Magazine estimates Ramaphosa as being worth $700m. That may be conservative.

Charlie Munger lamented at the Berkshire Hathaway AGM that in today's world, it no longer seems to matter how the money was made. In Ramaphosa's case, it surely does. His fortune was provided through the largesse of primarily white directors acting on behalf of shareholders because they regarded him as the most acceptable face of the New SA. There were no buckets of elbow grease or anxious hours balancing overdue debtors, stressed bank managers and angry creditors. Ramaphosa dealt in billions not thousands. His money came all too easily.

Given his experience, how could Ramaphosa possibly have a realistic perspective of how wealth is actually created? Of how difficult it is to actually survive in business? Hopefully those business leaders so eager to win him over with generous grants and shareholder largesse do not end up rueing the unintended consequences of their decision.

Best,
Alec

@alechogg I'm glad someone has had the guts to say it like it is. Almost. To put it bluntly he is a BEE billionaire http://t.co/XrOTBh5S5l
— Clifford (@KoosPatoos) May 27, 2014

@alechogg the perception re: his business acumen is all that is needed. The people actually starting & running businesses will do the rest.
— Mvi Hlophe (@MviHlophe) May 27, 2014

@alechogg Loved ur newsletter this morning re Cyril. The gap between corporateurs & true entrepreneurs is not appreciated by many.
— Tefo Mokaila (@LetonaTefo) May 27, 2014