OUT TO LUNCH
Like many politically realistic South Africans who are in the fortunate position to be able to do so, I have a reasonably healthy offshore US dollar denominated investment. The lefties will obviously label this ‘privilege’ but that’s only because the lefties suffer from serious inferiority complexes together with an unhealthy dose of envy.
As someone who arrived in this country forty-three years ago with the princely sum of R20 000 (partly thanks to the financial rand which was trading at R4.50 to the £ back then) I would argue that my offshore investments are the result of luck, good timing, hard work and some very astute investment decisions; all things that are foreign concepts to your average lefty.
For example, just over ten years ago when Pravin Gordhan was finance minister, he was bemoaning the fact that the Rand was too strong and was affecting our exports. Like a good, patriotic South African I immediately rallied around to help and decided to keep a modest legacy from my late mother in an offshore investment account rather than bring it back to SA and thus add to the strength of the Rand. At the time the Rand was trading at around R10.80 to the £ and is now trading at around R24.4 to the £ so my patriotism has paid off. ___STEADY_PAYWALL___
The pound sterling investment was converted to a dollar equity investment quite legally through my investment advisers and the only problem is that I face a large capital gains tax payment when I repatriate the investment. But bearing in mind the size of the capital gain that is the least of my worries.
My major worry is should I liquidate the investment and bring the proceeds back into South Africa or should I hang on for a bit longer? As I have pointed out to my bankers, I am not getting any younger and I don’t buy my groceries in the US so maybe I should have the money closer to home. On the other hand, the chances of the Rand weakening against all other major currencies pre and post election is a pretty safe bet in my book so my dollar account would look even better. And if I do liquidate my dollar investments and bring the boodle back to SA I will no longer have a foreign currency denominated account to benefit from any future ANC fiscal folly.
It’s not an easy decision but I’ve been checking the prices of second hand Bentley Continental GT’s with low mileage lately and I’m sorely tempted. After all, if the end of the world is nigh as the MSM seem to be suggesting one would wish to go out in style. Besides, if I leave the decision too long the Russians may have hacked all western imperialist bank accounts and there will be no trace of my offshore account.
Such trivial concerns didn’t seem to bother our finance minister last week as he raided the offshore gold and foreign currency reserve piggy bank to bring in an estimated R150 billion for the ANC to squander. The reason our foreign currency reserve numbers look so healthy is very simply because the currency has collapsed over the past 15 years under the ANC’s disastrous management of the economy. So perhaps Enoch should have waited a few more months and he might have milked R160 billion from our reserves.
The point though is, as with my comparatively modest investment, once it’s gone it’s gone. What became very clear in last week’s budget is that there are two financial constants that have been with us for years. The first is that the capacity to raise taxes is ever more limited with a dwindling personal and corporate tax base.
The second is that the appetite for more and more of other people’s money to fund the ongoing corruption and the madcap schemes of the ANC is as strong as ever. Range Rover Sports at upwards of R3mln a pop don’t buy themselves you know and what self-respecting blue light VIP escort doesn’t include at least two of them in the eight vehicle lineup?
While last week’s budget was predictably lacklustre and uninspiring there were some typically loony announcements to reassure us that the ANC’s grasp of basic economics is probably on much the same level as Joe Biden’s grasp of reality. The R15 000 tax rebate for individuals installing solar panels has been scrapped as at end February 2024 but from March 2026 producers of electric vehicles will be able to claim 150% of qualifying investment spending to boost the country’s transition to non-fossil reliant energy transportation. Presumably this date coincides with the completion of the Russian and Chinese built generating plants that Uncle (Tiger) Gwede is negotiating.
However, the real news last week was less to do with the budget and more to do with the smorgasbord of wonderful offerings the ANC revealed to supporters at the crowded Moses Mabhida stadium.
Personally I have never understood why any sentient being would want to give up an entire Saturday to travel in a hot and crowded taxi and then cram into a sports stadium to listen to a group of politicians lie. But there again, I can afford my own t-shirts and KFC so I’m not part of the target audience. What was truly amazing about the happy gathering was the evidence of short-term memory loss among the assembled throng. Or maybe it was simply a case of thinking that things couldn’t get worse so maybe they should stick with the devil they know.
While remaining disturbingly mute on how the post-election ANC proposed to deal with crime and corruption, Pres Frogboiler did make the comment that only clean members of the party (those who could get through “the eye of a needle”) would get on to its candidate lists. Since there is absolutely no evidence of this ever having happened in past elections, I think we can regard this comment as very similar to the stuff that comes out of the rear end of Frogboiler’s prize Ankole cattle.
The big election promise of course was lots more jobs; three and a half million was the number mentioned but since almost all job losses over the past fifteen years have happened due to the dire administration of the economy then one must assume that this means at least 2.5 million new civil servants and perhaps 1 million low paying jobs created with the help of the private sector. When you’ve spent years sabotaging the education system to provide a constant stream of poorly educated voters you can’t expect them all to end up as neurosurgeons or hedge fund managers can you?
Promising jobs ahead of an election should come as no surprise any more than promising a million more homes in Alex which was one of the many promises before the 2019 election. Alex is still waiting but patience has always been a virtue with the long-suffering ANC voters who have an almost evangelical belief that their leaders will deliver the goods next time around.
More concerning than the glib job creation promise though is the rather sinister comment that the ANC will “align macroeconomic policy with economic and social priorities” in the manifesto, including interest and exchange rates. Short of actually nationalising the Reserve Bank and printing money that looks very much like a promise to artificially control interest rates and exchange rates; things that have been tried before by such thriving economies as Venezuela, Cuba and Zimbabwe with dire consequences.
There was the usual twaddle about fixing potholes, paving roads and sorting out rural road infrastructure but the obvious question is why on earth did the ANC allow all these things to fall into such disrepair and might this all have something to do with dodgy tender processes? An obvious question to readers of PolWeb maybe but not one likely to be asked by the grateful recipient of a free Frogboiler t-shirt and some chicken nuggets.
Finally the really bad news is that the National Health Insurance will be implemented over five years, despite the fact that the ANC can’t run the public health system it already controls and that there is no money for the NHI (even the Finance Minister seems to agree with that judging by the R1.4 billion budget allocation).
As I have frequently commented… ‘there are many things you may die of in South Africa, but boredom isn’t one of them’.
