Rating agency Moody’s warned on Wednesday that the erosion of South Africa’s institutional framework and recent calls for changes to the central bank’s currency and price stability mandate risked undermining the country’s credit ratings.
Public Protector Busisiwe Mkhwebane, whose job is to ensure proper conduct in public office, sparked a political row and a plunge in the rand when she proposed changes to the South African Reserve Bank (SARB)’s mandate in June.
The central bank had that recommendation quashed by the High Court. But in fresh court papers on Tuesday it accused Mkhwebane of a “glaring omission” in failing to disclose that she had consulted on the proposal with advisers to President Jacob Zuma.
“Historically, institutional strength was a distinguished feature in the last couple of years but recently that has somehow deteriorated,” said Zuzana Brixiova, a senior analyst for Moody’s at a conference in Johannesburg.
“The issue of the mandate is quite clear in the constitution and the central bank has been performing that mandate very well,” Brixiova said.
Brixiova also said the timing of calls to change the central bank’s mandate and to nationalize the bank were “unusual” as they came ahead of the ruling African National Congress’s (ANC) conference in December to elect new leaders.
“Some of the ANC members and some of the political parties are going beyond the SARB nationalization, they are talking about the nationalization of the entire financial sector, so one also has to ask to what extent is this maybe the first step toward that,” she said.
Policy and political uncertainty has seen business confidence slip to its lowest level in 30 years.
In June, Moody’s cut South Africa’s debt to Baa3, its lowest investment-grade rating, citing a cabinet reshuffle in March that saw widely respected Pravin Gordhan fired as finance minister.
S&amp;P Global Ratings and Fitch each downgraded South Africa’s credit ratings to “junk” in the aftermath of Gordhan’s removal.
Allegations of widespread corruption in the awarding of government contracts worth billions of dollars have also dented investor confidence and widened divisions within the ANC.
The allegations are based on leaked emails between the wealthy Gupta family &#8212; who have close ties with Zuma &#8212; and their associates. Reuters has not been able to independently verify the allegations in the emails.
Zuma and the Gupta family have denied any wrongdoing.
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Reporting by Olivia Kumwenda-Mtambo; Writing by Mfuneko Toyana; Editing by James Macharia and Catherine Evans
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Pressure on South Africa’s central bank a key credit risk: Moody’s

David Everatt | University of the Witwatersrand
There is a famous polling story, commonly attributed to US President Lyndon B. Johnson. Attacking his rival in Texas, where the vote was close, Johnson used the sucker-punch tactic. As re-told by famous American journalist Hunter S Thompson,
<blockquote>The race was close and Johnson was getting worried. Finally he told his campaign manager to start a massive rumour campaign about his opponent’s life-long habit of enjoying carnal knowledge of his own barnyard sows. “Christ, we can’t get a way calling him a pig-fucker,” the campaign manager protested. “Nobody’s going to believe a thing like that.
I know, Johnson replied. But let’s make the sonofabitch deny it.</blockquote>
South African Deputy President Cyril Ramaphosa just fell for the same trick, albeit a more mundane: &#8220;he sleeps around (with humans)”. Whether it was apartheid era “stratkom” style dirty trick at work or the usual dirty game of electioneering, Ramaphosa was forced onto the back foot.
Instead of ignoring or laughing at the claims, he went to court to prevent a Sunday paper from publishing. Then he engaged the issue and revealed a long-past affair of little interest to anyone. How did his advisers think this necessary in the sleazy moral climate created by Jacob Zuma’s ANC?
The challenge for voters is that there are multiple election-related battles happening simultaneously within the ANC. There is a fight for the post-Zuma leadership, fairly obviously.
But there is also Zuma’s own fight for safety from prosecution for alleged fraud, money laundering, corruption and racketeering once he steps down. His chosen candidate – Nkosazana Dlamini-Zuma – isn’t attractive to voters, according to polls. The one attribute she can play on is the mantra “we need a woman as president”. That explains why Ramaphosa was attacked as a wife-beater, and when that didn’t stick, as a sequential blesser (sugar daddy).
<h2>What the polls say</h2>
Leadership polls in the public domain – of all voters, not just ANC voters – suggest that this election is Ramaphosa’s to lose. Among potential voters from all parties, he has overtaken the main opposition Democratic Alliance’s Mmusi Maimane, to lead Dlamini-Zuma by a considerable margin. Dlamini-Zuma seems to be on an ineluctably downward spiral, matched only by her ex-husband. Her campaign urgently needs an injection. Becoming an MP and presumably thereafter a minister is part of the attempt to do just that, as will the rumoured appointment as Higher Education Minister and bestower of more or less free education for all, if it occurs.
<img loading="lazy" decoding="async" class="aligncenter wp-image-283849 size-full" src="http://cnbc.africa/wp-content/uploads/2017/09/file-20170913-23138-iyb1cq.png" alt="" width="754" height="478" />
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But the problem is Ramaphosa. If Dlamini-Zuma needs a bounce, he needs his bubble burst. The ANC’s mid-year policy conference, which begun with Zuma proxies’ braggadocio, gave Ramaphosa a major bounce in the polls to the point where he is on a continued upward trend. The party’s December elective conference is suddenly very close. A repeat performance would secure Ramaphosa’s position; and leave current president Zuma looking very fragile indeed. Cue the smears.
<img loading="lazy" decoding="async" class="alignright wp-image-7604 size-medium" src="http://cnbc.africa/wp-content/uploads/2017/01/nkosazana_dlamini_zuma-300x190.jpg" alt="AU chief arrives in Zimbabwe ahead of elections" width="300" height="190" />
If Dlamini-Zuma remains burdened by “that” name – and focus groups make it clear that the name is a curse, not a blessing – then attacking Ramaphosa for philandering and beating his wife is meant to take the gloss off his campaign and, crucially, influence women voters. Who wants a(nother) president who cheats on his wife? Who wants a president who apparently beat a former wife (despite her strenuous denials)? These are all intended to dent Ramaphosa’s appeal to women voters. Above all, their aim is to reinforce the “we need a woman president” mantra – which is the central and only message of the Dlamini-Zuma campaign.
<h2>The 2019 national elections</h2>
All this is being fought out in the ANC, even if simultaneously in the full glare of a willing media. But the ANC nowadays is merely a player in the game – a big one, but most certainly not too big to fail.
There is still, in 2019, the real national election where South African citizens go to vote. This may be Zuma’s major miscalculation. All evidence suggests that the national leadership have not learned the lesson of the 2016 municipal elections, which is core to all polling: do not take your voters for granted.
The ANC has failed to find its mythical reset G-spot, and its post-election post-mortem seems to have found nothing needed correcting barring the removal of some peskily ethical ministers. The #Guptaleaks – the thousands of leaked emails exposing the extent of the powerful Gupta family’s capture of the state – and the cabinet re-shuffling plus simple cravenness of the entire ANC project, have worsened since 2016.
The ANC is still the “mothership” – the famous liberation party, settled deep in the heart and subconscious of many South Africans. But the same lovers of history are judging the present, and will vote accordingly. They did so in 2016. The warning seems to have passed unheeded.
The cloak and dagger cleverness being unleashed by all sides in the ANC struggle assumes one thing – that the party will win in 2019. Polls suggest that at the moment, the ANC remains the majority party. But that is voter sentiment right now – it does not measure voter intention in 2019. Moreover, winning and being a majority party are very different – just ask the ANC in Johannesburg post-2016, for example. A recent Ipsos poll found the following:
<img loading="lazy" decoding="async" class="aligncenter wp-image-283850 size-full" src="http://cnbc.africa/wp-content/uploads/2017/09/file-20170911-1323-m2eiv0.jpg" alt="" width="754" height="335" />
<h2>Nice guys don’t win</h2>
<img loading="lazy" decoding="async" class="alignright wp-image-40893 size-medium" src="http://cnbc.africa/wp-content/uploads/2017/02/mmusi_maimane_-_wikimedia-300x200.jpg" alt="South Africa's main opposition says will not form coalitions" width="300" height="200" />
Maimane’s coy slip of his own poll – that the ANC was polling below 50% – may represent a 2016-2018 downward trend. If that happens attacks on Ramaphosa will come from the main opposition DA as well. This doesn’t mean the DA will win. Maimane neatly said nothing of how his party was faring – but the messy business of bartering their way to provincial power via unshaky coalitions may be the future for an ANC that has truly toppled itself from the moral high ground.
&nbsp;
Ramaphosa is clearly trying to chart a more moral and honest path than his predecessor. Where Zuma faced a rape trial and repeated evidence of infidelity, Ramaphosa initially fell for the sucker-punch (hence the failed interdict against The Sunday Independent) and then took the route of quiet dignity.
If Ramaphosa can lose that initial twitchiness, maintain the dignity, but toughen up for far worse muck that will be thrown at him, the country’s most famous buffalo farmer may yet prevail.
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This article was first published in The Conversation.

Op-Ed: Bestiality and BS: Lessons from South Africa’s sleazy political climate

Keith Setaka | Absa Financial Services
The words ‘Last Will and Testament’ have a chilling kind of finality that many of us might prefer to ignore, reassuring ourselves that we are too young to consider the possibility of dying. However, the sad reality, as the well-known aphorism goes, is that “In the midst of life, we are in death” – and failing to prepare for that eventuality will mean leaving behind a family uncared for and unprotected.
Having a valid will is a critical part of financial planning because it allows you to specify exactly how you wish to distribute your assets – monetary and otherwise – to your selected beneficiaries following your death. It allows you to plan your estate according to your own wishes and needs, and ensures that the process through which your assets are distributed to the beneficiaries is simple and painless for them. By putting a legally binding will in place, you secure your loved ones’ financial future.
But while many people understand the need to have a will, it’s astounding that very few actually have one in place. Consider, for instance, the latest figures released by the Masters of the Court, which reveal that over 70% of the South African working population do not have wills. That means many workers die intestate, and risk their assets, pension and life policies payouts being inherited by the wrong people.
Yet, it doesn’t have to be like that. Working with a professional to draft a will is a fairly straight-forward process, and many institutions do it for free or at a fraction of the cost if they’re nominated as executors. A professional consultant will ensure that your will meets all legal requirements, and that your estate can be set up in a tax-efficient way to prevent assets being eroded by exorbitant estate taxes.
In addition, a professional consultant will assist you to ensure that there is adequate liquidity in the estate to meet necessary obligations during the winding-up period, as well as be able to advise you on issues surrounding nominating an executor: the person or institution responsible for winding up the estate.
It is important to know that the length of time that it takes to wind up an estate varies – simple estates with only one or two properties and a cash inheritance, for example, could take approximately six months, while complex estates or those placed under audit by the government could take years. Typically, the minimum length of time it takes to administer an estate is six months.
Another key piece of information that you should know is what happens to any life insurance policies that you may have in place. Depending on what you have specified in your policy, the proceeds will be paid directly to your named beneficiaries or into the estate account, wherein the proceeds will cover liabilities (if any) and the surplus disbursed to the estate beneficiaries.
A commonly overlooked part of the disbursement of assets to beneficiaries is if they are left to minors. In that case, their benefits will be transferred to the Guardian’s Fund administered by the Master of the High Court, which will pay out all their inheritance when they reach the age of eighteen. You can set up a testamentary trust through a will to protect your dependents’ inheritance until such time they meet certain conditions specified in a will, for example, when they are of an age you comfortable with, have graduated or achieved a certain milestone.
There are, of course, many other complex matters to consider, but the alternative – dying intestate – is infinitely worse. The obvious risk is to have your assets inherited by the wrong person because of a lack of explicit instructions. Another risk is that it might take considerably longer to wind up the estate, and that the assets finally allocated to beneficiaries might be depleted as they may need to be used to cover financial commitments in the estate during that winding up period.
Essentially, if you die intestate, your estate and assets will be administered in terms of the provisions of the Intestate Succession Act. According to this Act, succession is determined by relationship, namely spouses and descendants, and the process is a lot more complex as there are a number of scenarios that intestate succession covers.
These rules of intestate succession also apply if your will is found to be invalid. A critical point to note is that you have to live in South Africa at the time of death for these rules to apply – otherwise the laws of the country you reside in will apply.
The sheer volume of information that you need to know and consider when drawing up a will can be overwhelming. For this reason, I would strongly urge you to seek the counsel of an experienced advisor to advise you based on your unique needs and state of affairs. Absa, for instance, has been helping people with their estate planning for over 100 years and has the expertise to help you make sure that your family and loved ones are well taken care of even if you are no longer around to look after them yourself.

Why having a will is a critical part of financial planning

Global consultancy McKinsey, facing parliamentary hearings in South Africa over payments to a firm controlled by a billionaire family, ignored suspicions raised over several years by local senior staff that companies it worked with were set up to steer state contracts, two former employees said.
Since July, when new information emerged about McKinsey’s flagship South African contract, the consultancy has been under increasing scrutiny in a widening corruption scandal over the influence of the Gupta family, businessman friends of President Jacob Zuma.
South Africa’s parliamentary committee on public enterprises is investigating whether McKinsey knowingly let funds from state utility Eskom be diverted to a Gupta company as a way of securing a $78 million contract to advise Eskom. McKinsey denies wrongdoing and says it intends to cooperate with the authorities if evidence of any impropriety emerges.
“We hold ourselves to the highest professional standards wherever we work and stand firmly against corruption. We are committed to ascertaining the facts and swiftly taking any and all appropriate action,” spokesman Steve John told Reuters.
McKinsey has hired law firm Norton Rose Fullbright to assist in an internal investigation. Norton Rose said it would not comment while its probe is under way.
The accounts by the two former employees, who spoke to Reuters separately on condition of anonymity because their present jobs do not permit them to speak to the media, could provide fodder for lawmakers who say they have questions about the timeline McKinsey has given of when it learned of potential problems.
McKinsey says it carried out a due diligence review on its partner in the Eskom deal beginning in January 2016, and cut all ties with the local firm two months later after it concluded the company was unfit.
“We carry out checks on suppliers and partners when we work with them and address issues and concerns when they arise. When concerns were raised we undertook due diligence,” spokesman John said in a written response to questions.
But the ex-employees said they had attended meetings in Johannesburg where problems with that firm and a precursor company employing the same principal staff had been discussed much earlier: as far back as 2013.
The ex-employees said they would have expected such concerns to have been escalated to managers outside South Africa, although they did not know if that had happened.
Ultimately, McKinsey accepted the Eskom account in spite of the warnings, the sources said.
“We turned a blind eye,” said one.
McKinsey spokesman John said he could not comment on meetings that may have taken place without knowing the names of the participants.
Natasha Mazzone of the opposition Democratic Alliance, a member of the parliamentary committee investigating the affair, said the committee would be looking at what McKinsey knew, and when, about the intentions of its local partners.
“If McKinsey is found to have been deliberately misleading South Africa and assisting in state capture, they will certainly be held to account and recommendations will be made to the portfolio committee.”
“STATE OF CAPTURE”
McKinsey’s Eskom contract was huge for the consultancy, accounting for more than half of its South African revenue, according to the two ex-employees. The deal coalesced even as a number of other business services firms were curtailing their work for South African state firms in the wake of an anti-corruption watchdog’s report into the Guptas.
The 355-page report by the constitutionally-mandated Public Protector watchdog, entitled “State of Capture”, accused the government of improperly steering hundreds of millions of dollars in state contracts to Gupta-controlled firms.
The Guptas and President Zuma deny wrongdoing and say the scandal has been manufactured to undermine Zuma’s leadership.
While McKinsey was working for Eskom in 2015-2016, Eskom paid 30 percent of the deal’s value to a firm called Trillian, which was controlled at the time by a Gupta family ally. The three parties, McKinsey, Eskom and Trillian, have given contradictory explanations for the payments to Trillian.
Eskom says it paid because it was told by McKinsey that Trillian was McKinsey’s subcontractor. The utility declined to answer further questions for this story.
Trillian, in response to Reuters questions, said it “was the partner of McKinsey and was paid its proportionate share of what McKinsey and Trillian billed against work done.” It said it was no longer controlled by the Guptas, as longterm Gupta family business partner Salim Essa had sold his shares this year. Essa did not respond to requests for comment.
McKinsey has long said it was not responsible for the payments, never had any contractual relationship with Trillian and had severed all ties with the company in March 2016.
But in July this year, several South African newspapers released a leaked Feb. 2016 letter by a McKinsey director instructing Eskom to pay Trillian and describing Trillian as McKinsey’s subcontractor.
McKinsey says the letter “inaccurately characterised” its relationship with Trillian. The McKinsey director who wrote it, Vikas Sagar, has been placed on leave pending the outcome of McKinsey’s internal investigation.
Sagar did not respond to attempts to reach him on social media, and McKinsey declined to make him available for comment.
Mazzone of the opposition Democratic Alliance said: “We need to establish why a firm like McKinsey agreed to a 30 percent share of work with Trillian in the first place, when exactly they realised that siphoning to Gupta companies was taking place and if they alerted the Minister of Public Enterprises to possible concerns.”
<h3 data-reactid="69">TIMELINE</h3>
The two ex-employees said McKinsey’s South African office had been wrestling for years with the question of whether it was working with local companies that were little more than window-dressing to get contracts.
Trillian was formed in 2015 by directors from another firm called Regiments, and employed many of the same principal staff. Regiments had already been McKinsey’s local partner on another contract since 2012, and the ex-employees said McKinsey’s office considered the new company to be a spin-off of the older one, intended to play a similar role in future deals.
According to the ex-employees, McKinsey partners in South Africa told managers in the country that they thought both Regiments and Trillian had few capabilities, and were valuable mainly for political connections necessary to secure contracts.
“At least two (Johannesburg-based) partners raised concerns about using Regiments as a sub-contractor back in 2013. It seemed clear Regiments was a way of us winning the contract and if we caused a fuss we would lose business,” one of the ex-employees said.
“We had several meetings between 2013 and 2016 at top level locally about Regiments and Trillian, where it was asked: how are these unqualified companies winning us contracts? Why are the contract amounts so favourable? Why do we have to use them to get business?”
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In a statement to Reuters, Regiments strongly rejected the suggestion that it was employed by McKinsey solely to win contracts. Regiments had received “numerous client and McKinsey acknowledgements of our value add and delivery,” it said. “Regiments was never involved in the procurement process, except to provide our profile to McKinsey on a few occasions.”
According to the ex-employees, as the Eskom deal was coming together in 2015, there was strong resistance within McKinsey’s South Africa office to working with Regiments personnel and their new vehicle Trillian on the Eskom bid.
They said a McKinsey partner approached an Eskom board member in September 2015 to say that McKinsey did not want to work with either Regiments or Trillian, due to concerns over the ownership of those companies and their capabilities. A former Eskom executive, who also spoke to Reuters on condition of anonymity, confirmed that conversation took place.
The McKinsey ex-employees said the partner who made the overture to the Eskom board member was shifted off the project and replaced by Sagar, who was promoted to the rank of director. Sagar then wrote his letter to Eskom describing Trillian as McKinsey’s subcontractor and instructing Eskom to pay it.
The Eskom deal was too big to jeopardise by looking too closely at the role of the Guptas, the ex-employees said.
“Losing a contract of that size would have serious implications for the business and staff in South Africa,” said one. “It was considered a risk worth taking.”
($1 = 12.9514 rand)
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Editing by Peter Graff
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McKinsey ignored staff warnings in South Africa Gupta scandal, ex-employees say

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How Malcolm Gladwell’s theories about social epidemics have a lot to say to African innovation.
By Nnamdi Oranye
Recently I read Malcolm Gladwell’s book, The Tipping Point, and found a surprising correlation between his premise and my understanding of the plight of African innovators. Gladwell is a fascinating author and social observer. I suspect that even those that don’t buy into his theories still find him thought-provoking. The vantage point he views social epidemics from is one that lends itself well to the need for growth in our African context.
In his book, Gladwell outlines the significance of why certain ideas, trends, or social behaviours cross a threshold and spread like wildfire. His methodology proposes that there is usually a tipping point where these ideas, trends etc. take off. The reason why some do and some don’t is worth critiquing for the African context.
This is a continent that needs every advantage in order to understand its psyche. Pragmatically, the continent should be competing at a more noticeable global level but we know it often fails to get the attention it rightly deserves. Of course, the question is why? The answer often lies in our own understanding of ourselves and how we assess what we value.
<h4>How Rudy Giuliani turned around crime in New York City</h4>
One of the case studies that Gladwell references in his book really grabbed my attention. Twenty years ago, the crime rate in New York City was staggeringly high. The then mayor, Rudy Giuliani, got to work to turn it around. His approach was to attack the lawlessness of the city by focusing on petty crimes first: people not paying for their subway fares, graffiti scribblers, littering etc.
The police department clamped down on anyone that evaded subway fares, cleaned up the graffiti, and heavily fined those caught littering. This zero-tolerance approach was visible to all of New York’s citizens. People became well aware that no crime would escape the law and this translated to a drastic decrease in serious crime. What was highly criticised at the time proved to be one of the most notable success stories of crime eradication and has even been employed in other cities elsewhere.
<h4>What is the tipping point for African innovation?</h4>
This theory made me think about what the tipping point is for African innovation. Much of what I have written about in my two books, Disrupting Africa and Taking on Silicon Valley, emphasises the importance of promoting African innovators. This is the tipping point for the credibility of African innovation. If enough promotion and visibility
If enough promotion and visibility are given to African innovators, African innovation will become credible in the eyes of its disparagers. In many ways, African innovation is in its prime, but it’s nowhere near enough where it can be because it doesn’t receive the support it should from the very people it helps – you and I.
There are always plenty of complaints about the plight of the African innovator: access to funding, scaling etc. These are considerable challenges in themselves but, if the story of the crime rate in New York City is anything to go by, substantial change is possible by taking small steps. For the African context, it is as simple as actually knowing who the African innovators are before we are able to promote them.
<h4>Giving a voice to African innovators</h4>
Books can be written about African innovation, funding can be generated through VCs, statistics can be released about the challenges on the continent but, if no one knows who the innovators are, it has all been done in vain. If we focus on promoting African innovators, if we talk about them and give them a voice, then people will know about them. If enough people know about them, we have a tipping point. We have a trend and a social change.
From a negative point of view, Gladwell likes to talk about the “bystander effect”: the common practice of standing by, looking on, but doing nothing. We can’t wait apathetically for people to think differently (or rather, I would say, correctly) about African innovation. Rather it’s up to us to talk about them and support them. If we don’t consciously promote African innovators we will be nothing but bystanders. We can’t expect change if we adopt that attitude.
This is an opportune time for African innovation to reach its tipping point. Ten years ago we weren’t connected in the way we are today. Technology has given us the structure and means to promote African innovators but we have to see the value in it. We give so much credit to Silicon Valley innovators such as Uber, Google and the like, but we have to open our eyes more for our own continent. It will take a new eco-system, a network, a collaboration of African leaders to promote, and equally value, African innovators if we are to ever reach the tipping point we need here.

Op-Ed: The Tipping Point for African Innovation

Ghana’s central bank has raised the minimum capital required for banks three-fold to 400 million cedis ($90.2 million) as part of measures to ensure financial stability, its spokesman said on Tuesday.
“With immediate effect, the Bank of Ghana has set out a new minimum capital requirement of 400 mln cedis for banks as part of a holistic financial sector reform,” Bernard Otabil said.
The previous capital requirement for banks and new entrants was 120 million cedis. Otabil said the increases took effect from Sept. 11 and that the lenders have up to the end of 2018 to meet them.
The central bank last month revoked the licenses of two banks and transferred their deposits and selected assets to state-owned GCB Bank in order to protect financial stability.
The new government of Nana Akufo-Addo has vowed to restore financial stability and fiscal discipline to stabilise the major commodity exporter’s economy. Ghana has been dogged by high public debt and budget deficits, forcing it to sign a credit programme with the IMF in 2015.
“Going forward, banks will require a more sophisticated and robust capital framework &#8230; consistent with the growing risks &#8230; banks are currently facing,” a statement by the regulator seen by Reuters said.
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Reporting by Kwasi Kpodo; Editing by Tim Cocks
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Ghana cenbank triples minimum bank capital requirement to 400MN cedis

South Africa’s anti-graft watchdog consulted the Presidency on a proposal to change the central bank’s mandate to promote economic growth rather than currency and price stability, the bank said in court papers submitted this week.
Public Protector Busisiwe Mkhwebane, whose job is to ensure proper conduct in public office, sparked a political row and a plunge in the value of the rand when she proposed changes to the central bank’s monetary policy mandate in June.
The court quashed her recommendations in August.
Mkhwebane made the proposal as she announced her findings that the apartheid government that ended in 1994 had breached the constitution by supplying Bankorp, which was bought by Absa in 1992, with a series of bailouts from 1985 to 1995.
Absa is now owned by Barclays Africa Group and Mkhwebane said Barclays Africa had to pay 1.1 billion rand ($85 million).
The issue of the bailout is still under review in court after Absa and the central bank challenged the findings.
It is unclear why Mkhwebane included the recommendations on monetary policy at the end of an investigation into Bankorp.
However, in a court affidavit filed on Monday the central bank said Mkhwebane met with the Presidency and the State Security Agency before releasing her findings, local news service EWN said.
It also posted excerpts of the bank’s filings online.
Mkhwebane did not disclose her meeting with the Presidency on June 7 “to discuss the new remedial action in her final report”, the affidavit said, describing the her failure to do so as a “glaring omission”.
A Presidency spokesman was unavailable and the central bank declined immediate comment.
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Reporting by Olivia Kumwenda-Mtambo; Editing by Ed Cropley
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S.A Public Protector discussed cenbank mandate with Presidency: court papers

Dr Leanne Mandim | Life Healthcare 
For many, wellness in the workplace has moved from a nice to have to a must have.
“The increasing demands of today’s fast-paced business environment means employees need more personal health, wellness and lifestyle support than ever before. It’s well documented that happy, healthy employees are more efficient and more productive,” says Dr Leanne Mandim, Head: Employee Health and Wellness Solutions for Life Employee Health Solutions.
While the physical health of employees is always a key focus of wellness programmes, Mandim believes that an integrated programme which also highlights mental health is key. 
“The mental health and wellbeing of employees in the organisation is critical for maintaining sustainable levels of employee engagement, resilience in the face of organisational change, motivation, and innovation. Through an integrated employee wellness approach employers can benefit through the positive impact on productivity and business performance,” she says.
A recent World Health Organization study has shown that depression and anxiety account for the most frequent occurrences in occupational disability, according to the study, depression and/or anxiety is expected to account for 15% of the global disease burden by 20201. It is estimated that between 3% &#8211; 10% of GDP is lost annually as a result of stress related sick leave2.
“A well-managed comprehensive and holistic wellness programme can have definite benefits in positively managing risks surrounding depression and anxiety,” says Mandim.
A growing body of evidence suggests that employers can reduce costs by investing in the health and well-being of their employees. This includes both the direct costs of providing healthcare and indirect costs, such as absenteeism and reduced productivity.
Many employers have recognised the wider potential benefits of investing in wellness and have used it to promote the achievement of other important company objectives. Investing in wellness can lead to:
<ul>
<li>Improving employee engagement and building individual resilience.</li>
<li>Strengthening the employer value proposition to attract and retain the best talent.</li>
<li>Reducing safety risk through behavioural change solutions.</li>
<li>Enhancing the value and sustainability of the organisation’s most critical resource – people – and demonstrating this to stakeholders.</li>
<li>Achieving the organisation’s wider purpose and improving the lives of people.</li>
<li>Building the organisation’s reputation and brand.</li>
</ul>
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As productivity remains a core concern for most organisations, the demand for sustainable employee wellness initiatives has shifted from a purely HR driven strategy to a business imperative. With South Africa’s increasing disease burden, companies are starting to feel the pressure to play a more active role in employee wellness.

The cost of mental illness in the workplace

Seán Mfundza Muller | University of Johannesburg
The South African government is said to be seriously considering selling its stake in telecommunication firm, Telkom, in order to save the troubled South African Airways (SAA). This has brought back debates about what is the right thing to do around the country’s state owned enterprises. Sibonelo Radebe asked Seán Muller to weigh up the options.
What does financial support to SAA actually involve?
There are two basic forms of assistance government has provided to SAA. The first “government guarantees”, in which the Treasury provides a guarantee to support SAA’s borrowing from private lenders. These guarantees mean that if SAA is unable to pay its debt costs or repay the full loan when required, the Treasury must pay. As of February 2017, SAA held R19.1 billion in government guarantees. These pose a risk to public finances, but strictly speaking do not require any funds immediately.
The second type is a “cash injection”, where Treasury directly transfers cash to SAA. This is what is more commonly known as a “bailout”.
In the current case the lines between these two forms of support are blurred. One of Treasury’s reasons for giving SAA cash is apparently to prevent it defaulting on all debt that is called in by SAA’s creditors.
Is selling a Telkom stake and redirecting the money towards saving SAA a good idea?
There are two aspects to this question. First, is injecting more public money into SAA a good idea? Second, is selling government’s stake in Telkom a good idea?
It is hard to see the case for putting further public money in SAA. At various points it may have made sense to do this in order to stabilise SAA as a public enterprise, or prepare it for large scale privatisation. However, this scenario has been repeated so many times that the argument is no longer credible.
Of course, the government has an obligation to prevent the harm that would result from a state-owned enterprise going bankrupt. The direct effects via SAA’s operations, and indirect effects on the economy and investor sentiment in relation to state owned enterprises, could be severe. The failure to implement a successful turnaround strategy at SAA, which appears to be linked to the determination to keep Dudu Myeni as board chair, has placed South Africans in a bind: either the country wastes public money, or it incurs the costs of letting SAA go bankrupt.
With regards to Telkom, it is useful to remember that government previously committed to only bailout state-owned enterprises using funds raised through the sale of state assets. There are two advantages of this approach. First, it focuses minds on the consequences of state owned enterprises failure – as is happening in the case of SAA. Second, it means that the main national budget is not affected, so Treasury can still meet its commitments like the planned budget deficit.
But there is no good case for bailing out SAA. At best, it is simply to avoid an even worse scenario in which SAA’s guarantees are called in by creditors. Wherever the money comes from, the social cost is significant and arguably unjustified.
Some have suggested that there are additional costs because Telkom is now a profitable enterprise and represents a government success story, but this is debatable. South Africa’s ICT development has been unsatisfactorily slow and arguably one reason is that government’s stake in Telkom meant that it ended up protecting a firm with monopoly power in fixed line infrastructure.
Contrary to an increasingly popular narrative, the fact that Telkom has become profitable by moving into the mobile space and slashing employment does not make it either a privatisation, or a state ownership, success story. From this perspective, government selling its stake could be a good thing for ICT development in the medium to long run.
What does the consideration say about ANC’s attitude towards privatisation?
There is an obvious tension between the claim that SAA cannot be privatised, while effectively privatising government’s remaining stake in Telkom. Such inconsistencies are characteristic of ANC policy in the last two decades. This is partly due to differences within the alliance and partly the result of policy incoherence, along with a failure to act on advice and implement decisions.
The National Development Plan and the Presidential Review Committee on State-Owned Entities both provided fairly clear direction, but many recommendations appear to be inconvenient for the president and those around him – who appear to see state owned enterprises as vehicles for personal enrichment rather than economic development.
Clearly the Telkom model works. Should it be replicated?
It is actually not at all clear that the Telkom model “works” in the sense of advancing economic growth and development in the broader public interest. It was arguably the wrong model for the country’s ICT sector.
However, even if it had been the right model for that sector, simply replicating it would be a bad idea. State ownership, privatisation and regulation strategies need to take into account the characteristics of particular sectors. What works for telecoms will be different to what works for energy or for airlines.
And what do you make of the state of Eskom?
The state of Eskom is of grave concern. Load shedding and price increases, combined with more energy efficiency options for businesses and consumers, have led to much lower electricity demand than originally forecast.
Meanwhile, Eskom is bringing massive new coal power stations online that have vastly exceeded their original budgets. The result is that Eskom faces a “death spiral” where it needs to increase prices to prop up revenue and bolster its finances, but doing so leads to customers reducing demand (through increased efficiency and implementing alternative options like decentralised solar power).
Eskom holds up to R350 billion in government guarantees and is in an increasingly precarious situation. If one adds the lingering possibility of an unnecessary and ill-advised nuclear deal into the mix, the fear is that Eskom could end up in a similar state to SAA now.
SAA may be a waste of public funds, but the threat it poses can probably be contained. That would not be true of Eskom. The main debate between many analysts now is not whether a crisis is looming but whether there remains any chance of avoiding it, given repeated failures to make and implement critical policy decisions.
And so, what should happen to SAA and Eskom?
In the absence of a clear developmental mandate for SAA, and it being repeatedly bailed out with public money that could be better used elsewhere, the objective must be to minimise the cost of SAA to citizens: if privatisation is the best option then so be it. Eskom is a much more strategically critical enterprise and its problems are more complex, so privatisation would just create a range of different problems. Each state owned enterprises requires tailor-made solutions but one thing they all require is basic good governance, which is not currently in place.
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This article was first published in The Conversation.

SAA_Wikimedia

Op-Ed: South Africa needs to sober up to save itself from sickly state-owned enterprises

By: Stephen G Davies 
If you’re struggling with your current level of personal debt, here are steps you can take to regain control of your finances and the situation&#8230;
The latest statistics about the level of South African consumer debt have been released by the National Treasury and they don’t make comfortable reading. The Local Government Revenue and Expenditure review, which also details the level of personal debt in South Africa, has revealed that consumer debt hit R128.3 billion on 31 March 2017. Of that, R86 billion is carried by households. With a range of price hikes and policy changes still due to be made this year, the National Debt Advisors are warning consumers who struggle with debt to <a href="https://nationaldebtadvisors.co.za/sa-consumer-2017-hold-tight/">tighten their wallets</a> and control their spending if they want to make it through the year.
If you’re struggling with your current level of personal debt, there are steps you can take to regain control of your finances and the situation&#8230;
1. Take stock of all your debts
The first step is to write down every debt you owe. That includes car loans, personal loans, payday loans, credit cards any other short-term debt. You don’t need to include mortgages or student loans as these have longer terms and relatively low APRs. You should note down the balance (the amount owing), the interest rate, the monthly amount you pay for each of your debts and any other fees that apply. You should then be able to see clearly which debts are the most expensive to service. These should be the debts you repay first.
 2. Reduce your expenditure
We all have essential expenditure, such as rent, food, utility bills, transport costs and other household bills, and expenditure which is discretionary, such as holidays, non-essential clothing, takeaways, gym membership etc. By tightening your belt and being aware of where your money is going, it is possible to make simple savings every single day that can reduce your costs. Here are <a href="https://www.wonga.co.za/blog/massive-money-saving-tips/">40 money saving tips</a> to consider.2
3. Increase your income
Unfortunately, that’s easier said than done. In South Africa, wages, in real terms, are currently falling. That means the money you earn is not going as far as it did at the same time last year due to the rising cost of inflation. If you have the option to work paid overtime then doing just a few extra hours a month could help you make a considerable dent in the capital amount you owe rather than simply paying off the interest incurred. If you can’t work overtime, are there other ways you could increase your income?
4. Seek advice from a debt counselling service
There are a number of personal debt charities in South Africa, such as the aforementioned National Debt Advisors, who you can contact for free debt advice. They will help you work out the best way to tackle your debt, establish a budget you can stick to and even negotiate with your creditors on your behalf to reduce your monthly outlay.
5. Transfer to a zero interest deal
If your debts are limited to a couple of credit card bills which are incurring interest, the cheapest and simplest option may be to transfer the balances to a zero interest deal. Although you will incur an initial transfer fee, the amount you will save by not paying interest for a period of up to 24 months will greatly outweigh this charge and will allow you to chip away at the capital amount rather than only repaying the interest.
What are your experiences of personal debt? Please share your thoughts with our readers in the comments section below.

Personal Finance: 5 Ways South Africans can reduce personal debt

By: Standard Bank
Following a carefully planned management succession process Standard Bank Group announces changes to its current joint-group chief executive structure. The board is satisfied that the structure, which was necessary in 2013, has met and in many respects exceeded expectations. Accordingly, Ben Kruger steps down from the role of joint-group chief executive with immediate effect. He remains an executive director of the company, reporting to the group chief executive.
Sim Tshabalala continues in the role of group chief executive of Standard Bank Group and chief executive of The Standard Bank of South Africa Limited.
“The board expresses appreciation to both Ben and Sim, who have successfully led the process of refreshing the group’s strategy and managed complex challenges which faced the group in several jurisdictions, while delivering respectable returns to our shareholders. The resounding success of the joint-group chief executive structure is testament to the group’s culture and values which include working in teams, respecting each other and upholding the highest levels of integrity. Good momentum has been achieved in the implementation of the group’s refreshed strategy,” said Group Chairman Thulani Gcabashe.
The board appreciates Ben’s selfless leadership and is pleased that he remains part of the leadership team going forward.
Ben’s new role will include: Contributing to the governance of the group as a member of the group board; contributing to the leadership, management and governance of Africa Regions; guiding the continued digitisation of the group; deepening and broadening the group’s relationship with its strategic partner ICBC; helping with the management of the Group’s risks; and maintaining and building key client relationships.

Standard Bank CEO Ben Kruger to step down

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By Johann Serfontein
The NHI White Paper cites a number of public and private sector failures as reasons to implement NHI. But who is responsible for causing these failures?
The overarching reasons given for the implementation of National Health Insurance in South Africa is based on the National Development Plan, which wishes to improve quality in the public sector and reduce prices in the private sector. The White paper problem statement indicates that costs have been increasing in the private sector and that legislation and other tools have not gone far enough to regulate the private sector. With regulation being a government prerogative, the question arises as to why that is not happening?
The White paper problem statement indicates that costs have been increasing in the private sector and that legislation and other tools have not gone far enough to regulate the private sector. With regulation being a government prerogative, the question arises as to why that is not happening?
Assertions in the White Paper are that the nature of purchasing agreements, non-healthcare costs and lack of economies of scale drive up premium increases in the private sector. It is notable that consideration is apparently not given to provider groups having all received below CPI increases for many years from medical schemes.
<h4>Increased utilisation not considered in policy plans</h4>
One of the main cost inflation drivers, namely increased utilisation, is not mentioned in the policy document at all. This inflation driver was prominent in presentations to the Health Market inquiry, but yet is not considered by Government in their policy plans. The OECD hospital cost report is also mentioned, to indicate high private hospital fees, despite the report not being used in the Health Market Inquiry due to its questionable content not being verifiable.
Prescribed Minimum Benefits (PMBs) are quoted as another cost driver in the private sector. Low levels of cross-subsidisation, lack of pricing regulation and lack of healthcare technology assessment are specified as reasons for PMBs adding to costs. Government scrapping of the introduction of the Risk-Equalisation fund stopped any cross subsidisation in the industry, while non-consideration of practice cost results by the Department of Health led to the scrapping of reference price lists by the courts in 2010.
A PMB review, which would include technology assessment, has also not happened since 2010, despite it being legislated to happen every two years. Many of the pervasive cost drivers in the private sector can thus be directly linked to failure of government to implement current legislation, while not considering other legislative interventions that could reduce costs.
Mandatory medical scheme membership for all employees could reduce premium costs by 23% for all scheme members, according to Emile Stip, the head of actuarial services at Discovery Health. A reduction in the solvency requirements, which by all accounts is an arbitrary figure, can further reduce premiums by 1-2%.
<h4>White Paper blames human resource shortages in public sector</h4>
In the public sector, human resource shortages and attrition are blamed by the White Paper on job design; performance management systems; remuneration policies; employment relationships; the hospital work environment; shortages of equipment and tools; workplace culture and human resource practices. Published research shows that amongst providers themselves, dissatisfaction with working conditions and security concerns were the main reasons for leaving public sector employment.
Published research shows that amongst providers themselves, dissatisfaction with working conditions and security concerns were the main reasons for leaving public sector employment.  Working conditions fall squarely within the ambit of the Department of Health and could be improved by proper management and creation of a professional work environment, without spending additional funds.
A concerning trend in the public health system is also that while medical doctor numbers have only increased from 15 554 in 1997 to 16 006 in 2006, a 2.9% increase in 10 years, administration and management increased from 28 676 in 1997 to 37 419 in the same period, a 30.4% increase. There was also a 259% increase in managers in the same period (increased from 420 to 1091). This is especially worrying, as while there were 11 700 medical graduates from 2002 to 2010, only 4 403 doctor posts were created in the public sector in that time. Growth in public sector employment is thus focusing on the wrong areas. Despite the increase in managers, management and administration of the system are getting progressively worse.
<h4>The department is failing is failing South Africans in both public and private sectors</h4>
The Department of Health is failing South Africans, both by failing to provide quality services in the public sector and by failing to implement measures to control prices in the private sector. Their solution to miraculously fix all these problems is the introduction of NHI.
A radical funding overhaul of the system is not going to improve this self-inflicted situation. It will only serve to destroy the private healthcare funding industry while driving healthcare personnel and high-income tax payers from the country. In the gorge that needs to be crossed to improve South African healthcare, one giant NHI leap is just going to have the system end up in tatters on the rocks below. The Department of Health needs to focus on the current crisis and take small, manageable steps to improve the situation. It might initially appear to take us further downwards, but
The Department of Health needs to focus on the current crisis and take small, manageable steps to improve the situation. It might initially appear to take us further downwards, but eventually, we will emerge on the other side, with a system that can work in the South African context.
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Johann Serfontein is a member of the Free Market Foundation Health Policy Unit

Op-Ed: S.A’s public and private sector healthcare woes can be blamed on government

Linda Trim | Giant Leap
Sitting and working at a desk for long hours may feel far removed from being a professional athlete but to improve at your job there is a principle you can borrow from them: rest.
Linda Trim, Director at workplace specialists Giant Leap, said:”If you want to improve at your job or any activity — from triathlons to theoretical mathematics to working productively — the method for getting better is remarkably similar.
“And it requires a key thing many of us neglect: rest.”
Trim noted that the key to improvement and continued success is finding a balance between stress and rest. “Contrary to what many of the productivity-obsessed may think, rest is as important as the stress of hard work.”
It&#8217;s easy to see why athletes need rest. Physical exertion, like lifting weights or running long distances, puts stress on the body parts the athlete is trying to strengthen. Those physical challenges actually damage the body. You aren&#8217;t getting stronger when you lift weight — you are tearing muscle fibers and getting weaker.
It&#8217;s only during the rest and recovery period that your body begins to heal and adapt so it&#8217;s better prepared for future stress.
This the fundamental principle behind basic athletic training.
A similar principle works for creative or professional work too.
Research has shown that a cycle of work and rest is key for people learning to master a skill, trying to be productive at the office, or striving for a creative breakthrough.
Psychologist Mihaly Csikszentmihalyi — renowned for his work on the concept of “flow&#8221; (fully immersed in an activity, in the zone) — spent decades interviewing geniuses from diverse fields  including inventors, artists, scientists, and writers.
“The research found that the brightest minds spend their time either pursuing an activity with ferocious intensity, or engaging in complete restoration and recovery, “said Trim.
“This approach not only prevents creative burnout and cognitive fatigue, but it also fosters breakthrough ideas and discoveries.&#8221;
Top performers follow a cycle of total immersion into their work, followed by a disconnected period of rest and recovery. Other productivity researchers have also suggested that regular breaks are essential for people who perform best in fields ranging from computer programming to agricultural work.
This cycle of intense work followed by a real breaks enables the &#8220;eureka&#8221; moments — since these revelations usually come when the mind is disconnected from work.
So when your energy runs low at work or you get stumped on a task, that&#8217;s the time to take a break.
“Get away from what you are doing for at least five minutes — longer if you are particular stressed — and do something that gives your mind a rest from what you were focusing on,” Trim advised.
That could involve taking a walk, sitting outside, or even taking a shower, but half-hearted breaks spent browsing the internet aren&#8217;t restorative enough to take your mind out of work mode.
The hard part is actually doing this.
“Many of us have been told before that it&#8217;s important to take breaks, yet we still eat lunch at our desks, half-working and half-browsing the internet,” Trim concluded.

The fitness principle you should apply at work to be more productive

Jeremiah Ogonda Asaka | Middle Tennessee State University
Kenya’s 2017 general election has been one of the most litigated general elections since the country’s first multiparty poll in 1992.
Just weeks before Election Day the country’s Independent Electoral and Boundaries Commission (IEBC) was still embroiled in court battles. In fact, days before the vote, it appeared in court at least twice.
In the first instance Kenya’s main opposition coalition – the National Super Alliance – alongside the Thirdway Alliance Party of Kenya challenged IEBC’s award of a ballot printing tender to Al Ghurair – a Dubai based firm.
The High Court of Kenya ruled for the plaintiffs effectively barring Al-Ghurair from printing the presidential ballot papers.
In its second appearance IEBC appealed the High Court ruling. This time the decision went its way. The Court of Appeal reversed the the lower court’s decision arguing that the election commission didn’t have time to find a new printer. The appeal’s court also ruled that the lower court should have barred Al-Ghurair from printing ballot papers for all elective seats and not just the presidential one.
After the second ruling, IEBC had the green light to print the ballot papers and conduct the general elections. Infamously, the presidential result was then invalidated by the Supreme Court triggering a fresh election slated for October 17, 2017.
The Supreme Court ruling was not just a victory for Kenyan democracy but for democracy everywhere. It underscored the independence of the judiciary, strength of public institutions, and Kenya’s deepening commitment to the rule of law. These lessons go well beyond Africa.
But despite the court’s decision, there are those who still maintain that President Uhuru Kenyatta won the election. The president himself was confident that he had garnered the most votes and he blasted the courtfor usurping the will of the Kenyan people, swearing to fix the problemin the Judiciary if he won the fresh election. His words were broadly interpreted as a direct attack on the judiciary.
Role of election observers questioned
Kenyatta’s remarks are at worst a direct attack on the judiciary and at best an indication that the Executive will interfere with judicial independence. That is a threat that Kenyan will have to contend with at home.
On the international stage, election observers are also facing a threat to their continued existence. The role and effectiveness of international election observation has been called into question after more than 400 observers gave the Kenyan election a clean bill of health. The Supreme Court decision has put them in a tight spot.
The Carter Center which sponsored the John Kerry-led observation team has praised the court decision as “both important and encouraging, because it highlights the independence of the Kenyan judiciary”, while trying to distance itself from any wrongdoing.
Media pundits across the continent and beyond have weighed in on the future of international election observation, some of them calling observer missions out for their formulaic rubber stamping of results. Whichever way one looks at it, the Supreme Court judgment is a stinging indictment on the international election observation enterprise.
Moving forward, election observer missions should address themselves to two key issues if they are to regain credibility. First, they must approach elections as a process rather than an event. In this way observer missions will be able to stagger their reporting to reflect the various phases of the electoral process.
In the Kenyan case for instance, observer mission would be expected to report separately on their findings. They would start by observing voter registration, voting, vote counting and tallying, before reporting on results transmission and verification process, and the announcement of results. A comprehensive report of findings would be made available once the election was over.
Second, observers must contend with the new African election reality that includes a strong information, communication and technology component. It is foolish to observe an electronic electoral process using the same approaches that were used to observe manual election.
Further compounding this issue for the observation industry is the fact that a number of African elections are now hybrids that integrate electronic and manual aspects. This is something that election observer missions must quickly come to terms with in order to update their mode of operation.
Next steps for Kenya
Kenya’s 2017 general election court rulings are significant in two ways. First, they highlight the functioning nature of Kenya’s democracy, which includes checks and balances. In this respect, the Judiciary has emerged as a strong, independent democratic institution. Second, the Supreme Court has to a large extent restored Kenyans’ confidence in their country’s judicial system.
Interesting times lie ahead for Kenya as it prepares for a fresh presidential poll now slated for October 17, 2017. The opposition alliance led by Raila Odinga has already demanded for the reconstitution of IEBCbefore the October poll.
On their part, Kenyatta, his deputy William Ruto and their Jubilee Party have vowed to ensure that the IEBC conducts the fresh poll as presently constituted. As things stand, Kenya still has a long road to travel before the current election dispute is resolved.
That notwithstanding, Kenyans have a date with destiny. The Supreme Court ruling has granted Kenyans another opportunity to decide the path their country will take. It is now anyone’s guess what the result of a fresh election will be. One thing is certain, though, the October 17 presidential election will have long lasting ramifications for Kenya’s maturing democracy.
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This article was first published in The Conversation.

Op-Ed: How will the Supreme Court’s historic ruling impact the country’s democracy

Christoph Nieuwoudt | FNB
Credit is a sensitive topic that can evoke a wide range of emotions from consumers. Positive experiences include the excitement and relief of being able to buy your first house or car, pay for studies, home improvements, furniture or even a holiday. The opposite experiences include despair or fear of not qualifying for credit, to being over-indebted or even losing valuable assets.
Unfortunately, statistics show that nearly 40% of SA consumers listed on credit bureaus (9.7m of 24.7m) have some level of impairment in their credit record and are perhaps closer to the latter category of experience when it comes to credit. Another view of credit is to examine the R1.7 trillion of consumer-lending by banks and other lenders, which shows that by value, only around 5% of this is classified as non-performing.  This apparent discrepancy can be explained by examining the range of lending products from large, low margin mortgages, usually to lower risk customers, to smaller, higher margin unsecured loans, often to higher risk customers.
The bulk of lending by value is in the form of mortgage finance (R884bn), followed by secured credit (R389bn) of which 90% of new credit granted is vehicle finance. The rest is made up of credit facilities (R224bn) such as overdraft and credit cards as well as term loans (R168bn). An analysis of financial statements of major industry players indicates that average net interest margins range from around 2-3% on mortgages, around 3-5% on vehicle finance, around 8-12% on facilities (overdrafts, credit cards) to 12-20% on unsecured term lending by major banks to even higher rates for micro-lenders.
Clearly these are average product margins and actual client rates are influenced by the client risk rating (assuming the lender does risk-based pricing) and also by the funding cost structure of the institution and of the asset type. For example, 20-year mortgage products are much more expensive to fund than shorter-term products.
This complexity makes it hard to create any kind of benchmark for pricing an individual consumer across products over different life stages.  In spite of this, I believe that almost every consumer can benefit from having a much better understanding of the purpose and cost implications of the different credit products. Hence it’s imperative for consumers to plan their ‘credit journey’, from first entering the credit market to eventually owning their dream house and having (a lot) more investments than borrowings.
The most basic fact is that almost everyone starts off with more ‘expensive&#8217; credit products and by showing responsible behaviour i.e using credit products to purchase assets or to fund education rather than a lifestyle and unnecessary luxury items, and building a track record of good repayment can progress to availing of more inexpensive credit in larger amounts over longer terms.
Let’s breakdown each form of credit
Retail Credit
The starting point for most consumers in terms of formal sector lending and also by number of accounts is retailer lending/store cards.  The reason for this is very simple &#8211; retailers don’t actually give you money, but rather provide ‘finance’ against your purchase of goods from their store.
With retailer gross margins (against cost of goods sold) for many categories of credit retailers often being anywhere from 30% to 50%, it provides a large incentive for the retailer to finance goods to facilitate even &#8216;very high&#8217; risk sales which may otherwise not have taken place. While retail credit helps to facilitate access to credit, it may not be ideal to a consumer from a value or cost of credit perspective.
Unsecured credit offered by banks
In terms of unsecured credit products offered by banks in the main, it is useful for consumers to understand their purpose and availability. For most customers, unsecured term loans would be a natural starting point in terms of access to credit.  The advantage for the customer is that there is no security or collateral required, and that it is readily available for a wider set of customers.
The size of the loan provided, the term over which it is available as well as the pricing of the loan typically depends on the customer’s credit score. This is why showing a responsible credit repayment profile can greatly assist a consumer to access a greater amount of finance while reducing the cost and/or the repayments.   As indicated the range of pricing is wide and good risk clients can obtain well priced loans for relatively big ticket purchases.
Consumers should be cautious though when considering term loans with very long repayment terms (e.g. longer than 60 months) as the total cost of credit can become high. When sourcing such credit, it’s important for consumers to be clear on the purpose of the loan and rather use it for creating longer-term value such as funding education or home-improvement and not for short-term consumption.
The next natural product for a customer may be an overdraft linked to his/her transactional account. From an FNB customer perspective, we believe every qualifying customer should consider an overdraft as (a) it is free, with zero monthly fee if not used, (b) the purpose is to provide immediate access to cash for emergency or simply just unanticipated payments and (c) there is no specific repayment, but rather the customer’s salary naturally ‘settles’ the balance every month.
Lastly, there is the credit card. The purpose of the credit card is to facilitate and fund customer spend, including providing protection from fraud and/or non-delivery of services or goods, insurance on travel and access to even richer reward benefits.  From a risk perspective, a credit card can present young or new to credit consumers with a challenge as it can easily be used for a prolonged &#8216;shopping spree’, resulting in a credit hangover. At FNB, we believe an optimal size of facility should allow at least the 55 maximum days of interest free operation, which is not too onerous for the customer to roll and repay within a reasonable period.
Secured credit including mortgages 
Vehicle finance is usually the entry product and buying that first car is an experience most consumers cherish for the rest of their lives. Building up a reputable credit record through responsible repayment of unsecured credit, including credit facility products which demonstrate control by the customer, and not being highly indebted are pre-requisites for a meaningful credit journey.  In our case, finance provided by our sister company WesBank (and its partners) naturally takes the FNB relationship into consideration to facilitate finance availability and pricing.
The ‘ultimate’ credit product which is best associated with long-term customer value creation is the home loan (or mortgage).  In my view, in all their earlier interactions with credit, consumers should keep in mind the objective of one day owning their own property.  This goes beyond just being responsible with credit and not being highly indebted, but also putting aside funds for a deposit if required.  For an entry-level house, typically a deposit is not required, but customers still need to consider the total costs associated with buying a house, including furniture as it is not recommended to finance furniture if you are considering buying a home!
Some may look at the total amount of interest payable over a period of say 20 years and conclude that mortgage finance is expensive.  I believe the perceived high cost should be offset against appreciation of the property value and relative to the cost of renting, which almost invariably results in a better financial outcome by purchasing.  Clearly, finance cost is also reduced where the customer can make payments in excess of the minimum amount.
To summarise, I believe that if consumers have an appreciation of the purpose, benefits and cost of various credit products and critically the importance of how they use (and not abuse) credit products, they will extract significant ongoing value from even simple products like the overdraft, credit cards and occasionally term loans, while being able to finance the purchase of key assets like vehicles and homes.

How to best plan your credit journey

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The boards of West Africa-focused Avocet Mining and its  (SMB) subsidiary will resume talks on Friday aimed at saving the struggling gold operation from insolvency.
SMB, which operates the Inata gold mine in Burkina Faso, is is struggling to keep the mine operating after former workers seized a shipment of gold last year and faces possible insolvency after the expiry of a freeze on loan repayments.
The boards of SMB and Avocet, which owns 90 percent of the Inata mine, were to meet on Sept. 8 to consider “all available options”, Avocet had said.
Avocet said on Monday that a meeting would reconvene on Sept. 15 to reassess the status of talks with creditors, SMB’s liquidity position and the available options.
The Inata mine produced 72,485 ounces of gold in 2016.
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Reporting by Noor Zainab Hussain in Bengaluru; Editing by David Goodman
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Avocet to resume talks over Burkina Faso gold mine

Zambia’s economy will grow by 5.0 percent in 2018, 5.1 percent in 2019 and 6.1 percent in 2020, up from 4.3 percent in 2017, the ministry of finance said in a statement on Sunday.
The country’s fiscal deficit is expected to be 7.0 percent in 2017, 6.3 percent in 2018 and 4.3 percent in 2019, then drop to 2.6 percent in 2020, it said.
Inflation is expected to remain 6 to 8 percent from 2017 to 2020, the statement said.
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Reporting by Chris Mfula; Editing by Larry King
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S.A Public Protector discussed cenbank mandate with Presidency: court papers

The cost of mental illness in the workplace

Op-Ed: South Africa needs to sober up to save itself from sickly state-owned enterprises

Personal Finance: 5 Ways South Africans can reduce personal debt

Standard Bank CEO Ben Kruger to step down

Op-Ed: S.A’s public and private sector healthcare woes can be blamed on government

The fitness principle you should apply at work to be more productive

Op-Ed: How will the Supreme Court’s historic ruling impact the country’s democracy

How to best plan your credit journey

Avocet to resume talks over Burkina Faso gold mine

Zambia GDP growth seen rising to 6.1% by 2020

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Pressure on South Africa’s central bank a key credit risk: Moody’s

Op-Ed: Bestiality and BS: Lessons from South Africa’s sleazy political climate

Why having a will is a critical part of financial planning

McKinsey ignored staff warnings in South Africa Gupta scandal, ex-employees say

Op-Ed: The Tipping Point for African Innovation

Ghana cenbank triples minimum bank capital requirement to 400MN cedis

S.A Public Protector discussed cenbank mandate with Presidency: court papers

The cost of mental illness in the workplace

Op-Ed: South Africa needs to sober up to save itself from sickly state-owned enterprises

Personal Finance: 5 Ways South Africans can reduce personal debt

Standard Bank CEO Ben Kruger to step down

Op-Ed: S.A’s public and private sector healthcare woes can be blamed on government

The fitness principle you should apply at work to be more productive

Op-Ed: How will the Supreme Court’s historic ruling impact the country’s democracy

How to best plan your credit journey

Avocet to resume talks over Burkina Faso gold mine

Zambia GDP growth seen rising to 6.1% by 2020

News Tips

Advertise With Us

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