Paul Janisch

Oh the irony

Zuma received an honorary doctorate of leadership from the Limkokwing University of Creative Technology on his two-day visit to the Southeast Asian country.

The president said South Africa had made substantial progress in reforming education post-apartheid.

"Government's commitment to education is witnessed by the fact that education is allocated 20% of total state expenditure, receiving the largest share of government spending," Zuma said.

via www.news24.com

If you cannot see the irony in these three paragraphs then you are an ANC patsy. If you are new to South African politics I'll help you.

Zuma is a leader's backside. He's good at state plunder, patronage and creating children - nothing else. Perhaps the Malaysians don't offer doctorates for those achievements.
And then there is the ANC's tried and failed philosophy of quantity over quality. They genuinely believe that by allocating lots of cash to something you'll produce results. Yet our education system lets down about half a million matriculants every year.

You'll see the same feature within the BEE world too. And Rob (being Rob who has no credibility) thinks that if you double the training budget you'll get double the results.

Clever hey?

Luminance issue won’t blow out

This issue is not going away. Rob has now told Parliament that

funds would be prioritised to support productive sectors of the economy, namely agriculture, mining, manufacturing and value-added services such as tourism, business process services and the creative industries. Government agencies should make every effort to find local suppliers of finished, intermediate and capital goods, he said. He stressed that the government's industrial and procurement programmes were focused on deepening industrialisation, value addition and job creation. This meant productive sectors of the economy had to be prioritised. "Our resources and incentives ought not to be deployed to support the import of finished products," he said.

Whilst the deal still leaves me a little uncomfortable I still think there is nothing wrong with the NEF loaning money to a black woman in principle. Any person who is able to easily access funds because of their nationality, race, gender, sexual persuasion etc would do so. We know that under apartheid that if you were Afrikaans speaking and white (and a good Nat) then you would be granted all sorts of favours by the government. This is nothing new. The question that is not being answered is "Why did the banks not want to fund this business?" The press are not picking up on this. Surely if your name is Judy Dlamini and you are the wife of FirstRand CEO Sizwe Nxasana then some financial institution will make every attempt to give you finance for this deal. But they didn't. Therein lies the issue.

I suspect that the banks wouldn't go for it because it's a bad business model. It's that simple. I'm going to expose my ignorance of loan repayments under these circumstances in an attempt to illuminate the inherent risk of this venture. I know from a shop owner who had a shop in Hyde Park that they paid R30k/month rent for 33m² – that makes it R910/m² (Luminance has 700). Here is an estimate of the overheads to be paid on a monthly basis.

Description	Monthly cost
Rent	R500,000
Loan repayment	R400,000
Salaries	R200,000
Other costs	R50,000
TOTAL	R1,150,000

My figures work like this:

Rent – 700m² at R910/m² comes to R636,500. I believe that you can negotiate this rate based on a variety of criteria – I dropped the rent to R500k.

Loan repayment – I used a very simple calculator from ABSA's website. I based it on a capital amount of R32m at a prime rate of 8.5% (the calculator doesn't let me vary this). The payment period would be 120 months (10 years). When I asked those in the business of these kinds of loans they couldn't give me a straight figure so I made up my own. It is most likely that they are paying a different rate

Salaries – 20 people at an average of R10k/month. I think there might be more people than that in the business.

Other costs – security, stationery, telephone etc.

What am I missing here? Stock.  Stock is an important one and this stock is not cheap. Also those in the retail business tell me that fashion is a difficult business as well, which adds to the complexity. I suppose we should add on another R500k for stock. Here is the re-calculated table.

Description	Monthly cost
Rent	R500,000
Loan repayment	R400,000
Salaries	R200,000
Other costs	R50,000
Stock	R500,000
TOTAL	R1,650,000

These figures are no doubt completely out, so to be fair I'll halve them – R825,000. This means that Luminance has to turnover R9,9m to break even. To do this they would need to sell 396 dresses at R25k per dress. To make a profit they'd need to sell 397 dresses. This requires a lot of people who have a lot of money coming in and buying Luminance stuff.  Also every other boutique in Hyde Park is competing for the same spend, and most of those have established clientele with much lower overheads.

I put out it again – this is not a business that any savvy banker would ever want to bankroll for now very obvious reasons and this is where the mettle of the NEF will be tested. If Luminance's lights get switched off before the loan is repaid then we will see the true colours of this deal. Should this happen then we have every right to question the NEF – if not then we need to leave this deal alone altogether.

Construction BEE targets may have changed

Or have they. Technically the 5-7 targets should have come into effect on the 5^th of June 2013. The only problem now is, when does the measurement period start. Rob in his infinite wisdom (which he does not have in abundance) decided that the DTI's generic codes would kick in mid-month. In other words if your financial year ended after the 9^th of February then the new targets would apply to you. A grossly unfair state of events for those companies whose year ends at the end of February. This time things are a little different. IRBA is without doubt the more popular verification authority and it is run by accountants. Accountants like certainty and black and red (and white too) – the way they would interpret this is that all measurement periods commencing after the 5^th of June 2013 would be subject to the new targets. I agree with this, but it is unlikely that the personnel at the Construction Sector Council and the DTI would ever understand usch an international standard. Alas we are at their mercy. I must then conclude that all companies subject to the code should use the new targets from the 5^th of June 2013.

For your convenience and mine, I have put up those generic codes for Construction and BEPs.

Ownership (Construction and BEP)

Ownership. Total points - 25
Description		Weighting points	Compliance Target Year 5-7
	Voting rights
Exercisable voting rights in the enterprise in the hands of black people.		4	30%
Exercisable voting rights in the enterprise in the hands of black women.		2	10%
	Economic interest
Economic interest in the enterprise to which black people are entitled		5	30%
Economic interest in the enterprise to which black women are entitled		2	10%
Economic interest of the following black natural people in the enterprise black designated groups black participants in employee ownership schemes black beneficiaries of broad-based ownership schemes; or black participants in co-operatives are entitled		5	5%
	Realisation points
Ownership fulfilment		1	No restrictions
Net value		6	25%

Management (Construction and BEP)

Management Control. Total points –10
Description		Weighting points	Compliance Target Year 5-7
	Board participation
Exercisable voting rights of black board members using the adjusted recognition for gender (ARFG)		5	40%
	Top management participation
Black senior top management using the adjusted recognition for gender (ARFG)		5	40% (year 5-7)

Employment Equity – Construction

Employment Equity. Total points – 10
Description	Weighting points	Compliance Target (Years 5-7)
Black employees in senior management as a percentage of all such employees using the ARFG	3.5	60%
Black employees in middle management as a percentage of all such employees using the ARFG	3.5	75%
Black employees in junior management as a percentage of all such employees using the ARFG	2.5	80%
Black disabled employees as a percentage of ALL office-based employees using the ARFG	0.5	3%

Employment Equity – BEP

Employment Equity. Total points – 10
Description	Weighting points	Compliance Target (Years 5-7)
Black disabled employees as a percentage of ALL office-based employees using the ARFG	0.5	3%
Black employees in all management categories as a percentage of all such employees using the ARFG	9.5	60%

Preferential Procurement – (Construction and BEP)

Preferential Procurement. Total points – 20
Description	Weighting points	Compliance Target (Years 5-7)
B-BBEE procurement spend from all suppliers based on the B-BBEE procurement recognition levels as a percentage of total measured procurement spend	12	70%
B-BBEE procurement spend from all Qualifying Small Enterprises (QSEs) or from Exempted Micro-Enterprises (EMEs) based on the applicable B-BBEE procurement recognition levels as a percentage of total measured procurement spend	3	15%
B-BBEE procurement spend from any of the following suppliers as a percentage of total measured procurement spend:
suppliers that are 50% black owned	3	12%
suppliers that are 30 % black women owned	2	8%

Is Mac Maharaj being coached by Comical Ali? I think he believes the bullshit he's feeding us.

Govt firm on equity stance - bullheadedness is cause for concern

The department’s chief director, Thembinkosi Mkalipi, rejected all the submissions made by business on the bill when he gave the department’s response to issues raised in public hearings. The objections business raised included the linking of penalties for serious noncompliance with the act to company turnover.

via business.iafrica.com

It's the fuckyouness of these irrational departments that are a worry. It would appear from all the press on the new codes that Rob is going to do the same thing - ignore what we want and do whatever it takes to convince us that he is a total failure and complete embarrassment to an already embarrassing party.

NEEEF Conference in Windhoek in September

This is the first major New Equitable Economic Empowerment Framework (NEEEF) conference is happening in Windhoek next month.  There are some really good speakers at the conference including a few people that I know quite well.  I'm hoping my good friend Gerhardus makes it as a speaker too.  The dates are Date: 25 & 26 September 2013 at the Safari Court Hotel & Conference Centre, Windhoek, Namibia.  The brochure is attached if you'd like to attend.  Otherwise you can email Odette at Intelligence Transfer Centre.   I'll also be speaking - and I would love to meet those people who so actively passed information onto me about NEEEF.   

Progressive Professionals Forum (no apostrophe needed)

PPF comprises of professionals, academia, intelligentsia and entrepreneurs who align themselves with progressive movements and who aspire to progressive i…………………………

So says the PPF's Facebook page. Do we get to fill in the rest of the sentence? How about this

(i)nvolvement of likeminded people who are inspired by the Verwoerdian model of racial exclusivity. Of course being progressive we would never mention that whites, coloureds and Indians are not welcome in this group. In our experience, progressives have an affinity for the African way with a bent towards people who are over concentrated in certain provinces like KZN.

The PPF is designed to woo the black professionals back to the ANC. It's apparently open to all races, sexes, persuasions and political parties but has aligned itself to the ANC. One of its luminaries is Verwoerd's protégé – Jimmy Manyi, known as jungle jim on this blog. jungle is a known racist, an institutionally protected racist who hides his disdain for everything non-African by couching his dogma under the guise of empowerment. I concur with Solidarity who are concerned that Manyi's ideals are going to infiltrate the top levels of the ANC through the PPF. I wouldn't be surprised if these ruminations haven't started germinating at the top.

The PPF was launched last week with a cry from Zuma to rally clever blacks.

President Jacob Zuma is wooing black professionals and opinion makers back into the ANC's fold ahead of next year's elections. And several high-profile figures who have been out in the cold are responding to his call – among them former Government Communication and Information System (GCIS) and Black Management Forum (BMF) boss Jimmy Manyi, who is organising the constituency; disgraced former national director of public prosecutions Menzi Simelane; and businesswoman Danisa Baloyi, who cooked her political goose by backing Thabo Mbeki ahead of the ANC's Polokwane conference in 2007. The three are among the founding members of the Progressive Professionals Forum (PPF), whose launch Zuma addressed in Sandton on Friday night.

That's the PPF. Its core is made up of a few disgraced characters. Do you remember Fidentia and the Living Hands Trust? That is where Baloyi really cooked her goose – she was a trustee on the board of the Living Hands Trust and as a result of her brilliant trusteeship she got booted off a number of boards. This in itself should be an alarm signal about the integrity of this forum.

Why then would you as a progressive want to join this band of merry people? As a progressive professional it's very likely that you contribute a large percentage of your income to SARS. SARS then allocates this money to Nkandla, helicopters to Nkandla, to assist in rampant corruption etc.

Might I suggest that the incomplete preamble on Facebook should go along these lines…..

If you are into racism, cronyism, incompetence, corruption, protected government employment and entitlement – the PPF is for you!!!!!

The most successful land reform projects were those where beneficiaries enlisted the help of commercial farmers

Democratic Alliance MP Lourie Bosman, a former president of farmers’ union Agri SA, endorsed the bureau’s findings and said the most successful land reform projects were those where beneficiaries enlisted the help of commercial farmers. "I therefore share the bureau’s findings on support. I have seen many farming projects fail for lack of it," he said. "There was often no expertise available and people didn’t know how to manage, or didn’t have the capital they needed."

As per BDlive today.  And the bureau found

TIGHTER margins in farming because of "fierce" local competition and the entry of global players will make it "virtually impossible" for small farmers to enter the sector, an agricultural think tank said on Tuesday, raising fresh doubt about the government’s land reform targets.

The Bureau for Food and Agricultural Policy also said land reform had been dealt a severe blow by the dismantling of support services for farmers in the years of political transition, the bureau said in its latest Baseline Agricultural Outlook.

 

 

BBC didn't make the cut as a Prasa BEE partner

Prasa’s empowerment partner selection process came under attack last year from the Black Business Council. The umbrella body’s general secretary, Sandile Zungu, said allowing Prasa to choose BEE partners was "dangerous" and that it fed into "the stereotype that BEE is about handouts".

 Mr Zungu could not be reached for comment on Thursday night.

Neither could Black Business Council CEO Xolani Qubeka, who was a bidder in the BEE process but was not selected.

via www.bdlive.co.za

This is good news.  It does show that Prasa is apparently serious about other players.  We all know that Zungu is Zoomer's big buddy - does ignoring his pronouncements indicate a decline in Zuma's power?  I fucking hope so