ZA Confidential attended the recent Accenture Innovation Awards, and met some of the finalists. One who struck us as a thoroughly impressive individual was Mara Glennie, who is using the cell phone system to help the victims of rape and sexual abuse to seek help, through an initiative called Tears. ZA Confidential chatted to her….

ZAC: What inspired you to set up Tears?
MG: My motivation comes from a deeply personal space. I was a victim of violence and tried to report it at the local Police Station. I was told to come back on a Monday between 8.00 and 4.00. It was 6.00pm, on a Friday! I felt helpless and desperate and did not know where to turn. The memory of that feeling has never left me. So some years later I decided to take action and make assistance easy – for every South African to get help at his or her fingertips – and we are proud to say we launched the service on Women’s Day this year.

ZAC: If someone has been threatened, how does it work?
MG: The first phase of our assistance is reactive – what to do if the assault or rape has already occurred. Where to get help is not as easy as people think, as the places are either non-existent in some areas, or difficult to locate in other places. Tears is a bridge between the victim of rape & sexual abuse and a service provider. At Tears we have an existing database that has been carefully researched and we are still adding to it on a daily basis, thus making it easier for the victim/survivor to find help. Included in the next phase of the mobile assistance system will be an option for an emergency. In case of a life-threatening situation, you would dial 2 for Emergency. The message will be sent to a call centre where agents will contact the victim back, assess the situation and respond accordingly by phoning the authorities – ambulance, police, or even getting hold of a family member.

ZAC: What has the response been like so far?
MG: We had over 3000 “hits” in the first 9 weeks, and had not yet publicized the number nationally. We believe that once the service has received national coverage, this will increase vastly. A rape occurs every 25 seconds in our country. Victims of sexual assault require comprehensible, gender–sensitive health service in order to cope with the physical and mental health consequences of the experience and aid their recovery from an extremely distressing and traumatic event.

ZAC: For many poorer South Africans, having airtime on their cells is an issue. Does a lack of airtime prevent them from raising the alarm?
MG: We have developed our service across all platforms. At present you have to have 20c on your phone to use the service. We have made relevant applications to change and have offered to pay the fee. However, currently, that is not able to be implemented. We are aiming to provide this service free for the end user. The information can be accessed on our web site www.tears.co.za

ZAC: Have the authorities given you any support, or given you any encouragement?
MG: No support has been received from the government or parastatals. We sincerely hope that once the relevance and need for a national data base of rape and abuse survivors is acknowledged, the Tears initiative will receive the funding we so badly need. It is a first of its kind in Africa.

ZAC: Have you made much of a difference yet?
MG: The potential of reaching out to victims in South Africa is untapped and although we have helped individuals we have not yet make a real difference. It will grow with awareness that the number needs to be on every South African’s phone. The service is still in its infancy stage.

ZAC: What is needed to really grow Tears?
MG: Tears’ reactive service, the Help Line, is the bridge to give victims the access to the much needed help and support they desperately need to help the healing process begin. Tears’ proactive service is an educational game – LifeBoard: This fun educational game can be adapted to any age, gender or social group. The game educates on all levels about inappropriate behaviour, rape, sexual abuse, communication, making a difficult subject easy to talk about and learn through laughter. In order to make both of the above services available to every member of the rainbow nation we need funding. There are no companies in South Africa that we have been able to identify that have a CSI profile to assist rape. Generally, funding is scarce. Not only are companies cutting back on funding but those funds that are available are not allocated to combatting ape and abuse. To date most of the funding is self-funded – hence this stands in the way of Tears developing its true potential.

ZAC: You were one of the finalists for the recent innovation awards. What did that recognition mean to you?
MG: I believe it went some way to show to the sceptics (and there were many) that the service is really a unique innovation and can (and does) work. It does and it was a wonderful experience to be amongst the amazing innovations, and I hope that it will now open doors for the future.

ZAC: What comes next?
MG: We are planning an emergency Service Call centre – which is under development. We will then extend the service to provide more information, and will launch a cell phone application.

Tweets of the Day:
Hantus Mostert (@CDS_VINTEC): The world loves South African wine. It’s liquid ☀ and some say liquid poetry.

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New data from Statistics SA show the unemployment rate has improved – falling to 24.7 % in the third quarter from 25.6 % in the second quarter. The labour force increased by 194 000 to 18.6 million, while the number of unemployed people fell by 114 000 to 4.6 million. The number of discouraged work seekers – those who are willing and able to work but are not actively searching for employment – fell by 125 000 to 2.2 million during the quarter. What do our experts make of it?

Mike Schussler from economists.co.za:

We have never ever had this big a growth in employment on a quarterly basis – with over 300 000 jobs, and the yearly growth rate is the highest in over eight years! This certainly does not gel in my thinking with the weaker economy – but we do see high consumer spending, which does support at least some job growth, as the money must come from somewhere.

Dawie Roodt from the Efficient Group:

Better than expected! A few comments: the fall in agricultural jobs is probably directly related to the sharp increase in the minimum wage earlier this year. Compared to a year ago, the number of discouraged work-seekers increased, a real concern – however, on a quarterly basis there was some improvement. And the increase in employment in the service and trade sectors is good – sign of a modern economy. However, we need more jobs for the unskilled, and clearly the economy is not creating enough of those.

Loane Sharp from Adcorp:

During the quarter, 308 000 more people were employed than in the previous quarter, with the formal sector contributing most of these jobs. A further 114 000 people left unemployment, with large numbers of people expressing newfound hope about their prospects of finding work. Most of the new jobs were created in the services sectors, notably retail, finance and government. Most of the new jobs were created in white-collar occupations, notably clerical, administrative and professional staff. Around 54% of new jobs were temporary in nature, reflecting employers’ continuing uncertainty around the durability of the current expansion. According to the report the last quarterly improvement is not a once-off event: employment rose in seven of the last nine quarters, even though economic growth slowed from 4.0% to 1.7% per annum over the same period. Nonetheless, South Africa’s unemployment challenge persists: since 2008 the number of unemployed has increased from 3.9 million to 4.6 million, and at present 31.4% of youth aged between 15 and 24 is in neither education nor employment.

Neren Rau from SACCI:

SACCI welcomes the slight drop in both the official and expanded definition of unemployment. SACCI is hopeful that this trend can be sustained in order to build a more inclusive economy. Policy interventions like the Employment Tax Incentive should help to strengthen this trend provided its scope of application is widened. SACCI remains concerned over ever growing public sector employment. Government employment increased by 120 000 on an annual basis in the third quarter of 2013, the biggest growth item for this period that further entrenches government as the single biggest employer at 3.15 million, followed by retail trade with 3 million. The strong quarterly growth in Construction (100 000) and Finance (92 000) also showed that the private sector has significant appetite for employment creation.

Nedbank Economic Unit:

The rise in formal sector jobs is encouraging. However, this does not reflect a sustained increase in job levels. Subdued economic growth on the back of still weak, although improving, global conditions and lacklustre domestic output growth point towards job creation remaining generally slow in the next few quarters. These numbers, together with the credit demand figures released earlier today, confirm that demand-driven inflation remains subdued. We therefore expect the Reserve Bank to keep interest rates unchanged well into 2014 as it strikes a balance between high cost-push inflation and modest domestic growth.

Tim Harris of the DA:

The Quarterly Labour Force Survey released today indicates that unemployment has become entrenched at more than 35% over the past year. The new jobs created in the third quarter are almost completely neutralised by the increase in the size of the labour force and an increase of 70 000 jobseekers who have given up looking over the period. The report further shows that 3.3 million young South Africans are not in employment, education or training. In total 6.8 million South Africans are unemployed or have given up looking. In 2009, 5.8 million people were unemployed or already gave up looking for work. Today, one million more people are unemployed than at the start of President Zuma’s term in office.

Comment: It is always encouraging to see a fall in unemployment. However, the army of the jobless still has far too many members, and we are not creating jobs fast enough. Wait, too, for the impact of all the above-inflation wage rises which have been awarded recently, leading to more mechanisation and fewer people in our factories and mines.

Tweets of the Day:

Sarcasm (@WorIdComedy): You’re not fat, you’re just.. easier to see.

Azanian (@ntk_999): Cruel Fact. RT~»"@UberFacts: You’re more likely to die on your way to buy a lottery ticket than you are to actually win the lottery."

Puns (@omgthatspunny): I saw a beaver movie last night, it was the best dam movie I’ve ever seen.

Puns (@omgthatspunny): For a while, Houdini used a lot of trap doors in his act, but he was just going through a stage.

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In yesterday’s ZA Confidential we expressed concern that Finance Minister Pravin Gordhan had announced in his mini-budget that there would be curbs on the government purchasing booze for official functions. We are grateful to 702 Eyewitness News for reporting from CT that the Minister may be having second thoughts – a story which the mainstream media appears to have ignored. According to 702, Cope MP Nick Koornhof raised the issue in Parliament yesterday, saying it was unthinkable that South African wines would no longer be served at state functions. Gordhan reportedly agreed to reconsider the scope of the alcohol ban. The Cape wine industry is a source of national pride, and we want every possible support from government for our producers. This is an issue we will follow with keen interest, and hopefully more media outlets will follow the lead of 702 in reporting the matter.

Tweets of the Day:
Puns (@omgthatspunny): Two hats were hanging on a hat rack in the hallway. One hat says to the other, ‘You stay here, I’ll go on a head.’

Life Pro Tips (@LifeProAdvices): Remember, the difference between a boss and a leader… A boss says "Go" A leader says "Let’s go"

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This week’s mini-budget was disturbing. Not only was projected growth scaled down, but there was little indication that government has the slightest clue on how to get us out of the mass-unemployment trap into which the country has fallen. Attention inevitably fell on some of the measures to clamp down on the worst excesses of our kleptocratic politicians and officials, but there was one measure which worries me. Those who encounter me at company briefings and other events will know that I am partial to a glass of good wine with good food. And even when the standard of corporate catering is really pathetic, as is often the case, the wine can be a small compensation – when offered. Now, there are many government functions where I am sure the guests neither deserve good booze or much good grub either. However, there are events where our taxes are used to help promote the most deserving industry in this country – the Cape Wine industry. If Finance Minister Pravin Gordhan is really banning booze at State Functions and diplomatic events, I would be worried, not that ZA Confidential is often on the guest list for these. I suspect what Gordhan is doing is shifting the bar bills from the State to the private sector – seeking sponsorship for the alcohol. If so, the impact may be dampened and there might be good reason to raise our glasses to the Minister. But what do our experts make of all this?

Frans Cronje from the SA Institute of Race Relations:
Nice sentiment but let’s not get carried away. This is not why we have a deficit crisis and nor will it solve the crisis. The real issue is growth, investment and the policies that undermine these outcomes. If the government were as bold on these harmful policies – stricter employment equity and BEE, cadre deployment, more taxation, failed schools, and increased labour regulation – as it promises to be on its liquor bill we would indeed have something to celebrate. In some respects it suggests the limited scope of influence granted to our finance minister by the president and the cabinet that he is allowed to determine the lunch bill but not to change much in terms of policies that actually matter. The minister wants to tell the country that this is austerity. If his government really wanted to save resources for South Africa it would cut the mounting pile of costs being foisted on investors and consumers. The real waste is not ministers having a tipple. It is paying the administration fees of e-Tolls. It is new carbon taxes. It is raising the cost of business via new BEE goalposts. But he is impotent on these issues because his cabinet is not yet ready to make the hard choices to reform SA’s economy. You can add to my list the costs of bailing out SAA and the SABC and a host of other state-owned enterprises. In fact he has done his cabinet colleagues a disservice – because with what is in store for our economy they will need more than a few stiff drinks.

Duane Newman from Cova Advisory:
As leaders in government they need to lead by example and practice what they preach. For many years we have not seen that, as government leaders spent with little regard to the example they set. Now that government have taken a harder line on alcohol, it is pleasing to see that they are leading by example ..t is also pleasing that limits will be set on vehicles purchased and credit cards will be cut up. I know I cut up my own corporate credit card when I was in business as it is just too easy to spend on it. If you have to spend on your personal card and claim it back, there will be a lot more rigour in the process. While there are limits on (the cost of official) cars, I would like to see government leaders being forced to buy locally-made cars. Buy local is also another government lead initiative.

Food and Wine guru Michael Olivier:
I am thrilled with this new idea! I like the fact that first class air travel and luxury cars are being put an end to as well. Not quite sure what they mean by public funds though? Doubtless they will have catering and they will have alcohol – so where will that money come from? Government exists on public funds.

Branding guru and wine lover Jeremy Sampson:
How sad that Cabinet Ministers, Ministers etc, all public servants, cannot be trusted with the public’s (our) money. I applaud Mr Gordhan, wonder how it will be implemented, and look forward to people being held publicly accountable. The suggestion that this will save millions if not billions is mind boggling and the fact that people will have gotton away with it is criminal. As to alcohol, most leaders of countries have a State Wine Cellar to use when visiting dignitaries are in town. That¹s important. As to the rest of it, like all of us, pay your own way. And buy South African.

Hotel Executive Graham Wood:
Any austerity measures proposed that seek to minimize wasteful expenditure should be welcomed! Compliance to directives will always be the challenge!

Chris Gilmour from Absa Investments:
I think Pravin Gordhan’s comments on alcohol should not be seen in isolation; rather they should be seen in the overall context of a new cost-conscious regime that is about to come into operation at government. This includes the scrapping of government credit cards, curbs on premium air travel and a limit that can be spent on cars etc. It is sending out a clear and unequivocal message to cabinet, regional and municipal politicians as well as the general public that the intention to spend taxpayers’ money wisely is sincere. Gordhan has always led from the front – he walks the talk and has an appeal that transcends the political divide. This message will further endear him (and government) to a broad range of ordinary citizens.

Comment:
Our experts have come up with a range of useful views. While I applaud the crusade against waste, I just hope that the Cape wine industry is not a big looser in all of this. Get rid of the gravy, but please don’t throw out the wine as well.

Tweets of the Day:

Puns (@omgthatspunny): When the smog lifts in Los Angeles, U C L A.
Chris Hart (@chrishartZA): Employed people have more dignity, better health, are able to keep their children in education for longer.

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The cold-blooded execution last week of forensic auditor Lawrence Moepi in the car park of his office complex was a graphic illustration of the way in which crime and criminals do not just operate in a shady underworld, but can be found in more mainstream walks of life as well. Werksmans Attorneys this morning arranged a briefing on white collar crime with director Dave Loxton, who suggested that South Africa’s general levels of lawlessness have put us in the global top three for cyber-crime – after the Russians and Chinese. Having said that, he noted that corruption is not unique to ZA, and is a worldwide problem. In the last twelve months one in four has paid a bribe – in ZA it’s one in 2. He noted that in the last two years his white collar crime practice has shifted to focus on cyber-crime. Within the next 3 years, the fruits of cyber crime will outweigh the fruits of all other white collar crime. One large ZA corporation, which he was unwilling to name, has had its

server hacked for 4 years, and the cyber-spies intercepted all board packs and correspondence with CEO, while material was sold from the warehouse. It was a large international syndicate, with the local ZA player being paid in drugs. A few statistics: globally, 600 000 Facebook accounts are compromised per day, with 1.5 m victims per day of cyber crime. ZA loses about R1bn per year to cyber crime, and the global cost is $110 bn. Why is SA in the top 3? Loxton says it is because we are a very lawless society and international syndicates know that law enforcement is paper thin, due to a lack of resources. Many people fail to take basic security measures for their cell phones and tablets- they are more interested in the device’s features than its security. He concluded that cyber-crime is a national crisis, and in this area we have a serious skills crisis – with little police expertise to crack cyber-crime. The FBI is brilliant – the SA police service has very few

brilliant people. In ZA we need to recognise there is this national crisis and throw resources at the scourge of cyber-crime.

Comment: Things are bad, but at least we are not Malawi.

Tweets of the Day:

Politics & Law (@PoliticsL (https://twitter.com/PoliticsL) ): How many lawyers does it take to screw in a light bulb? How many can you afford?

Puns (@omgthatspunny (https://twitter.com/omgthatspunny) ): I used to hate maths but then I realised decimals have a point.

BabyBlade (@ZitaHarber (https://twitter.com/ZitaHarber) ): Ballerinas are always on their toes. Why don’t they just get taller ballerinas?

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Financial services group KPMG has just published its annual survey on the global construction industry. ZA Confidential caught up with KPMG’s Africa Construction Leader Gavin Maile to find out how the sector is performing….

ZAC: How would you summarise the current state of the construction sector in ZA, and how does it compare to the global picture?
GM: It looks like we are past the low point and the majority expect improvements in both order books and margins. SA margins were lower than those globally for the past year, but are in line going forward.

ZAC: What about the outlook, locally and globally?
GM: A real turnaround is expected in 2 – 5 years – both local & global – except in the Americas, where the turnaround is strongly in progress

Q: Are there particular customer sectors which offer favourable prospects for our construction firms?
GM: Power & Energy are expected to make most impact

ZAC: The ZA government’s infrastructure programme is obviously going to be of great importance, given its scale. Do you see more spending coming through the pipeline, because a persistent criticism has been the State’s failure to implement its spending plans?
GM: There does appear to be more traction and progress happening.

ZAC: The admitted collusion among some local construction firms, and the high fines which have been levied, have tainted the image of the sector. Do you think the worst is now over for the companies involved, or will the calls continue for civil suits and heads to roll among executives?
GM: Most CEO’s have already rotated – but I expect there will be further distractions to business as normal.

ZAC: When he attended your launch, the Minister of Public Enterprises Malusi Gigaba called for the industry itself to take a more positive stance and work with government on issues like skills development and empowerment. Is there much of an appetite for this.
GM: I believe so, as industry needs these skills as well to sustain themselves

ZAC: We hear a lot about the opportunities in Africa, but some local firms have had poor experiences elsewhere in the Continent. What is the outlook in the short and medium term for activities by ZA firms in the rest of Africa?
GM: Very positive – especially where they follow their local clients into Africa – specifically in mining.

ZAC: Finally, the recent strike in the sector was settled. Do you expect a period of relative calm in terms of labour relations in the construction industry?
GM: Sorry – no idea.

Tweets of the Day:
Funny Tweets (@iQuoteComedy): i’m only a morning person on december 25th

Puns (@omgthatspunny): I was struggling to figure out how lightning works then it struck me.

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South Africa’s sudden and ill-mannered decision to scrap a series of bilateral investment treaties with a number of EU member states has come under fresh fire from the EU’s Ambassador in Pretoria Roeland van de Geer. The move was slammed during a recent visit to Pretoria by EU Trade Commissioner Karel de Gught, with a warning that it might have an impact on foreign investment in ZA. Within months, German car giant BMW announced that it was not going to open a new production line at its South African plant, as had earlier been hoped for. The main reason given was the month-long strike in the automotive sector, which caused production to halt and exports to plummet. However, some trade watchers believe that South Africa’s rudeness and arrogance over the investment agreements also played a part in scaring off the Germans. At a media breakfast in Johannesburg today, the Ambassador and his trade sidekick explained why they were so upset with Davies’ announcement that the Bilateral Investment Treaties (BITs) would be scrapped. Said the Ambassador: “We feel there is a partnership. If one of the parties says we will stop with this, you expect a consultative procedure. What has happened literally is that ambassadors were called in the morning, and received in the afternoon a note saying: “it’s over”. It was the way in which it was done which we all agreed in the diplomatic field – you don’t do it in that way. It was an unnecessarily heavy-handed approach. I spoke to investors in Europe and they (spoke their concerns about) Marikana, and then while this was happening, the BITs were thrown away as well. It was the approach and the timing. To be competitive as an investment destination you have to compete with everybody out there, and tick all the boxes. To voluntarily weaken your position- why do you do it? We felt obliged say to the government: don’t do it this way….this is not the way you should proceed.” The Ambassador said he could not comment on detail on the BMW decision to walk away from a new investment in South Africa. “I have to say from my position I would have hoped they would have bid,” he said. “They feel under the current circumstances there is a risk they may not perform. They feel: if they have to present the bid in an international competition, they might not be able to deliver. There is an element of (what is happening in) SA, but is there something internal to BMW? It is not the sign that we need. I would have hoped they would bid for that. I know the Mercedes factory in SA is in the top of the Mercedes factories in the world – so it can be done. Foreign investors look at the global map and choose the most cost-efficient place. Investors hate uncertainty. It is a very delicate, subtle, sensitive, issue to deal with. The EU accounts for 70% of past FDI into ZA.”
On other issues, the Ambassador expressed his optimism that a new Economic Partnership Accord (EPA) would be negotiated between the EU and Southern Africa before the end of this year. This would give ZA extra access for fresh and tinned fruit to Europe, but ZA is under pressure to also make concessions to European exporters. Meanwhile, discussions continue on a disease called citrus black spot, which has caused the EU to monitor imports of citrus fruit from ZA, has already led to some restrictions, and could lead to a ban. The EU is expected to scale down its development funding to ZA, but details are not clear as the new 7-year European spending plan has yet to be decided by the EU authorities, and notably the European Parliament.
The Ambassador said that ZA has begun investigations into chicken imports from Europe, following the recent tariff increases on imports from many other countries,. The EU was not affected because of its existing trade deal with ZA, but Davies wants the right to trigger so-called safeguard measures, if there is a surge of European imports. The Ambassador warned that inefficient ZA chicken producers must not be cushioned. He said: “Protectionist measures can’t be seen as a solution to the competitiveness problems of the South Africa industry – which include the price of electricity, labour productivity, and the level of the rand.” He said it would be tempting to bring in new measures to support the ZA poultry producers “to give a breathing space to the industry, but that will not solve the long term problems which need to be dealt with.”

Tweets of the Day:
Bartinney (@Bartinney): Around here, we only drink Wine on days that end in Y

Puns (@omgthatspunny): The international jewel thieves were hard to catch because they had a good ring leader.

Nein. (@NeinQuarterly): You’ve seen one Doppelgänger, you’ve seen’m all.

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Trade and Industry Minister Rob Davies played down the impact on consumers of the new tariffs on imported chicken when he recently announced the measures. However, ZA Confidential has discovered that there has already been shockingly high inflation in chicken prices in the local market, running at way above the general annual inflation rate of just over 6%. One supplier of food products to restaurants announced a 5% jump in June, followed by a further 5% at the end of September, and a massive further 12% this week. Meanwhile, the prices of other food items – from nuts, to cherries to cheese to chocolate to chips – have also been spiralling upwards. What do our experts make of it all?

Duane Newman from Cova Advisory:
We have a family-owned coffee ship in Kyalami, which my wife runs, and I can confirm that we are being faced with really high price increases – and chicken is a big problem, with price rises this year of several times the general inflation rate. I fear there may be more to come, with our suppliers warning that some chicken importers have closed their doors due to the new tariffs. That will give local chicken producers yet another opening to further raise their prices. It is difficult to pass on these rises to our customers, who are often not aware of the big jump in food inflation. It gets worrying when you combine this with the electricity hikes, increased transport costs once the e-Tolls kick in, and an expectation from the staff for wage increases to match those recently awarded across the economy. And if inflationary pressure is happening at the wholesale end of the food market, it must also come through with retailers facing higher costs, and needing to pass these on to their customers.

Food and Wine Writer and TV Chef Michael Olivier:
I think that suppliers need to justify this type of iniquitous price rise of basic foods. Chicken used to be one of the cheapest forms of protein and it should be kept so. I also feel very strongly about imports of chicken from places like Brazil getting in as processed food simply by sprinkling some salt and black pepper on top of it! I don’t mind cherries and chocolate prices going up, but I feel for the poor – with basic protein prices skyrocketing. Add the electricity prices going up, fuel etc and it impacts hugely on the poor.

Independent Economist Ian Cruikshanks:
Consumers’ basic expenditure potential is being squeezed by spiralling food costs, which is likely to dent alternative discretionary spending. As consumer expenditure contributes over 60 percent of ZA’s GDP, higher food prices will definitely negatively impact the retail sector – casting doubt over the stocks maintaining their high share prices. Monetary policy will be forced to remain unchanged despite higher inflation – as consumers are certainly at the limit of affordability. The 2 percent estimate for GDP growth this year could be in danger of downside risk.

Dawie Roodt from the Efficient Group:
Part of the reason why the minister announced the recent increases in chicken duties is because he mostly concentrates on revenue side of the income statements of chicken producers in the country. He saw, and the local pressure group made very sure that it was very well emphasised, that their revenue was “not enough” and that something needs to be done to make sure that the revenue side of the income statements of the local chicken guys were boosted; import duties were the obvious and easy choice. That is wrong. Instead the minister should have looked at the expenditure side of their income statements to see if it was possible to make life a little easier for them. And there are plenty opportunities: for example, he would have seen that the cost of labour doesn’t match labour’s productivity, that skills are lacking, that electricity prices just keep on going up, that tax compliance is very high, that red tapes strangles these business, that security is expensive and plenty of other very expensive expenditure items. Instead of “increasing” the revenue of chicken producers we can reduce the cost of chicken production by liberalising labour legislation, by improving education, by privatising Eskom, by overall-ing the tax system, by cutting red tape and by doing many other things that make it easier and more viable to do business in SA. Chicken producers will make more money and we will now have to pay more for chickens; but that is the more difficult option, not an option our politicians are usually keen to pursue.

Mike Schussler from economists.co.za:
Chicken, along with some fish, is a cheap source of protein – and South African consumers spend a lot of money on chicken. It is, by far, the protein source with the highest weight in the CPI – at 1,7 of the total in urban areas. With the rand’s decline, I had thought that chicken farmers would get a break – but now the tariffs have been introduced, it is clear that prices are now on the way up. It may save the poultry industry, but it may just be another nail in the consumer’s coffin. As interest rates are likely to remain low for now, the bigger effect would just be on the consumer’s pocket, and particularly that of poorer the consumer.

Chris Hart from Investment Solutions:
While it is appreciated that there are genuine and complex issues around chicken imports, the recent measures to protect the local industry are likely to have a negative impact for consumers and for inflation. Protectionism helps one set of stakeholder but has a negative impact on others. The imposition of tariffs on imported chicken did not come with any local efficiency caveats or any time limits. South Africa has suffered before by supporting local inefficiency through high tariff barriers, which stunted growth and reduced the incentives to greater efficiency and competitiveness. Ultimately, this will prove to be unsustainable and the industry will be left worse off that if the tariffs had not been raised. Sustainability over the medium to longer term will require that South African industry (in this case poultry) be structured in a way that is globally competitive. Protectionism leads to rent-seeking behaviour, where stakeholders seek out soft options or special favours for themselves but to the cost of the more productive. South Africa will be left poorer if rent-seeking behaviour is encouraged at the expense of industries that genuinely add value.

Conclusion:
Chicken prices have been going up, along with other food prices, and there are more rises in the pipeline. Sadly, it is the consumer who is taking the roasting.

Tweets of the Day:
Funny Tweets (@iQuoteComedy): The only honest people in the world are small children and drunk people.
Funny Tweets (@iQuoteComedy): Mom: how are your grades this term? Me: mother what’s important is that we have our health

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It was recently announced that one of our more impressive business leaders will soon be standing down. As CEO of WesBank, Brian Riley has played a key role in both the financial services industry and the automotive sector. While he may not have had the same high profile as his FirstRand Group counterpart, FNB’s Michael Jordaan, who has also stood down this year, Brian’s impressive track record at WesBank speaks for itself. ZA Confidential caught up with Brian to get his views on the industry, and to find out his plans for the future.

ZAC. It’s often said that buying a car is the second biggest purchase after your house. Is that still true?
BR: Yes, this is definitely still the case. However, looking at the most recent Consumer Credit Market report, Secured Lending (mainly vehicle finance), is currently exceeding Mortgage Finance. WesBank’s average transaction value for new cars has doubled from R120 000 to R240 000 from 2006 to the present; during this same period the average transaction value for used cars grew from R94 000 to R165 000, an increase of 75%.

ZAC: What big changes have you seen during your time at WesBank, in terms of the emergence of the black consumer, trends in bad debt, length of loans, move to more fuel-efficient cars and so on…….?
BR: Since 2006 we have seen a change in the demographic makeup of our new business production, as follow:
2006 Present
Indian 5.5% 5.0%
Coloured 5.4% 5.5%
African 24.1% 34.4%
White 51.9% 45.5%
Companies 13.1% 9.6%

This clearly shows a transformation of wealth, in particular to the African customer. There has been a plethora of governance and compliance related changes. From a regulatory perspective, the introduction of FICA, FAIS, CPA as well as the NCA have quite rightly afforded the customer more protection, fundamentally changing the way we do business. Risk Management has also taken a new form in the banking environment with the introduction of the Basel Accords. The cost of compliance has grown significantly but at the end of the day the sustainability of a strong banking environment is at the heart of any economy and the legislation should be welcomed. The NCA was the most significant introduction for us as it affected our credit assessment methodologies, resulting in improved assessment and risk management capabilities. The NCA has also provided the customer more flexibility in structuring their finance agreements such that, more recently, we have witnessed average contract periods extending from 54 months to 68. It has also afforded the client clear rights and more protection from unscrupulous lending practices. WesBank has invested considerably in technological innovations which include the electronic submission of applications directly from the dealer floor. WesBank pioneered the first web-based contracting process with the launch of iContract. In order to empower our customers and address the ever increasing need for instant service gratification, WesBank also recently launched the online self-help account management service. We have seen a direct correlation between self-help functionality and improved customer service. These improvements have been significant contributors to ensuring WesBank is a highly efficient, cost effective organization delivering excellent service to both dealers and clients.

ZAC: WesBank has been an impressive contributor to the fortunes of the FirstRand group, but has tended to fly under the radar. Was this deliberate?
BR: It was, and for two reasons. Firstly, WesBank isn’t a big public-facing brand. 95% of our business is written through the brands of other companies, in return for which we jointly share, to some degree, in the profits we make. There are very few companies around the world which successfully specialize in partnership business models. When you are leveraging the strength of your partner’s brand, it makes little sense in spending large sums of money building your own. The other reason is a matter of personal style. Getting the job done is far more important to me than being a public figure. It is impossible to avoid media and public attention but I limited my involvement to events and interviews which I felt added value to WesBank.

ZAC: Your departure from the group follows that of former FNB CEO Michael Jordaan, who has already announced new interests. What about you? Are you staying in ZA? Will you be taking on new roles? And why are you now leaving WesBank?
BR: I am certainly remaining in South Africa. I became a citizen quite some time ago which hopefully confirms my commitment and loyalty to the country. I have a 26 year old son in the UK and a 17 year old son schooling here in South Africa. My partner, Fiona, has two children being educated in the country and quite frankly South Africa is a wonderful place to live and whilst it is not perfect, it is full of promise and opportunity. I can’t imagine myself living anywhere else. I am also too young (56) and too energetic to finish working just yet. I have received a couple of offers but want to take a couple of months to wind down a little before deciding upon what I am going to do next. I have worked for 37 years in the instalment finance industry. I started working for a small personal loan company in the UK straight from school before working for Lloyds Bank and Barclays. My move to WesBank in 1990 occurred as a result of Barclays selling its instalment finance ‘arm’ to GEC. When I took over the reins in 2007 I made it public knowledge that I would stay for 7 years. It created certainty for those aspiring to run the business one day. It also meant that to achieve the success I envisioned, it required a significant bias for action within a limited time period. It’s time to do something else. I’m sure that what I will be doing will become clearer in the next couple of months – but it will not be in the instalment finance business.

ZAC: Looking at the auto industry, we have seen a lot of strike action, BMW SA recently announcing it is losing a new ZA investment, and surveys showing low business confidence. What is your view on the outlook for the automotive sector and the broader economy?
BR: The Automotive Industry contributes approximately 7% to SA’s GDP and is therefore a significant contributor to the broader economy. Without the APDP which heavily subsidises the Motor Manufacturing industry we would not be producing vehicles at all in South Africa. I must believe that disruptions to the production geared for export will raise questions in manufacturing boardrooms around the world. We are not ideally located for export, and CEOs of Original Equipment Manufacturers in Asia, Europe and the USA will ultimately make the right decisions for their shareholders, and at some stage that may exclude the production operations in South Africa. Workers have the right to fight for better working conditions and better wages, but the decision to remain in South Africa will ultimately come down to economics and quality. If vehicles can be produced at the right quality and at an appropriate return for shareholders, productions plants in SA have a future. If not, they will be closed. If we import all of our vehicles they will become more expensive, but South Africans love their cars and the retail market will continue to perform in sync with the GDP of the country.

ZAC: There is a growing likelihood that e-Tolls are coming. Do you feel sorry for the Gauteng motorist?
BR: The South African Government needs to invest in the maintenance and upgrade of infrastructure. However, the viability of e-Tolls as a preferred funding mechanism for this is debatable. With improved transparency and pro-active consultation with the public, the perceptions of e-Tolling may have been different. Either way, infrastructure investment has to be recovered through taxes one way or another, and for South Africa to thrive, far more development has to take place.

ZAC: Road safety is a big issue. Are there any measures you would favour to make ZA roads safer?
BR: WesBank acknowledges the importance of maintenance and the general roadworthiness of vehicles in order to improve the safety of road users. The major contributors to road accidents occur because of worn shock absorbers, brakes and tyres. The introduction of an annual test to ensure vehicles over 5 years old are roadworthy would be an initiative we would support. This has been discussed for quite some time and why it hasn’t been introduced yet, is beyond me. This would help improve the roadworthiness of vehicles. In addition the upkeep of roads along with strict adherence to the legislation, in particular drinking and driving and speeding, would benefit safety. The long awaited points system should also be introduced sooner rather than later.

Tweets of the Day:
Puns (@omgthatspunny): It’s a lengthy article on Japanese Sword Fighters but I can Samurais it for you.
Politics & Law (@PoliticsL): "The problem with socialism is that eventually you run out of other people’s money." — Margaret Thatcher
The QI Elves (@qikipedia): If the Romans had been obliged to learn Latin, they would never have found time to conquer the world. HEINRICH HEINE

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There has been an active debate recently, sparked by UFS Vice Chancellor and education superstar Jonathan Jansen, on the benefits, or otherwise, of teaching Afrikaans kids in English, so ZA Confidential decided to take a look at the topic. What do our experts make of it?

Mario Pretorius from Telemasters:
The great Noam Chomsky, the expert in human language learning, says the capacity to successfully use language requires one to acquire a range of tools including phonology, morphology, syntax, semantics, and an extensive vocabulary. When our kids are capable of doing that by age 5, when they go to school, we can teach them in any second language. Until then, please let’s teach everyone in their native language and introduce an international language (Mandarin, French, English, Spanish, Afrikaans, Zulu) as an interaction language and keep each kid learning in that kid’s preferred language. I sense huge numbers of parents are ignorant of, and absent in, the learning process and abdicate that to school – which puts their kids at a severe disadvantage to those whose parents actively teach and coach their kids. For once, let’s get the politics of language out the way and do what’s best for the kids themselves.

Frans Cronje from the SAIRR:
Mother-tongue education in early years has educational benefits. But that is not what this controversy is about. What we are dealing with here is parents who use language to isolate their own children, preserve pure racial enclaves, and therefore stunt the development of those children as future citizens in what will become an increasingly integrated society. I regard this as something akin to child abuse and believe that it harms human relations in South Africa.

Conclusion:
I was brought up in an English-speaking family and was atrocious in Afrikaans when taught it as a youngster. However, I fully support the widest possible access to language teaching for all young people. Like it or not, people entering the workforce or higher education need to have a good grasp of English. How early they have to set aside their own language outside the home – be it Afrikaans or any other language – should be an area where the parent is consulted and comfortable. We must, however, be careful to ensure the interests of the child are not obscured by the more political aspects of all this. But we must also ensure that the family language, which is an important part of one’s cultural heritage and legacy, remains alive through the growth and development of a young person, and is preserved for future generations as well. This is a tricky one. Ja, nee?

Tweet of the Day:
Puns (@omgthatspunny): When the window fell into the incinerator, it was a pane in the ash to retrieve.

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