Po­lit­i­cal and eco­nomic head­winds in the year that was

The New Age (Gauteng) - - BUSINESS - BERNARD SATHEKGE bernards@the­newage.co.za

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.

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