Wine Tasting Podcast: Spice Route Obscura White 2019


Shedding some light on Obscura

By John Fraser

Today’s Cape wine tasting podcast goes terracotta potty.

Food and wine guru to the stars Michael Olivier introduces a highly unusual white blend – the Spice Route Obscura 2019 – a qvevri wine.

Our guest tasters are Cova Advisory’s Duane Newman, economist Ian Cruickshanks, Clientele’s Malcolm MacDonald, and the man with the brand Jeremy Sampson.

The panel also discusses the delights of the neighbouring farms of Fairview and Spice Route, and the importance of promoting wine tourism.

Click below to join in the fun.

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Has Cyril signalled his own vulnerability or the death of Davos?

Resident President Cyril Ramaphosa

By John Fraser

The annual yawn-fest in Davos will have a few fewer VIP visitors next week.

It is not often I have a word of praise for the vile Boris Johnson, but I did applaud the announcement that he will not be heading for the alpine posing parade.

Now, we learn that President Cyril Ramaphosa has done something that Boris rarely does. He has pulled out.

Not just from Davos but also from an investment conference in London.

But why?

His Trade and Industry Minister Ebrahim Patel and Finance Minister Tito Mboweni invited the media to a baconless breakfast briefing this week, stressing that there is good news about SA and that the problems are being addressed.   The message at Davos will be a bullish one.   It may be spun into the stratosphere, but it will be reassuring.

Now, Cyril had no problem recently in flying halfway around the world to watch a rugby match in Japan and seems to spend a good chunk of his time on trips.  

He has no fear of flying.

Possibly he is very fearful of his political pals.   The ANC remains as divided over policy as the British Conservative Party was over Brexit (until Boris pedalled to the rescue).

Continuing commie calls for the nationalisation of the Reserve Bank, an Energy Minister who seems allergic to private-sector power generation and a residual stench of state-capture-lust hang like a maggot-ridden rotting corpse over the ANC.

And then there is Davos itself.

A self-indulgent, preening event which still has some relevance but which has lost its sparkle.

Of course, it still offers the chance for business and political leaders to chat and to do deals.  I hear it will offer one climate-obsessed Nordic schoolgirl the chance to once again play truant.

But business and political folk can find many other warmer places to swap notes.  The restrooms at Heathrow Airport?  The fringes of the oh so many other international Summits, gathering and VIP funerals which they tend to attend. in their droves

Oh, and there is always Skype.  It doesn’t offer air miles or a decent wine list, but it is good value, even if you have to pay SA’s highly-inflated rip-off data charges.

Risking ice-induced broken limbs and the wrath of the climate-change brats, the SA delegates who attend will each get a free scarf.    So they are happy to represent the country, while Cyril is grounded.

Cyril’s job seems to be on the line from the troglodyte wing of the ANC, so he has wisely decided to forgo the free scarf.

It might be very wise for him to stay at home, to continue the fight, to watch his back.

For if he fails, no amount of bullish bullshit in London or Davos will save this country, which would tailspin into economic misery if the relatively-reassuring Ramaphosa is toppled.

He may lose out on a few air miles, but it is a small price to pay.

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Dawie Roodt: Prepare for higher taxes in SA

Leading economist Dawie Roodt

By Dawie Roodt

No 20/20 vision, but the picture is getting clearer

20/20 vision refers to a clear vision over a distance of twenty feet. Now, I certainly do not have a clear vision of what can be expected for 2020, but slowly a picture is emerging, and it is not a pretty one.

I want to ease into the bad news, so let’s start with a thin silver lining.

South Africans owe Lesetja Kganyago, governor of the South Africa Reserve Bank (SARB), a huge debt of gratitude. Kganyago defended the independence of the SARB quite successfully last year after a politically inspired attack.

Additionally, the lower inflation rate at the end of 2019 proves that he was also successful in his primary objective of protecting the value of the currency. But even more importantly, future inflation expectations are also slowly “drifting” lower which shows that the SARB succeeded in its endeavour to “manage” inflation expectations lower.

Although the official inflation target of the SARB remains between 3% and 6%, they recently announced that 4.5% is their preferred target. Markets didn’t really believe this but at the end of last year, inflation reached its lowest levels in many years. It’s even possible that the inflation rate can fall to below 3%.

This strict monetary policy approach supported, amongst others, a stronger rand the last couple of months, and this could last for a while still.

The South African financial markets are also particularly attractive in terms of valuations. Even if we are downgraded, something I’m strongly suspecting, the rand and our financial assets may just perform well in 2020. This is good news because the SARB then has room to cut interest rates.

So, to conclude, the good news: expect a strong rand and a nice run on our (especially financial sector) assets and the capital market.

And now for the bad and even worse news.

The same record is still playing. The mismanagement of especially Eskom, and the subsequent limited supply of electricity, means that the rate at which the South African economy can grow is severely constrained. I expect an economic growth ceiling of approximately 1% which means that growth could be lower but unlikely to exceed 1%.

Onto the “state’s” dire finances. The (central) state’s debt is at a record high and rising fast, while our beloved Eskom alone owes more than R500 billion. The rest of the SOE’s are also mostly mismanaged while the finances of the local authorities are at a similar state of collapse.

I think we can safely say that the “state” is in the process of collapsing.

In order to stabilise the states’ finances, only two options are available; limit state spending (expenses) dramatically or increase the state’s revenue (more taxes), or a combination of the two.

The downside: any of these two options will reduce the stimulatory effect of the fiscus and hence will further stunt economic growth in the short term. And can we look at minister Tito Mboweni to deliver the goodies in next month’s budget? I expect that he will try to limit the state’s spending, as well as try to increase revenue through higher taxes.

I believe Mboweni is the best man for the finance portfolio, but he faces enormous odds. The ANC’s raison d’être is to seize the state in order to feed and maintain its own massive patronage. Without consistent high state spending, the ANC simply loses its reason for existence.

So, it’s unlikely that a significant reduction in state spending will be possible at all. I’m also not holding my breath that Mboweni will last that long as the minister of finance…

So, what can be expected on tax proposals?

I have no doubt that several taxes will be increased.

My only uncertainty is whether VAT will also be increased and by how much personal income tax will be increased. A VAT increase, which is the least damaging option, is politically almost impossible while higher personal income tax will be much easier to implement.

But since a reduction in spending or an increase in taxes will weigh on economic growth, in the short term, the 1% “ceiling” (compliments of Eskom) will be reduced even further.

Then there is also the very likely possibility of other stupidities. Further steps are likely to be implemented to follow through on the planned National Health Insurance – which is anyway doomed to failure – prescribed assets may come a step closer, and an increase in forex controls is also possible.

And this just further entices the downgrading-sword hanging over us. Not that a downgrade should make much of a difference, I believe that much of the bad news has already been priced into the markets.

Back to the 1% ceiling; perhaps we may consider ourselves lucky if we even reach this. In an environment where the population is growing at more than 1.6%, it’s unavoidable that unemployment and poverty will increase yet again.

The president will be shocked and disappointed…

Dawie Roodt is Chief Economist at the Efficient Group

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SA Wine Tasting Podcast: Benguela Cove Collage 2017

Benguela 2020-01-12 at 17.38.17
Red refinement

By John Fraser

Is it a bird?  is it a plane?  No!  It’s a podcast.

The ZA Confidential tasting panel confidently tastes a Cape red blend, Benguela Cove Collage 2017.   (Spellcheck alert:  mine tried to turn ‘Cape red’ into ‘capered’).

Corked crusader Michael Olivier introduces the wine to a vintage panel of top tasters.  Cova Advisory’s Duane Newman is joined by Brander Jeremy Sampson, economist Ian Cruickshanks and IT supremo Malcolm MacDonald.

Click below to dive into the fun….

Ramaphosa fails to show leadership as a difficult and decisive year looms

President Cyril Ramaphosa’s speech failed to inspire confidence.
EFE-EPA/ANC handout

Andre Duvenhage, North-West University

On the eve of the statement marking the 108th birthday of the governing African National Congress (ANC), South Africa’s finance minister Tito Mboweni tweeted:

If you cannot effect deep structural economic reforms, then game over! Stay as you are and you are downgraded to Junk Status! The consequences are dire. Your choice…

Similar sentiments have been voiced by many well-respected commentators concerned about the state of South Africa’s economy as well as its politics – and the ability of the ANC to provide effective leadership to address the major challenges it faces.

South Africa faces perhaps many more challenges than it did in the build-up to the new constitution of 1994. These include a moribund economy and a governing party that is faction-ridden and ideologically disorientated. This is blamed for enabling much of the massive corruption and nepotism in the country best described as “state capture”.

What South Africa needs is a reformer who can redirect its politics to address issues related to economic growth and development, political stability, social cohesion, service delivery and several issues related to governance, management and administration.

It should all start with President Cyril Ramaphosa and the ANC, which he leads.
He had the opportunity to set the tone this weekend when he delivered the ANC national executive committee’s January 8 statement to mark the party’s birthday. Such statements are viewed as being important because they provide direction for cabinet discussions ahead of the new legislative sitting of parliament as well as the state of the nation address delivered in February every year by the President.

Ramaphosa was expected to lay out the political direction for South Africa during 2020. Unfortunately, his speech failed to hit the mark. It didn’t offer any radical new ideas on the structural reforms hinted at by Mboweni. Ramaphosa showed a complete lack of party as well as political leadership. His inability to be bold and decisive about what needs to be done suggests that he is increasingly becoming a victim of his own party’s inability to deal with the difficult circumstances of the current negative state of affairs in the country.

What was missing

There was nothing new in the speech outside of the existing policy and strategy of the ANC. The core of his presentation was the usual talking points about rebuilding the state, reinforcing the state-owned enterprises, the battle against corruption and state capture, social cohesion, and economic growth and development.

Despite an emphasis on making state companies, specifically the power utility Eskom work, and making progress with land reform, no fresh proposals were made. More rhetoric, a lack of strategic vision and political survival at all costs seem to be the name of the game.

This is a far cry from what’s needed.

Even more difficult times lie ahead for Ramaphosa. His promise that this year will see decisive action against those implicated in widespread corruption – among them influential party leaders – will no doubt add to his precarious position in the party.

The ANC’s 108th birthday bash provided fresh evidence that Ramaphosa faces a very difficult political environment in the party. There were expectations that about 35 000 people would turn up. In the event, only 11 500 arrived to hear him deliver his speech. Some party leaders bemoaned the poor attendance.

This shows that, beyond any doubt, 2020 is going to be dominated by the battle for control of the ANC. That battle will gain a lot of momentum towards the party’s national general conference which is due to be held in the middle of this year. The national general conference is held midway between party conferences, to debate the “strategic organisational and political issues facing the movement”.

There are already those who are already beginning to shows signs of mounting a challenge against him. These include those implicated in state capture, among them ANC secretary-general Ace Magashule, as well as other disgruntled members of the ANC presenting themselves as a “coalition of the wounded”.

The outcome of this battle will have far-reaching implications for the future for South Africa, and its ability to deal with its numerous challenges.

Decisive year ahead

The year ahead promises to be a very difficult but also a very decisive year for South Africa. Is Ramaphosa the man to take the country into a new dawn, or is he going to be the victim of a well-organised campaign to disrupt his intended initiatives?

This year will provide a perspective on the way forward. If strong forces within the ANC get their way, someone other than Ramaphosa will present the January 8 statement in 2021.

For ordinary South Africans, this presents a very difficult scenario, with the strong possibility that the economy will slide into recession.

This, plus amending article 25 of the constitution to enable the expropriation of land without compensation, will result in even lower investment levels, higher levels of political instability and bigger challenges in terms of food security.

This does not augur well for the future of the country and the well-being of its citizens.The Conversation

Andre Duvenhage, Research Director, North-West University

This article is republished from The Conversation under a Creative Commons license. Read the original article.

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Eskom: just pay the buggers their bonuses


By John Fraser

There has been a severe backlash following reports that troubled parasital Eskom wants to pay R1.8bn in annual bonuses to staff.

This demand has since been tweaked by Eskom, with a suggestion that the cash is needed not for bonuses,  but to fund thirteen cheques.  So different it takes one’s breath away.  Or not.

For Eskom, the cash is merely part of  “employees’ normal remuneration package.”

The anger at this is understandable.   Unreliable power supply, massive fraud, escalating costs and tariff increases have all stoked the anti-Eskom sentiment.

However, should the staff be punished by having their thirteenth cheques cancelled?

It may make many disgruntled customers feel more gruntled, but is that wise or fair?

We need to ask why we need staff at Eskom.

The system is under-maintained, prone to breakdowns, and the consequences of decades of mismanagement and under-investment are there for all to see.

However, there are very few people who can keep things going, who can fix, maintain, assess and plan for a more reliable future.

Staff leave at Eskom was cancelled over Christmas.  This was necessary, but it will hardly have boosted morale.

To now suggest that those Eskom employees who have continued to work hard to keep the lights on for as frequently as they have been…..should face further penalties is just mean-spirited.

In the main, these Eskomites are not the crooks, the incompetent, the culpable.  Please let us go ahead and pay them their ‘I can’t believe it is not a bonus’ bonuses.

But do punish the right people.   Every politician and government official who has had oversight of Eskom for the first 20 years of ANC misrule should have all of his/her pension and free travel allowances withdrawn, and – where possible – repaid.

The same applies to all those senior managers and board members who underperformed, stole, fucked things up.

There is every reason for all South Africans to be anger at Eskom.

But punish the real crooks, not those on whom we now rely more than ever to turn things around.

You know it is the right thing to do.

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Wine tasting podcast: Simonsig Die Kluisenaar 2016

Unusual, but impressive and fun

By John Fraser

It’s a top table of tasters for today’s Cape wine tasting.

Oenological superstar Michael Olivier introduces a highly unusual blend – the 2016 Simonsig Die Kluisenaar.  Our guest tasters are Cova Advisory’s Duane Newman, economist Ian Cruickshanks, Clientele’s Malcolm MacDonald, and the man with the brand Jeremy Sampson.

The panel also discusses the wonders of visiting the Cape Winelands.

Click below to join in the fun.

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Wine tasting podcast: Alto Cabernet Sauvignon 2015

Alto Pack Shot Cab Sauv copy
A Stellenbosch classic

By John Fraser

Another fine wine-glugging session with a panel of enthusiasts was staged for this podcast, which features the Alto Cabernet Sauvignon 2015.

Wine, food and ambrosia expert Michael Olivier introduces the wine to Cova Advisory’s Duane Newman, economist and investment entrepreneur Chris Hart and Clientele’s Malcolm MacDonald.

The ZA Confidential panel also discusses the enjoyment of uncorking an old friend, as well as the fun of experimentation.  In addition, we debate different tastes for different ages and the merits of booze as corporate gifts.

Click below and join the fun!

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