Friday, October 25, 2019

ESKOM RECOVERY PLAN IS BASIC LOGIC!

ESKOM RECOVERY PLAN IS BASIC LOGIC:


Floyd Shivambu

On Tuesday, the 22nd of October 2019, the National Assembly passed a special appropriation bill to permit the South African government to shift R59 billion from the National Revenue Fund to ESKOM as part of the many interventions for its financial recovery. In 2015, ESKOM was allocated R23 billion by the erstwhile Minister of Finance Nhlanhla Nene, who made commitments that such will never happen again. ESKOM currently has a debt of more than R400 billion and recorded losses of more than R20 billion reported in the last financial year. There is clearly no cogent and believable plans and strategies to salvage ESKOM from the current financial crisis and directionlessness.

As part of the many logically superior interventions we make in parliament, we as the EFF Caucus submitted that the following key interventions should be made to bring the long overdue stability to ESKOM. The EFF submissions on ESKOM reveal the simple reality that the power utility’s problems are self-inflicted, and not financial and operational difficulties common to all companies. Self-interests, greed, class and ideological prejudices are currently the major stumbling blocks to ESKOM’s recovery and stability.

Firstly, ESKOM should standardise all coal prices and only pay the prices determined by the National Energy Regulator of South Africa (NERSA). This will save ESKOM billions of Rands because coal procurement is the biggest expenditure item in ESKOM’s balance sheet. ESKOM should explore all legal possibilities, including court validation up to the Constitutional Court which will exit the evergreen contracts, most of which we signed before 1994, and are a huge financial burden to the power utility.

ESKOM and Government should announce annual ceiling price per tonne of coal from all suppliers, let us say of R400 per tonne. If the suppliers cannot manage to continue with supplying ESKOM, Government should massively capitalise the African Exploration Mining and Finance Corporation (AEMFC), which is a State-Owned Mining company to take over the contracts of those who cannot supply at normalised cost prices per tonne. The current privately-owned coal suppliers to ESKOM are paid more than the NERSA approved price per tonne and therefore exceedingly profiteering.

Secondly, ESKOM should fundamentally review all Power Purchase Agreements (PPA) with Independent Power Producers (IPPs) with the aim of exiting these nonsensical contracts designed for the enrichment of few multinational corporations in alliance with domestic parasitic and comprador bourgeoisie. In its own financial report, ESKOM admits that as things stand, IPPs account for more than 25% of primary energy generation yet produced less than 5% of the needed energy. Put differently, ESKOM expends more than 200 cents to purchase electricity per kilowatt hour which it retails for less than 100 cents. This is pure foolishness and one of the major contributors to ESKOM’s financial losses.

 As a matter of principle and superior logic, Government should immediately move towards cancellation of all PPAs, and institute a wiser more sustainable energy generation plan than the current nonsensical IPPs approach. This will play an important role in bringing the long overdue stability to ESKOM.

Thirdly, Government should assemble a highly skilled panel of Engineers from all over the world to come investigate the delays in the completion of the two major power stations, Kusile and Medupi. The costs for Medupi escalated significantly to over R300 billion from estimated 24.9 billion, and cost for Kusile escalated to R161.4 billion from estimated R80.7 billion. There is still no define clarity as to when these power stations will be fully plugged into the national grid. A special task force of experts overseen by the president and reporting weekly should be put in place to monitor progress in the completion of the two power stations.

Fourthly, Government should issue Requests for Proposals from private developers of nuclear power stations, which should necessarily use a Build, Operate and Transfer (BOT) model to illustrate how they will use their own money to construct nuclear stations, operate them for a period not exceeding 25 years, transfer skills and thereafter handover to the State. The number of years on operating might vary according to the financial modelling that should will be tabled by various respondents. Nuclear is necessary for a balanced and sustainable energy mix.

Fifthly, the South African Government should massively invest in renewable energy projects including wind, solar and water sources of energy generation. This should be deliberately aligned to domestic industrialisation of the major components to harvest the sun, wind and water as sources of energy, and should be labour intensive.

All these cannot happen if Government’s appetite is to unbundle ESKOM in the middle of a financial crisis. It is purely preposterous to unbundle an unstable organisation and should never happen. Unbundling a sick organisation will just be evidence that those doing so have no other intentions but self-interest which they will derive out of complete destruction of ESKOM.

The other important component on political oversight of ESKOM is that it should not have a single ministry as a shareholder representative. The shareholder should be represented by the ministries of public enterprises, minerals and energy and finance. Where possible, the Public Investment Corporation loan to ESKOM should be converted into equity and the PIC should have direct shares and say in the running of the company. The method of single shareholder for such a strategic asset has proven to be disastrous and almost always underpinned by subjectivity and personalisation of what should be collective efforts to turn around the company.

Lastly, the leadership instability in ESKOM should be immediately resolved through appointment of a capable permanent board of relevant experts in various fields. The current leadership of ESKOM, especially the board chairperson and Acting Chief Executive Officer is neither capable nor skilled in the provision of stewardship to the power utility. Jabu Mabuza is a liability to ESKOM and if he loves this country, should voluntarily step aside and stay far away from ESKOM. Government should ask him to step aside if his servitude, self-interest and greed are above the obligation to provide electricity to all, which in the current generation is a basic human right, not a luxury.

Floyd Shivambu is EFF Deputy President

Sunday, September 01, 2019

{UNEDITED}TITO MBOWENI’S ECONOMIC STRATEGY DOCUMENT IS SPONSORED STATE CAPTURE THAT MUST BE FOUGHT!

{UNEDITED} TITO MBOWENI’S ECONOMIC STRATEGY DOCUMENT IS SPONSORED STATE CAPTURE THAT MUST BE FOUGHT! 01/09/2019 Notes:

Floyd Shivambu 

The Minister of Finance Tito Mboweni issued an Economic Strategy discussion document, which is evidently not a product of domestic intra-governmental and inter-governmental consultation process. The economic strategy is a product of the two colloquia convened by the Minister in December 2018 and January 2019 attended by amongst others, Harvard University’s Centre for International Development ex-Director Professor Ricardo Hausmann; World Bank Consultant, who’s former citizen of South Africa Professor Robert Lawrence, and Professor Dani Rodrik, who is associated with the Rockefeller Foundation. 

The National Treasury’s statement issued on the 18thof January 2019 announcing the 2ndcolloquium, confirms that, “discussions at both colloquia placed particular emphasis on interventions that encourage new models and paradigm shifts in support of faster and more inclusive economic growth. The outcomes of the colloquia will form the basis of an economic strategy for South Africa which will be submitted to Cabinet for its consideration”. The detached nature of the now issued economic strategy and its ignorance of recent past developments in terms of policy reveals the fact that it was drafted by external forces. TELKOM Group Chief Executive Officer excellently exposed the policy dichotomy on spectrum distribution, where the National Treasury proposals are far apart of a Cabinet approved and now gazetted policy on spectrum. 

These Professors worked with National Treasury, the South African Reserve Bank and unnamed South African Experts and Academics to produce one of the most detached, ignorant, unrealistic and orthodox economic policy proposals in South Africa. The proposals are reminiscent of the erstwhile neo-colonial Structural Adjustment Programmes (SAPs) of the International Monetary Fund and World Bank. Dismissing the nonsensical SAPs, Professor Ha Joon Chang recently remarked that, 
A lot of people -- Joseph Stiglitz, Paul Krugman, Mark Blyth and Yanis Varoufakis, to name some prominent names -- have written that austerity does not work, especially in the middle of an economic downturn (as it was practised in many developing countries under the World Bank-IMF Structural Adjustment Programs in the 1980s and the 1990s and more recently in Greece, Spain and other Eurozone countries).

Many of those who push for austerity do so because they genuinely (albeit mistakenly) believe that it works, but those who are smart enough to know that it doesn't still would use it because it is a very good way of shrinking the state (and thus giving more power to the corporate sector, including the foreign one) and changing the nature of state activities into a pro-corporate one (e.g., it is almost always welfare spending that goes first)”.

Despite the almost scientific convergence of many honest Academics and professors all over the world that SAPs have failed, these Professors from Harvard University are proposing adjustment programmes, which will inevitably lead to socio-economic disaster for the people of South Africa. The SAP will lead to further job losses through privatisation, shrinking revenue due to complex tax avoidance schemes associated with almost all private corporations in South Africa, and reduced State capacity to provide social services such as education, healthcare and social assistance programmes. 

The National Treasury’s economic strategy proposes a variety of outdated and detached models to boost economic growth and base these on flawed and sometimes totally false suppositions. One of the totally false suppositions is that Independent Power Producers are a huge success in South Africa, and that this model should be applied to sanitation, water provision and roll out of irrigation systems. Contrary to the deliberate falsehood, IPPs are not a huge success in South Africa, and they are one of the major reasons ESKOM is making huge losses. In its own admission, ESKOM pays more for electricity generated by IPPs than it retails the electricity to users, and this is at the centre of the ESKOM Financial crisis. Of course, the private producers of electricity, who almost exclusively use foreign technology and systems, make a lot of money from the power purchasing agreements entered between Eskom and IPPs.

Now, despite openly available evidence that IPPs are at the centre of South Africa’s energy insecurity, the Economic Recovery Plan suggests that water provision, sanitation and irrigation should be privatized. What this effectively means is that Municipalities will be turned into nothing but overstaffed Supply Management Chains issuing out tenders to the private sector to deliver services that would otherwise be provided by the local state. History of South Africa illustrates that whenever privatization happens, ordinary people are excluded from benefits. 

Tito Mboweni Economic Strategy also recommends a solution previously contained in INVESTEC internal documents that ESKOM should be unbundled into three inter-related components. The nuance in the approach is that the Recovery Plan says the private sector should play a significant and possibly central role in the generation of energy, not only from renewable sources, but also from coal statins which would have auctioned off. This will rise electricity costs as private sector is not interested in electricity access for all, but profits. It is also foolish to want to commence the unbundling of a crisis ridden ESKOM. 

All these proposals on privatisation amount to the deepest level of imperialist and white monopoly State capture because in the ultimate end, it will be white minority owners of capital who will buy the State capacity to distribute water, electricity, sanitation, irrigation and still be in charge of transport infrastructure such as railways and harbours. The Economic Strategy basically intends to hand over all key economic roles of the State to the private sector. 

The Economic Recovery Plan does not provide any cogent plan on how to link nascent industries with shelve spaces. There will never be a successful industrial policy plan without guaranteed long term access to shelve space. Nascent Industrialists under a highly competitive capitalist system should be guaranteed access to shelve spaces and long term off take agreements. South Africa’s industrial and trade policy fails to acknowledge this reality, hence domestic production of goods and services continues to shrink or migrate to other places.

The United Nations Conference on Trade and Development (UNCTAD) estimates that more than 800 million jobs will be lost globally due the Fourth Industrial Revolution. In that scheme, most countries in the developing world will lose up to two thirds of their jobs. The Economic Recovery Plan does not say anything about the so called Fourth Industrial Revolution despite the fact that when in full steam, it is will replace physical Labourers with machines and will also affect State revenue streams. 

Importantly, the Economic Recovery Plan does not emphatically deal with redress of South Africa’s historical injustices. There is no sensible Economic Strategy in South Africa that ignores the fact that wealth is concentrated in few white people’s hands. The land, banks, factories, chain retail stores and all means of production are predominantly owned and controlled by white people and that is due to apartheid. So any Economic Recovery Plan should decidedly respond to the fact that South Africa still has economic apartheid, which excludes an absolute majority of black people from economic ownership and control. 

Instead of orthodox economic proposals that are imported through Tito Mboweni to South Africa, our country should pursue inward industrialization with export capacity. South Africa should produce its own consumable goods, services and products and depend on Africa’s economic integration for growth. It is not cast on stone that South Africa cannot produce its own cars, trains, cell phones, solar panels, televisions, confectionary, plastic products and thousands of many other daily consumables. These should be linked to domestic, regional, Continental and global shelve spaces. The State should use its procurement capacity to boost local inward industrialization.

An Economic Recovery Plan should necessarily speak to space and respond to the fact that real economic activity in South Africa is concentrated in less than 10% of space. Spatially decentralized economic expansion programme is long overdue in South Africa and will redefine intra economic migration which causes a lot of strife to social stability. 

All these rather obvious economic solutions are ignored in favour of ideas that are not organic and will not address our country’s economic crisis. So, the entire Economic Recovery Plan of Tito Mboweni must be rejected and treated as part of the Neo liberal hogwash that it is. Tito Mboweni must allow for a domestic development of an economic policy plan, and the plan issued out cannot be the basis. 

It should be noted that some of the funders for the Centre for International Development (CID), which Professor Hausmann is associated with include Standard Bank Group, George Soros’ Open Society Foundation, and INVESTEC Asset Management. A striking coincidence mentioned below is that some of the proposals contained in the economic strategy on ESKOM and energy plans are also contained in INVESTEC’s documents and proposals. The Professors and the unnamed Experts and Academics seem to agree with the private views of Donors—it is a coincidence. 

Progressive working-class forces must work together to fight privatisation and State capture by the imperialist and white minority capitalists. Government must not be allowed to trade off the key sectors of the economy because such will condemn the black majority and Africans in particular to permanent economic servitude. 

Floyd Shivambu EFF Deputy President.

Wednesday, August 14, 2019

UNEDITED: THE ANC HAS A RENTED PRESIDENT WHO IS DANGEROUS FOR SOUTH AFRICA.

THE ANC HAS A RENTED PRESIDENT WHO IS DANGEROUS FOR SOUTH AFRICA:

Floyd Shivambu

The recent factual and accurate reports about the funding that was mobilised from rich white businessmen to assist the incumbent Mr. Cyril Ramaphosa to campaign for ANC Presidency reveals the fact that he is a rented President. Cyril Ramaphosa the white capitalist establishment and its comprador tentacles who used money to persuade ANC branches, delegates, regions and provinces to vote for Cyril Ramaphosa as ANC President. The purpose of raising so much money for Ramaphosa to win the ANC 54th National Conference was evidently intended at safeguarding the white capitalist accumulation path that defined South Africa since colonial conquest, apartheid capitalism and imaginary dawn of democracy. If CR17, which stands for Cyril Ramaphosa 2017,did not have the hundreds of millions it used to hypnotise delegates prior to and at the ANC 54th Conference, the outcomeswould have been different—the ANC would have elected its first female president

The white monopoly fraction of the capitalist establishment realised that their ruling class status was being threatened by the less sophisticated, greedy and flamboyant Gupta capitalist fraction. Faced with this reality, the white capitalists united insupport Ramaphosa to win over the ANC, with the end goalbeing capture of the State, and subjugation of its direction, form and content to profiteering. This happened through usage of money, patronage and capture that hypnotised ANC Conference delegates, therefore setting an unsustainable precedent of external money interests used for internal ANC politics. 

It should be stated here that in politics, those who are required to take decisions (such as delegates in an elective Conference) are sometimes presented with two options, which are both be fatally wrong. One occasion of this nature was the ANC 54thConference which presented two candidates, one associated with the Gupta capitalist fraction and one intricately embedded in white monopoly capital. Both factions were wrong options and both factions were funded by different capitalist fractions whose end goal with was to subjugate the State and economy to their methods, path and forms of wealth accumulation.

There are several ANC documents, rules, resolutions and guidelines that forbid usage of money for internal electoral Conferences but the ANC collective, including its Integrity Commission and Veterans will ignore all these. They do so because in one way or another they were involved in the same practice and all ANC structures including elders are factionalised and refusing to think and act out of factional interests. The factionalism is not based on ideological, strategic, tactical or political differences, but on which fraction of capitalists must be dominant under whose leadership of the ANC. This form of ANC capture is the worse form of capture because a significant component of his highest decision body is a product of money. This simply means the ANC will be incapable is rescuing itself because it is not just individuals who are captured, but the entire organisation. 

What is worse is that such happened against an observation by the ANC Diagnostic report, which amongst many other observations said, “the use of money to buy votes for elections in the party, is at the heart of the decline of the quality of structures across the board. Money has replaced consciousness as a basis for being elected into leadership positions at all levels of the organisation. The ethical behaviour of leaders is no longer an issue, as it has been replaced by status. Ethics is seen as an elitist approach to politics and has developed social distance as an effect. Social distance accelerates the growth of the trust deficit between leaders and society, leading to decline of support for our movement”.

The reality is that Cyril Ramaphosa is a rented President, placed in his current position due to the money influence of the white capitalist establishment. Because capitalists control the media, an almost 100% unanimity was created in society that he is the modern-day messiah, who will salvage South Africa from Gupta capture, misnamed State capture for political and discursive convenience. This attitude and approach of the capitalist establishment was rooted in the belief that it is Ramaphosa or Nothing. What this meant is that the domestic capitalist in alliance with established global capitalism were more than ready to collapse the South African economy, its currency and credit standing if Ramaphosa was not elected as President of the ANC. This they would effortlessly achieve through withdrawal of the guarantees on the State debt, which is almost 60% of the Gross Domestic Product, and miles ahead of the revenue collected by the Revenue Services on an annual basis. 

Discontented with ex-President Zuma’s miscalculated and rabid abuse of power in all key State institutions such as the Prosecutions Authority, Parliament, State Owned Companies, and Government, a significant component of South Africans wasfed up with Zuma’s rapacious and almost militaristic usage of political power and wanted him gone. Zuma’s nepotism, disregard for meritocracy and good governance in State Owned Companies made things worse. On several instances, key appointments into State Owned Companies was dictated by the Gupta capitalist fraction, whose appetite for wealth accumulation was inconsistent with the collective vision to defeat poverty, create jobs and reduce inequalities. Their philosophy was Get Rich or die trying. 

As is being revealed, Zuma’s replacement in the ANC and Government, Cyril Ramaphosa is not a solution to South Africa’s massive developmental, governance and socio-economic challenges. Cyril Ramaphosa and the manner in which he was elected President is dangerous for the country and certainly an infiltration of the ANC. His philosophy and the philosophy of those who rented him as President is Get rich, stay rich and reproduce wealth in the same patterns designed under colonialism and apartheid. The reality is that if he stays in power, Cyril Ramaphosa’s greatest legacy will be widened inequality where the rich get richer, the poor get poorer, massive unemployment and economic stagnation due to factors not in his control. 

You need not go further to realise this than the recent past appointment of Jabu Mabuza as Executive Chairperson and Acting Chief Executive Officer of ESKOM, South Africa’s largest domestically based corporation with deep systemic and systematic vitality. Jabu Mabuza is appointed into that position because even under apartheid, Mabuza was in alliance with the capitalist establishment. Mabuza started to serve in First Rand Board in 1992, and was a leader of FABCOS, an organisation of aspirant black business people that worked with apologists of apartheid to oppose the economic sanctions that were meant to put pressure on apartheid to end. 

The role played by Trevor Manuel and his wife Maria Ramos in key sectors of the economy is not insignificant. The conflict-ridden process to appoint SARS Commissioner is not trivial, and part of the systemic capture which will disable SARS from maximally collecting taxes from tax avoiders, who use sophisticated tax avoidance mechanisms to generate wealth in South Africa and not pay taxes here because of their unsavoury relationships with tax havens. The subjugation of the Public Investment Corporation to embedded capitalist interests is not innocent and part of fulfilling the funders’ mandate and aspirations.  

There are various other deployments and decisions made and to be made that will reflect the reality that he who pays the piper calls the tune. One of those is the INVESTEC, which pre-emptively prescribed how ESKOM should be restructured and its prescriptions were followed in a same way a chronic patient would follow a Doctor’s prescriptions. All these deployments and decisions will not be taken to achieve a common developmental project, but to appease those who contributed money to win the ANC Conference and therefore South Africa’s Presidency. 

The fact that Cyril Ramaphosa wants to hide the identity of those who gave him money to cajole ANC delegates should be a cause for concern. It becomes a cause for concern because he clearly intends to mislead the whole country into believing that his deployments and decisions are not embedded whilst they will always be. The reality is that the Biblical observation that you cannot serve both money and God is applicable to the fact that you cannot serve both the white capitalist establishment and the people of South Africa is true. 

Ramaphosa’s intricate alliance with the white capitalist establishment is not a secret. In a book about the Rupert capitalist empire, it is said that, “In 1990 Johann Rupert was confronted about Richemont by Cyril Ramaphosa, secretary-general of the South African trade union federation Cosatu (SIC) and subsequently the ANC’s chief negotiator at the Kempton Park negotiations on the country’s transition to democracy. At a dinner at a Cape Town restaurant where the two men met for the first time, Ramaphosa, at one stage mentioned as a prominent contender for the role of possible successor to Nelson Mandela, wanted to know why the new company had been established overseas. 

At the time, the ANC had strong communist leanings and nationalisation was in the air. Johann gave a straight answer: ‘Cyril, it’s actually very simple, and you can tell that to your stakeholders. I have to protect the assets of my stakeholders, the shareholders, against your stakeholders – so that if they want to steal stuff, they won’t be able to do so. No capital has left the country; no capital will ever leave the country; and all the revenue still returns to South Africa. I’ve given my word to Dr Gerhard de Kock (former president of the Reserve Bank), and over the years we have not taken out a single penny.’ Ramaphosa then ‘nearly split his sides’ and said: ‘Oh, you Afrikaners!’ 

When Johann asked what he meant by this, Ramaphosa said he had just put the same question to Julian Ogilvy-Thompson, chairman of Anglo American, and that Ogilvy-Thompson had told him all kinds of stories about marketing agreements with Russia, et cetera . . . Johann said such talk was just nonsense, and he and Ramaphosa subsequently became good friends. Ramaphosa even served as a director of the Peace Parks Foundation for a while but found he could not devote sufficient attention to this on account of other obligations”. 

As a matter of fact, Ramaphosa has had an earlier close alliance with the white capitalist establishment and there are many instances where they openly said with him in office, their interests are safeguarded. His association with the capitalist establishment backdates the end of apartheid and formation of the National Union of Mineworkers, which brought him into political prominence. Both Anton Rupert and Harry Oppenheimer, the Godfathers of South African racial capitalism brought Mr. Cyril Ramaphosa closer from the time of the Urban Foundation in the late 1970s, through to formation of the NUM and subsequently to leading negotiations which he publicly said the opponents were happier than those who represented the liberation movement. 

The Chief Justice Mogoeng Mogoeng correctly observed this when he said, “We need to allow ourselves to be captured by the ideal of a democratic and free society. I’m in the habit these days of saying what is democracy? A government of the people by the people and for the people.  Does it continue to be so when you stand no chance of winning elections unless you are connected to the financially well-resourced. If they fund you to a point where you succeed and win, are you not captured in advance? We need to think deep about how capture happens. There is no free lunch - and never for the millions. You may get lunch for a R1000, but once they begin to give you R1 million, R3 million, R5 million, R50 million or R100 million, whether I set you up in business or in government, there will be payback time. Why should I make you a millionaire, why should I prefer you to others? It’s an investment”. By all measure of standards, the Chief Justice is correct. 

South Africans should appreciate that we are led by a deployee of the white capitalist establishment, a rented President and he will loyally fulfil their dictates to achieve their immediate and long-term objectives. In doing so, he will degenerate into desperation of selective prosecutions and persecutions of those opposed to his continued reign. Ramaphosa will victimise opponents because his funders and handlers will tell him to be ruthless. Those who gave him money have already taught him to deliberately lie and mislead parliament and the public and the next step will be persecution of his opponents. 

The people of South Africa should decide on what is to be done. If the mandate is that Parliament should impeach him as a President, a Parliamentary majority can be mobilised, even from his political party to do so. When this happens, the capitalists will throw tantrums and collapse the economy and the currency because they exclusively own and control it. If the consensus is that he must remain for one term as President, reality is that he will do everything in his power to dance to the tune of those who paid. In South Africa, it is almost scientifically proven that white capitalist interests have never coincided with the interests of the people, and any imagination that seeks to persuade us towards that direction is wrong. Cyril Ramaphosa is embedded in dangerous capitalist networks and will not work for the people. He is rented President.

Floyd Shivambu is EFF Deputy President


Tuesday, June 18, 2019

Ministers’ Resignations from 6th Parliament

Former ministers choose fat pensions over mandate to serve the people! 


One thing that came to define the start of the 6th Democratic Parliament are the resignations by former members of the executive from the National Assembly.

There are of course various speculations on why these former ministers and deputy ministers resigned, and these include pension consideration and rumours of redeployment to other focus areas. 
One thing that is certain though is that all these former Cabinet members and parliamentarians resigned because they were not considered for the still bloated national executive. 

When the correct history of South Africa’s Parliament is told in years to come, it should be highlighted that Jeff Radebe, Bathabile Dlamini, Siyabonga Cwele, Derek Hanekom, Thokozile Xasa, Nomaindia Mfeketo, Mildred Oliphant, Dipuo Letsatsi-Duba and Susan Shabangu left Parliament when they were not considered for the personally benefiting and self-aggrandising roles of being members of the executive. 
This is however not the first time ANC members who are removed from Cabinet left Parliament. 

In plain revolutionary terms, these members care more about material benefits accruable to them when they are in Cabinet than service to the country.

So when presented with two choices, one being of service to the people as legislators and overseers of the executive and its entities and self-aggrandisement, they boldly choose the latter.

This is no surprise because that’s what post-colonial political office bearers from so-called liberation movements have become. They only partake on service and sacrificial work that comes with personal benefits. So it is safe to affirm that we don’t expect much from all the liberation movement politicians because to them, it’s “me first and the rest shall follow”, the rest includes revolutionary principles, sacrifice and commitment.

This is also particularly true of what has become of the character of the erstwhile SACP, now a faction for positions, supporting leaders only if they accommodate them in the executive and not for what they stand for.
With that said, the resignations also confirm the fact that Parliament in its current design and form is of lesser value and significance.

The resignations from Parliament confirm the systematic subordination and trivialisation of the first arm of the state, which is Parliament. The reality is that the status of being an MP is miles below ministerial positions in terms of political, legislative mandates and structured support systems. 

These are the reasons why Parliament is insignificant and subordinate to other arms of the state. Despite the fact that Section 73(2) of the Constitution allows ordinary MPs to introduce private members bills, more than 99% of legislation in South Africa’s Parliament is introduced by the executive.
MPs are not provided with adequate research capacity and content support, and ministries can employ as many advisers and researchers as they wish. Parliament does not have adequate capacity to oversee the executive despite section 55(2) of the Constitution obliging Parliament to play an oversight role. Virtually all court judgments that speak about Parliament have highlighted its perennial incapacity to effectively oversee the executive.
MPs from the ANC have limited space to play their oversight role because whenever ministers come to Parliament, they feel obliged to close ranks and defend executive members who belong to their own party, regardless of the evident incompetence and damage they may be causing to the state.
This was the case when ANC MPs defended Jacob Zuma for years, even after the Constitutional Court ruled that he had violated the Constitution.
Structurally and despite imaginations that they live in laps of luxury, MPs are accommodated in apartheid style two-bedroom houses which the Department of Public Works can gain access to without MPs’ approval/knowledge. They are fetched every morning by common buses and cannot travel anywhere else except where the buses are headed to.
They are not paid the ridiculous amounts which newspapers claim they get. From a potential R50 000 nett salary, virtually all MPs have to pay party levies, which range from 7% to 15%. 
They must belong to a compulsory Medical Aid Scheme called Parmed, which charges more than R4300 per adult per month. Meaning that a member can pay as much as R25 000 if parents, spouses and older children are added. Basic research and an analysis of an MP’s actual income can confirm this. 
So being an MP, particularly for the ANC, a person becomes an impecunious zombie that cannot initiate legislation, cannot legislate, and cannot effectively oversee the executive outside of the study group (caucus) position. Most times, the things that the zombie MPs read as speeches in the chamber are mediocre notes taken from Wikipedia by the ANC’s underpaid and largely mediocre back office of novice researchers. 
So between this and a fatter pension, the former ministers chose the pensions and some will accept deployment to foreign missions. Despite the fact that Parliament has an important role to play in South Africa. Parliament still has a backlog of hundreds of apartheid legislations that must be repealed.
By its very nature, Parliament needs a generational mix of people from different backgrounds. In this, there must be a mix of those that have experience in the executive and those who have been in Parliament for a longer period so that they are able to provide some institutional memory. 
Complete withdrawal of those who have some degree of experience deprives the younger generation of institutional memory of what was done previously and what was avoided. 
On many occasions, Parliament traverses the same journey of issues dealt with by previous Parliaments and written memory does not have the same impact as would those with first-hand experience on what happened.
As a legislative body, Parliament should dynamically use its combined capacity to legislate and pass laws, and among its members, should be politicians and activists who are senior to those in the executive.
This aspect is important because senior political leaders use their seniority to avoid being held accountable. One of the excuses Zuma used to evade Parliament was his seniority as a freedom fighter and president of the ruling ANC.
There is therefore a long overdue need for substantial political, ideological and structural change towards Parliament. Its generational composition, gender balance should almost exactly be a microcosm of society, and all who take up the responsibility should be willing to serve.
In terms of support systems, Parliament should strive towards equalisation of MPs (core of legislators and overseers) and members of the executive because the current imbalance trivialises Parliament, reduces it to mediocrity and subordinates it to the executive. 
Equalisation should mean equal administrative support, not too distant salary structures, and no one should be given a house as both MPs and members of the executive should stay within the people. There is really no substantial contributions that these ministers are doing which MPs cannot do, hence they are chosen from among them. 
The EFF founding manifesto speaks this point in relation to the government, and says, “as a broad and cogent principle, the EFF’s approach to public representatives (those occupying political office through elections) is that because they are there on the mandate of the people to serve, the many perks associated with political office should be limited”. 
“Representatives should live like ordinary people. Because they are responsible for the allocation of resources, and the implementation and monitoring of services, public representatives and their dependants should be compelled, by law, to use only public services, particularly schools and healthcare facilities and services. 
“This should apply to all public representatives from the president of the republic to a local municipal councillor.” 
Without a strong and properly supported Parliament, the democratic project will be undermined, and the biggest casualties will be ordinary people because government officials will undermine accountability and transparency prescripts in full knowledge that Parliament is weak, and Parliamentarians are powerless.
Floyd Shivambu is the deputy president of the EFF.

Wednesday, February 06, 2019

THE ARROGANCE AND DISHONESTY OF REBECCA DAVIS: THE SO-CALLED SANITY CHECK OF EFF MANIFESTO IS SHALLOW AND MISPLACED.

THE ARROGANCE AND DISHONESTY OF REBECCA DAVIS: THE SO-CALLED SANITY CHECK OF EFF MANIFESTO IS SHALLOW AND MISPLACED. 

Floyd Shivambu 

The pitiful attempt by Rebecca Davis to give a critique of the EFF’s Election Manifesto is lousy, yet we we will provide a clear response to what quite frankly is claptrap disguised as analysis. The EFF welcomes and encourages engagements including disagreements with the commitments on what people said should be our plan of action when we takeover government after 2019 elections. The despicable attempt to vulgarize the wishes of the people, which they raised publicly in community meetings, letters, emails, messages and through the experience of EFF representatives in legislatures, must be called what it is, nonsense!

Rebecca Davis claims that the EFF has broken with the unspoken social contract of opposition parties’ approach of reasonable response about the policy pledges they present before elections. She goes further to make an absurd claim that the manifesto ‘is filled with unforgivably vague pledges, sketching the picture of a healthy, educated, employed and happy South Africa zipping along 10% economic growth with no plausible details as to how this can actually be accomplished’. She accuses the manifesto of being a dishonest document. But in reality, she is the one who is being dishonest because the people’s manifesto and a clear detail plan of action has details such that it is the first of its kind, something even Davis has not seen in a manifesto. She’s blinded by class and possibly racist prejudices which seek to provide a critique before she reads and understands. 

Firstly, the EFF is unequal that we were not part of the 1994 elite pact, and not signatory of the CODESA compromise that handed over political power to black people, yet solidified unequal propert relations between white and black people. For us to continue with the tradition of political parties to approach election with the so called cautious policy commitments would be to continue with the postponement of our people’s true liberation. The EFF Manifesto emphasizes the NOW! because we are a different generation, with new demands which will not be postponed. We want our land and jobs NOW! Secondly, the inability to see millions of South Africans, who in the main are young and black, healthy, educated and employed like it is the case with most European developed nations in a plan of action from a five-year-old organization led by young black intelligentsia reflects Davis’s own bigotry.

On agrarian reform

Agrarian reform is the cornerstone of our agrarian vision of promoting and protecting local agricultural industry. The thrust of the EFF’s vision is that the country must only import food products that we practically cannot produce, to supplement what is locally produced. In essence, our aim is to maximally use all arable land for food production, with the aim of building adequate capacity to fully feed ourselves. On basic food products that are essential yet with ecological litigations in terms of production capacity, we should explore the rising agricultural technology with the aim of producing enough to feed ourselves. This is important for two reasons:
Firstly, our country’s agricultural sector is a constricted sector, controlled by only a tiny minority of players. As a result, many commercially oriented small-scale farmers are kept outside of the mainstream markets for agriculture. The EFF government commits to developing alternative markets for these growers, by obliging the State to buy from small scale farmers for their consumption needs (food for schools, hospitals, clinics prisons etc). Whatever is produced by small scale farmers must find a market, and the State must buy 100% of its food requirements from local small-scale producers, except for products that cannot be produced in the country. 

Secondly, since the deregulation and liberalisation of agricultural trade in South Africa, from the late 1970’s, but intensified by the ANC after 1994, we have observed a rapid reduction of active participants in agriculture, and a reduction in production. This is made manifest by real reduction in the number of commercial farms registered for tax purposes, from about 90 000 in 1971, to just over 60 000 in 1991, 45 000 in 2002 and to about 35 000 by 2016. Some of these farms were consolidated into single, bigger family farms, some struggled to such an extent that they were bought by bigger, more capitalised farmers who easily integrated into the global agricultural value chain.

Trade liberalisation also had an impact on the volume of food produced and consumed in the country. The percentage of imported wheat increased from 20% in 2007 to about 60% by 2007, while at the same time local production was reduced by about 54%. So, imported wheat dislodged local production of wheat. It is as a result of these dynamics that some academics have argued that South African agriculture is the “least protected agricultural sector in the world”. The EFF argues that this is not the way to develop agriculture and catalyse rural job creation, therefore, we will through tariff and non-tariff measures promote the rejuvenation of local agriculture. It’s not rocket science, it’s a basic and pragmatic programme of action, one anyone with a juvenile understanding of the country’s agrarian economy will understand, but it is clearly way above her comprehension.

One jobs

On “One Degree, One Job”, Davis radically misses the point and based on some incoherent out of context scenario courageously demonstrate her ignorance when she says the EFF will need to guarantee 13 million jobs. What she does not say is that the EFF manifesto specifically says the EFF government commits to absorbing all unemployed graduates and place them into areas relevant to their qualifications. The 13 million figure she cites is a number of mostly children who are in primary and secondary school. While our long term objectives include absorption of all learners into quality post secondary education and training, the commitment about “One Degree, One Job” seek to immediately absorb those with qualifications now into full time employment and with the gradual abolition of tenders, such is possible.

Furthermore, an impression is given that it is all graduate that will depend on government for employment as if private sector will stop employing graduates. Currently, according to Stats SA latest Quarterly Labour Force Survey (QLFS), 6.4% or 504 000 of graduates are unemployed, and not all of them have degrees. The EFF intends to abolish tenders and make it compulsory for all spheres of government to directly provide services in areas that are inherent functions of the state. The expansion and capacitation of state, including retaining ownership of all state-owned companies and entities, have the capability to absorb all unemployed graduates, a coherent articulation linked with state capacity which in her vilifying state ownership and intervention, she clutches on unintelligible conclusions and misses the link. So Davis developed an illusion and critised the imagination as if it’s EFF policy. We forgive her ignorance. 

On basic education

Davis proceed to claim other significant factors related to teacher morale and training, administrative problem and the contention SADTU together with inadequate infrastructure which plays a role on the poor quality of education as if the EFF manifesto does not concretely address these issues. 

Firstly, the teacher morale and training challenges facing South Africa’s education are not inherent to the system. One of the challenges crippling public services, including education sector, is the decline in real value of public servants’ salaries in particular teachers, police officials, solders and general workers while the senior government officials’ salaries have increased drastically matching those of private sector. The EFF government will review and upgrade the salaries of teachers to start addressing some of the challenges. But also, to address the issues of morale, the EFF government will launch a yearlong #TeachersMatter campaign, starting in 2020, to look at both professional and personal needs of teachers, including training in soft skills, emotional wellness, financial literacy, assistance with debt management etc. a clear and practical program of action. 

Secondly, she nit-picks the point about the appointment of one orthodontist per school, which she ridicules insinuating that it is unnecessary and we don’t have enough through a misguided out of context linear calculation. What the EFF manifesto emphasizes is the need to have an orthodontist allocated to each school. This does not mean that we will have one orthodontist in each school present every day of the week. What we actually mean is to have each school allocated an orthodontist, but this orthodontics may be responsible for many schools in particular districts, region or province given the available resources. Clearly this is a level of sophistication and imagination which Davis does not have. It is practical to have one orthodontist responsible for 10 schools or even more depending on the dental challenges of children in schools. 



On fee free education

Davis elevates the World Bank right-wing economic approach of income-contingent loans instead of free fee quality higher education which include free accommodation, two free meals a day, free transport and laptop while increasing funding for research. As the EFF, we have consistently criticized the government of relying on National Student Financial Aid Scheme (NSFAS), which has been badly managed instead of resolving the higher education and vocational training funding crisis. 

Fee free higher education for all deserving students is affordable through proper prioritization. What is required is political will and a commitment to introduce free quality education for all. We make a proposal of 2% of total company revenue education and training taxes in addition to skills levy as one of the means to fund fee-free quality education, proposal which Davis ignore completely asking where the EFF will find money as if we did not provide a clear fiscal framework. She possibly did not see this funding model because added to the budget directly appropriated for the department of higher education, NSFAS, and the 2% education tax, there will be enough resources for all students to gain access to quality fee free higher education.

On social grants

Davis makes another incoherent conclusion that if there was money available to dramatically increase social grants, you can be pretty sure that the ANC government would be doing so. She says this as if she has been absent from the country when BOSASA former executive were giving evidence of grand scale looting, Gupta industrial scale thieving and the current theft that is taking place at Eskom through Independent Power Producers (IPPs) is not a demonstration that the money is there but the problem is the ANC. 

Davis further turns a blind eye on the EFF’s Fiscal Framework Chapter in the Manifesto which commits to maximal tax collection and dealing decisively with illicit financial flows, base erosion, and profit shifting. She obviously had not read the part that introduces a long term financing structure for infrastructure in order to lesson the fiscal burden on short term but impactful funding needs such as social assistance programmes.

Given that we come from a very low baseline, the EFF government will double social grants. Social grants have demonstrated that they have the potential to be an immediate solution to poverty in the short term, and can ignite some degree of heightened local economic activity. The money that is wasted in corruption irregular expenditure and maladministration will be redirected to social grants. In addition, the overhaul of the fiscal framework will also expand allow for expansion of social services broadly. 

Additionally, the EFF’s cogent jobs plan will mean that the number of social grants recipients will drastically decline, so the calculation that is based on the current unemployment crisis misses the point.


On Sovereign Wealth Fund

Again, Davis makes another mistake of mixing issues pretending to understand the context in which a sovereign wealth fund (SWF) is created when clearly, she is clueless. In the past, we offered a comprehensive perspective which we demonstrated that for a country that is rich in mineral resources, SWF will be a dynamic, important instrument and mechanism to save and redistribute wealth. Countries like Norway, China, Singapore through multipronged state-led development, have successfully build some of the strongest SWFs within a similar context which we are proposing considering South Africa’s distinctive characteristics. We said a South African SWF should be established with the following features:

a. Relative autonomy from political micromanagement,
b. Account to Parliament,
c. Only 15% of gross profits should be deposited into national revenue fund
d. A combination of shareholders including state-owned companies.
e. And, an investment policy which brings about a delicate balance of asset management and private equity.

A SWF is not the same as Foreign Direct Investment, and clearly there is conceptual confusion in Davis’ critique of the EFF’s position. The SWF will fill the void of domestic investments in the productive economic sectors, because FDI has largely invested in speculative and non Labour absorptive capital.


These are the details contained in the EFF plan of action and commitments to our people. However, individuals like Davis, who write some dishonest drivel make it their mission to misunderstand the EFF so that they can spread lies, slander, gossip and pure caricature of what the economic emancipation movement stands for. These individuals and groups are often blinded by racial and class prejudices and choose to drown in ignorance even in the face of superior logic. 

EFF supports, members and ground forces are correct to be inspired by their own voices which have been captured with such clarity. After all, it is the people’s manifesto. At best, it is a cogent and clear program of action. The doomsayers and reactionaries will shout from the sidelines, but in the EFF, we know that for privileged groups, calls for equality sometimes sound like calls for oppression.
We will never retreat nor surrender. Down with reactionary and shallow criticisms Down! 

Floyd Shivambu is EFF Deputy President 

Tuesday, February 05, 2019

EFF’S JOB PLAN WILL RESCUE SOUTH AFRICA FROM A CRISIS.

EFFS JOB PLAN WILL RESCUE SOUTH AFRICA FROM A CRISIS.

Floyd Shivambu 

One of the biggest failures of  the post 1994 Government has been the inability to create jobs, in particular for able, willing and young people. South Africa has more than 22.6 million people who can work, of which 16.4 million are employed and 6.2 million are unemployed. These figures do not include the more than 2 million people who looked for work, could not find work and now they have given up in looking. In expanded definition, which is the real definition, close to nine million South Africans are jobless. All aspects and sectors of the EFF 2019 manifesto have jobs dividend, and this article only focuses on the industrialisation and procurement jobs plan contained in the Manifesto.

Historically and currently, the most effective way to create jobs is to build sustainable industries to produce things that people consume on a daily basis and involve people in all stages of production. South Africas semi-colonial character has positioned the country to be the importer of almost all finished goods, products and services, and exporter of natural, and semi-processed products. The domestic consumption of goods and services therefore create and sustain jobs of many people in China, Vietnam, South Korea, Europe and America. It is not Gods instruction that all cars, electronics and textile used by South Africans should come from the oceans. The massive and almost complete importation of finished goods and products is man-made and the EFF carry the political and ideological will to fundamentally change that. 

The post 1994 Governments industrial policy has failed drastically because the kind of industrialisation pursued was not the kind of inward industrialisation needed to build sustainable Labour absorptive factories for production of daily consumables. This failure was made worse by the fact that the movement of investors money that come to South Africa was less regulated and shaped, as a result a larger component of foreign capital in our country came in as speculative capital, which do not have the much-needed jobs dividend. 

The failure of the ANC led Government can be seen by the fact that in the last 25 years, only five special economic zones i.e. Coega, Richards Bay, East London, Saldanha Bay and Dube Port are functional. The direct state investment in the SEZ for the entire 25 years is around R10 billion, and thats insignificant for a country that expends more than R150 billion on social assistance annually. Just under 14 000 jobs has been created by the SEZs, which if massively expanded, protected and supported could end SAs socio-Economic crisis of joblessness. 

As an interim measure of poverty alleviation, social grants are a progressive intervention, but can not and should not be a permanent solution to South Africas developmental, poverty, and inequality challenges. Social assistance programmes must be accompanied by an equally aggressive Labour absorptive industrialisation, and this is the argument contained in the EFFs Founding Manifesto and clearly located in the 2019 General Elections Manifesto. 

Firstly, to create sustainable jobs, the EFF industrial policy will focus on inward industrialization with export capacity. The policy of inward industrialisation will also aim to depopulate high density populated cities such as Johannesburg, Durban and Cape Town through creation of Labour absorptive industries in parts that have not realized any form of economic development since time immemorial. 

To achieve this, the EFF government will declare zero company taxes in multiple special economic zones in various regions in South Africa, starting with 35 areas and the whole of Northern Cape Province. The multiple special economic zones will gain special economic zones benefits such as tax incentives and factory building allowance. The non-negotiable and legislated basis of each company gaining access the SEZ benefits will be employment of a minimum of 2000 workers per company per investment area. 

As the EFF we studied areas that have immense potential either informed by historical infrastructure, market and resources to identify viable special economic zones. Some of the special economic zones will be declared in Qwaqwa and Thabanchu in the Free State, Butterworth and Mbizana in Eastern Cape, Bushbuck Ridge and Enyibe in Mpumalanga, Shayandima and Groblersdal in Limpopo, Kagisano and Moses Kotane in North West, uMhlabuyalingana and Maphumulo in Kwazulu-Natal, Cape Agulhas and Beaufort West in Western Cape amongst others. 

Any investor who can commit to a minimum of 2 000 sustainable jobs, pay employees a minimum wage and employee benefits will have access to these multiple special economic zones benefits. The EFF government will spend a minimum of R100 billion annually in pursuit of massive inward industrialisation. An emphasis is placed here that the form of inward industrialisation we will pursue will not be the same as the one of many post-colonial societies, which substituted imports with inferior domestic products. The inward industrialisation pursued by the EFF will necessarily have maximum quality controls with export capacity. 

The underpinning belief of the EFF industrialization policy is creation of jobs and any investment must clearly demonstrate commitments to jobs to access special economic zones. These tax free multiple economic zones alone have the potential to generate a minimum of 400 000 by 2024 if each zone can attract in average between five to ten companies who will commit to sustainable 2 000 jobs per investment per area. 

The industrialists in all these sectors should primarily be South Africans whom the State should incubate, guide and finance with an appreciation that not all industries will be immediately profitable. Developmental Finance Institutions must be positioned to finance and support not less than 30 000 initiatives annually, and a 60% success rate in this regard would have created many jobs. 

These industries will not be producing daily consumables only but will leverage on the domestic beneficiation of South Africas natural resources, with a firm legislative framework that ensures that a minimum of 50% of all-natural resources are added value domestically. Massive and decisive industrialisation will in turn develop financial and professional services sector and boost other household industries because many people will have work and in need of other consumables. 

Secondly, the EFF government will decisively use state procurement in all spheres of government including state-owned entities (SOEs) and local government to guide industrialization including in these multiple special economic zones. A conservative estimated is that all spheres of government including SOEs spend above R1 trillion every year in procurement, and this should be the enabler of industrialisation and localization. 

The EFF government will amend the Public Finance Management Act (PFMA) and the Municipal Finance Management Act (MFMA) to compel national, provincial and SOEs to procure 80% of all goods, and products from local producers of which 50% should be owned and controlled by women and the youth. Products such as glasses, cups, plates, spoons, tiles, energy efficient building materials, furniture, washing products, electronics, textile products that government use on the daily basis must be produced locally through labor absorptive means. 

The EFF government will leverage the economies of scale to purchase commonly used products such as motors, linen and garments for hospitals, clinics and correctional services facilities, food and other consumables to expand on the value for money to use government budget to have a maximum impact on industrialization and job creation.

At the core of the EFF industrial policy that is underpinned by employment dividends is the call for quality work and living wage. Those South Africans that work but continue to live in poverty because they are paid low wage, many are as good as unemployed. Any industrial policy that intends to create jobs but does not emphasis quality of work and living wage will fail to address South Africa problems of unemployment, inequality and poverty. 

It was for this reason that the EFF in Parliament objected to a R40 national minimum wage across all sectors and strongly called for sectoral determinations. For far too long, the value of wages continues to decline unabated while companies continue to make millions in profits for the shareholders. 

The EFF government will marry closely the need to create jobs through inward industrialization with quality export capacity, maximally use state procurement capacity and fast-track the process of industrialization and at the same time, the quality of work and a living wage will also be a key priority. Added to the comprehensive job creation plan that will come with the abolishment of unnecessary tenders, the EFFs plan on jobs is cogent and a decisive departure from what the post 1994 Government has been doing. The people of South Africa should give the visionary EFF political power and will gain economic power as a result. 


Floyd Shivambu is EFF Deputy President and Parliamentary Chief Whip. 


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