Sacci index the second to show business confidence rebounding

Business confidence improved last month but remains vulnerable to volatility and a weak economic backdrop, the South African Chamber of Commerce and Industry (Sacci) said on Thursday.

Sacci’s business confidence index (BCI) rose by 4.1 points from July to 95 in August — nearly the same level as in June, when it registered 94.9 points, the business group said.

“The upturn in the Sacci business confidence index in August must be judged against a background of volatility and a weak economic base,” Sacci said.

“The short-term unpredictable nature of the BCI will probably continue until the end of the year unless the domestic economy undergoes substantive changes that would support more positive results,” it said.

The pickup in Sacci’s index mirrors the trend in a similar index compiled by the Bureau for Economic Research and Rand Merchant Bank, which was released on Wednesday.

That index showed that business confidence rose by six points to 47 in the third quarter, after an 11-point plunge in the prior quarter.

Sacci said the fact that the index rose despite the impact of the violent protests at the Marikana mine during the month was “evidence of the resilience of South African businesses in a challenging environment”.

But the business group said it was concerned that the investment appeal of local mines, which were already under severe operational and competitive pressure, was burdened by militant behaviour.

Six of the components of the BCI were positive last month — retail sales, vehicle sales, inflation, share prices, precious metal prices and municipal services.

But manufacturing, exports, imports and the rand’s exchange rate all put negative pressure on the index.

Construction and real financing costs were neutral.

Source: Business Day BDlive

Jacob Zuma is criticised as former ANC youth leader says the president sided with mine owner when 34 were killed

They were there in their thousands, leaning against tin shacks or sitting in the dusty veld: miners and their wives still looking for answers after a massacre by South African police that left 34 striking workers dead. A red T-shirt worn by a rally organiser seemed to offer one, stating: “Fuck capitalism.”

The huge crowd erupted as a charismatic young politician, Julius Malema, took the microphone. He is seen by some as a dangerous demagogue, but to the grieving, angry community at the Lonmin mine in Marikana he came as a messiah offering a radical future.

“The British are owning this mine,” he said. “The British are making money out of this mine … It is not the British who were killed. It is our black brothers. But it is not these brothers who are mourned by the president. Instead he goes to meet capitalists in air-conditioned offices.”

Malema was expelled this year as president of the youth wing of the governing African National Congress after falling out with President Jacob Zuma, whom he accuses of failing to challenge “white monopoly capital”. He has since been in the political wilderness; once contemptuous of the media, he now courts it. As the Marikana tragedy lays bare discontent over inequalities 18 years after apartheid, he senses his moment.

“President Zuma said to the police they must act with maximum force. He did not say act with restraint. He presided over the murder of our people and therefore he must step down. Not even apartheid government killed so many people … From today, when you are asked ‘Who is your president’, you must say ‘I don’t have a president’.”

There were cheers from people whose votes the ANC can no longer take for granted after 18 years in government.

It was the promises of a militant union that stirred violence at Marikana, where the ANC-aligned National Union of Mineworkers has been losing support. Malema hopes this will be mirrored on the national stage, where he accuses the ANC of failing to pursue economic freedom as it did political freedom, leaving millions of black people poor and disenfranchised. He wants mines to be seized from private companies and nationalised. The call appears to be gaining traction in Marikana, where workers are demanding from Lonmin, whose HQ is in London, a wage increase from 4,000 rand (£300) to 12,500 rand a month.

“Lonmin treat us like dogs,” said Thembelani Khonto, 24. “When you’re underground, it’s like you’re a slave and they don’t know you. But on the surface people who don’t do anything in offices are earning more than us.”

Siphiwo Gqala, 25, said he sometimes spends up to 14 hours a day underground but does not receive overtime pay. “It’s dangerous work,” he said. “Sometimes you go down there and a rock falls and you die. Big vehicles can come and kill you.” Recalling Thursday’s massacre, he said: “I’ve never seen something like that: people killed like chickens. One of my friends is still missing. I don’t know if he’s in the hospital or the mortuary.”

The impact on the community will be far-reaching, added Gqala, who lives in a shack because house rentals are too high. “Women come here from Eastern Cape with their husbands, who are the breadwinners. If someone has five children, how will they live? I have two young brothers depending on me. What if I die? Who’s going to look after them?”

The conditions leave people like Gqala looking for radical solutions. “The mine must be nationalised. We support Julius Malema and the youth league for saying the mines must be nationalised. Now they’re starting to shoot us. If we die today, all of us must die: we no longer want to work here.”

Two days after the shooting, in which 34 people died and 78 were injured, many families are still waiting to learn the miners’ fate. A casualty list has still not been published and there is little information on who is dead, injured or under arrest. Wives have been turned away from local clinics and hospitals.

A 22-year-old woman, who did not wish to be named, had lost a loved one in the shooting. “He was shot in cold blood,” she said. “My tears have not dried; I cried all day. I’m worried about things like who’s going to feed the kids he left behind. No one is going to give the love to his children like their father.”

Elizabeth Makana, 48, a widow whose brother-in-law was wounded, said: “They treat the miners like dogs. The miners take the risk to dig platinum, but the people who sit in offices make the money.”

Lonmin defended its treatment of mine workers. A community development brochure published by the company describes extensive health, education, infrastructure and economic projects in the area. Spokesman James Clark said: “We absolutely recognise the hugely positive relationship we have with communities living in the area and doing the best we can for them and their families goes to the heart of our business. It’s why we do so much around health and education, but we’re not complacent. We do the best we can and try to do better every time.”

That will not satisfy Malema and his constituency, however, who argue that the ANC has been too moderate for too long, bending the knee to western corporations. Flashpoints like Marikana expose the fissures in a party that contains capitalists and communists.

Aubrey Matshiqi, a research fellow at the Helen Suzman Foundation, said: “I think the people of Marikana, particularly the miners, see themselves as the manifestation of the gap between mineral wealth and socioeconomic conditions. The death of so many miners has amplified the extent to which Julius Malema’s views on mine nationalisation resonate with the people in the area.”

He added: “You have the ANC that some people believe has been too pragmatic and sold out and bent over backwards for foreign capital at the expense of the people. Julius Malema suggests that a better life for all would be possible under someone like him. If he is wrong, you will have populism and disappointment that will lead to conflict.”

Source: Guardian UK

ANC won’t heed yesterday’s man.

In the same week in which Trevor Manuel delivered the National Planning Commission’s National Development Plan to President Jacob Zuma, recruitment group Adcorp released statistics showing South Africa’s labour productivity has fallen to its lowest in 46 years. This is decidedly not a good place from which to review the hopes contained in the development plan.

The numbers are somewhat confusing at first glance. Superficially, output per worker has risen consistently. The problem appears to be that, although labour productivity is recognised as being of overarching importance, there is no commonly agreed method for measuring it. That means, of course, that you can get the numbers to do whatever suits your book at the time.

According to Adcorp, in 1967 the average worker produced R63,162 of real output a year. In 2012, however, real output per worker had escalated to R143,412. You can imagine how well that sits with trade unionists. “Look how workers are performing,” they can crow, “yet their wages don’t reflect these huge gains.”

But output per worker isn’t produced just by workers. There’s land, capital, and entrepreneurial management to be taken into account too. Adcorp economist Loane Sharp argues that a better procedure is to standardise the output per worker measured by the amount of capital used in production. That yields output per worker per unit of capital.

And, on that basis, the numbers look dreadful. In 1967 the annual output per worker was R7,297 a year. It is now R4,924. That’s a fall of 32.5%. This explains, says Sharp, why labour’s share of national income is at a record low.

These are not numbers trade unionists will want to contemplate. But the unalloyed fact is that labour’s contribution to the common weal has fallen drastically, and it is probably fair to ascribe much of this to the intervention of trade unions. If you just look at the number of stoppages and strikes experienced by this country over the last few years, it explains why we are entitled to call ourselves the strike capital of the world.

Seen against that background, what is the National Development Plan telling us? It cannot be anything other than that we cannot continue down this path. Manuel has already said, though not in such impolite terms, that unless the pace of change and development is accelerated we are heading for the tubes.

Is anyone in the African National Congress (ANC) actually listening? I doubt that very much. I think Manuel is considered yesterday’s man and, in any event, he cannot muster the kind of grassroots support to command respect in his party’s ruling circles.

Not long ago that I wrote in this column of the dangers facing us if we do not encourage big innovation. Joshua Kurlantzick, writing in Businessweek (June 28), noted that, “Brazil and India have used the levers of state power to promote innovation in critical targeted sectors of their economies, producing world-class companies in the process.”

These are our Brics emerging market partners. But we aren’t following their example. Council for Scientific and Industrial Research CEO Sibusiso Sibisi says the institution’s discretionary budget, which allows it to do critical high-risk research, is in decline.

“We run the risk,” he told Engineering News, “as the discretionary budget declines, of becoming a contract researcher, and not doing proactive research required to address current and future challenges.”

Finally, it is noteworthy that the NDP arrived on the same day that Nedbank chairman Reuel Khoza repeated concerns he first expressed in his annual chairman’s statement and for which he became a target for the ANC’s deep displeasure. South Africa is on the road, he wrote, to becoming a rogue state, an expression that has been used about us before.

Source: BDlive

Business confidence slumped unexpectedly to its lowest level in 12 years last month,  a key index showed on Tuesday, reflecting poor prospects for growth in the economy this year.

The confidence index compiled by the South African Chamber of Commerce and Industry (Sacci) fell to 90.9 from 94.9 in June, suggesting the business environment was deteriorating.

That is bad news for investment in the economy, which is still mainly driven by the private sector.

“The latest move in the index indicates that business confidence remains highly fragile and unpredictable,” Sacci said  in a statement.

Sacci CE Neren Rau said the fall was a surprise after an increase in the index during June. Further declines were expected given the uncertain economic outlook, which had been affected by the global downturn, he told Business Day.

“We were really hoping that the June recovery, though mild, was the beginning of an upward trend — we didn’t expect a further step back,” he said.

Sacci said it was concerned about the slowdown of economic growth on a global scale and the widespread downward revision of expected growth rates for South Africa.

Many analysts have lowered their predictions for growth this year to 2.5%, from between 2.7% and 2.9% earlier. The economy grew by 3.1% last year.

“Without stronger business confidence, we won’t get the economic recovery back on track,” Meganomics economist Colen Garrow said.

Sacci said it was particularly worried about the effect slowing economic growth would have on  South Africa’s trade deficit and  balance on the  current account, which is a country’s broadest measure of trade in goods and services.

During the first half of this year, South Africa’s trade deficit widened to R51.1bn, compared with R2.5bn in the same period last year.

That would partly be due to the fact that most of South Africa’s manufactured exports go to Europe, which is sliding into a recession.

The trend also reflects lower commodity prices and weaker demand from China, South Africa’s biggest single trade partner.

“Foreign trade remains a key contributor in supporting and nurturing local business confidence,” Sacci said.

Sacci’s index is compiled from 13 economic indicators, including manufacturing, exports, construction, share prices, real financing costs and the rand’s exchange rate.

Source: Business Day BDlive

03 May.

Microfinance bodies merge into single fund.

A new umbrella microfinance agency, which will fall under the Industrial Development Corporation (IDC), will use the new Postbank facilities at post offices around the country to fast-track loans to small businesses.

Announcing the establishment of the SA Finance Enterprise Agency (Safea) in Parliament yesterday, Economic Development Minister Ebrahim Patel said the aim was to encourage start-up businesses through the amalgamation of SA Microfinance Apex Fund, Khula Enterprise Finance, and the IDC’s small-business lending book.

The amalgamation of the agencies would lead to administrative savings of about R20 million a year, Patel said. This saving would be fed into supporting finance products for small businesses.

The cabinet, including Finance Minister Pravin Gordhan, had been fully supportive of the project, reported Patel, in the presence of IDC chief executive Geoffrey Qhena and senior IDC and Economic Development Department staff.

Patel did not divulge the extent of the loan book but it is understood to be in the region of R3 billion.

“Cabinet was quite clear, we needed to speed up implementation (of the new agency) so that staff are not distracted with a lengthy process of bringing together three lending programmes. A new agency could rapidly take up the challenges of expanding enterprises and growing jobs,” he said.

The focus would be on including small businesses in the large infrastructure projects spearheaded by Eskom and Transnet. “The IDC can bring… small businesses into the mega projects that it finances,” Patel said.

President Jacob Zuma announced the intention to create one agency in his State of the Nation speech in February.

Patel said that the business of the agency would be to focus on investing in small businesses that support the productive sectors, including small-scale manufacturing, agro-processing, infrastructure development, mining support services, the green economy and tourism.

The minister said that falling under the wing of the IDC, the agency would be able to leverage the power of its balance sheet and tap into its experience in managing a loan book.

IDC chairwoman Monhla Hlahla said people who grew up in the townships would know that many entrepreneurs were scared to growth their businesses. “They would rather start another enterprise than enter into the formal sector,” she said. The new entity would “walk with them in the path of growth into larger entities”.

Source: Business Report

Recreated Black Business Council aims at giving financial power to the country’s majority

The newly re-created Black Business Council (BBC) is the economic version of the ANC, says its president, Ndaba Ntsele.

Whereas the ANC delivered political power, the BBC hopes to give “the people” economic power.

Black people need to control the commanding heights of the economy, and this is the goal of the BBC. “Our intention is that black people should control the economy as the majority in the country,” he says.

The latest reincarnation of the BBC was born out of the disillusion of its members with Business Unity SA (Busa), which they felt was weak on transformation and dominated by white business interests.

This is in spite of the fact that the leadership structure of Busa is predominantly black, including both a black president and a black CEO.

The chairman of its transformation committee was young business mogul Sandile Zungu, one of Jacob Zuma’s most ardent financial backers when he was vying for the presidency of the country.

Previous incarnations of the BBC have also aimed at capturing the commanding heights of the economy. Ntsele, who is also CEO of Pamodzi Investment Holdings, has nothing new to say about how they are going to do it this time.

“We’ll do it the way the Afrikaners did it. They came together and they formed corporations. They put money together and they had access to funding. That is how you get control of the economy.”

Busa, which was formed in response to the Mbeki government’s plea that business should speak with one voice, is less focused on black or white control of the economy than on the immediate goal of growing the economy, creating jobs and developing skills.

Those skills won’t be developed in sufficient numbers until blacks control the big companies, says Ntsele. “How do people get skills? They get skills by being given the opportunity to fail.”

Because most of the big legal and accounting firms are controlled by whites, young black lawyers and accountants are not being given the same chance as their white counterparts to get skilled, he says.

He paints a picture of a largely white-controlled economy determined to keep black South Africans at a disadvantage.

That is why the BBC opposes labour broking, he says.

“Most of the big [white-owned and controlled] businesses prefer to use contract labour, so their employees are not unionised.”

To the argument that contract labour is essential to many businesses in the services sector, he retorts that (white-owned) restaurants don’t employ (enough) blacks as waiters.

When this is queried, he says, okay, maybe they do. But they’re foreign blacks, not South African blacks, because South African blacks would have to be paid more.

While Busa tries to transcend divisions between black and white business, to focus on what unites rather than divides them, doesn’t the re-creation of a “black business council” merely exacerbate the divisions? Shouldn’t he and his fellow travellers be moving in the opposite direction? “That would be the ideal,” he says. “Busa is the ideal. But once you’re inside, you see that things don’t work like that. Because we cannot ignore the fact that Busa was started by white businesses and black businesses.”

What’s the problem?

“The problem is, and I’m talking as a businessman, that when I buy into a company, I either have a controlling stake or I don’t have any control. We said we wanted equality; let’s come together and have the same vote. We couldn’t agree on that.”

Ntsele doesn’t buy the argument that it is increasingly meaningless to talk, as he constantly does, of black and white companies when more and more blacks are moving into senior management positions and directorships in “white” companies. And that through institutional shareholdings, there are more black investors in many of these companies than whites.

“There is no big black ex-white-controlled company that has a majority shareholding. There’s a difference between a black manager of a white-owned company and a shareholding. MTN might have a black CEO, but look at the shareholding. Who owns that company? It’s not black people who own the company.”

He acknowledges that black and white businesses face many of the same challenges.

“But it’s worse for a black business person because we don’t have a balance sheet. We’re not the same. Most black people don’t have a balance sheet. Our parents never gave us something that we could start a business with.”

Access to funding is the biggest single thing holding back the development of black business, he says.

“Why can’t they get access? That’s something we’re going to research and find out because that’s the biggest stumbling block.”

One route would be giving blacks title to more land against which they could borrow. Another is accessing the “over R1.1-trillion the government has announced for infrastructure spending. We must figure out how a part of that money is going to filter through to the black people of this country.”

The BBC’s eagerness to cosy up to government (no fewer than four cabinet ministers were given the floor, and celebrity treatment, at its recent founding conference) should perhaps be seen in this context.

“We’re an independent entity, but we’re going to work alongside our government,” he says, before providing a revealing take on a line from former US president JF Kennedy. “You know the famous quote that you must look not only at what the government is doing for you, you must also do something for the government?”

Ntsele, 59, who started his career as an entrepreneur selling newspapers, had plenty of access to funding when he needed it, even under apartheid.

“In the early 1980s, Standard Bank and Barclays gave me a lot of marbles to play the game. They gave me a lot of money. And they were white managers and white banks.”

He made lots of money building petrol stations and through property deals. His big break was securing the licence for Nike in Africa. In 2007, he was the Ernst & Young Entrepreneur of the Year.

His big dream was to control a listed South African gold company and, in 2006, he listed Pamodzi Gold “amid a flurry of trumpets”, according to a report in Mining Weekly.

But he ran it into the ground and, in 2009, it was suspended from the JSE and liquidated, with the loss of 13000 jobs. He blamed his failure on the “shenanigans” of the Industrial Development Corporation (IDC), which pulled the plug on him when he consistently failed to repay a R400-million debt. He appealed to President Zuma for “timely and decisive intervention”.

The IDC was “playing silly games with the lives of our indigent and desperate people”.

His version of events differed sharply from that of the IDC, and his credibility was left in tatters.

Is he the right man to lead the BBC’s assault on the commanding heights of the South African economy, then?

“As a businessman, you win some, you lose some,” he says. “One swallow doesn’t make a summer.”

Source: Sunday Times

The public launch of Corruption Watch is arguably the most important political development in SA since the Polokwane putsch of 2007

The public launch yesterday of Corruption Watch — an initiative of the Congress of South African Trade Unions that will be funded independently but which has been endorsed by the government and a range of civil society and business organisations — is arguably the most important political development in South Africa since the Polokwane putsch of 2007. That is because it strongly reinforces the Zuma administration’s decision to opt for clean government rather than the “tenderpreneur” culture epitomised by now suspended African National Congress (ANC) Youth League president Julius Malema and the style of crony capitalism as practised by officials in Limpopo.

This was a choice Mr Zuma was always going to have to make, although he managed to avoid doing so for a remarkably long time while he consolidated political power after defeating former president Thabo Mbeki. The decision to discipline Mr Malema was the first definitive step in the right direction; the commission of inquiry into the arms deal the second; and the crackdown in Limpopo the third.

Justice Minister Jeff Radebe’s enthusiastic support for Corruption Watch and all that implies is surely the point of no return.

And not a moment too soon; tolerance of corruption, often disguised as affirmative procurement or black economic empowerment, was a terrible price for the country to have to pay to settle a power struggle within the ANC.

As revealed by the Treasury’s initial probe of Limpopo’s finances, corruption has rapidly become a way of life in parts of South Africa. Auditor-general Terence Nombembe uncovered more than R20bn in unauthorised expenditure in 2010-11, much of it money that was simply stolen, while Willie Hofmeyr, the former head of the Special Investigating Unit, estimated that the government loses about R30bn to corruption every year.

PricewaterhouseCoopers’ most recent annual global survey of South Africa’s CEOs found that 66% were concerned about bribery and corruption, well ahead of the global average of 34%, and a TNS poll towards the end of last year found that 83% of adults in the country’s metropolitan areas believed corruption to be rife.

While there is reason to believe the government is sincere in its desire to eradicate corruption, the best intentions are all too often thwarted by party-political imperatives. The Corruption Watch initiative is therefore an essential weapon in the battle. Make no mistake, this is war; there are too many people whose livelihoods now depend on sucking the state dry for the victory to be an easy one.

While Corruption Watch’s investigative capacity will be limited, the importance of the organisation’s emphasis on broad public and corporate participation in the campaign, and its plan to make widespread use of social media, cannot be underestimated. In the words of director David Lewis, whose past experience as chairman of the Competition Tribunal stands him in good stead: “No matter how good the police are, and as important as it is to prosecute, we’re not going to solve this scourge by serial prosecution but by people standing up to it in both the public and the private sector.” Where corruption has become a way of life, the public must be persuaded that it is antisocial behaviour and that its practitioners should be ostracised.

It has been suggested that South Africa follow the example of the UK and US, both of which have enacted specific anti-bribery laws. But corporate South Africa can pre-empt the legislative process by taking proactive measures to combat corruption. Some multinational groups — BHP Billiton and Anglo American are examples — already have policies in place to help their employees avoid corrupt dealings with the state, and this should become the norm. No institution is better placed to intervene to this end than the JSE; combating corruption is surely a fundamental principle underpinning sound corporate governance.

Source: Business Day

A survey finds 37% of privately held business owners in South Africa cite red tape as their chief constraint, followed by a lack of a skilled workforce, at 36%.

Overregulation and red tape are the biggest constraints to business expansion in SA, according to a survey by accounting, audit and advisory firm Grant Thornton.

The survey was based on the views of CEOs, chairmen and business owners in the fourth quarter of last year.

Red tape was now as pervasive a problem in SA as in other Brics (Brazil, Russia, India, China and SA) countries, Grant Thornton Durban managing partner Deepak Nagar said yesterday.

The survey found 37% of privately held business owners in SA cited red tape as their chief constraint, followed by a lack of a skilled workforce, at 36%.

Durban Chamber of Commerce and Industry CEO Andrew Layman said the results were “spot on” and SA’s regulatory environment, for small businesses in particular, needed to be reviewed.

The increasing complexity of regulations such as additional tax or governance requirements, labour issues, black economic empowerment, the time taken to register companies or change directors’ names was stunting the growth of business, Mr Layman said.

The second-biggest constraint to business globally was reduced demand for products — the effect of economic problems in the US and Europe. In SA, the second-biggest constraint to business was a shortage of skilled staff, said Mr Nagar.

Keith Brebnor, CE of the Johannesburg Chamber of Commerce and Industry, said it had become “very intimidating” for young people to start a small business in SA because of the onerous regulatory environment. Dealing with crime and a lack of skills also added significantly to the cost of doing business in SA, he said.

The survey found business owners in SA were more optimistic in the fourth quarter of last year compared with their global counterparts. In SA, 58% of respondents were positive about the state of the economy, compared with 16% globally and 40% in Bric countries. At the end of 2010, 60% of South African business owners were optimistic.

The survey found 27% of KwaZulu-Natal business owners had given serious consideration to leaving SA permanently in the past 12 months, as a result of the high crime rate and political uncertainty. In comparison, 23% of Gauteng’s business owners, 19% in the Eastern Cape and only 11% in the Western Cape had considered emigration.

There was a downward trend on crime, with 46% of business owners across SA affected by crime in the past year. The survey found 52% of Gauteng businesses were affected by crime, and 39% in the Western Cape and Eastern Cape.

Nevertheless, “it is one in two respondents … the impact of crime on South African business is still unacceptably high,” Mr Nagar said.

The survey found that 53% of South African businesses were affected by poor government service delivery, with the Eastern Cape the province that was the most affected (63%), followed by Gauteng (50%) and the Western Cape (47%). In KwaZulu-Natal, 44% of business owners were affected by poor service delivery.

When asked which service delivery elements affected businesses the most, 41% of businesses in SA rated utilities such as gas and electricity as having the greatest negative effect.

Other service delivery items included billing problems, taxation, poor roads, potholes and malfunctioning traffic lights.

Source: Business Day

Cosatu laments ‘white, capitalist-owned’ JSE. More than 80% of the JSE is accounted for by the large banks and the few companies in the traditional sectors: mining and energy, the Congress of South African Trade Unions (Cosatu) has said.

“All these companies are white, private, and capitalist-owned and they are increasingly being foreign-owned,” Cosatu president Sdumo Dlamini said in his comments on the 100th anniversary of the ruling ANC, of which the union federation is an ally.

There was “significant foreign ownership” of many of these companies.

“Sasol is about 30% foreign-owned and Arcelor-Mittal is 65% foreign owned. Massmart is 60% foreign-owned, Shoprite is 35%, Truworths is 50%, Foschini is 40%, JD Group is 40%, Lewis is 30%, Pick n Pay has less than 10%, Spar under 20% and Mr Price and Woolworths 20%.

“Absa is 56% foreign-owned whilst Standard Bank is at least 40% foreign owned,” Dlamini wrote.

The fact that major conglomerates such as Anglo American had shifted their headquarters and had listed abroad was “an indication of the increasing foreign and imperialist ownership of the means of production in South Africa”.

Dlamini said that economic power was still “very much concentrated” and had increasingly become externalised.

“The drive towards foreign ownership, combined with private ownership of the Reserve Bank, deepens the transformation of the South African economy away from working class control. The centenary celebrations must mean a reversal of this painful reality of our economy.”

Dlamini added that the present economic reality translated into a situation “in which African people remain at the lower end of the ladder”.

It was for this reason that since 1994 Cosatu had remained “consistent in emphasising that the liberation movement must use its position of political incumbency to create a sustainable economic power base for the majority of the blacks and Africans in particular”. — I-Net Bridge

Source: Mail & Guardian

The ease of doing business in South Africa went up a notch this year to rank 35th out of 183 economies, according to a report released by the World Bank.

One of the factors contributing to South Africa’s improvement was the new Companies Act, which eliminated the requirement to reserve a company name and simplified the incorporation documents.

The report said South Africa made transferring property less costly and more efficient by reducing the transfer duty and introducing electronic filing. Another factor was the introduction of a new process to facilitate the rehabilitation of financially distressed companies.

For the fourth consecutive year Mauritius, with a global ranking of 23rd, was the easiest place in sub-Saharan Africa for an entrepreneur to conduct business.

The report, Doing Business 2012: Doing Business in a More Transparent World, assesses regulations affecting companies in 183 economies and ranks the economies in 10 areas of business regulation, such as starting a business, resolving insolvency and trading across borders. This year’s report covers regulations evaluated from June 2010 to May 2011.

The rankings on ease of doing business have expanded to include indicators on access to electricity. In this category, South Africa went down two places to 124.

Having an electrical connection installed was most effortless in Iceland, Germany, Taiwan, China, Hong Kong and Singapore.

This year Singapore was the leader on the overall ease of doing business, followed by Hong Kong, China, New Zealand, the US, and Denmark.

South Korea was a new entrant to the top 10.

The global report shows that governments in 125 economies out of 183 measured implemented a total of 245 business regulatory reforms, 13 percent more reforms than in the previous year.

Between June 2010 and May 2011, 36 of 46 governments in sub-Saharan Africa implemented reforms in at least 10 areas measured by the report.

Augusto Lopez-Claros, the director of global indicators and analysis at the World Bank, said: “At a time when persistent unemployment and the need for job creation are in the headlines, governments around the world continue to seek ways to improve the regulatory climate for domestic business.

“Small and medium businesses that benefit from these improvements are the key engines to job creation in many parts of the world.”

Against the backdrop of the global financial and economic crisis, more economies strengthened their insolvency regimes in 2010 and 2011, the report read.

A total of 29 economies implemented insolvency reforms, up from 16 the previous year and 18 the year before.

Source: Business Report