Political and economic headwinds in the year that was
BUSINESS and politics did not make happy bed partners this year and the economy was the poorer for it.
Three finance ministers were fired in quick succession, the country’s credit rating was downgraded to junk, we went into recession briefly, joblessness spiralled out of control and the country enters the new year with a R50.8bn gap in tax receipts.
In his final days as ANC president Jacob Zuma promised radical economic transformation and free tertiary education for poor and middle-class students.
One late night in March a Cabinet reshuffle saw the axing of finance minister Pravin Gordhan and his deputy, Mcebisi Jonas, a move which sent the rand and stocks tumbling.
This was followed by another heavy blow as SA fell into recession in the first quarter for the first time in eight years, with unemployment hovering at 28% and wages stagnating.
A number of multinationals such as Glencore, Standard Bank and Shanduka were named in the leaked Paradise Papers which glaringly highlighted damning cases of tax avoidance and questionable funds transfers involving multinational companies, politicians, celebrities, wealthy executives and royals.
Public protector Busisiwe Mkhwebane’s ordered for the Reserve Bank’s constitutional mandate to be changed, which sparked an outcry and flurry of court actions that resulted in a judicial smack-down for Mkhwebane.
One of the world’s big four accounting firms, KPMG, found itself exposed in the so-called Gupta leaks, along with SAP, McKinsey and utilities Eskom, Transnet and Prasa.
Towards the end of the year, the repu- tation of corporate SA was smeared again with more companies accused of dirty tricks, including Naspers and its subsidiary, MultiChoice.
SA’s big four banks – Absa, Standard, Nedbank and FNB – closed Oakbay’s bank accounts after hinting at money laundering but without providing any proof, allegations that Oakbay strongly denied.
Oakbay put its assets up for sale, resulting in businessman Mzwanele Manyi buying The New Age and ANN7.
At least 17 banks were prosecuted by the Competition Commission for collusion in trading foreign currency pairs involving the rand since April 2015 and the matter was referred to the Competition Tribunal.
Easily the biggest corporate scandal of the year – perhaps the biggest in SA corporate history – was the Steinhoff accounting scandal which wiped off more than R300bn of value from the JSE, including R12bn in pension funds.
CEO Markus Jooste, once the darling of the billionaire set, took the blame and resigned. It remains unclear what the future holds for him. Retail tycoon Christo Wiese, Steinhoff’s biggest shareholder, saw his personal wealth drop by R156bn in a matter of days.
Business both locally and internationally welcomed the narrow victory by Cyril Ramaphosa in the race to be the next president of the ruling ANC and cited his wide experience and business acumen.
The rand has been strengthening the past month or so and yesterday was at a two-and-a-half year high at R12.26/$.
MANDATE: Busisiwe Mkhwebane drew flack over the Reserve Bank.