Global South African Weekly News Wrap Up 14 June 2012

Contents
Confident Zuma rings the changes in Cabinet .......................................................... 3 Numsa ready to take to streets to alter constitution .............................................. 5 Government rejects swathe of amendments to secrecy bill ..................................... 7 Saudis in R20bn deal with SA ..................................................................................... 8 Stiglitz calls for R2bn Walmart jobs fund ................................................................. 8 Gordhan warns of taxpayers getting impatient with low value for money .......... 10 Power to the youth, shape a better tomorrow ......................................................... 12 Durban to grow tourism fastest in Africa ............................................................. 14 Khayelitsha mob rule raises fears ............................................................................ 15 Zuma busy sacrificing youth to get re-elected ...................................................... 16 Premier keen on youth wage subsidy ....................................................................... 17 Policy uncertainty scares foreign investors away ................................................... 18 Zuma demotes 'loose cannon' Sisulu ........................................................................ 20 Key political risks to watch in South Africa ............................................................ 21 Angola oils campaign to secure AU vote for SA...................................................... 24 Governance limbo holds SA back ............................................................................. 26 City and Cosatu on collision course over Obama ................................................... 28 Zuma speaks in riddles .............................................................................................. 28 300, 000 new jobs to be created: Molewa ................................................................. 29 Cartoonist Zapiro scoops world prize ...................................................................... 30 Tide is turning for Zuma re-election camp.............................................................. 31 Zuma cops flak ........................................................................................................... 33 Zuma continues with his re-election efforts............................................................. 36 SA needs more power to accelerate growth .......................................................... 37 Tshwane has bold vision for development ............................................................... 38 Bad policy drives away good firms ........................................................................... 40 No Telkom payout after Korea snub........................................................................ 42 The Thick End of the Wedge The Editors Notebook ....................................... 43 Zuma meets 'fired' Cele............................................................................................. 45 SA 'already like Zimbabwe', says Numsa's Jim ...................................................... 47 Cele did meet Zuma ................................................................................................... 48 Celes likely successor no career policeman ............................................................ 49 DA is closing in on ANC, says Vavi .......................................................................... 51 Mandela film wins big in US ..................................................................................... 54 ANC leaders firm on Malema sentence ................................................................. 56 Independent must go into SA hands ...................................................................... 57 Zuma calls for tough conference approach ............................................................. 58 We need to be tougher: Zuma................................................................................... 60 Modise warns ANC not to buy votes ........................................................................ 60 All too familiar scenario ............................................................................................ 62

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Corruption on the rise............................................................................................. 64

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13 June 2012 Business Day Page 1 Sam Mkokeli

Confident Zuma rings the changes in Cabinet

Third reshuffle shifts Transport Minister Sbu Ndebele after e-tolls debacle Transport Minister Sbu Ndebele has taken the fall for the governments chaotic management of the e-tolls project, as President Jacob Zuma yesterday shifted him from the crucial state department in his third Cabinet reshuffle in three years. Yesterdays reshuffle came shortly after a political victory for Mr Zuma on Monday night, when the national executive committee of the African National Congress (ANC) dismissed a call to overturn the expulsion of Julius Malema, who has been campaigning for a change in the partys leadership. Mr Ndebele and his deputy Jeremy Cronin have been shifted to new portfolios, opening up an opportunity for new leadership in a frontline ministry at the centre of the governments ambitious infrastructure programme. Ben Martins, who was deputy public enterprises minister, was promoted to transport minister. The shuffle also shows Public Enterprises Minister MalusiGigaba s influence his former deputy is now in a portfolio that will work closely with his. Mr Cronin moves to the Department of Public Works, again as deputy minister. The shifting of Mr Ndebele and Mr Cronin comes after court action halted the contentious Gauteng highway e-toll system. A task team, headed by Deputy President KgalemaMotlanthe , was appointed to sort out the mess that followed Mr Ndebeles capitulation at a meeting between the ANC and the Congress of South African Trade Unions, at which he agreed to suspend tolling. The government is concerned that delays in its implementation will bring down credit ratings of SA and the South African National Roads Agency (Sanral), making it difficult for the country and state-owned enterprises to raise funds on the international market. Moodys downgraded Sanral in March due to uncertainty over the repayment of bonds raised on international markets to pay for the highway upgrade, despite a stateguaranteed R20bn loan to the agency should the tolls not be implemented on their due date. The countrys infrastructure and energy investment drive relies on international loans and foreign investment.

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A Presidency official said yesterday Mr Ndebele was blamed for not "enthusiastically" pushing for the implementation of the e-tolls. He was associated with Cabinet ministers who rejoiced when the tolling was interdicted. Mr Ndebele is now correctional services minister, hardly a frontline department. LindiweSisulu has been moved from defence to the Department of Public Service and Administration to replace Roy Padayachie, who died in April. NosiviweMapisa-Nqakula has been moved from correctional services, and goes to the defence portfolio, a senior post. Ms Sisulu joins her new department in the middle of salary negotiations with trade unions threatening a strike, and pressure on Finance Minister PravinGordhan from ratings agencies to cap the hikes. Her move is seen to be a demotion, considering the importance of the defence force, and SAs role in peacekeeping on the continent, and fighting piracy and terrorism on the east coast. Mduduzi Manana, a national executive committee member of the youth league, has been appointed deputy higher education minister. This is seen as a reward for Mr Manana, who recently stood up to Mr Malema. He was an MP, and is closely associated with Mr Gigaba. Mr Mananas dramatic rise could also be attributed to Mr Gigabas growing influence in the ruling party. HlengiweMkhize, deputy higher education minister, is now deputy economic development minister, filling a vacancy created by Enoch Godongwanas resignation in December. SindisiweChikunga, chairwoman of Parliaments portfolio committee on police, is the new deputy transport minister, and Gratitude Magwanishe, deputy chief whip of the ANC, has been appointed as deputy minister of public enterprises. Asked about Mr Zumas reshuffle, presidential spokesman Mac Maharaj said: "It is his prerogative to reshuffle his Cabinet obviously he intended to make the executive function better." He defended the frequency of Mr Zumas reshuffles, saying the latest was prompted by death and resignation, among other reasons. When pinned on the changes in the transport ministry, Mr Maharaj said: "Well, you check out your rugby team you know what happens with a rugby team sometimes they have to shift positions. Are you happy with how your captain played? Or do you think he was put in the wrong position?" The reshuffle was widely welcomed. The South African Communist Party was pleased that Mr Martins, a central committee member, was appointed.

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The Congress of South African Trade Unions was cautious, sending out a short statement which welcomed the changes, and wished the new appointees well. While Mr Zuma satisfied most ANC allies and leagues in the reshuffle, none of the new appointees are linked to the unions. There were rumours that Mr Zuma would fire Human Settlements Minister Tokyo Sexwale, who has criticised his leadership of the ruling party and the government. An official said Mr Sexwale had expected to be fired, having taken on Mr Zuma in the ANCs political battles. Insiders said he heavily criticised Mr Zuma for stifling debate in the ANC, when he argued for Mr Malemas expulsion to be overturned during a special meeting of the ANC national executive committee on Monday. Mr Sexwale could challenge Mr Zuma during the ANCs Mangaung elections in December. He has support in the Eastern Capes branches, which are expected to nominate him ahead of the December elections. A dismissal would have boosted Mr Sexwales campaign, as he would be seen as a victim. Mr Zuma benefited when Thabo Mbeki fired him as the countrys deputy president in 2005, as many in the ANC saw him as a political victim and rallied behind him. 13 June 2012 Business Day Page 4 Natasha Marrian

Numsa ready to take to streets to alter constitution

The National Union of Metalworkers of SA will lobby for a national strike to compel the government to scrap South Africas macroeconomic policies The National Union of Metalworkers of SA (Numsa) has called for a review of the constitution, and will lobby for a national strike to compel the government to scrap SAs macroeconomic policies, its general secretary, Irvin Jim, said yesterday. Numsa is the Congress of South African Trade Unions (Cosatus) second-largest affiliate, and a powerful voice in the federation. Under Mr Jim the union is quickly gaining notoriety for its radical and provocative proposals to transform the economy. Fresh from Numsas national congress last week, Mr Jim said only drastic changes to SAs economic trajectory would address poverty and inequality.

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"We would want to do everything possible to convince our African National Congress (ANC) in the policy conference and towards December that the macroeconomic framework adopted in 1996 has failed the country," he said yesterday. "That macroeconomic framework its name is Gear (Growth, Employment and Redistribution), was about growth, employment and redistribution. It has failed all those targets." Numsa would lobby Cosatu to issue a strike notice and "take to the streets" to compel the government to abandon its policies. It resolved to review the property clause in the constitution to allow for the expropriation of land, mines, the Reserve Bank and monopoly industries. "The Freedom Charter said mineral wealth, banks and monopoly industries must be returned to the people as a whole, and this is not for manipulation by black or white, and on this we are not narrowly pursuing now another race ticket," Mr Jim said. "Equal access to the economy of this country is in the best interest of both black and white." The ANC requires a 70% majority in Parliament to change the constitution. "I can tell you this, if the ANC were to take a resolution both in its policy conference and its national conference and say it wants to review this constitution, our people will vote for the ANC, they will deliver more than the two-thirds, because that will be exactly in their best interests," Mr Jim said. Numsa president Cedric Gcina said if the ANC did not receive the required majority, it should lobby smaller parties in Parliament such as the Pan Africanist Congress to vote along with it. Numsa wants the leadership emerging from the ANC in December to take forward its proposals, and would pronounce on its preference at the "right time". Mr Jim said the union wanted Cosatu to pronounce on its preferred leadership at the federations national congress in September, as it did in 2007 when it endorsed President Jacob Zuma over former president Thabo Mbeki .Cosatu has taken a decision not to do so this time around. Unionists should also continue to swell the ranks of the ANC and the South African Communist Party (SACP), including occupying seats in their highest decision-making bodies. Numsa received a tongue-lashing from the SACPs general secretary, Blade Nzimande, at the unions congress last week over its criticism of his holding a key post in the party while also serving as a Cabinet minister. Numsa was unmoved and reaffirmed its position that to build a strong SACP, key positions in the party had to be filled full-time.

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Business Day Page 4 Wyndham HARTLEY

Government rejects swathe of amendments to secrecy bill

The Department of State Security has disagreed with a swathe of amendments to the so-called secrecy bill made by a National Council of Provinces ad hoc committee Acting director-general Dennis Dhlomo went through the suggestions of the committee yesterday and tried to persuade the members that they should not be included in the bill. Opposition parties have been using the council stage of the bills passage through Parliament to effect changes. In addition to the inclusion of a limited public interest defence, they sought a tightening of the definition of national security. The department did not agree, with Mr Dhlomo saying the reason national security was broadly defined was to create the space to respond quickly to developing threats against the state. Democratic Alliance (DA) MP Alf Lees said the score after a discussion of the first chapter was 16 to the department and nil to the committee, with one "maybe", and "the department wants to persuade this committee to abandon its amendments". His scoring earned him the ire of ANC committee chairman Rasiriti Tau, who emphasised that some of the departments arguments might be accepted while on other issues the committee might well stand firm and keep its amendments to the bill. On a limited public-interest defence to protect whistleblowers and journalists, the department said "the requirements of the rule of law, and the duty it imposes on all citizens, including the media, are to respect classification decisions until they are set aside. To make special provision for the media and whistleblowers, would place them in a special category ". Mr Lees said the DA would raise the concerns of members of the United Nations Human Rights Commission about the secrecy bills "potential dampening effect" on press freedom. "Deputy Minister of Justice and Constitutional Development Andries Nel tried to allay these fears by saying it was not the purpose of the bill," Mr Lees said. "Whether or not it is the purpose of the bill is debatable. The fact remains that the bill in its current form still poses a significant threat to human rights and fundamental freedoms enshrined in the Constitution."

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12 June 2012 The Times Page 10 Sapa

Saudis in R20bn deal with SA

South Africa and Saudi Arabia have created a joint holding company that could see at least R20-billion investment, Trade and Industry Minister Rob Davies said on Monday. He said Saudi Arabian SA Holding would spend the initial capital on feasibility studies for investment in South African agriculture and Saudi Arabian mining and petrochemicals. "Saudi Arabia has identified gold mining and other base materials. They've chosen not to exploit those previously ... but are now moving towards expropriation and looking at South African technology and expertise," Davies said. The Middle Eastern country was also looking at investing in South African agriculture for food security and stimulating local job creation. As a first option, it could be a major shareholder in joint ventures, entitled to free 5% equity in projects initiated and promoted by it. It would also act as a "government-endorsed" facilitator for businesses looking to invest in large-scale projects in their counterpart countries. Davies said he hoped investment by Saudi companies would run "into tens of billions of rand" in the next few years. Saudi Arabia-SA Business Council chairman Iqbal Surve said Saudi Arabian crown prince Nayef bin Abdul Aziz had formally endorsed the company. "We are ready to tango and waiting for South Africa to join the dance as well." He said South Africa could benefit from investment through Saudi Arabia's sovereign wealth fund, "one of the wealthiest in the world". 12 June 2012 Business Day Page 1 Amanda Visser

Stiglitz calls for R2bn Walmart jobs fund

Two reports on remedy for ill effects of merger between Walmart and Massmart as experts differ

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THE R100m fund proposed by the Competition Tribunal to mitigate the harmful effects of Walmarts entry into the South African market is inadequate and should be increased to up to R2bn, says Nobel laureate Joseph Stiglitz. The Competition Appeal Court has approved Walmarts takeover of Massmart on condition that an "investment remedy" be found to empower local suppliers to respond to "the challenges posed by the merger". The size of the proposed supply chain development fund was one of several differences of opinion among three experts appointed to assist the court. This led to two reports being prepared. Prof Stiglitz and Genesis Analytics managing partner James Hodge were appointed by the government and the South African Commercial, Catering and Allied Workers Union to craft a remedy. Massmart and Walmart appointed Mike Morris, research professor at the School of Economics of the University of Cape Town. The Stiglitz-Hodge report said a supplier development fund equal to "many multiples of the proposed R100m" would be needed to ameliorate the effect of the Walmart transaction on the economy. They proposed a fund in the range of R500m-R2bn, allocated over five to 10 years. In his ruling at the Competition Appeal Court, Judge Dennis Davis criticised the tribunals acceptance of the condition of a supplier development fund of R100m. He said there was "inadequate interrogation" of this proposal, given the concerns raised by the opponents over increased imports and, in turn, the potential for a negative effect on the economy. The Stiglitz-Hodge report said a large fund would "materially address the concerns of the court and provide sufficient incentives to Massmart to implement a serious programme to empower local suppliers". Prof Morris said in his report that throwing large amounts of money at a problem seldom solved it. "When too much money is floating around under these conditions the chances of corruption and waste increase enormously." He believed a smaller, but "highly focused and well-managed fund" was likely to have a greater effect than a large, unfocused and over managed programme. Prof Stiglitz and Mr Hodge examined the supply development fund set up by Massmart and said because of its narrow focus on small and mediumsized enterprises (SMEs), it "effectively becomes a form of corporate social responsibility programme". Their report asked that recipients of the fund should not be limited to SMEs or businesses owned by historically disadvantaged persons, although they may be afforded greater emphasis. Prof Morris asked for a grading of firms which will require capacity building, but focused on small and medium-sized suppliers.

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The experts agreed the desired outcome should be "sustainable supplier development" outlasting the fund and that the concept be adopted by other retailers. Also, the programme "must not simply result in a squeeze on wages or employment at supplier firms". The experts agreed that the fund should have a high level of public oversight and accountability and that the key to success would be Massmarts "buy-in" to ensure changes in procurement. Lawyers representing Walmart and Massmart said yesterday all parties had a month to prepare their responses before heading back to the appeal court. The governments legal representative, Heather Irvine, said the Stiglitz-Hodge report gave some practical guidelines for the fund.

13 June 2012 Business Day Page 1 Paul Vecchiatto

Gordhan warns of taxpayers getting impatient with low value for money
Private sector must show more integrity in tendering for government business Finance Minister Pravin Gordhan warned yesterday taxpayers were losing patience with the misuse of public funds, but also pointed a finger at private sector costs of products and services supplied to the state. The auditor-generals report for last year found fruitless and wasteful expenditure in the public service had reached R30bn. Speaking in the National Assembly during the debate on the Appropriations Bill, Mr Gordhan said: "We need to constantly remind ourselves that this is taxpayers money that we are talking about and that taxpayers are becoming impatient with the fact that we are not adequately providing value for money." However, he then turned his attention to the private sector, and said that a higher level of integrity was needed in the way it tendered for government business. "There is ample evidence that there are two sides to every story," Mr Gordhan said. He said the European crisis meant that expectations of future government budgets should be lower. Even if the euro zone found a solution to its problems, there was no evidence to suggest growth would return there soon.

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These events would have a serious effect on South African jobs, growth prospects and fiscal balances, Mr Gordhan said. This included the prospect of lower tax collections as the South African economy slowed in line with international developments. Earlier this year Mr Gordhan trimmed SAs gross domestic product growth for this year from 2,9% to 2,7%. In April, the South African Revenue Service reported that it had collected R742,7bn in taxes this year R4bn more than Mr Gordhan had budgeted for and an increase of R68bn on the previous financial year. Yesterday Mr Gordhan called for a "more rigorous" exercise to save government funds and to route them in the right direction. The rise in government spending was trimmed in the 2012-13 budget to an increase of 8,8%, from the previous years 9,1%. In his budget vote speech in February, Mr Gordhan warned about "haircuts" as a means to curb public-sector spending. He criticised government departments for wasting money or not allocating it appropriately. Bank of America Merrill Lynch also warned yesterday SA was not in a position to easily absorb a big global shock and could slip into a recession if problems in the euro zone worsened considerably. A sharp slowdown in growth would erode government revenues and swell the budget deficit, which could prompt a downgrade of SAs sovereign credit ratings, the companys South African economist Matthew Sharratt said at a media briefing. "We will have a good idea by the third quarter, if not sooner, where the public sector (fiscal position) will settle," he said. Based on the view that Europes sovereign debt crisis would not deepen significantly, SA was likely to notch up growth of 2,5% this year, Mr Sharratt said. The economy grew by 3,1% last year. Mr Gordhan asked Parliament if the public sector had a proper management cadre that understood its priorities and had the capability to deliver and use effectively the R1trillion national budget. He said that infrastructure spending was not getting the required funds and, even when it did, " we do have that money, regrettably we dont spend it as effectively as we should". Mr Gordhan said the sole criterion for evaluating the governments spending performance was whether or not it improved the lives of SAs citizens. He said this meant that budgeted funds were supposed to ensure the correct levels of service delivery and that all would benefit from it. 10 June 2012 Sunday Times Page 4 Miller Matola

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Power to the youth, shape a better tomorrow

If young people are not creating their destiny, who is? The history of the youth in South Africa is one of playing a critical role in driving change and moving this country forward. Today, South Africa's youth are at the forefront of calls for economic equality and for basic service delivery. They are also affected by the country's biggest challenge - that of unemployment more than any other section of our society. Of a population of 49million, 7.5million South Africans are out of work; and young people are worst affected. Statistics South Africa's Quarterly Labour Force Survey for the third quarter of 2010 showed that about 42% of young people under the age of 30 are unemployed compared with less than 17% of adults over 30. It is a grave situation and is threatening to become an overwhelming challenge. Well into the month of June - Youth Month - we are once again confronted with the reality that youth unemployment is one of the biggest stumbling blocks in our growth plans. There have been discussions and debate around the value of development agencies, funding models and how accessible our economy is for budding entrepreneurs and small businesses. But none of this makes a difference unless the youth takes an active interest in development and policy matters. As a young person, you need to ask yourself - do you really understand the policies that drive your country's development? Those unemployment figures and statistics and percentages - do you fully understand their impact on a microeconomic scale and the difference they make to your pocket? When you talk about starting your own business, do you know how to start and where to go? Do you really understand what BEE means, how broad based it must be, and how you can most benefit from it? How should you be pursuing the ideal of economic equality? It starts with a simple action - being involved. That means understanding the principles, policies and instruments at your disposable and using them to reach all benchmarks.

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The challenges and issues around employment are as diverse and historical as they are multifaceted. Diminishing interest in education from both teachers and pupils, minimum to zero skills, and a continuing cycle of inter-generational poverty are just some of these challenges. Even though our country is considered a middle-income economy, if you scratch beneath the surface you will see the true state of things for most South Africans inter-generational poverty largely determines how far we get. Even for those young people who are lucky enough to have jobs, many support a large number of people, meaning that access to education and opportunities become limited. Entrepreneurship and enterprise development become distant dreams, because if you are living from hand to mouth, how can you afford the luxury to go after greater pursuits? Solutions cannot be reached if we do not concede the truth, no matter how uncomfortable it might be. As a developing economy, we rely on partnerships between government, the private sector and civil society for a truly tangible difference - and so far we have seen that most of these partnerships have failed to bear fruit because of contradictory agendas. For the most part we've seen growing profit margins in companies and a reduced rate of talent and skills development, as well as entrepreneurial effort. So we need inspiring new ways premised on policies that are implemented and collective interest in how far we can go as a nation. What South Africa needs to do, what we need to do, is to start rewriting our own story and formulating our own rules. The youth, especially, needs to realise, acknowledge and accept their power to change the country. This country can only be shaped by you - so shape it for a better tomorrow for you. See the value that comes with being an innovator and get rid of the mindset of seeking inspiration in the "well-resourced" parts of society. Innovation, business development and the creation of new industries are not limited to resources - they also require ambition and boldness. Corporate South Africa should open up its doors to those who demonstrate new and creative energy for their industries - but this can only ever take place if the youth are an inspired generation that demands change. What corporations need to ask themselves is: if we are not playing our part in grooming the young to lead, who will? And the youth should be asking, if I am not actively participating in shaping my future, who is?
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Business Day Page 1 Ntsakisi Maswanganyi

Durban to grow tourism fastest in Africa

A new survey identifies Durban as the city that will grow its tourist market the fastest in Africa this year A mastercard index released yesterday identifies Durban as the city that will grow its tourist market the fastest in Africa this year, in terms of visitor numbers and expenditure. Tourism Minister Marthinus van Schalkwyk said recently SAs tourism industry had bucked international trends and had survived the worst of the economic downturn. Tourism accounts for 9% of employment in SA. The MasterCard global destination cities index, which surveys visitor and expenditure numbers across 132 cities, found most visitors came to Durban for work and business. The index included 12 other African cities Johannesburg, Casablanca, Accra, Nairobi, Beira, Cape Town, Dakar, Kampala, Lagos, Maputo, Cairo and Tunis. "The Durban International Convention Centre provides the largest flatfloor, column-free exhibition and conferencing space in Africa, attracting many international exhibitors to the city," Dries Zietsman, manager for MasterCard Worldwide in SA, said yesterday. The index was compiled using advance flight schedules from several airlines to estimate actual passenger departures and forecast departures for the coming year. Johannesburg was tipped to be the second-most visited destination in Africa behind Cairo with a projected 2,5-million foreign visitors expected this year. The index estimated they would spend about $3bn this year, an 8% increase on last year s spend. Cape Town was still a favourite destination, particularly for visitors from London, with their expenditure forecast to be $361m this year. On the global destinations index, London which is hosting the Olympic Games that kicks off next month topped the worlds cities by visitor numbers for the second consecutive year. Paris took second place, followed by Bangkok, Singapore and Istanbul. A compiler of the report and global economic adviser for MasterCard Worldwide, Yuwa Hedrick-Wong, said that the changing global dynamics were reflected in the index through the inclusion of emerging-market Asian cities among the top 20. 12 June 2012 The Times Page 6

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Philani Nombembe

Khayelitsha mob rule raises fears

A Cape Flats community that has taken the law into its own hands and necklaced criminals has been branded as a bloodthirsty pack of murderers. On Saturday, police came across the charred remains of an unidentified man in Makhaza, Khayelitsha. The man, it has been said, died at the hands of an angry mob who accused him of theft. His death brings to nine the number of people who have been brutally murdered in vigilante attacks in Khayelitsha this year. However, community leader and ANC councillor Andile Lili, who rose to prominence when he condemned unenclosed toilets in Makhaza, said this was but the tip of the iceberg. He said while this type of attack occurred constantly, reports of them seldom reached the media. He said criminals were brazen enough to boast about their escapades when they returned from prison and even adopted nicknames such as "Killer". "The justice system is not assisting this community. Criminals get arrested and then they come back and do the very same things for which they were arrested. "This leads the community to take the law into their own hands and when this happens police end up going after the community instead of the criminals," said Lili. "I've tried to reason with them but I have realised that, although I'm their leader now, I'll soon turn into their enemy." While Lili said the attacks were not orchestrated, Community Safety MEC Dan Plato said that, in some instances, they were. "It is becoming a common phenomenon in Khayelitsha and, to some extent, it's orchestrated as well," said Plato. "The fact is that [the community] are now killers themselves. At the end of the day, police need to conduct a thorough investigation, find these perpetrators and bring them to book. "One wants to urge community leaders as well, to condemn vigilante killings in the strongest possible terms." Zweli Mnisi, spokesman for Police Minister Nathi Mthethwa, said the police had pleaded with Khayelitsha residents to stop the killings and to work with the police instead. "We condemn such acts because they are not helping in the fight against crime. People have raised issues - one of them is that police take longer to respond and that there is no cooperation between society and

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police. But we are saying continuously murdering people based on the kangaroo courts ... we will never allow this," said Mnisi. He said the police would bring to book officers who did not do their work. But first they would need to investigate. Mnisi singled out Khayelitsha as a hot spot but last month nine men were sentenced to 15 years' imprisonment for their role in the murder of a man accused of stealing a cellphone in Du Noon. Police spokesman Captain FC van Wyk said: "We will not allow the community to take the law into their own hands; we cannot allow the public to be punishing suspected criminals." Makhaza residents would not be drawn on the weekend's killing.

8 June 2012 Business Day Page 3 Paul Vecchiatto

Zuma busy sacrificing youth to get re-elected

DA leader Helen Zille accuses President Jacob Zuma of bowing to pressure and stalling the implementation of the R5bn youth wage subsidy Democratic Alliance (DA) leader Helen Zille accused President Jacob Zuma yesterday of bowing to pressure and stalling the implementation of the R5bn youth wage subsidy to boost his chances of re-election. Speaking at the Western Cape provincial legislature, Ms Zille, the provinces premier, said: "The tragedy is the president is prepared to sacrifice millions of young South African lives to get re-elected in Mangaung." In contrast, she praised Finance Minister Pravin Gordhan, saying the subsidys design was "perfect". The debate was called by the DA, to press home its demand that the province should have its share of the subsidy that Parliament had already appropriated the funds for. The proposed subsidy was meant to have come into effect in April, but it has stalled following strong opposition by the Congress of South African Trade Unions (Cosatu), which argues that the subsidy would prejudice older workers who would be let go by companies in favour of younger and cheaper employees. Ms Zille quoted Mr Zumas recent reply to a parliamentary question stating that Cosatu had blocked the subsidy in negotiations at the National Economic Development and Labour Council.

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She described Cosatu as the champions of "comrade capitalism", alleging that its investment relationships were more important than the alliance it had with the African National Congress (ANC) and the South African Communist Party. ANC leader in the legislature Lynne Brown accused the DA of union bashing, saying it was continuing to play opposition politics despite being the governing party. "The provincial government should only get its money once it does its job right," Ms Brown said.
12 June 2012 Business Day Page 4 Edward West

Premier keen on youth wage subsidy

KwaZulu-Natal Premier Zweli Mkhize says the province is getting read to implement the youth wage subsidy The KwaZulu-Natal government was getting ready to implement the youth wage subsidy, Premier Zweli Mkhize said yesterday, breaking ranks with leftist allies in the ruling alliance. His comments came as the Democratic Alliance (DA) held a march in Pietermaritzburg calling for a "provincial version" of the youth wage subsidy in KwaZulu-Natal and for Finance Minister Pravin Gordhan to release the provinces share of the R5bn national youth subsidy. Youth unemployment in SA has been described as a ticking time bomb. Last month, the DA marched to the headquarters of the Congress of South African Trade Unions (Cosatu) in Johannesburg, resulting in a violent clash between the two bodies. The DA claims Cosatus influence in the ruling alliance is to blame for the subsidy not being implemented. Cosatu believes the subsidy will result in existing workers being laid off in favour of younger workers, and that the subsidy will be abused by employers. "We have long expressed our support for the youth wage subsidy initially announced by the Finance Minister Pravin Gordhan two years ago, with an allocation of about R5bn in the February budget estimates," Mr Mkhize said. He hoped the subsidy, before the National Economic Development and Labour Council, would soon be resolved and recommendations would be made to national and provincial cabinets. "We can safely say KwaZulu-Natal is readying itself for the implementation of this initiative." He said the provinces Broad-based Black Economic Empowerment Advisory Council had also endorsed the proposed subsidy.

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DA parliamentary leader Lindiwe Mazibuko said that a memorandum meant for President Jacob Zuma was handed to Mr Mkhizes representatives yesterday. "While President Zuma has dithered and bowed his knee to Cosatu, KwaZulu-Natals African National Congress (ANC) leadership has said the right things about the youth wage subsidy," Ms Mazibuko said. Mr Mkhize urged political parties to engage the legislature on issues of youth development instead of "playing with emotions of vulnerable members of our society in order to advance narrow party-political interests". He said the province now had many youth development programmes. For example, KwaZulu-Natal had awarded 2743 student bursaries worth more than R112,2m so far this year. Last year, it supported 4877 bursaries for poor students at a cost estimated at more than R500m. The province had also allocated R55m towards a youth ambassadors campaign. But Ms Mazibuko said the youth ambassadors programme was mostly a source of ANC cadre deployment. There are 4445 youth ambassadors recruited as peer educators for young people.

11 June 2012 The Times Page 15 Justice Malala

Policy uncertainty scares foreign investors away

The ANC has been in power for 18 years. It is therefore reasonable to expect that its leaders know a thing or two about what domestic and international investors look for in a country. These leaders have been on numerous road shows across the globe. They are not greenhorns. So why is the South African government acting in such a shambolic, haphazard and suicidal way that many business commentators are now declaring that we are a country that is closed for business? Why is it that President Jacob Zuma's government has zig-zagged so wildly on policy over the past year that many people across the globe are looking elsewhere to invest instead of in South Africa? The dream of creating jobs for the more than 7million people walking the streets is slowly diminishing and the culprit is our own government. We are turning money away, sending mixed signals to investors and damaging our own brand.

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Examples of this are the government's lack of policy clarity on the SA National Roads Agency e-toll issue, and the Walmart-Massmart deal. Investors are scratching their heads and asking: What do these guys want? Then they take their money elsewhere. The latest instalment in this policy flip-flop is the weird decision by the cabinet two weeks ago to reject a $385-million (about R3.2-billion) offer for a 20% stake in Telkom by South Korea's KT Corp. The government had introduced the deal to Telkom. Telkom's board and various committees had interacted with KT for months and a duediligence investigation had been undertaken. The board, led by Lazarus Zim, had approved the deal. Last month Telkom said it was all systems go for the deal. Then along came the politicians. Without interacting with Telkom executives and the board, the cabinet announced at the end of last month that the deal was off. The government did not give reasons for the decision. It later emerged that the government believed that it can deliver broadband through Telkom far more cheaply than the Koreans. Incredibly, two senior cabinet members have come out and wondered out loud what happened here. Deputy President Kgalema Motlanthe last week told the ICT Indaba in Cape Town that South Africa can learn from South Korea. "In this case, we can learn a thing or two from the experience of South Korea, whose per capita domestic product in 1960 was equal to that of Nigeria, Ghana and Cameroon. However, within 30 years South Korea has managed to propel itself to being among the eight richest economies in the world by setting up a knowledgebased economy." These are the same guys we turned down just a week before. Motlanthe's bamboozlement was echoed by Minister in the Presidency Trevor Manuel, who even more explicitly questioned the decision to scupper the deal. "Even when lucrative offers are on the table we seem not to be able to utilise them," Manuel said. "We think that we as a state can deliver more cheaply than the private sector." The immediate result of the fiasco was that Telkom's share price plunged to its lowest in eight years. Worse, investors think this country is a joke. "[The decision] hangs a label around South Africa's neck saying that we are closed to business," said Arthur Goldstuck, managing director of World Wide Worx. Now, take this with the government's behaviour on the Sanral e-tolling issue over the past few months. While Finance Minister Pravin Gordhan was arguing in court that

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we needed to pay tolls for the Gauteng highways, ANC secretary-general Gwede Mantashe and Cosatu's Zwelinzima Vavi were unilaterally taking the decision that the tolling would not go ahead. What message does this kind of flip-flopping send to investors? That the government does not follow its own clear policies and is run from Luthuli House and Cosatu House? Then there is the shocking Massmart-Walmart deal. Economic Planning Minister Ebrahim Patel led a cabal of ministers to block the deal, while Zuma, Motlanthe, Gordhan and others were saying we need this deal to happen Who is running this place? Crucially, what is the government's stance on foreign investment? The key role of the government is to create a climate in which investors are able to establish, fund and expand businesses. Investors do not demand much: the rule of law, consistency in policy, and certainty that things will not change from one day to the next. Under Zuma, policy changes from day to day. Leadership sits in 30 different places. Investors do not know who is in charge. The result is that we will not create jobs. Incompetents will continue to loot parastatals. South Africa will become an also-ran. The ANC needs to wake up and smell the coffee. The house is on fire. 13 June 2012 The Times Page 2 Staff reporter and Sapa

Zuma demotes 'loose cannon' Sisulu

Along with the axing of national police commissioner BhekiCele, President Jacob Zuma on Monday, announced changes to his cabinet. One of the key announcements was Defence Minister LindiweSisulu's move from the powerful portfolio to Public Service and Administration. According to ANC insiders, Sisulu had become a "loose cannon". "She is not easy to deal with and has stood her ground most of the time," a senior ANC insider said. Her replacement, NosiviweMapisa-Nqakula, according to sources, was happy to remain in the cabinet and would "accept anything she is given".

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Other changes include Ben Martins as Transport Minister, replacing S'bu Ndebele, who has been moved to Correctional Services. But Jeremy Cronin, Ndebele's deputy, has not been left unscathed, leaving many wondering whether the e-toll saga had taken its toll on the pair. Cronin has been moved to Public Works as Thulas Nxesi's deputy. He has been replaced by SindisiweChikunga. Other changes include Gratitude Magwanishe as Public Enterprises deputy minister. Hlengiwe Mkhize was appointed Economic Development deputy minister, which was left vacant after Enoch Godongwane resigned. Mduduzi Manana has been appointed as Blade Nzimande's deputy in Higher Education. 11 June 2012 Reuters Jon Herskovitz

Key political risks to watch in South Africa

South Africa's ruling ANC is braced for a major policy conference this month after the top three international credit rating agencies said the party was sending Africa's largest economy down the wrong path. The main concern of the African National Congress, in power since apartheid ended in 1994, is a leadership struggle that now looks set to be settled with President Jacob Zuma in position to control the party and country for the rest of this decade. This scenario worries economists who feel his ineffectual leadership will allow problems to fester including a broken education system, an overly rigid labour market and rampant corruption, with risks mounting the longer he stays in power. Meanwhile, the electric grid is operating on razor-thin margins, raising the possibility of rolling blackouts that could slow growth and cost the energy-hungry mining sector billions of dollars in lost output. THE ZUMA ROT Zuma's presidency has focused largely on an electoral conference at the end of the year where the ANC selects its leaders. If Zuma wins re-election as head of the party, he is assured of being its nominee in the 2014 presidential race and winning another five years in office. To keep his grip on power, Zuma has become beholden to powerful labour federation COSATU and thousands of ANC supporters, many of whom appear to have pledged loyalty in return for skimming money from state coffers.

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His courtship of COSATU has led to a raft of union-friendly legislation that has driven up personnel costs while doing little to counter chronic joblessness. The unemployment rate has crept up to 25 percent during his time in office. Zuma and ANC leaders have made the fight against corruption a top priority but most in the country see their pledges as paying nothing more than lip service to a growing problem. Billions of dollars of state funds meant to help the impoverished majority are being siphoned off. Zuma has also put before parliament legislation to manage state secrets. Critics say the measures, if passed, would set up a small cabal around the president who could sweep under the carpet harmful information on corruption and spy on its foes without seeking approval from the courts. The government says the measures would help safeguard national security. What to watch: - Growing protests from the poor, angry at the government's shoddy performance. The protests could destabilise the ANC. GROWING STATE CONTROL OF ECONOMY The ANC will hold their top-level policy meeting at the end of June. The event is held every five years and is designed to determine the direction of the former liberation movement that now enjoys virtual one-party rule. The ANC has released hundreds of pages of policy discussion documents showing its intention to have the state play a bigger role in guiding the economy. Market players will be paying attention to recommendations in a policy paper on mineral resources calling for new taxes on mining firms in the world's largest platinum producer to help pay for welfare spending. The plan would impose a "resource rent tax" - effectively a windfall levy - of 50 percent that will kick in after investors have made a "reasonable return". Zuma has set aside billions of dollars for infrastructure spending to create jobs and grow the economy. But similar spending has seen billions lost to corruption, delays in construction and several projects never getting off the ground because of poor planning. What to watch: - Policy directions the ANC takes with mining, national health insurance and stateowned enterprises. SLOWING CHINA, SLOUCHING EUROPE

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Adding to policy woes at home are troubles in its two most important overseas partners - China and Europe. China is South Africa's biggest single trading partner and the main destination for its mineral exports. Signs of slowing growth in the Asian economy could translate into sluggish growth and job losses for South Africa. The European Union, mired in debt woes, is South Africa's largest trading bloc partner. Europe is also the main destination for its exports of manufactured goods, a sector accounting for about 15 percent of South Africa's economy. What to watch: - Shock moves of the rand currency caused by a volatile euro. ELECTRICITY The near-collapse of the electric grid in 2008 forced mines and smelters to shut for days and deterred new mining and manufacturing investment. Electricity supply shortages still worry businesses and households. State utility Eskom's capacity margin will remain thin until a massive new power plant comes on stream next year, but construction delays have raised worries on whether it will be operational as planned. Large tariff increases over the next three years are helping Eskom plug its funding gap, but industry leaders complain the extra costs are likely to stifle growth. What to watch: - Blackouts caused by system overload may undermine Eskom's assertions that there will be no repeat of 2008, deterring long-term direct investment. TOLL ROADS The government may be stuck with a $3 billion bill to upgrade its busy highways in Johannesburg after unprecedented protests and a court decision forced the state road agency SANRAL to suspend its tolling plans. Without tolls rolling in, SANRAL may be forced to default on at least 20 billion rand ($2.4 billion) of debt unless the Finance Ministry steps in to pick up the tab. The bill is more than the country pays each year to run its court system. Economists have warned if toll plans collapse, this could deter infrastructure investments, which use the same bond funding model as SANRAL. What to watch: - Greater difficulty for state-owned enterprises in raising funds through the bond market.

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($1 = 8.3007 South African rand) 8 June 2012 Business Day Page 1 Ray Ndlovu and Khulekani Magubane

Angola oils campaign to secure AU vote for SA

Region flies teams around Africa to lobby for Dlamini-Zuma Angola is bankrolling a concerted campaign to secure SAs efforts to win support for Home Affairs Minister NkosazanaDlamini-Zuma to lead the African Union (AU) with a $200000 pledge to finance lobbying ahead of the AU summit. Oil-rich Angola, signalling its foreign policy ambitions on the continent, has combined in the campaign with SA, which is chartering aircraft to take teams of cabinet ministers to lobby around the continent. The move places it in direct conflict with Africas other oil powerhouse, Nigeria, which supports the incumbent AU c ommissioner, Gabons Jean Ping. Political observers said yesterday the cash injection by Angola was an indication of an "all-out" offensive by the Southern African Development Community (Sadc) to have its candidate elected. In January, neither Mr Ping nor Ms Dlamini-Zumawere able to gain the two-thirds majority vote needed to land the leadership of the AU. The stalemate forced the continental group to call off the race until next month, when it meets again in Malawi. A confidential report detailed proceedings at the extraordinary Sadc summit in Luanda last week when the bloc discussed at length Ms Dlamini-Zumas candidacy. "Angola had pledged $200000, of which $174000 was received by the s ecretariat," the report reads. Sadc executive secretary Tomaz Salomao said yesterday he could "neither confirm nor deny" the payment from Angola, and when the remaining $26000 would be paid. At the summit SA was tasked by Sadc with the responsibility for chartering aircraft for "lobby teams for the duration of the campaign", the report stated. The three teams, which began their work on April 29, included representatives from Angola, Namibia, Tanzania, Mozambique, Zambia and Zimbabwe. There is a South African Cabinet minister on each team State Security Minister Siyabonga Cwele , Justice Minister Jeff Radebe and Public Enterprises Minister Malusi Gigaba .
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The lobby teams were tasked with a second visit to nine countries before the AU summit. C ountries targeted include Sierra Leone, Senegal, Egypt, Guinea-Bissau, Togo, South Sudan, Burkina Faso, Libya, Tunisia, Morocco and Algeria. The Sadc report paints a gloomy picture of the prospects of an outright victory for Ms Dlamini-Zuma. "The campaign teams visited 28 countries in the continent, of which 12 confirmed their support for Sadcs candidature, nine were not, four were uncertain, two were also uncertain, but may vote for Southern Africa, while one did not know who to vote (for)," the report from Luanda reads. Diplomatic sources, who could not comment officially but are close to the lobbying campaign, said yesterday the three-way split among AU subregional organisations with different positions held on the AU post by Sadc, the Common Market for Eastern and Southern Africa, and the Economic Community of West African States was a "major challenge" to the lobbying effort. The Sadc report seems to back this assertion and signalled that lobbied countries, "advised that the two candidates should withdraw and that new candidates be presented". While SA had skillfully used the disquiet in the region to lobby for its candidate despite being at loggerheads with Zimbabwe and Madagascar over their domestic political situations analysts believed it was far from winning support in Africas Francophone countries. The Department of International Relations and Co-operation yesterday confirmed the campaign, but opted not to comment on the payments by Angola or SAs chartering of aircraft. The departments spokesman ClaysonMonyela said yesterday that Ms Dlamini-Zuma was not SAs candidate for the position of AU c ommissioner, nor was she Sadcs candidate. "She is the candidate of the Southern African region. This is why the region itself is deploying resources in support of Nkosazana Dlamini-Zuma. "Historically, since the Organisation of African Unity and (its successor) the AU, this region has not had the opportunity to have a representative leading in this position," Mr Monyela said. The Southern African region was lobbying other regions to support their candidate and the costs including chartered or commercial flights was known by the countries involved. "This is the second round of elections for AU c ommissioner. We decided last year that she (Ms Dlamini-Zuma) was the candidate," he said.

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"Neither she nor Jean Ping could get the majority needed to win. Further elections will take place in Malawi and what took place in Angola was a reaffirmation of Ms Dlamini-Zuma as a candidate," he said. Trevor Maisiri, a senior analyst at the International Crisis Group, said there were demands to bar Ms Dlamini-Zumas candidature, which he described as "covert attempts" by Nigeria and Kenya to muscle SA out. "SA stands a very big chance this time around. Mr Ping is stepping up to the gauntlet, but from a perceived background of bungling in Libya and Ivory Coast. He stands accused of failing to react to their crises," Mr Maisiri said yesterday. "But on the other hand, SA has made its presence felt outside of its own borders, despite criticism levelled against it that its foreign policy is skewed. "It is part of peacekeeping efforts, the Brics group of nations and, come the AU summit, it could mark the rise of SAs diplomacy on the continent." Persistent speculation in political circles was that President Robert Mugabe would vote for Mr Ping as punishment for President Jacob Zuma over his hardened stance against the 88-year-old veteran ruler. But Simon KhayaMoyo, Zanu (PF) national chairman and former ambassador to SA, yesterday confirmed his partys support for Ms Dlamini-Zuma. "Zanu (PF) fully supports the position of Sadc. We are part of a family, the Sadc family, and as a family we have assumed a common position around the AU candidate and Zimbabwe will stick to that decision," Mr Moyo said.

8 June 2012 Business Day Page 12 Editorial

Governance limbo holds SA back

Planning Minister Trevor Manuels comment that the state cannot go it alone in expanding essential infrastructure will be welcomed PLANNING Minister Trevor Manuel s comment that the state cannot go it alone in expanding essential infrastructure will be welcomed by a private sector that has been getting a cold shoulder from the government of late. However, while Mr Manuel is clearly more in touch with the real world or perhaps just less ideologically blinkered than many of his left-leaning Cabinet colleagues, that in itself is becoming something of a problem for SA. His questioning of the Cabinets controversial decision to veto a deal between Telkom and South Koreas KT Corporation, which had the potential to speed up the rollout of
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broadband in SA and cut data costs, echoes the consensus among sector analysts, who have been scathing in their criticism of the short-sightedness of the decision. But Mr Manuel is a member of the Cabinet and, as such, shares collective responsibility for its decisions. He presumably expressed his opinion and was outvoted by his colleagues for reasons they have chosen not to reveal. His options were therefore to grit his teeth and defend the decision in much the same way as Transport Minister Sbu Ndebele has had to defend the Cabinets decision not to give up on the Gauteng e-tolls project despite his known personal antipathy towards the toll-road concept keep mum on the subject or, if he felt strongly enough, to resign as a matter of principle. It is hard to fathom why President Jacob Zuma tolerates such open dissent either. For a C abinet to function properly, it needs to be, if not united on every aspect of policy, at least pulling in the same general direction. But therein lies the rub. There is no consensus in the Cabinet, and precious little visionary leadership, on where SA is headed and especially how to get there. There are fine goals, such as full employment, better education, less poverty and the like, and myriad plans, including those produced by Mr Manuels laudably forwardthinking ministry. But the political and ideological divide in the Cabinet is now too wide. The result is general confusion, an inordinate amount of the executives time spent fighting internecine battles and undermining colleagues, and a stupefying paralysis. Its little wonder SA has been slipping down the global competitiveness rankings, attracting a paltry share of Africas foreign direct investment and generally underperforming its economic potential. Goldman Sachs Asset Management chairman Jim ONeill, who coined the Bric (Brazil, Russia, India and China) acronym to describe the worlds leading emerging markets and was initially bullish on SAs prospects, despite believing it was too small to be a member of the club, now believes it does not even deserve to be part of the N11, the next 11 most-promising developing countries. He has told The Economist SA has lost its focus and can no longer be considered the continents superpower. This was, of course, entirely predictable after Mr Zuma pulled off the Polokwane putsch and deliberately put together a Cabinet with representatives from all the varied factions that rescued him from the political wilderness. That they had little in common ideologically was neither here nor there: the primary aim was to prevent the African National Congress (ANC) from disintegrating and to hang on to power. Now we are in limbo, with a president who is afraid to lead in case he offends any ANC faction that may retaliate by doing to him at Mangaung at the end of the year what they did to then-president Thabo Mbeki in 2007. Mr Zuma has to keep the alliance together, even if it is at the cost of SA treading water indefinitely while the rest of the developing world surfs past us, because if he doesnt, he could find himself in court facing those pesky corruption charges he has put so much effort into making go away.

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8 June 2012 The Times Page 5 Quinton Mtyala

City and Cosatu on collision course over Obama

While Cosatu is gunning for Cape Town mayor Patricia de Lille to withdraw her intention to bestow the freedom of the city on US President Barack Obama and his wife Michelle, the city is adamant it will go ahead. De Lille made the announcement last month, but opposition to the plan only surfaced recently. Cosatu provincial secretary Tony Ehrenreich said there had been no consultation. "The process was flawed,'' said Ehrenreich. ''When they came to the standing committee [responsible for name changes], Patricia de Lille had already made the announcement." Ehrenreich said Obama did not deserve the honour and that he had done nothing for Cape Town. "Cities can't do things outside of national protocol," he said. Spokesman for Cape Town Priya Reddy said all parties had been consulted before the announcement was made on May 28. "Given that council has approved the recommendation, with the support of a number of political parties and that all necessary democratic processes have been followed, there is no need to review the decision," said Reddy. Brian Denver, acting spokesman for the US embassy said the US was honoured by the recognition bestowed on the Obamas. "We appreciate the fact that there may be internal debate and feel open dialogue is critical in a healthy democracy," said Denver. 11 June 2012 The Times Page 4 AndileNdlovu

Zuma speaks in riddles

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President Jacob Zuma yesterday admitted that the ANC was at a "crossroads" over leadership issues and warned the party's detractors against bad-mouthing it. Speaking at the National Education, Health and Allied Workers' Union's policy conference yesterday, Zuma cautioned those who attack the party against "talking about us every day in the wrong way", saying " they must not push us". The president bemoaned the erosion of "a particular type of leadership", and constantly referred to the late SACP secretary-general Moses Kotane, as the type of leadership the country needed. Zuma continued, lambasting people who seemed to undermine the country's leadership. "I said one day, not long ago, we don't want to tell people where they come from. We don't want to remind them. But they keep on talking about us every day in the wrong way. They might just force us to describe them very correctly, but we don't want to do so. "We have a noble objective to build this country." He said South Africa would be in trouble if discussion moved away from the issues facing the country, to individuals. He also encouraged discussion of the party's "second transition" document, which describes the ANC as the way to address the inequalities of the past. He said: "The structure of the apartheid economy has remained ... it [the document] takes a long-term view of the future of our country. We shaped and determined the type and nature of our leadership. We did that, but today because there's freedom, every person wants to shape the future of this country because it is [now] nice. There is freedom, there is democracy. "Shaping it, while participating in it [under apartheid], meant among other things, death. Many who talk more than anyone today, did not want to come near." The ruling party will hold its national policy conference at the end of the month. 11 June 2012 The New Age Sandile Hlangani

300, 000 new jobs to be created: Molewa

Addressing The New Age business briefing in Sandton, Minister of Water and Environmental Affairs Edna Molewa said 300,000 new jobs in the green economy will be created to help young people who are currently unemployed. South Africa is facing major challenges of job creation and 300, 000 new jobs in the green economy will be created to help young people, said Molewa.

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Asked when will the department create green jobs, Water Affairs Director General Nosipho Ngcaba said 150 000 jobs of targeted 300 000, have already been created. We have already created 150, 000 green jobs that are currently benefiting young people in the country and we encourage more young people to participate, said Ngcaba.

13 June 2012 The Times Page 7 AndileNdlovu

Cartoonist Zapiro scoops world prize

South Africa's best-known cartoonist, Jonathan "Zapiro" Shapiro, has won the International Publishers Association's Freedom to Publish prize. Shapiro will collect the award from the association's president, Young Suk Chi, at the closing ceremony of its 29th congress in Cape Town tomorrow. "I'm thrilled. I really am because, when this sort of thing comes along at a particularly right moment, it does seem all that more meaningful. "It comes at a time when I'm being sued by the president and when my fellow artist, Brett Murray, has come under savage attack and other artists, such as Zanele Muholi and Andries Botha, have also found themselves under attack," Shapiro said. President Jacob Zuma's defamation lawsuit against Shapiro, over the 2008 cartoon titled Rape of Lady Justice, is set to be heard from October 25. Zuma says in court papers that the cartoon is degrading and suggests he is abusing the justice system "in as vile ... a way as the raping of a woman". Despite attacks by government officials and others, Shapiro is not deterred. "[I'm not], because when I wake up in the morning and I'm listening to the radio and reading the paper, there are so many things that still make me want to blow my fuse. They get my creative juices going." The IPA's Freedom to Publish committee has called on Zuma's lawsuit to be dropped, saying the government must not "stifle" freedom of expression. Bjrn Smith-Simonsen, the committee's chairman, said Shapiro was one of the brave voices speaking out against the dangers of corruption and authoritarianism. "Jonathan Shapiro exemplifies everything that the IPA Freedom to Publish prize stands for," he said.

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13 June 2012 Business Day Page 3 Sam Mkokeli

Tide is turning for Zuma re-election camp

When President Jacob Zuma is emboldened politically, he gets the confidence to shake things up in Pretoria EVENTS of the past two days show President Jacob Zuma firmly in charge of the political game. First, he personally put the lid on the Julius Malema hole on Monday, making sure the former president of the African National Congress (ANC) Youth League cannot come back to harm his chances of re-election at the Mangaung conference in December. Before the dust could settle, he moved on to reshuffle his Cabinet. This is the third reshuffle since he became president three years ago. There is a pattern with reshuffles: they tend to follow important victories in ANC battles. When the president is emboldened politically, he gets the confidence to shake things up in Pretoria. Its almost rule by reshuffle, by the man who has been criticised for not leading the government from the front. On the ANC front, Mr Zuma could not be more comfortable. Having thwarted a bid to review Mr Malemas disciplinary hearing, Mr Zuma and his backers can now focus on his re-election. And they are dictating the terms. A party official, speaking on condition of anonymity, says the failure of the attempt to exhume Mr Malema from the political grave eases Mr Zumas path towards reelection. The question was now about who would be elected into the other top positions. Kgalema Motlanthe , the deputy president, has been touted as a possible challenger, but there are doubts over whether he would stand against Mr Zuma. Mr Motlanthe could be re-elected as Mr Zumas deputy if he does not stand against him. Secretary-general Gwede Mantashe, who has been a target of Youth League missiles, looks set to return to his position in December. For too long Mr Mantashe has been the subject of attacks by Mr Malema and the Youth League. Mr Malemas demise is seen as a victory for Mr Mantashe, who stood firm against a campaign by the league to discredit him and undermine his leadership. The Youth League has been campaigning for its former president, Fikile Mbalula, to become the secretary-general. An ANC source said yesterday there were also moves in Mr Zumas camp to retain Baleka Mbete , the party chairwoman. If the drive by the ANC Womens League to have gender parity in the top six succeeds, that will mean three of the officials must be women. That also means the current team of six cannot come back as it is. At least one of them would have to

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make way for a woman. Currently, there are only two women in the top six. At risk of being dropped are those who have backed Mr Malema, as their dreams could sink with him. Early indications are that two such leaders associated with Mr Malema the party treasurer, Mathews Phosa, and deputy secretary-general Thandi Modise will not appear on the list of candidates being put together by Mr Zumas campaigners. Also likely to suffer is Human Settlements Minister Tokyo Sexwale, who is heavily invested in Mr Malema and the youth league. ANC sources say Mr Sexwale launched a blistering attack on Mr Zuma during the ANCs special national executive committee meeting on Monday typical of a man with nothing to lose. Some expected Mr Zuma to fire Mr Sexwale yesterday, but that would have boosted Mr Sexwales already struggling presidential campaign. If the plan to retain the four most likely to survive in the top six gains momentum, jostling will intensify for the remaining two positions in the top six. On the long list of names bandied about are those of Police Minister NathiMthethwa and Public Enterprises Minister Malusi Gigaba . In many ways the two are carbon copies of each other. Perhaps only one of them can make it big in Mangaung. They both come from KwaZulu-Natal, which would limit their chances of making it big in Mangaung. It would be difficult for another leader from KwaZulu-Natal to make it into the top six. But Mr Mthethwa and Mr Gigaba represent a new generation of ANC leaders. They are seen as reliable defenders of Mr Zuma. Mr Mthethwa took all the flak for the drama in the police department, while Mr Gigabas growing influence is seen in the campaigns on the ground to make sure that Mr Zumas road to Mangaung is smooth. As it becomes clearer that Mr Zuma will be difficult to dislodge, competition for the 80 national executive committee (NEC) additional seats is expected to intensify. The NEC is a powerful body, from which Cabinet ministers are mainly chosen. Companies looking for the inside track on the ruling party also invite NEC members to serve on their boards. Provinces that back the winning horse will be in a better position to push their people into the committee. The realisation that backing the wrong horse can mess up such benefits makes it even more important for provinces to be careful during the horse trading. With Mr Zuma looking stronger, lower structures are likely to be enticed to throw in their lot with his campaign. He has the backing of KwaZulu-Natal, where almost 24% of the ANC membership comes from. With votes here and there in other provinces, Mr Zuma can already smell a second term. 13 June 2012 The Times Page 1

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Graeme Hosken, Chandr Prince and Dominic Mahlangu

Zuma cops flak

President Jacob Zuma's appointment of Mangwashi "Riah" Phiyega as the first woman police commissioner has been criticised as nothing but a "big flop" - including by members of the ruling party. Yesterday, security experts, opposition parties and senior ANC sources slammed Zuma's latest choice, saying the human resources practitioner came with "nothing but certificates". ANC members who spoke shortly after Zuma announced Phiyega's appointment at the Union Buildings, criticised the president's decision, saying he was not resolving the chaos in the police service but was more intent on securing his political survival ahead of the all-important Mangaung elective conference in December. "At a time when we are faced with such challenges in the police service, Zuma brings a former social worker to head the most important post in the land. This is a big flop. "How is the new commissioner going to deal with intelligence reports that involve politicians? With her lack of experience in security matters, we are afraid that she will be a useful tool for those in power," a senior ANC member in Gauteng said. In a late afternoon press statement, ANC's headquarters, Luthuli House, expressed its support for Phiyega, saying her knowledge of public policy and understanding of the government would help her in her job. But others said: "Not that we want someone connected to the ANC, but surely we deserve better than this. This appointment will solve nothing other than give space for politicians to dictate terms within the SA Police Service." Zuma also announced that he had fired BhekiCele as police commissioner based on the report by the chairman of the board of inquiry into Cele's fitness to hold office, Judge Jakes Moloi. Zuma said he had a detailed discussion with Police Minister NathiMthethwa about the corrective measures that needed to be adopted immediately. "These include management and financial systems as well as the breaches of information security within the establishment, which have unfortunately become common. "We have in the past few weeks witnessed a disappointing spectacle of police officers jeopardising state security by placing information in the public domain, in contravention of their oath of office. "This is unacceptable and intolerable if the fight against crime is to continue being effective," he said.

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While Zuma portrayed Phiyega as the ideal antidote to the internal strife plaguing the upper echelons of the police, senior researcher at the Institute for Security Studies Johan Burger labelled the appointment as a slap in the face of police management. "Clearly, once again, Zuma has not learnt from the previous two mistakes in appointing civilians and politicians to head the police service," Burger said, referring to Phiyega's predecessors - the jailed Jackie Selebi and now-fired Cele. Burger said though in principle the reasons for firming up management and financial systems of the police service might appear to be good, Zuma's stance on information security within the police was "extremely worrying". "While I have nothing against the new appointment, this crackdown on information leaks is something that needs to be guarded against. "Instead of welcoming the public airing of financial abuses, Zuma is shutting down the avenues for information to become public." Burger said there was a "need for more openness, not less" and that the new appointment was an indictment on police management. "It shows what the president really thinks of those good hard-working members, of whom there are many. "What we need is another commissioner, like [Nhlanhla] Mkhwanazi, who is prepared to stand up and show the country and the world that there are good, hard-working and honest members within the core of the police," he said. DA leader Helen Zille described the appointment of the new commissioner as an act of "desperation" designed to muster support for Zuma ahead of Mangaung. Zille said Zuma should have appointed someone with a demonstrable ability to fight crime. Mthethwa, the ANC Women's League and police union Popcru welcomed Phiyega's appointment, saying she brought with her a "wealth of experience on strategic leadership and sound management background" . Phiyega's experience within government has been limited. Her only real exposure came when she was appointed by Zuma as chairman of the Presidential State-Owned Enterprises Review Committee in October 2010. The committee was appointed to review all entities including SOEs, agencies, utilities as well as companies within which the state has significant shareholding. It was given a deadline of September 2011 to submit a final report but had failed to deliver by March this year. Before this, Phiyega spent her time in the corporate sector until she fell foul of Absa CEO Maria Ramos.

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The two had worked together at Transnet, where Ramos had been appointed as CEO and Phiyega had occupied various positions, including running the Transnet Foundation. But, according to sources, she and Ramos had "personal difficulties". Phiyega then moved to Absa. But Ramos was then appointed CEO at the bank and Phiyega knew she "would be squeezed out". But Mthethwa insisted that her "vast" experience in both the public service and private sector would place her on perfect ground to steer the police towards "better compliance, systems integration, effective and greater accountability". "We believe that her appointment is well-deserved as her CV speaks volumes and that her previous achievements in various management echelons are not coincidental but achieved through dedication and hard work." The ANC Women's League also endorsed Phiyega's praises, saying it believed that a "strong woman at the helm of the police service will bring a renewed focus to overcoming the scourge of gender-based violence, such as rape, which has become a growing concern across the country".

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11 June 2012 Business Day Page 2 Wyndham Hartley

Zuma continues with his re-election efforts

President Jacob Zuma will make a number of public appearances this week culminating in National Youth Day on Saturday President Jacob Zuma will remain on his "charm offensive" this week with a host of public appearances culminating in National Youth Day on Saturday. Mr Zuma spent much of last week on the road trying to woo supporters, particularly in the trade union movement, but according to weekend reports, failing in some and succeeding in others. Tomorrow the president goes to Butterworth to switch on the connection for Eskoms 4-millionth electricity customer. The Eastern Cape is a key constituency for Mr Zuma if he is to gain re-election at the African National Congresss (ANCs) electoral conference in December. On Thursday, he will be in Soweto to monitor public transport and interact with the community while on Friday he will deliver the ANC centenary lecture in the Johannesburg City Hall. Then Mr Zuma is off to Port Elizabeth for the commemoration of the June 16 uprising where he will speak at the National Youth Day celebrations. Deputy President Kgalema Motlanthe will face his colleagues in the National Assembly on Wednesday during questions to the deputy president. Inkatha Freedom Party MP Narend Singh will ask him if his recent visit to Ghana was in pursuit of finding alternative oil resources in view of the United Nations threat to call for a ban of oil imports from Iran and whether he intends to visit more oil producing nations to source alternative sources of crude oil supply. African Christian Democratic Party leader Kenneth Meshoe will ask Mr Motlanthe if SA will join the US, France, Britain, Canada, Germany, Italy, Spain, Australia and Bulgaria in expelling Syrian envoys from their countries as an expression of their outrage at the recent massacres in Houla. The official opposition Democratic Alliance (DA) will also be on the road, literally, with parliamentary leader Lindiwe Mazibuko leading a march in Pietermaritzburg today protesting against youth unemployment. The last time the DA marched for a national youth wage subsidy it ended in disarray with Congress of South African Trade Union members breaking up the march in Johannesburg. Todays march will end at the office of KwaZulu-Natal Premier Zweli Mkhize who will be called on to support the subsidy idea publicly.

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On Wednesday, Patricia de Lille will address the Cape Town Press Club on the anniversary of her election as mayor of Cape Town. In Parliament tomorrow, all eyes will be on Finance Minister PravinGordhan when the National Assembly has the first and second reading debates on the National Budget, or appropriation, Bill. Also up for debate will be the Financial Markets Bill and the Rates and Monetary Amounts and Amendment of Revenue Laws Bill. The controversial Protection of State Information Bill will feature on Wednesday as the ad hoc committee from the National Council of Provinces receives and considers proposed amendments to the bill. Opposition parties and civil society have been arguing for a public interest defence to be inserted to protect whistle-blowers and investigative journalists from prosecution if the classified information they reveal is clearly in the public interest. The ANC had proposed a limited defence clause which will offer protection to those who divulge classified information if it can be shown that the classification was intended to hide criminal activity. The Department of State Security is apparently opposed to even the ANCs proposed clause. The intelligence committee will on the same day be holding a meeting but, as always, this meeting will be closed to the public and the media. Another ad hoc committee, that on a code of judicial conduct and regulations on judges disclosure of registrable interests, will meet on Wednesday and Thursday to continue its deliberations. In January, a senior delegation of judges submitted that many of the regulations drafted to regulate judicial disclosures were unconstitutional.

11 June 2012 Business Day Page 3 Evan Pickworth

SA needs more power to accelerate growth

Analysts warn that economic growth of 6% is a far-off dream if power capacity or efficiencies are not expanded faster than current rates of just 2,7% While President Jacob Zuma on Friday celebrated Medupi moving a step closer to generating its first power to the national grid next year, analysts warned that economic growth of 6% is a far-off dream if power capacity or efficiencies were not expanded faster than current rates of just 2,7%. SAs gross domestic product (GDP) growth tends to match requirements in power capacity and even with the new Medupi and Kusile plants coming on stream in 2020, a long, slow growth path of just less than 3% can be expected unless more energy is found.

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Mr Zuma initiated the final phase of the pressure test on the boiler of the first unit of Eskoms new Medupi power station on Friday. This will be the first new power station SA has built in more than two decades. Once it is complete, at a cost of R91b n, it will be the worlds fourth largest coal-fired power station, with a total installed capacity of 4 800 megawatts. But Ian Liddle, chief investment officer at Allan Gray one of the countrys biggest asset managers said even with two new stations coming on stream, power supply only grew 2,7% to 2020. His research indicated a strong, historic correlation between GDP growth and power capacity growth. "So it seems hard to believe how real GDP can grow at more than 3%, as we are fully utilising capacity," he says. Colen Garrow, chief economist at Meganomics, said a big benefit SA did have was that "we started leaning against the winds of contagion long before it became fashionable to rely on infrastructure". But the problem was that SA needed 6% growth to dent its 25,2% unemployment. Mr Garrows forecast is at 3,5% at the upper end over three years. "We are still building, while a lack of skills are holding us back and commodities are holding us back, " Mr Garrow said. While big electricity and water projects may be on the cards, recent statistics show growth levels are not very exciting. According to first quarter GDP statistics, the electricity and gas sector had no growth whatsoever, whereas in the quarter before it grew 0,7% and before that 1,1%. That was three consecutive quarters of really poor growth. However, Mr Garrow said that infrastructure spending in the trillions and its knock-on effect to GDP numbers was "huge". "We are starting to tie things up. Things are happening, and if not quick enough, at least were not going in reverse. "But if we dont get electricity and some key utilities moving, we cant deliver as an economy and get the efficiencies, so its really holding us back in many ways." 11 June 2012 Business Day Page 4 Thabang Mokopanele

Tshwane has bold vision for development

Tshwane opening a new chapter by developing the municipality into a first-class destination for visitors, investors and residents TSHWANE, one of the largest metropolitan areas in SA, is opening a new chapter by developing the municipality into a first-class destination for visitors, investors and residents with a long ranging development vision.

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Tshwane will soon compete with Johannesburg, Cape Town and Durban by building its own international convention centre in Centurion and is also planning to build a government boulevard to house government departments in the central business district (CBD). By building the convention centre, the city wants to attract the lucrative conference market in the city, which is home to 132 embassies and four universities. By investing in infrastructure, the city aims to attract more businesses, and prevent government departments from moving into other areas such as Lynnwood and Hatfield. In an interview on Friday, mayor Kgosientso Ramokgopa said previously the vision of the city was short term and not long ranging. He has identified a number of multimillion rand capital projects, including the rehabilitation of Centurion Lake as part of a larger Centurion SymbioCity project. His most ambitious plan is the Centurion node, which is positioned within the development corridors linking Johannesburg and Ekurhuleni and therefore will be a major player in the proposed high intensity developments which are destined to take place in the region. The project on 10ha of prime land near the Gautrain Centurion station, includes creating the tallest building in Africa at 110 storeys high. The proposed Centurion Symbio City will feature two office towers, and include hotels, retail facilities, a convention centre and residential space. The project could take anything up to eight years to complete. This would position the city to be the best among the three metropolitan municipalities in Gauteng. Mr Ramokgopa said Tshwane, Johannesburg and Ekurhuleni were the extremities of the "golden economic triangle of Gauteng" and the metropolitan municipality needed to claim its rightful place. "We are now changing that by having a long ranging vision and we have taken a decision to invest in the rejuvenation of the city. We want to create a government boulevard and move away from our previous conservative approach to investment and be aggressive and maximise opportunities that are available." In the Pretoria CBD, plans are already under way to stop vehicle movements around Church Square by creating pedestrian sidewalks, bus rapid transport (BRT) and improving security. The section of Paul Kruger Street between the Pretoria Railway Station, passing through Church Square, and the Pretoria Zoo, would be upgraded to demonstrate how the city intends to adapt, shape and improve the inner city to be more accommodating for nonmotorised commuting. The first BRT station would be constructed in Hatfield by the end of next month and the process of procuring buses is in progress.

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"What people dont realise is that security is very important for any city to operate efficiently. We are also a seat of four universities and there is a huge demand for student accommodation, so we want to provide family units in the CBD for masters students who are studying here."

11 June 2012 Business Day Page 10 Editorial

Bad policy drives away good firms

Deep frustration over inefficient bureaucracy and red tape in the country THE decision by Resilient Property Group to end its development operations in SA is just another example of good business being driven away by bad policy. Resilient CEO Des de Beer said last week the company plans to stop developing shopping centres in SA as a result of inefficient bureaucracy and red tape in the country, instead choosing to move the operation to Nigeria. It is bad enough when international investors are discouraged from bringing their money into the country, but far worse when our own companies are forced to look outside SA for opportunities. We can no longer ignore the extent to which the Zuma administration has been distracted by internal party politics to the detriment of the economy and the country as a whole. Resilient is not the only company to have expressed frustration at the effect government inefficiency and obstructiveness are having on the ability to do business in SA. Redefine, SAs second-largest property group, has faced similar problems and, partly as result, has chosen to direct more of its activities to the Western Cape than to Gauteng, the countrys economic heartland. The company has also chosen to limit its exposure to government-tenanted buildings due to inefficiencies associated with the states black economic empowerment requirements. It is a reality that interactions between the government and the private sector in SA have become characterised by ineffective, time-consuming regulations, rules and administrative procedures, and even open hostility. Yet, as much as the government laments the slow pace of economic development and job creation in SA, it remains deaf to the complaints of business. Much of this attitude seems to stem from an unfounded belief that SAs economic and political dominance of the continent is unshak able, and that it is doing foreign investors a favour by allowing them to bring their capital into the country. Yet, while SA remains a key entry point into Africa for foreign corporations, perceptions of rising corruption and government inefficiency are starting to take their toll on confidence. In the face of high taxes, a poorly skilled workforce, and rapidly

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increasing real wages, SAs appeal to foreign investors has been declining. International corporations are increasingly looking to Nigeria, Kenya and even Egypt as alternative locations to set up operations and to use as springboards into Africa. The consequences of the governments indifference to the effects of overregulation, inefficiency and corruption on investment in SA are plain to see. In comparison with our northern competitors for investment Kenya and Nigeria whose growth rates are close to 4% and 7% respectively, SA has barely managed 3% over the past few years. In 1995, SA accounted for almost half of sub-Saharan Africas gross domestic product, yet today it can lay claim to less than a third. Considering our considerable mineral wealth and relatively well-developed infrastructure, it is shocking that SA is now one of the slowest-growing economies in Africa. A big part of the problem is that the government is inclined to favour politically motivated policy options over economically prudent ones. This is particularly apparent in the mining sector. Proposed changes to the regulation of the sector include a tax on so-called "super profits" and the implementation of recommendations in the African National Congresss State Intervention in the Minerals Sector study. Anglo American CE Cynthia Carroll warned recently that further changes to the fiscal regime in SA would create a grave risk of making the country internationally uncompetitive. SA has some of the richest and most varied mineral deposits in the world, yet our attractiveness for mining investment has sharply declined in recent years as concerns over regulatory uncertainty and constant threats of nationalisation have increased. Ms Carroll is not alone in warning about the effect of party-political wrangling on SAs economic outlook. Ratings agency Moodys cited concerns about heightened political risk in the context of increasingly constrained public finances as a reason for downgrading SAs risk outlook. It has previously raised concerns over rising pressure to give in to populist demands. Even if the real risk is small, for many investors perception is akin to reality, and they would rather invest in a country with a more positive outlook. The regulatory environment in which business operates directly influences competitiveness, so it is not hard to understand why a growing number of domestic businesses would rather invest elsewhere in Africa than at home. The biggest difference between these countries and SA is their can-do attitude and willingness to facilitate investment rather than put obstacles in its way, even if other business conditions are not optimal. The Kenyan government has in recent years enacted several regulatory reforms to simplify both foreign and local investment, for instance. In response to the rise in negative perceptions about doing business in SA, the Western Cape government has been trying to reduce red tape. The launch of a comprehensive plan to remove statutory and systemic blockages to investment and growth in August last year has yielded positive results, but there is a limit to how much the province can achieve in a vacuum. A national framework to reduce red tape, and above all to change the official attitude towards business, will be required if further progress is to be made.

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It is not hard to understand why a growing number of domestic businesses would rather invest elsewhere in Africa

11 June 2012 Business Day Page 1 Thabiso Mochiko

No Telkom payout after Korea snub

Telkom has paid dividends each year since 2004, with special cash payments in five of the six years until 2010 THE collapse of the proposed equity investment by South Koreas KT Corporation in Telkom and a slump in full-year earnings are behind the fixed-line operators decision not to pay dividends for the first time in years. KT Corp planned to buy 20% in Telkom, a sale that was expected to bring a cash injection of just more than R3bn. But the deal was rejected by the government, Telkoms majority shareholder. Telkom faces many challenges, including declining voice revenue, and continued erosion of the traditional fixed-line business by the rapid adoption and use of cellphones. The company is operating in a highly competitive fixed and mobile market, and extensive capital investment is needed to renew and expand its network, it says. According to Bloomberg, Telkom has paid dividends each year since 2004, with special cash payments in five of the six years until 2010. A final payout of R1,50 was expected, according to Bloomberg dividend estimates. "Telkoms strategic objectives of network transformation and the building of its mobile business will see dividends being considered on an annual basis based on the performance of the group," the company said on Friday. Analysts expect Telkom to start paying dividends again if and when its strategy starts paying off, which could take up to two years, or when its mobile business 8 ta reaches break-even. Telkom will use internal cash to fund its network infrastructure project and has an option to raise debt. But no plans exist to go to the market for funding. Telkoms chief financial officer Jacques Schindehtte said that "without KT, there is certainly no reason for panic we will need to find an alternative to find the required expertise". He said the "reality is that the capital market and rating agencies would have found comfort in the additional capital (from KT) and the fact that Telkom has experienced partners in the execution of its strategies". This also would have allowed Telkom to comfortably tap into the debt market to a moderate level, he said.

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Andrew Kingston, equity analyst and portfolio manager at Sanlam Asset Management, said Telkom was being "prudent" and "conserving cash" for a potential fine that the Competition Tribunal may impose. Also, the fact that the KT deal was no longer happening meant that the expected cash has fallen away. "It is unclear as to when they will resume dividend payments but probably when the mobile business is closer to break-even. As to when that is depends on how successful they are on the mobile side. I would expect the resumption of dividend payments within two years," he said. But Abdul Davids, head of research at Kagiso Asset Management, said Telkom needed to stop spending money on their mobile business, 8ta, and use the savings to declare and pay dividends. "Telkom has a current market value of R10bn and their fixed-line business generated R11bn in cash. Clearly, the market is currently placing negative value on their mobile business and is not factoring in any growth. "Therefore, if they want to add value to shareholders, they should cut off the portion of their business that is detracting value and instead reward their shareholders with dividends." But Telkom has already identified 8ta as an area for growth and it is pumping about R2,5bn this year into the business. Mr Schindehtte believes Telkoms future lies in broadband and mobile, hence investments are being made in building a high-speed fourth-generation network. Mr Kingston said Telkom should at least focus on mobile data for corporate customers where it has more strength.

11 June 2012 Business Day Page 10 Peter Bruce

The Thick End of the Wedge The Editors Notebook

What must it be like to be Trevor Manuel in a Cabinet meeting and watch truly dreadful decisions being made and not be able to do anything about it? WHAT must it be like to be Trevor Manuel in a Cabinet meeting and watch truly dreadful decisions being made and not be able to do anything about it? Youre collectively responsible, after all. But he would have been there the week before last when the Cabinet decided that, no, it didnt want a South Korean company to invest in Telkom .Unwanted foreign investment. You can just imagine the new giants of state thinking Ebrahim Patel

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and Malusi Gigaba arguing that they know better, that Telkom is a development tool and not merely a company. And, obviously, the more foreign ownership in state-owned enterprises the less flagrantly they can be milked to fund the ANC. It isnt that South African Airways (SAA) or Transnet or Telkom pay money directly to the party, you understand. But if you want to do business with them youll find every contract comes with a political premium. Fund this conference, take 20 tables, hire these comrades... So Manuel has to shut up. To his credit, he did find a way last week to express his disgust at the Telkom decision, but it barely stirred the political tree. President Jacob Zuma , of course, should fire him for breaking the "collective responsibility" code. But he wont. He needs Manuel inside the tent even if it is not always convenient to listen to him. And Manuel could himself go, but where? If he left out of exasperation with the government thered be nothing in the private sector for him. Business is relentlessly bullied by the state and the ANC and they would be too scared to hire an outcast. An international job? Where? How? His wife, Absa CEO Maria Ramos, makes more money than he ever will and her job is in Johannesburg. All that means he has to stay in government and most people I know think thats probably a good thing, even if he loses some big battles. Thing is, he wont lose them all and it is so important to have at least one voice talking sense to the president, no matter how distracted he might be by his personal issues. Finance Minister PravinGordhan is another voice of reason, but he is a Zuma loyalist from way back and would never rock the boat. But there is work for both men to do. Zuma has been duped into thinking that the state must play a central commercial role in the economy. But that is the road to ruin. Telkom will need cash. So too will SAA, Transnet and Eskom, and they are the kinds of demands that have led countries such as Portugal, Greece and, now, Spain, to bankruptcy. The new line distorts policy and strategy. As former competition tribunal head David Lewis argues in his absolutely brilliant new book, Thieves at the Dinner Table (Jacana), competition rules are still in place and working, thanks to the competition commission and tribunal. But, thanks to the states rediscovered taste for monopoly, competition policy has been blown away. Naturally, this forces prices up rather than down, which the president just cannot see, or, worse, thinks he can control. "Had the privatisation of Telkom been more carefully considered or had the state not permitted Iscor to own the Saldanha steel mill we would not today be confronting a notoriously uncompetitive telecommunications sector, nor would we be worrying about excessive pricing of steel products. Those are the consequences of a nonexistent competition policy," he writes. In a swipe at Patel, who now controls the competition regulators and blatantly uses them for political outcomes (Walmart), Lewis writes of his own realisation of the

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limits of the state as a driver of growth and development. "I began to have more confidence in the prospect of a JD Group disciplining an Ellerines," he writes, "than of a Minister of Furniture achieving similarly efficient and equitable outcomes." Some people learn. Some dont. 10 June 2012 Sunday Times Page 1 Sibusiso Ngalwa

Zuma meets 'fired' Cele

President Jacob Zuma held a secret meeting with disgraced national police commissioner BhekiCele on Friday to discuss his decision to "relieve" the former top cop of his duties. The two met at John Langalibalele Dube House, the president's official Durban residence, three days after Zuma wrote to Cele informing him of his decision to fire him. Zuma is expected to officially announce Cele's axing in line with the recommendations of Judge Jakes Moloi's board of inquiry into Cele's fitness to hold office. The board of inquiry found Cele guilty of maladministration and misconduct relating to the leasing of two buildings to the police totalling R1.7-billion. Cele plans to challenge the findings in court this week. Zuma's spokesman, Mac Maharaj, yesterday refused to confirm or deny the meeting, but Cele's spokesman, Vuyo Mkhize, confirmed it did take place. "I can confirm that on May 27 General Cele sent through a meeting request to the president. I can also confirm that the president responded to this request on June 6, setting the meeting down for June 8. The meeting took place in Durban as scheduled," said Mkhize However, he would not confirm that when Cele initially requested the meeting, he had planned to officially tender his resignation as national commissioner . "Unfortunately, I am not at liberty to disclose what was discussed at the meeting or confirm that the reason General Cele requested the meeting in the first place was so he could tender his resignation," he said. Zuma's letter informing Cele of his axing was delivered to his home in Durban on Tuesday. The letter, dated June 5, details Zuma's reasons for firing him.

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A highly placed insider who saw the three-page letter told the Sunday Times it made no mention of businessman Roux Shabangu, despite his name featuring prominently in the Moloi commission's report. "The letter mentions two things that Zuma feels Cele failed to do. It says his decision to withdraw delegation powers from his subordinates for the procurement of goods worth over R500000, while at the same time relying on them for advice, was negligent of him. Zuma says if Cele was so concerned about possible corruption in the SAPS supply-chain management division as to request a Special Investigating Unit investigation, then his stated reliance on the same people was negligent," said the insider. Zuma then points out how Cele flouted the provisions of the constitution, the Public Finance Management Act (PFMA) and Treasury regulations. Zuma said while he gave regard to Cele's crime-fighting imperative as the top cop, he had decided to "relieve you of your duties as national police commissioner forthwith". Cele's firing followed days of speculation over whether he was planning to resign following publication of the report. It has been learnt that he was planning to resign and even had a letter drafted, but was talked out of the plan by his close advisers, as it would diminish his chances of successfully challenging Judge Moloi's findings. Cele is expected to approach the court this week to challenge the findings against him, but not his firing. Zuma's letter came a day after the ANC's KwaZulu-Natal provincial executive committee (PEC) decided on Monday to send its top five leadership, led by premier and provincial chairman Zweli Mkhize, to meet Zuma regarding Cele. It is understood that the matter came up during the PEC meeting, at which some members even suggested that Zuma should reinstate Cele. However, the view that won the day was to send the leadership to meet Zuma and ask him to "redeploy" Cele. The provincial ANC leaders believed that a "redeployment" would win over party supporters who believed the axing was too harsh a punishment. The matter is expected to also come up during KwaZulu-Natal's special provincial general council later this month. Asked about Cele's plan to go to court, Mkhize said: "While Cele accepts that it is the president's prerogative to appoint and fire the national police commissioner, he also believes that nobody - Judge Moloi and President Zuma included - has a right to make legally unsound and defamatory claims about his character and conduct. This is the reason why he will go to court if the president upholds Judge Moloi's report. His court bid will be to clear his name, not to fight to hang on to his job."

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Maharaj said the presidency would not comment on the issue "until we issue a statement". He would not even say if Zuma had started looking for Cele's replacement. Labour Department Director-General Nathi Nhleko, a long-time Zuma ally, is widely seen as the frontrunner to replace Cele, despite growing pressure from within and outside the ANC for the next police chief to be a career policeman. Nhleko yesterday denied that he had been approached for the job. "I've heard of the rumour and all the speculation that accompanies the rumour itself. You will appreciate that it is a rumour and it remains a rumour," he said. Asked if he would accept the post if approached, he said: "That's an unfair question. It's like asking somebody, 'What would you do if there was a thunderstorm? Would you run into someone's house or get under a car?' For me, we rather deal with that which is scientific, that which is factual. It has not happened." 10 June 2012 Sunday Times Page 4 Sibusiso Ngalwa and Sibongakonke Shoba

SA 'already like Zimbabwe', says Numsa's Jim

The levels of poverty and inequality in South Africa were no different from those of poor Zimbabweans because of the country's macroeconomic policies, which continue to stifle the creation of jobs. This is the view of National Union of Metalworkers of SA (Numsa) general secretary Irvin Jim, who said the leadership of President Jacob Zuma had not helped the working class in this regard. "People say we will be like Zimbabwe. South Africa is [already] like Zimbabwe in terms of levels of poverty, unemployment and inequality. The only difference is that, in Zimbabwe, there is [President Robert] Mugabe, whom the West is presenting ... as a monster and everything else. In South Africa, we are in trouble equal to Zimbabweans in terms of poverty, unemployment and inequalities." Jim was speaking to the Sunday Times on the sidelines of Numsa's ninth national congress at the Chief Albert Luthuli Convention Centre in Durban. He said the workers remained exploited and that the ANC had yet to implement the resolutions taken at the 2007 Polokwane conference, which resolved to review the country's monetary and macroeconomic policies. Their congress required of the leadership to be "brutal and honest" about the state of affairs in the country, government and ANC-led alliance.

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"We are very frank that Polokwane [leadership] has not helped us in relation to the macroeconomic framework ... one of the things that Polokwane needed to do was to review macroeconomic policy in this country and make sure we do grow the economy and create decent jobs. Labour brokers need to be banned." Numsa also wants Cosatu to review its decision not to nominate its preferred leaders for the ANC leadership at the Mangaung congress. ''We said we must embark on a process of reflecting on the performance of the leadership and be detailed on all individuals who form part of that leadership, and take a view about the comrades we think have performed very well and take a view about comrades we think have not performed. We will assess leaders both as individuals and as a collective. Even if we are all in a race and a certain athlete keeps falling at the start, what do you do?'' Numsa is demanding the nationalisation of the Reserve Bank, mines, land and strategic industries without compensation. Closing the congress on Friday, Numsa president Cedric Gina said nationalisation should be implemented with speed "if we are to avoid sliding into anarchy and violence as a result of the cruel impact of the effects of poverty, unemployment and extreme inequalities". Jim said the comparisons that had been made between him and expelled ANC Youth League leader Julius Malema were meant to "stigmatise" him. "When people say I've occupied the space of Malema, I don't expect that ... as you are raising these fundamental issues, you won't be categorised in various ways with a view to stigmatise you, to ensure that you are liquidated. It is an orchestrated agenda, but we are not going to budge," said Jim. 11 June 2012 The Times Page 5 Katharine Child

Cele did meet Zuma

THE Presidency yesterday confirmed media reports that suspended police commissioner BhekiCele and President Jacob Zuma met on Friday but would say nothing about Cele's fate. The Sunday Times yesterday reported that Cele and Zuma met in Durban on Friday to discuss Zuma's decision to fire the police chief. Presidency spokesman Mac Maharaj said yesterday: "The president had called the meeting to discuss the report of the board of inquiry chaired by Justice Jake Moloi.

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"The content of the discussions remain confidential. The president will announce his decision as soon as he has completed all necessary processes." Cele's spokesman, Vuyo Mkhize, said Cele called for Friday's meeting, not Zuma. He refused to comment further but said the meeting was to discuss "certain issues we are not prepared to elaborate on". Reports that Zuma had fired Cele surfaced on Wednesday. Last month a board of inquiry led by Moloi recommended that Cele be fired, saying he was "dishonest" and unfit to hold office because of his role in the R1.7-billion scandal around the leasing of two police buildings. The board was appointed by Zuma six months after Public Protector Thuli Madonsela found Cele's involvement in the lease deals was "maladministration" and "improper". The board found that senior police officials had lied to protect Cele and that many of the written public submissions to support Cele's case were identical and only the names on the pages were different. Cele wrote to Zuma last month, maintaining that the Moloi board's findings should be ignored. Maharaj said he could not say when a decision about Cele's future would be announced, but Zuma was aware of the "urgency and seriousness of the matter". Cele is expected to file court papers this week to challenge the board's report.

8 June 2012 Business Day Page 3 Wyndham Hartley

Celes likely successor no career policeman

President will make decision on new boss known when he is ready, writes Wyndham Hartley THE man strongly tipped to become the next national commissioner of police NathiNhleko is not a career policeman. Mr Nhleko would fill a role that has come under intense public scrutiny, with demand in many quarters for a police chief who would avoid plunging police morale even lower. Speculation was rife this week over Gen Bheki Celes status, amid reports that President Jacob Zuma had fired him.

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Presidential spokesman Mac Maharaj said yesterday Mr Zuma would make his decision known "when he was ready". One of the many criticisms of Mr Nhlekos predecessors Jackie Selebi and Gen Cele was that they were not career policemen. Mr Nhleko, however, does have some experience in law enforcement. Before being appointed to his current position as director-general in the Department of Labour, he headed the anticorruption unit in the Department of Public Service and Administration. He also served as a regional commissioner in the Department of Correctional Services. Mr Nhleko had been involved in the trade union movement before SAs first democratic election in 1994. In 1993, he was appointed as an election co-ordinator by the Congress of South African Trade Unions. His job was to organise how to get people to the polls. He admits being aware in 1994 that he was on an electoral list somewhere, but was startled to realise after the elections that he had been elected as an MP. It was here that he began his rise to prominence in the ruling party. He served on a number of parliamentary committees, including transport, public enterprises labour and agriculture. He was then appointed chairman of the portfolio committee on the public service and was also elected chairman of the African National Congresss (ANCs) parliamentary caucus. It was while serving as caucus chairman, during a caucus meeting in 2002, that it was announced, to his complete surprise, that he was to succeed Nosiviwe MapisaNqakula as the chief whip of the ANC in the National Assembly. Ms Mapisa-Nqakula had been appointed deputy minister of home affairs. He had only been in the job for two years when he was surprisingly dumped, reportedly after having incurred the displeasure of then president Thabo Mbeki . Apparently that was over his handling of a public protectors report into then prosecutions boss Bulelani Ngcuka. It was an action based on a complaint laid by then deputy president Jacob Zuma. He reportedly gave the report, which found that Mr Ngcuka had abused his office by saying there was a prima facie case of corruption against Mr Zuma, to Mr Zuma before Mr Mbeki had seen it. Several political parties this week criticised Mr Zumas silence on the future of Gen Cele, again raising concerns over the effect of this uncertainty.

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This comes after a report last month by the board of inquiry appointed to consider Gen Celes fitness to hold office, which reportedly recommended that he be fired. The inquiry was established to examine his role in lease agreements worth R1,7bn for police headquarters in Pretoria and Durban. On Wednesday, Judge Ephraim Makgoba granted an urgent interim interdict to Freedom Under Law in terms of which the national police commissioner and minister of police were prevented from assigning any duty to former crime intelligence boss Richard Mdluli. This was pending the determination of Freedom Under Laws application to set aside decisions to withdraw criminal charges and disciplinary proceedings against Lt-Gen Mdluli. The criminal charges range from murder and defeating the ends of justice to fraud, corruption and money laundering. 8 June 2012 Cape Times Page 1 Gaye Davis

DA is closing in on ANC, says Vavi

Cosatu general secretary Zwelinzima Vavi has warned the ANC and trade unions that without a new ethos in the ruling alliance, the opposition DA could mount a serious challenge to the ANCs power in 2019. Vavi blamed leadership failures on a lack of political consciousness among too many union and political leaders who had become distanced from the people. Too many of our leaders stay in Sandton, in the former whites-only suburbs and a lot of them have become visitors in the theatre of class struggle, he said in an unscheduled speech to the almost 1 000 delegates at the National Union of Metalworkers (Numsa) congress in Durban yesterday, They spend six, eight hours then they go back to the comfort created by their picking up the bones falling from the tables of masters . Too many leaders had become distanced from those bearing the brunt of the jobs crisis and dysfunctional health and education systems, he said. He called for a new ethos that would prevent the ANC having its name dragged through the mud or scoring the kind of own goals that lost it control of both the City of Cape Town and the Western Cape to the DA. Vavi said the DA was showing increased confidence. That it had been able to mount a march on Cosatu headquarters involving some 3 000 unemployed African youth means they are gaining confidence, they are smelling something and they are saying they want to take us on at some point, perhaps in 2019.

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They say, we will be so weak at that time The ANC and its alliance partners were unable to take back the Western Cape, which it had lost through a rain of own goals, including divisions and factional battles. It had held off the DAs attempt to win Port Elizabeth (Nelson Mandela Bay metro) by only the narrowest of margins. Already the DA has five percent of people in the townships something unheard of in the past, Vavi said. Vavi also gave the ANC notice that the federation would discuss at its September congress putting a single demand before the ruling partys national elective congress in Mangaung in December: the full implementation of the Freedom Charter. Cosatu had been calling for 18 years for the changes that would lead to a non-racial, prosperous and democratic society, but South Africa was now the most unequal society in the world, he said. Numsa, Cosatus second largest affiliate, has already vowed to pressure the ANC to fully implement the Freedom Charter by nationalising the mines, banks and other key sectors of the economy. This position is not shared by the National Union of Mineworkers (NUM) the federations largest affiliate, however, and a position on nationalisation will have to be thrashed out at Cosatus elective conference in September. Divisions within the federation and its affiliates were caused not by political or ideological differences but by a battle for resources. The ANC was also now contested terrain, Vavi said. We are at the point now where we must convince all of us if we dont change here (within Cosatu), this revolution is going, Vavi said. While in Europe there were daily protests in the street over rising levels of unemployment, in South Africa, where the crisis was far worse, with almost one in four people without work, it was Cosatu and its affiliates that were seen as being the crisis, Vavi said. Where there were protests such as the 10 or so service delivery protests a day the leadership of the alliance was not in the forefront. Within Cosatu, shop stewards committed to servicing the interests of workers without expectations of reward were disappearing fast. Lack of focus was the most dangerous thing. We are defocused completely. We fight for positions, our focus is on positions. We have to create a new society a new ethos, a new principle in the organisation, Vavi said.

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Leaders accused of wrongdoing should step down rather than be forced to after months of bringing the name of the (ANC) down, Vavi said. He referred but not by name to Gauteng MEC Humphrey Mmemezi, still in his post despite allegations that hed abused his government credit card on hotel stays a few kilometres from his home, on suits bought in India and to pay McDonalds thousands of rand, not for food, but for a painting. He also referred again, not by name to Northern Cape ANC provincial chairman John Block, facing numerous fraud and corruption charges, yet who was likely to be reelected at its conference this weekend and whose court appearance had seen members of the provincial government present in his support. If we dont change here, so that a person like that can know hes guaranteed of no support knows that he must resign and stops us all the pain of committees of inquiry and months of bringing the name of (the) organisation down, if he can leave on his own if we cant do that then we will continue to face own goals, Vavi said. Unless we change that, we are gone because our battles are about hands off and not about unemployment, poverty and inequality. Leaders did not have to spend hours waiting for a Panado at a public hospital because they belonged to medical aid schemes. Its a distant issue for them, they are not affected immediately, Vavi said, to loud applause. With their children in private schools, too many leaders were unaware of the pain of dysfunctional schools and an education system that each year marginalised thousands more young people entering the labour market without hope of attaining a skill. And what do we do? We come to conferences and make speeches that sound so nice and yet the situation of the working class does not change. Year in, year out, people remain trapped in their poverty yet we clap hands, we sing the praises of our leaders, Vavi said. Most divisions in unions today were not ideological or political. Fights at congresses were about a battle for resources, said Vavi. So we go into this (Cosatu) congress, comrades, to say one big and central thing, there has to be a mindset change among the leadership and the activists of the federation as a whole and in the leadership of the ANC and the SACP.

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13 June 2012 The Times Page 3 AndileNdlovu

Mandela film wins big in US

DaraKell and Christopher Nizza's documentary film Dear Mandela walked away with two of the biggest prizes at the Brooklyn Film Festival this past weekend. The 90-minute film was shot in 2007, when 32-year-old Kell, who was born in Newcastle in KwaZulu-Natal, first heard about the social movement Abahlalibasemjondolo (shack dwellers), which started in 2005. It began with a protest by shack dwellers of the Kennedy Road settlement in Durban against the sale of a piece of land they had been promised by the municipality, but was sold to an industrialist. There were forced evictions and court orders at the time. Kell said she and Nizza met community leaders who "embodied Nelson Mandela's pragmatic idealism". Speaking from New York yesterday, Kell said: "It's been amazing. Certain things in South Africa get really big laughs. "People get the jokes, and there is quite a lot of humour in the film because our characters are warm and funny. I was really impressed with the international response." The film won Best South African Documentary last year at the Durban International Film Festival and the Golden Butterfly Award at The Hague's Movies That Matter film festival.
12 June 2012 Business Day Page 4 Ernest Mabuza Xenophobia still a concern, as SA reports to UN on rights SA continued to make progress in the realisation of socioeconomic rights such as housing, health and political rights, but concerns remained over its efforts to prevent and combat xenophobia, Deputy Justice Minister Andries Nel said yesterday.

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The country presented its second report to the 13th session of the United Nations Peer Review Mechanism Working Group in Geneva at the end of last month. The document was "warmly received" owing to SAs commitment to human rights and improving the lives of its citizens and for taking the lead in promoting the rights of gay, lesbian, bisexual, transgender and intersex persons. While SA had adopted several measures to mitigate the scourge of xenophobia, including visible policing and community awareness programmes, reports of random attacks were an indication that the government needed to do more. In May 2008, 62 people were killed in the country during a spate of attacks against foreign nationals. The violence has not stopped, with reports of foreigners running spaza shops being constantly viewed as an easy target. Mr Nel said while the country presented its report outlining what it had done, member states recommended that SA step up its efforts to prevent and combat racism and xenophobia. He said SA was on the verge of releasing a "national action plan" to address racism, racial discrimination, xenophobia and related intolerance. The country signed the International Convention on the Elimination of All Forms of Racial Discrimination in 1994 and ratified it four years later. Mr Nel said other notable achievements were efforts to provide universal healthcare, improving school enrolment rates, the provision of antiretrorival treatment and the fight against HIV/AIDS, the promotion of human rights, and the establishment of the Ministry for Women, Children and People with Disabilities. Other areas of concern were acts of violence against gays and lesbians, and violence against women. Member states also recommended that SA ensure that the new Protection of State Information Bill complies with international human rights law, and that SA engage with civil society to seek common ground on the bill. Mr Nel said policy structures within the government would be expected to take further decisions on the implementation of all the acceptable recommendations. "The same structures are also to decide on which of the recommendations are acceptable to SA. An indication will be submitted to the 21st session of the Human Rights Council in Geneva during September," Mr Nel said. On the Protection of Information Bill, Mr Nel said SA had indicated that the bill was not about the media and that 99% dealt with how state information was handled.

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"We indicated that there was consensus in Parliament on 90% of the contents of the bill." On the public interest override, Mr Nel said the National Council of Provinces was looking at proposals to address the concerns of interested parties. The parliamentary process would take its course and the Constitutional Court would be the final arbiter if there were concerns about any aspect of the legislation, he said. 12 June 2012 Business Day Page 3 Setumo Stone And Sam Mkokeli

ANC leaders firm on Malema sentence

ANCs top leaders reject a call to review the process that led to Julius Malema being expelled Julius Malemas attempt to have his expulsion from the African National Congress (ANC) reversed failed yesterday when the partys top leaders rejected a call to review the process that led to him being expelled, it was learnt last night. This gives President Jacob Zuma a boost ahead of the partys policy conference to be held in two weeks time, and means Mr Malema has reached the end of the road unless delegates to the ANC conference in Mangaung in December save him by rejecting the outcome of the disciplinary process. ANC spokesmen Jackson Mthembu and Keith Khoza were not available for comment last night. A party source said Mr Zuma stood up at yesterdays national executive committee (NEC) meeting and defended the disciplinary processes and the decision to expel Mr Malema. Mr Zuma has not been known to personally defend such decisions or to take on challengers in a platform such as the NEC. His involvement in the matter is likely to weaken those who harbour leadership ambitions, and boost his chances of being re-elected without opposition in December. Last nights decision came at a tense NEC meeting, at which Human Settlements Minister Tokyo Sexwale is said to have criticised Mr Zuma for bad leadership and intolerance. There is growing speculation that Mr Sexwale, who has become a critic of Mr Zuma, could now be removed from his Cabinet post. NEC members who backed the call for the review included Fikile Mbalula, Lumka Yengeni and Mathews Phosa, among a group of about 10 members, an ANC source said, Deputy President Kgalema Motlanthe was "reserved". Before his expulsion, Mr Malema was leading a campaign to replace Mr Zuma with Mr Motlanthe.

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Yesterdays NEC meeting came after the ANC Youth League sent a petition to the ruling partys highest decision-making committee outside of its national conferences, asking it to review Mr Malemas expulsion and the suspensions of league secretary Sindiso Magaqa and spokesman Floyd Shivambu. Mr Magaqa was given a years suspension, and Mr Shivambu three years. In his petition, Mr Malema had argued that the top six officials were not constitutionally empowered to be the official complainants in disciplinary matters. This argument appeared to have been bolstered by a clause in the ANCs Organisational Renewal document, released in April, which states that the partys "constitution needs to be amended to include the officials as one of the leadership collectives with clear collective responsibility and accountability". The petition was turned down at last months NEC meeting because it was not submitted through the "proper channels". It had to first be considered by the top six leaders and the national working committee. It is understood that Gauteng ANC chairman Paul Mashatile raised the matter for discussion at the previous meeting of the NEC. 12 June 2012 Business Day Page 1 Paul Vecchiatto

Independent must go into SA hands

Eric Kholwane, chairman of Parliaments portfolio committee on communications, says Independent News & Media SA should not be offered to a foreign buyer if it is sold again Independent News & Media SA should not be offered to a foreign buyer if it were sold again, Eric Kholwane, chairman of Parliaments portfolio committee on communications, said yesterday. Several reports have said JSE-listed Sekunjalo Investment Holdings may be interested in buying the local operations of financially troubled Irish-owned Independent News & Media. "I dont mind who owns it and some foreign ownership may be good. However, there must be a place for previously disadvantaged people to own a stake as this would help with the transformation issues concerning ownership," Mr Kholwane said. At its annual general meeting in Dublin on Friday, the major shareholders fired Independents chairman, James Osbourne, and chief financial officer Donal Buggy. The company has 240m in corporate bonds to service. Its failure to pay a 200m debt in 2009 forced the group to restructure.

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These financial woes have fuelled speculation that Sekunjalo may be part of a consortium to buy Independents operations in SA. A lawyer active in the mergers and acquisition sector said the market was abuzz with speculation Sekunjalo was about to place an offer as part of a consortium. "We dont know exactly who is in the consortium, but Sekunjalo is definitely there. They havent talked price yet," the lawyer, who cannot be named for professional reasons, said yesterday. Sekunjalo CEO Iqbal Surve, a former African National Congress (ANC) activist, denied yesterday he had been to Ireland last week to discuss a deal. He said he had attended a World Economic Forum conference in Istanbul. "These reports were as much as a surprise to me as anyone else. Are they (the media) following me?" However, Dr Surve would not explicitly state if his company was, or was not, interested in buying a stake or the whole of Independent News & Media SA. Another ANC-linked businessman, Cyril Ramaphosa of Shanduka Investment Holdings, has also been touted as a possible buyer. A Shanduka spokesman said yesterday the company had a policy of not commenting on speculation. Democratic Alliance MP Marian Shinn expressed her partys disquiet over the possibility that the local Independent operations might fall into the hands of the political elite. "Dr Surve, like Louis Luyt, has never made a secret of where his political allegiances are," she said yesterday. Ms Shinn was referring to how The Citizen was founded in the 1970s in an attempt by the National Party to control and influence SAs Englishlanguage press. This led to the "Information Scandal". Parliaments communications committee is due to conduct public hearings on media ownership, in Johannesburg on Monday.

10 June 2012 The New Age Sapa

Zuma calls for tough conference approach

The ANC must approach its national conference with the serious manner it approached its founding conference in 1912, President Jacob Zuma said on Sunday. "We must approach the conference with a view to find solutions for the nation," he said.
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He was speaking at the national policy conference of the National Education, Health and Allied workers Union (Nehawu) in Boksburg. The African National Congress would hold its national conference in Mangaung at the end of the year and its policy conference would be held in Midrand at the end of June. Zuma said the policy conference must come with better policies for the ANC and the country, and that the policy document on the "second transition" was critical. "The document tackles challenges facing the ANC and the country. It reviews historic landmarks of the ANC, and takes a view of the future of South Africa". Zuma said that regardless of political gains made in 1994 there were still problems of unemployment, inequalities, and poverty. "We must build a country, and we must lead the social and economic transformation." He said the policy conference must also debate an economic model suitable for the country. He urged Nehawu members not to shy away from activities of the ANC at branch levels. Earlier Congress of the SA Trade Union, Sdumo Dlamini said the federation stood by its commitment to defend the resolution taken in Polokwane and the leadership elected. "Comrades let me be clear on this position,Polokwane was a watershed moment bringing a shift in leadership, policy and resolution. We stand by our resolution to defend the resolution of Polokwane." He said he hoped not to hear contradiction about their stance on the defend of Polokwane. He introduced Zuma as a trained unionist produced by revolution. "He is one of us because he was produced by a revolution we are part of." Zuma walked into the hall flanked by Dlamini and Nehawu president Mzwandile Makwaeba. Delegates dressed in red union T-shirts, burst into a song praising Zuma and waved placard calling for him to run for re-election for the second term as ANC leader in Mangaung. "Kubikubisiyayanomakunjani,besitshaya; besibopha, besidubula, siyaya [the situation is bad but we will still get where we are going, even if the beats us, arrest us, or shoot to kill us, we will get there]," they sang. After his speech Zuma sang his trade mark song Awuleth' UmshiniWami( bring me my machine gun).

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10 June 2012 The New Age Sapa

We need to be tougher: Zuma

The ANC must approach its national conference with the serious manner it approached its founding conference in 1912, ANC president Jacob Zuma said on Sunday. "We must approach the conference with a view to find solutions for the nation," he said. He was speaking at the national policy conference of the National Education, Health and Allied workers Union (Nehawu) in Boksburg. The ANC will hold its national conference in Mangaung at the end of the year and its policy conference will be held in Midrand at the end of June. Zuma said the policy conference must come with better policies for the ANC and the country, and that the policy document on the "second transition" was critical. "The document tackles challenges facing the ANC and the country. It reviews historic landmarks of the ANC, and takes a view of the future of South Africa". Zuma said that regardless of political gains made in 1994 there were still problems of unemployment, inequalities, and poverty. "We must build a country, and we must lead the social and economic transformation." He said the policy conference must also debate an economic model suitable for the country. He urged Nehawu members not to shy away from activities of the ANC at branch levels. 10 June 2012 The New Age Sapa

Modise warns ANC not to buy votes

ANC party members should not choose leaders in the upcoming Mangaung conference because of their financial powers and seniority, party deputy secretary ThandiModise said. Modise was addressing delegates at the Limpopo provincial general council in Polokwane on Sunday.

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She said lessons should be learned from the Polokwane conference and denounced the culture of using money to buy votes. "If you have money don't buy ANC people, don't buy Mangaung conference comrades," she said. The conference should be used to revive the life of the African National Congress, and many ANC policies needed to be reviewed during the upcoming policy conference, she said. "I don't know how many policies we have had, but what I do know is that half of them need to be reviewed." Modise said the ANC seemed to be scared to be discussing the land issue policy. "It is a fact that black people are trying to acquire as much land as they can, it is not a sin. It is a fact that a willing seller willing buyer had instrumentally failed land restitution." According to Modise the land issue among others was the cornerstone for the party to see another hundred years.

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13 June 2012 The Times Page 15 S'thembiso Msomi

All too familiar scenario

Is President Jacob Zuma headed for the same precipice as his ANC predecessor, Thabo Mbeki, ahead of a crucial ruling party conference? Remember how Mbeki, just weeks before the ANC's national general council in 2005, fired Zuma as the country's deputy president after a judgment in the SchabirShaik corruption trial that was damning for the then deputy president? Remember, too, how Mbeki - in the run up to the 2007 ANC national conference dilly-dallied over axing Jackie Selebi despite serious corruption allegations hanging over the then national police commissioner's head. Undoubtedly, the two incidents played a great part in Mbeki losing his ANC job and subsequently being unceremoniously recalled from the Union Buildings some eight months before his term in office expired. The protest at the 2005 national general council against Zuma's firing from the cabinet, and branch-level opposition to a bid by Mbeki's supporters to have Zuma removed from the ANC national executive committee, marked the beginning of a rebellion against Mbeki's bid for a third term as party leader. Would the upcoming ANC national policy conference, scheduled for June 26 to 29 in Midrand, go down in history as having been the start of a revolt against Zuma and his desire to be re-elected ANC president? If so, two issues are likely to be the main rallying points for those leading the charge against Zuma. The most obvious is the expulsion of ANC Youth League president Julius Malema and two of his trusted lieutenants. Malema's latest bid to have his banishment to political wilderness overturned was shot down at Monday's special ANC NEC meeting, with the majority of leaders saying there was "no compelling reason" for the committee to review the rulings of the national disciplinary committee of appeal. Although ANC secretary-general Gwede Mantashe was adamant during a press conference yesterday that the NEC decision meant the Malema matter was closed for good, you should bank on Malema supporters trying to force it onto the policy conference's agenda in two weeks' time. Malema's sympathisers would believe they have history on their side. In 2005, just days before the NGC, the ruling party's top leaders had met in Luthuli House where

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they "accepted" Zuma's offer to step down as party deputy president while trying to clear his name on corruption and fraud charges . But the "acceptance" of Zuma's effective resignation was to be overturned by angry delegates at the NGC, giving an important political lifeline to a politician who by then seemed destined for political oblivion and even jail. Just like Mantashe says the Malema matter is now closed, pro-Mbeki leaders at the time spent many of the days leading up to the 2005 NGC arguing that the issue would not be part of the conference's agenda. They were to learn the hard way that even the supposedly powerful NEC cannot dictate to delegates during a national gathering of party branches and regions. Are Zuma and Mantashe about to be taught a hard lesson at the policy conference? What seems to be working in their favour is that, as things stand, supporters of Zuma's second-term bid seem to have the backing of the majority of the party's structures. With the largest province, KwaZulu-Natal, as well as Mpumalanga, Free State, the Women's League and even the MK Military Veterans' Association likely to back Luthuli House's decision, it does seem as if Malema will not have his way. But loyalty in the ANC, especially in an elective conference year, is very fluid. Provinces such as Limpopo, Northern Cape, sections of the Western Cape, the Eastern Cape and North West are most likely to join the league in calling for his reinstatement. The same could be done by Gauteng although the province's leaders, while supportive of the movement that wants change within the ruling party, are weary of aligning themselves with the divisive Malema. Another source of rebellion against Zuma, especially in his home province of KwaZulu-Natal, could be his handling of disgraced national police commissioner Bheki Cele's axing. You would think that Cele's firing following adverse findings against him by a board of inquiry led by Judge Jake Moloi into his fitness to hold office would have been a straightforward issue and that everybody would agree that the president has no option but to act. However, such matters are never that simple in the ANC. Cast your mind back to June 2005 when Mbeki stood before parliament to explain why he was "releasing" Zuma from his duties. Very few here and abroad found fault with the president's reasoning, especially given Judge Hilary Squires' findings about the relationship between Shaik and Zuma. Yet in the ANC, this was a source of much unhappiness. News from KwaZulu-Natal suggests party structures were angry at the prospect of Cele - a former local politician - being fired. While they conceded that Cele could not possibly remain in the post given the findings, they wanted him redeployed elsewhere in the government and returned to the ANC's NEC.

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ANC structures in KwaZulu-Natal has so far appeared unanimous in their belief that Zuma should serve another term. Will Cele's axing drive a section of the province into the arms of those campaigning against Zuma? We will know in two weeks.
14 June 2012 The New Age SiyabongaMkhwanazi

Corruption on the rise

The Public Service Commission (PSC) has been alarmed by the apparent escalation of financial irregularities in government with money lost through fraud and corruption increasing from R356m to R938m. The director-general in the PSC, Richard Levin, said yesterday the PSC needed to increase its investigative capacity to deal with cases of corruption. The commission was briefing the parliamentary committee on public service and administration on the performance of senior managers in government. Levin said financial misconduct cases had been on the increase since 2007. He said the fact that the figure had escalated from R356m to R938m showed that there wasan urgent need to address the problem. However, he said the PSC did not have sufficient investigative capacity to deal with the challenge. Levin told the committee that they need to prevent financial misconduct and punish officials involved. During the 2006-07 financial year, 1042 were probed for financial misconduct and in the following year the figure dropped to 868. But in the 2008-09 period, state employees being investigated for corruption numbered 1204 and in 2009-10 there were 1135 officials under investigation. During the 2010-11 financial year, there were 1035 employees under investigation. Levin said in the national and provincial departments and state-owned entities there had been almost 10000 cases of corruption reported through the anti-corruption hotline. He said the PSC received feedback on 42% of those cases, while 27% of the cases had been closed. This is a worrying statistic. Investigative capacity is a gap in dealing decisively with corruption, he told MPs.

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On the declaration of financial interests by director-generals and other senior managers in the government, he said they were complying with the requirement. The PSC had reported last year that some of the DGs and senior officials had failed to declare their financial interests when they were requested to do so. Levin also asked MPs to give the PSC more teeth to deal with nonperforming managers. He called for strong action against officials who failed to perform their duties. He said parliament should give the commission more powers to be able to take tough action against managers who were not up to scratch with their work. The PSCcan play an important role to ensure its mandate is strengthened, he said.

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