ANC weak point was apparent for years

TO BE a member of the ruling party, one needs to fork out only R12 a year. If, for argument’s sake, the party has about a million paid-up members, that comes to about R12-million a year to run an organisation ultimately responsible for Africa’s most sophisticated economy and one of the leading emerging-market economies in the world.

That’s the enterprise value of the ANC, an institution more than 100 years old.

With the ANC’s senior management earning salaries comparable to those of ministers, it’s within reason to believe that membership fees don’t trickle beyond the top floors of Luthuli House.

In such a dire financial situation, it’s no wonder that members with the deepest pockets hold sway in most debates that in any way affect their interests.

The ANC has long been bought, which may not have come as much of a surprise to many of the party’s critics. But when a cabinet minister took up the cause of a private family in both parliament and in private Swiss boardrooms, for the rest of us doubters there was no clearer evidence of this fact.

And if any South African business worth its salt had done an assessment of political risk over past years, I’d imagine they would have caught on to this rather telling chink in the ruling party’s armour.

In response, business had two options.

The easiest was to dust off long-shelved expansion plans outside not only the country, but also the continent. SubSaharan Africa’s economic slowdown over the past few years provided the perfect cover for adventures into Europe and other developed climes.

Miners, across all commodities, have been loath to sink any more of their capital into South African operations, preferring assets in jurisdictions such as the Democratic Republic of Congo.

Neal Froneman’s Sibanye, which not too long ago championed itself as a “national champion”, is in the process of buying and overpaying for New York-listed platinum company Stillwater Resources.

So much for a local growth story.

South Africa’s listed property sector may as well be eastern European, given the amount of funds that have sought exposure to markets such as Poland.

The second option, a whole lot less popular, has been to get more actively involved in the local South African story, especially after the events of December 2015, when Nhlanhla Nene was fired as finance minister.

At the tail-end of last year, at one of these many year-end media corporate parties that one attends, a highly regarded CEO spoke of the efforts he and his colleagues had made to ensure that the country avoided the dreaded descent into “junk” territory.

These efforts helped to win the country a stay of execution from a downgrade last year, but they have been undone in recent weeks by the tantrums of a president.

SA’s business community needs to ask itself some hard questions

One wonders what messages these CEOs are going to send to their shareholders — especially in private.

But before losing all faith in local politics, South Africa’s small and powerful business community needs to ask itself some hard questions. In the push to deliver returns to shareholders over the past decade, how much has the costcutting focus poisoned the economic landscape?

There were countless warnings before that fateful December day in 2015, none more loud than Marikana. When I asked the CEO at the year-end function why earlier signs of woe had been ignored by corporate South Africa, he really had no answer.

Today, we are in deep crisis. And as much as the president is at the centre of it all, what did corporate South Africa do to avoid the slide into “junk” which began about five years ago? derbyr@sundaytimes.co.za @ronderby