In the same week that South Africa commemorates the funeral of former president and national icon, Nelson Mandela, it seems that I, personally, will be remembering the country itself – only from afar.
Which is a shame as, before returning to the UK my Beloved and I had hoped to spend a final happy Christmas together here in Johannesburg, basking in the sunshine and enjoying a bit of relaxed African downtime.
But, sadly, it seems that bureaucracy has got the better of us. Despite a trip to Namibia, advised by two alleged experts on all matters immigration in order to obtain a 90-day visa extension, I found that on returning from a weekend away in the capital Windhoek, the said extension was arbitrarily denied.
The only way I could get one apparently was to fly off to the UK and back again. Namibia, despite being a sovereign nation these days, simply didn’t cut it – even though Namibians are just as entitled as subjects of Her Majesty to enter the country for three months on a visa waiver. Go figure.
So what all of this means is that I’ve now had to change my flight from early January to this Saturday, or risk being blacklisted and not allowed into the country again. Charming.
But I must admit that this apparent making-up-of-new-rules-on-the-fly without anyone ever seeming to know about them is one thing that I won’t particularly miss about the African way of life.
Another is load shedding, the name given locally to the scheduled, rolling national power blackouts that are designed to keep South Africa’s national grid from collapsing, and which are the talk of the nation at the moment.
For one, they take place at all hours of the day or night, which is deeply inconvenient at a personal level.
On the other hand, there is lots of concern, especially among small companies unable to afford generators, about the damage being done to their businesses, the inevitable worry being that the situation, if it continues, will kill them eventually.
A question of power
To put a price tag on the debacle, some economists have pointed out that power outages cost the economy a huge ZAR6.8bn (£37 million), or 0.2% of GDP, last year, with conservative estimates indicating that the situation this year will be at least as bad.
Indeed, state-owned monopoly Eskom may have promised that the lights should more or less stay on until January, helped by generally lower power usage during high summer.
But it has also warned South Africans to brace themselves for ongoing power supply problems for at least the next 18 months until it can bring two new power stations online – a situation that, I among others, find deeply worrying for the future financial health, and related long-term social stability, of the country.
At the end of last week though, President Zuma took the interesting step of denying that the country’s energy challenges had anything to do with years of government underfunding or mismanagement. Instead he chose to blame Eskom’s current difficulties in supplying demand on the apartheid regime, which collapsed 20 years ago.
The utility, he informed delegates at the Young Communist League’s congress in Cape Town, had been structured to provide electricity exclusively to the white minority, “not the majority”, which is where the foundations of the problem lay.
But unlike hospitals, airports, mines and Parliament, it seems that the President’s official residences in both Pretoria and Cape Town are, luckily, insulated from power cuts themselves due to “technical reasons”. Therefore, he is in the fortuitous position of not having to share the majority’s pain.
But all of this raises two salient points about South Africa. One is the desperate, grinding poverty that most of the population still, very noticeably, lives in once you leave the well-heeled, predominantly white suburbs and business districts.
A land of contrasts
The disparity between the prosperous and the poor in this beautiful, resource-rich country is the greatest in the world. But it is this very inequality, which drastically bumps up average per capita income levels, that means South Africa fails to qualify for all too many donor programmes from bodies such as the United Nations.
As a result, the country all too often fails to get the financial aid it so desperately requires to help its needy population – an obvious wrong that should really be righted somehow.
Another distinctively South African issue raised by President Zuma’s comments is the thorny one of race, in this land still so deeply scarred by the brutalities of the apartheid regime – and one that lives on to this day, in fact, through the economic and social structures introduced by policies such as forced resettlement.
As a result, I can quite honestly say that I’ve never lived anywhere where race appears to form such an undercurrent to so many conversations, and where so few people of different heritage seem to mix socially – a culture shock after living in multi-cultural Britain, and especially London, for so long.
Despite this, what did give me huge hope – and not just symbolically – was seeing young students at Stellenbosch University, the so-called engine room of apartheid, starting to do just that – to learn together, play together and even, in some instances, go out together. And although not enormously widespread, the same is true to some extent of the younger generation here in Johannesburg too.
But in spite of its troubles, South Africa has a lot of plus points. I’ll certainly miss the climate and its balance in favour of warm/hot weather, appalling winters notwithstanding.
I’ll also miss the friendliness and courtesy of the people – being called “Tannie” (Auntie) by Afrikaans speakers or “Mami” by black Africans whose gorgeous smiles could light up rooms, despite past and current circumstances. Such terms, employed as a mark of respect for age, show a civility forgotten long ago in the UK.
But I’ll also miss learning about the country’s fascinating cultures and traditions and the ways of a nation in some ways so viscerally linked to Britain and in others, so vastly different.
So all in all, it’s been a blast. Thank you, South Africa – for everything. I’ll remember you always.
If you’re interested in finding out about the social and cultural mores of the UK, feel free to catch up with my new blog entitled www.mygreatbritishadventure.com.
Word has it that President Zuma will miss the first anniversary celebrations of Nelson Mandela’s death today (5 December).
Although the day has not been made a public holiday, raising eyebrows in some quarters, it has nonetheless been marked with an official commemoration at Freedom Park in Pretoria.
In the absence of the President, the ceremony was officiated over by his deputy Cyril Ramaphosa, who lad a “call to action” at exactly 9.56am and 53 seconds this morning.
Such action involved people sounding bells, sirens, musical instruments and vuvuzelas not only in the Park, but also at churches, schools, factories and the like around the country.
This cacophony was followed by a three-minute silence at 10am, bringing the total time elapsed to six minutes and seven seconds in order to represent the 67 years that Mandela spent in service to the country.
The national anthem was then sung, before a wreath-laying service was held at the Union Buildings, the seat of the government in Pretoria.
As to why Zuma decided not to grace such an historic event with his presence, meanwhile, this was due to important business with China – South Africa’s largest single trading partner since 2009, and China’s biggest on the continent.
In fact, it was China’s patronage and influence that saw South Africa being accepted into the influential club of BRIC (Brazil, Russia, India and China) nations in 2010.
This week, however, President Zuma led a delegation of ministers and representatives from 100 companies on his second state visit to the country. Here he met Chinese President Xi Jinping in a bid to review and strengthen existing relations and trade ties.
To this end, the two nations signed a five-to-10-year strategic cooperation programme, which included cementing “political mutual trust and strategic coordination” in international and BRICS-related matters. It also involved a commitment to improving collaboration in the areas of trade and investment, particularly in sectors such as agriculture, finance and transport.
The deal builds on the Beijing Declaration, which was signed four years ago during Zuma’s first state visit, and created a partnership centred around 38 cooperation agreements. These agreements ranged from mineral exploration to political dialogue and joint activity in global arenas such as the United Nations.
But a joint forum involving about 150 Chinese companies will also take place today, with the aim of generating a raft of new business deals between the two nations.
Getting such deals right could prove tricky though. Although South Africa’s bilateral trade with China increased by 32% in 2013 to ZAR 270bn (£15.6bn) from ZAR 205bn (£11.8bn) the previous year, the trade balance has remained so far in China’s favour.
In fact, South Africa’s trade deficit with the country widened from ZAR36bn (£2.1bn) in 2012 to ZAR38bn (£2.2bn) last year.
The problem, according to Trade and Industry Minister Rob Davies in a written reply to a parliamentary question by African National Congress MP Freddie Adams in March, centres primarily on the make-up of this two-way commerce.
While more than 90% of South Africa’s top 10 exports to China comprise raw materials, all of its top 10 Chinese imports consist of higher value manufactured goods.
But now, it seems, both countries have recognised the unsustainability of the situation and agreed to try and tackle it. The first way, according to Davies, is by working together “to promote value-added exports to China”, while the second is to “increase inward investment from China”, which has traditionally been low.
But trade deficits are not the only way in which doing business with China can apparently be a double-edged sword.
In October, for example, the South African government generated domestic and international controversy by apparently kowtowing to its ally’s political demands.
Pretoria, it appears, chose to deny Tibet’s spiritual leader, the Dalai Lama, a visa – for the third time in five years – to attend a Nobel laureates’ summit in Cape Town in order to honour the memory of fellow laureate, Nelson Mandela. The summit was duly cancelled and is now scheduled to take place in Rome on 12-14 December.
But the government was widely reproached for being afraid to anger its trading partner, which has occupied Tibet since 1950 and sees the Dalai Lama, albeit in exile in India, as an influential and subversive voice of independence.
China, in turn, only made matters worse for its friend by commending the “correct position” it had taken and thanking it for its support.
Although Pretoria hotly denied any culpability, claiming that the Dalai Lama had cancelled the visa himself, it was roundly criticised for everything from handing over its sovereignity, “selling its soul” and betraying the country’s commitment to human rights since the fall of apartheid 20 years ago.
But China’s influence is also being felt in more temporal ways in the everyday lives of ordinary South Africans.
For instance, according to African TV news channel eNCA’s Checkpoint documentary entitled “South Africa and China’s Trade Relationship”, this very partnership has led to 100,000 jobs being lost between 2002 and 2010 as cheap Chinese imports have flooded in and decimated local industry. Chinese investment has by way of contrast created less than 50,000 new positions.
A particularly marked casualty has been the garment-manufacturing sector in the Western Cape, which in its heyday in the 1990s employed 50,000 workers of its own.
But according to Ron Stockdale, managing director of men’s suit producer PALS, the industry has been unable to compete due to labour laws that restrict working hours to 42.5 hours per week compared with China’s 60.
“They’ve got a nearly 50% longer week to produce garments against the same fixed overheads so they can give better prices,” he explains.
His company has survived by cutting delivery times due to productivity improvements and finding a niche by making police uniforms for African states and bowling trousers for the UK.
But Stockdale is also hopeful that, after years of sitting on its hands, recent measures by government to provide interest-reduced loans and productivity-incentive schemes to help businesses purchase new equipment may bear fruit.
Another issue that is causing local concern, meanwhile, is the large number of Chinese people moving to South Africa. At an estimated 300,000 to 500,000, the country is believed to have the largest such population on the continent, with many workers leaving China in the hope of finding better-paid job opportunities than they would at home.
The almost inevitable consequence of these dynamics though is that the Chinese presence is becoming increasingly unpopular.
According to a survey by the Ethics Institute of South Africa among over 1,000 Africans across 15 countries earlier this year, a statistically significant 43.3% had a negative perception of Chinese businesspeople compared with only just over a third holding the opposite viewpoint.
Locals were just as unimpressed with Chinese products and services (55.9% negative) and their labour practices (46% negative). This was due to a widespread belief that Chinese firms do not treat their African staff with respect, fail to provide decent working conditions and have little regard for either their basic rights or health and safety.
But it appears that, of everyone questioned, it is South Africans who are the most anti-Chinese.
This situation was attributed not only to the fact that they are “generally-speaking more xenophobic than other Africans”, but also that Western media, which tends to paint a black picture of Chinese investment in the continent, has more influence here.
In addition, the long-standing presence of Chinese businesses means that they are more widespread than elsewhere, particularly in rural areas, which has entrenched dislike. The final nail in the coffin is the fear that such businesses are perceived to pose a direct threat to domestic manufacturing, especially the textile industry.
But the one glimmer of hope is that an ongoing complaint that Chinese businesses employ countrymen rather than local workers due to their willingness to work longer hours for lower wages, is starting to loose validity as salary costs rise back home.
Whatever the truth of it though, it appears unlikely that China’s influence in South Africa – or the rest of the continent for that matter – is likely to wane anytime soon.
As Dr Garth Le Pere, author of “China, Africa and South Africa” told Checkpoint: “China is looking at major mining concessions in South Africa and the region at a time when there’s a rentrenchment of commitment, development aid, trade and investment from the European Union and United States. And this is the difference – the Chinese make things happen.”
Despite Johannesburg’s reputation for being the most dangerous city in South Africa, it now appears that the tourist mecca of Cape Town has stolen its crown.
According to a list of the top 50 most violent urban areas on the planet compiled by Mexican NGO Citizens’ Council for Public Security and Criminal Justice and published last week, the Mother City was ranked a startling number 20.
The ratings are assigned by measuring the number of homicides per 100,000 citizens each year and do not include war zones. So on this basis, Cape Town recorded an average of 50.94, making it not only the most violent city in the country, but also the entire continent.
Joburg, on the other hand, did not figure in the rankings at all, which were, in fact, dominated by Latin American cities, with San Pedro Sula in Honduras topping the list (187.14).
But this is not the first time that Cape Town has been singled out for its high levels of violence. Although domestic arguments turned nasty are the most likely reason for murder in the region, accounting for a third of all 2,580 such incidents last year, next on the list is gang-related violence (18%), which has been escalating in recent years.
As for the areas with the highest murder rates last year, these were found not so much in the region’s high-profile tourist areas, but rather in the townships of the Cape Flats.
The Cape Flats are a vast, barren area about 30km to the south east of Cape Town itself, where people designated as “non-white” during the apartheid era were compelled to live as part of the regime’s forced removal policy.
Among the most afflicted townships there are Gugulethu, where Anni Dewani, whose British husband is currently on trial for her murder, was killed, and Mitchell’s Plain, a predominantly “coloured” (a South African term for people of mixed race) settlement that suffers the highest levels of gang-related murders.
Because, while “black” townships may experience the highest murder rates overall, it is “coloured” communities that suffer disproportionately from organised gang activity.
Craven Engel, a minister and chief executive of NGO, First Community Resource Centre, which is based in the troubled area of Hanover Park, explains that, while gangs have existed in one form or another for generations, before forced resettlement in the 1960s, they were largely benevolent.
But the social dislocation, disempowerment and anger resulting from the policy led to a change in focus. A lack of action by law enforcement then entrenched the situation, leaving communities feeling increasingly hopeless, marginalised and abandoned.
In fact, as the gangs increasingly moved into drug trafficking, some corrupt police officers also started taking a slice of the pie. This scenario led to whole roads being “contaminated with drug outlets”, specialising mainly in tik (methamphetamine) and, progressively over the last two years, heroin-based nyaope.
But there are also other factors at play. For example, overcrowding is rife and urban design alienating, something that Engel hopes will be tackled by City planners following an external assessment for a much-needed redesign next year.
To make matters worse, he says: “Unemployment is crazy – 70% the last time I checked – and poverty is crippling people. There’s a lack of opportunity and educational levels are also quite low, with school dropout rates terrible. This makes recruitment to gang culture very easy as there’s derailed youth everywhere.”
In fact, the gang’s recruitment policy with regards to age has now dropped to 12 years old as it is perceived that children will get off more lightly and not be sent to prison if caught.
But being a tattooed member of a gang not only generates an income, it also confers respect, a feeling of identity and of safety by belonging to an organisation that promises to protect you.
What this all means, Andre Standing, a senior researcher at the Institute of Security Studies, points out in a 2005 policy discussion paper – the most up-to-date estimate available – is that there are now as many as 130 street and prison gangs operating in the Cape Town area, which between them have around 100,000 members.
In a bid to reduce the levels of violence that ensue though, Engel set up a social crime prevention programme called CeaseFire four years ago after attending a workshop hosted by a group with the same name from Chicago in the US.
The scheme, which is funded by the City of Cape Town, is based on the idea that gang violence is like a contagious disease. Therefore, when it breaks out in the community, individuals need to be quarantined by so-called “violence interrupters” to prevent it from spreading further.
“An interrupter is like an antibiotic,” Engel explains. “He’s a street-level guy who spends most of his time on the beat and mediates to prevent violence or retribution taking place. Once that’s done, he hands the case over to an outreach worker, who is more of a social worker. They then do risk work with individuals and find out what we can offer them.”
Possible services here include residence at a half-way house to help people deal with substance abuse, skills development, legal support and help in finding work.
But trauma counselling is also available both for gang members and their families who often suffer from post-traumatic stress disorder due to living in what is essentially a continuous warzone.
Another thing worth noting though is that both interrupters and outreach workers are all former gang members themselves, often with prison stretches behind them. This status not only gives them street cred, but also means that they are intimately familiar with the issues faced by others.
As a result, over the last two years, CeaseFire’s Hanover Park programme has successfully intervened with 158 youths, some 70 of whom have left gang life and are now in gainful employment.
“The primary aim is to stop guys shooting and to mediate conflict so as to stop violence spreading. But the hidden agenda is to get people to exit gangs,” Engel says.
Although many programme participants have yet to do so, “almost 70% aren’t shooters any more”, he adds. While they might still carry weapons to protect their turf, “they’ll now think twice before using them”.
This means that, since the scheme began, violence levels in the area have dropped by about 50%. While 38 people died last year, the figure up until 16 September had more than halved again to 16.
One tool that is proving useful in supplementing limited manpower levels, meanwhile, is the Shotspotter gunfire detection system. Despite its far-reaching work, the CeaseFire programme is only able to employ five interrupters and outreach workers respectively, two office staff and two volunteers.
The system, which was developed by California-based SST to alert police should shots go off in troubled US neighbourhoods, is also being used in Kruger National Park in the fight against rhino poaching.
But since 15 August, Shotspotter has likewise been taking part in a three-month pilot project covering a 1kmsq area of Hanover Park. Once a shot goes off in the area, the sound is triangulated using sensors, and audio and location data is sent to interrupters via an SMS message.
They are then able to respond to the incident within minutes and without having to depend on often-unreliable information from members of the public.
Another key advantage of the system is that it provides analytical information, which enables both CeaseFire and law enforcement bodies to deploy resources when and where they are most needed.
Engel explains: “We now know that most activity takes place between 12pm and 3am on Monday mornings, which we didn’t expect. So the data has navigated us much closer to the trouble spots and, because we can see areas heating up and cooling down, it’s now possible to deploy people more effectively.”
A decision on whether to extend the trial or have the system go live will be taken early next year, most likely around the same time that CeaseFire begins extending its scheme into nearby areas such as Manenberg and Kewtown.
As Engel concludes: “There’s much hope around the programme. It takes time for a community to heal, but peace attracts positive things like investment and job opportunities. They’re now starting to happen and so, while it’s taken a long time, we’re finally beginning to see positive rays of hope.”
Although South Africa has had no confirmed cases of ebola and is thousands of miles from the epicentre of the epidemic in West Africa, it appears that its tourist industry is being hammered anyway.
According to local reports, panic over the disease is reminiscent of that generated by SARS in 2003, causing holiday-makers from Europe, the US and particularly Asia to cancel their travel plans to the country in droves.
Enver Duminy, chief executive of Cape Town Tourism, told national Sunday newspaper City Press over the weekend, for example, that, even though the organisation had issued numerous statements confirming the Mother City’s ebola-free status, its Asian tour promoters and trade contacts were experiencing cancellation rates of up to 90%.
And this despite the fact that the city is actually further from the centre of the epidemic in Freetown, Liberia (3,365 miles) than it is from London (3,172 miles).
But as unwarranted as such fears may be, they could potentially be disastrous for the local economy. Tourism is worth about ZAR18 billion (£1 billion) to the Western Cape, South Africa’s largest sightseeing destination by far, and employs a huge 150,000 people.
In fact, across South Africa as a whole, tourism contributes a significant 9% of GDP and accounts for one in 11 jobs, making it a hugely important, and often underestimated, industry.
As a result, in a bid to help try and prevent the spread of the disease to these shores, Finance Minister Nhlanhla Nene has allocated an extra ZAR33 million (£1.9 million) to help support the continent’s worst affected nations – Guinea, Liberia and Sierra Leone.
Each of South Africa’s nine provinces has also designated certain key hospitals to handle an outbreak should one occur, introduced trained response teams and implemented surveillance at all ports of entry, including thermal scanners at Johannesburg’s OR Tambo and Lanseria airports.
And such preventative measures would appear to be vital. According to the World Health Organisation (WHO) last week, the disease has already killed 5,160 out of the 14,098 people who have been infected with it in eight countries across West Africa.
But another dangerous illness worth considering, even though it has received nothing like the global attention of ebola, is bilharzia – or to use its scientific name, schistosomiasis.
Despite being a rather neglected condition to date, the WHO expressed concern last month that the spread of bilharzia may be about to hit epidemic proportions in South Africa.
It is estimated that as many as five million out of a total population of 53 million could be infected, with the problem being particularly acute in Kwa-Zulu Natal’s (KZN) humid, low altitude coastal areas.
The disease itself, meanwhile, is caused by a schistosoma parasitic flatworm that enters the skin through contact with infected fresh water from rivers and lakes. These parasites, which can live in the blood stream of their host for up to 30 years, develop over time into worms, which mate and release up to 500 eggs a day.
Some of these eggs are passed out in an individual’s urine or faeces, while others remain trapped in body tissue, the most common being the intestine, liver, bladder or reproductive organs, causing inflammation or scarring in the process.
While symptoms vary, for many people, they start with a rash or itchy skin within a few days of infection. The next stage is often a fever, chills, a cough, muscle aches and diarrhoea a couple of months later.
But, while the illness takes a number of forms and can even remain dormant in people’s systems for years, the ultimate outcome is generally immune problems and progressive organ damage.
While children are most vulnerable to the disease, it is actually its effect on women that is causing most concern to experts. Estimates are that about two million South African females are currently infected with bilharzia, which can cause severe gynaecological issues, including infertility.
Other problems include severe pain and chronic bleeding, particularly during sexual intercourse, which mean that women are as much as three times more likely to contract HIV/AIDS – a disease already at pandemic levels among disadvantaged women in rural communities – if having sex with an infected partner.
And even more worryingly, the WHO believes that more than 150 million women across the continent suffer from this generally unrecognised form of the disease.
But there are things that can be done. If diagnosed early enough, the worms can be killed off quite easily with a single dose of the drug praziquantel, although the eggs cannot.
Children in particularly affected areas of South Africa are already given such medication once every two years for prevention purposes, although some experts believe that an annual dose would probably be more appropriate.
But there is currently no vaccine for bilharzia and, to make matters worse, the illness tends to go largely un- or mis-diagnosed. Too few medical practitioners are even aware of its existence, and those that are tend to look for blood in the urine as a primary symptom, which is not necessarily the case.
As Dr Eyrun Kjetland, an honorary lecturer at KZN University and the Norwegian Centre for Imported and Tropical Diseases, told a gathering of WHO experts, African doctors and leading researchers at the University last month: “It is a neglected tropical disease and there’s not a lot of attention on it. The pharmaceutical companies don’t care about it, there’s no donations coming forth and the authorities are not doing enough in paving the way to make it less of a public health problem.”
As a result, she is currently working with a number of other health experts in order to compile an information booklet. The document, which is due to be published within a couple of years, is intended to help doctors recognise the condition and treat it more effectively.
A team from KZN University is also undertaking research on the province’s south coast, where infection is rife, in a bid to come up with a wider plan of action for treatment and prevention. To this end, a draft report is already in the pipeline – and so it would appear, not a moment too soon.
What with seemingly endless energy shortages, simmering industrial unrest and innumerable social challenges, South Africa increasingly appears to be a country in trouble.
Although the continent’s second largest economy, and the one that still attracts the highest level of foreign direct investment, there are fears in some quarters that its star may be starting to wan – and will continue to do so unless swift action is taken.
For example, while South Africa may for years have boasted the largest GDP in Africa, it was knocked off its perch by Nigeria in April after a rebasing exercise, making the West African country more attractive to foreign investors overnight.
But the various gloomy perceptions about South Africa’s future were not helped last week by Moody’s decision to downgrade its credit rating to only two notches above junk status, continuing the steady fall from a 2009 high when the country boasted a top A3 rating.
Moody’s took the decision as a result of the developing nation’s deteriorating economic growth, an increasing budget and current account deficit and rising public debt levels (50% compared to 27% only five years ago).
These were caused, among other things, by rolling power outages, known locally as load shedding, apparently endless strikes in the all-important mining sector and generally slow domestic and global demand.
Although the move to cut South Africa’s investment grade status to Baa2 from Baa1 was not entirely unexpected following warnings in July, it has once again raised fears that a slide into junk status could be on the cards.
Similar concerns are also being raised over the country’s five largest banks – Standard Bank of SA, Absa, FirstRand, Nedbank and Investec – after Moody’s likewise downgraded their rating to Baa2 status on Tuesday.
The problem is that, because the banks have sizeable holdings of sovereign debt securities, the SA government’s weakening credit profile is having an impact on their own perceived creditworthiness too.
But any shift to junk status would cost the country dear by triggering an automatic sell-off of its bonds by foreign institutional investors and resulting in new buyers charging higher interest rates in order to counterbalance higher levels of investment risk.
In real terms, this means that it would cost South Africa, and its private sector, significantly more to service their debts. It would also become harder to borrow money in order to fund much-needed projects such as infrastructure development. Other potential repercussions include a likely nose-dive in the value of the rand and a rise in inflation.
To make this situation a reality though, two out of the three credit rating agencies would have to make the move. But Standard & Poor’s has already assigned South Africa a BBB- rating, the lowest grade before junk, while Fitch is expected to follow suit in December. This would mean that the country does not have much further to fall.
In South Africa’s favour though, Moody’s appears to have given its sovereign currency the benefit of the doubt. By shifting its outlook on the rating from negative to stable, the agency has made it clear that change is unlikely to occur any time soon.
On the downside, some analysts are predicting that if South Africa fails to sort out key issues such as weak tax receipts and sluggish exports fairly quickly, a downgrade could occur in as little as five years.
But David Knee, head of fixed income at financial services firm Prudential, believes that, when compared to other developing markets, South Africa is not in too bad a shape.
“It is clear that much hinges on economic growth over the medium-term”, he says, adding that South Africa “could indeed be downgraded by the ratings agencies should GDP growth remain weaker than expected for an extended period of time”.
But when “looking at the metrics of South Africa’s peers”, which include India and Brazil, Knee points out reassuringly that “the deterioration would likely have to be fairly significant to prompt ratings action”.
One area that the country really does need to sort out sooner rather than later if it is to prevent such deterioration though is its energy sector.
To this end, the government pledged to inject at least ZAR 20 billion (£1.1 billion) in equity to help plug state-owned utility Eskom’s funding gap at the close of last month – a move that saw both Standard & Poor’s and Moody’s hold off from downgrading its bonds to junk status, a seemingly a recurring theme here in South Africa at the moment.
Eskom needs the money not only to service the debt required to pay for completion of two new power stations vital to ease the country’s chronic power shortages, but also to maintain its existing ageing estate.
Evidence of what happens if such action is not taken came only a few weeks ago, in fact, when a coal silo at the Majuba power station in Mpumalanga collapsed, leading to yet another series of rolling power blackouts across the country.
South Africa’s iconic weekly documentary programme, Carte Blanche, attributed the collapse to non-existent maintenance following the introduction of incentivisation schemes that linked senior managers’ bonuses to keeping expenditure levels low.
But Majuba is not expected to function at maximum capacity for another six months, making scheduled load shedding an ever-present threat to both business and the economy.
As a result of all this, organisations such as South Africa’s second largest supermarket chain, Pick ‘n Pay, have been working hard to reduce their exposure by finding ways to cut electricity consumption.
As David North, the retailer’s group strategy and corporate affairs director, explains: “The objective of saving money motivates any business. South Africa is not immune to energy price hikes or electricity outages from load shedding. So when you get a combination of rapid increases in pricing and uneven supply, most companies will look at how they can reduce these challenges.”
To date, the retailer has managed to slash its power usage by 30% per square metre against its 2008 store baseline simply by addressing lighting and refrigeration efficiency issues. Such action has saved it a total of ZAR 508 million on electricity (£28.6 million) since the project began.
In fact, last year alone the company’s ZAR55 million (£3.1 million) investment in retrofitting lighting and refrigeration across 10% of its stores and two of its key distribution centres saved it a huge ZAR14.5 million (£814,949).
Measures taken included implementing less energy-intensive lighting systems, encouraging staff to turn lights off when no longer required as well as introducing motion sensors and key-switches to automatically put them out at night.
Moreover, all of the retailer’s stores now have online electricity metering, which means that managers can monitor energy usage via a dashboard. It alerts them should a refrigeration unit suddenly start consuming more electricity than normal, for example, so that they can take immediate action.
But because 85% of Pick n’ Pay’s buildings-related carbon emissions are generated by electricity consumption, the move has likewise helped it slash carbon emissions by 19.4%, beating the target it set itself in 2010 of a 15% reduction by 2015.
The firm’s efforts have, in fact, earned it an accolade from the Carbon Disclosure Project for being the top-performing retailer in Africa. Which just goes to show that every cloud truly does have a silver lining.