Asset-stripping, the ANC way

William Saunderson-Meyer says our ruling party possesses a grasshopper mentality


ANC’s grasshoppers strip the granary bare

South Africa isn’t run by a government. It’s been hijacked and is under the control of a cabal of asset strippers. 

This is a country not being governed to benefit its people. Instead, it’s being dismantled and sold off piecemeal to provide oodles of cash for a small political elite.

Asset stripping is one of the uglier manifestations of present day capitalism. While the phenomenon is modern, the script is ancient — straight out of Aesop’s fable of the industrious ant and the feckless grasshopper.

The story starts with a business assiduously building of its asset base over many decades, rather than declaring huge dividends for shareholders. Like the fabled ant, it’s actions are based on the philosophy of not gobbling the entire harvest but carefully salting away resources to protect against the lean times.

Unfortunately, asset strippers can sense juicy pickings like scavengers sense carrion. The strippers grab managerial control, often through the ploy of promising the greedy grasshoppers — um, shareholders — to “unlock value”. Meaning, let’s loll about in the sun and binge on the contents of the granary.

Anything that can be turned to cash is sold and soon a once-comfortably solvent business is reduced to hand-to-mouth survival, with nothing left to cushion it when the hard times come. As come, they always do.

And that’s exactly what the African National Congress and its partners in asset destruction, the Congress of SA Trade Unions and the SA Communist Party, are doing to South Africa (Pty) Ltd. They are commandeering at least a century of accumulated sovereign wealth and hocking it for dosh to splurge on Blue Label and sushi. 

These alliance grasshoppers have over the past 25 years financially eviscerated Eskom and South African Airways (SAA). Both entities are now technically bankrupt and neither is any longer fit for purpose, or feasibly salvageable without a trillion or so of investment.

After asset-stripping cadres gained the upper hand at PetroSA , they sold off the country’s entire crude oil reserve of 10m barrels at $28 a barrel, this at a time when the international price was closer to $40. All that “unlocked value”, straight into the pockets of some very fortunate offshore investors.

A fortnight ago, the Auditor-General, Kimi Makwetu, told Parliament that it was uncertain whether PetroSA could continue operating. So, too, the SA Nuclear Energy Corporation and its subsidiary, Pelchem.

In last week’s budget, Finance Minister Tito Mboweni painted a bleak picture of two state-owned concerns, the arms manufacturer Denel and Transnet, the logistics company. Both have been chowing their harvests as if there is no tomorrow, white-anting their own organisations through a deadly combination of theft and incompetence.

Although not yet in the same parlous condition as Eskom and SAA, Transnet wasted R54bn on locomotives not suited for SA networks. Forensic reports identified eight of its executives implicated in the looting of assets as far back as 2011, but they were issued with suspension letters only last week.

SA has  more than 700 state-owned enterprises (SOEs) and its unlikely that the picture is any rosier at many of them. But it is not only SOEs that have been turned into cash cows for the cadres. All of SA’s infrastructural assets have been looted or allowed to decay.

Rail and road infrastructure, which are the sinews of economic muscle, have wasted away, except where under control of private enterprise. Almost two-thirds of local government entities are dysfunctional or almost dysfunctional, according to the government’s own assessment.  

Not a week passes without new revelations regarding the hollowing out of SA. In every one of four current commissions of inquiry, the picture that emerges is of ANC apparatchiks betraying their country by looting, or destroying through neglect, the accumulated assets of our heritage. 

None of this stems from the whimsies of fate. The situation we are in is not because of an unfortunate confluence of circumstances, or the miscalculations of some inexperienced executives, or because of apartheid.

This dismal state of the nation’s balance sheet is a direct result of the ANC’s grasshopper mentality — a genetic predisposition to short-termism. From such blighted DNA stems the determination of many in the alliance to reap what others have sown, rather than to bother overly much with the tedious process of growing from seed.

One should therefore take with a pinch of salt the sudden apparent determination of the “new dawn” ANC under President Cyril Ramaphosa to curb corruption, to promise to put in the necessary hard yards, and to curb its penchant for instant gratification. No matter how well-intentioned the president, his approach commands barely a majority on the party’s national executive. In the party’s powerful, policy-determining membership structures and in the broader tripartite alliance, it is still very much a minority view.

SA has been there before and it did not end well. It was to a large degree because President Thabo Mbeki championed cautious economic policies and the shrinkage of the SOE sector through privatisation, that he was ousted by the ANC’s hard left, the unionists and the communists.

Ramaphosa and those in the alliance with a worker-ant philosophy are likely to meet the same fate. Grasshoppers rule, OK?

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