Editor's note

by Michael Avery

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Sitting down to write about the events of the last few months in South Africa, and trying to find a silver lining, feels a bit like picking up pennies in front a steamroller. The pennies, glimmering in the form of the president raising the cap on license exemptions for self-generation from 1MW to 100MW, the introduction of private shareholders to give grounded SAA wings, and some positive moves against those inside the party implicated in corruption, started rattling on the ground under the weight of tens of thousands of rioting feet, hellbent on destruction, coaxed or otherwise, that have shaken confidence in the country to the core. 

At the time of writing, estimates of the economic cost of the civil unrest that rocked the country in mid-July stood at roughly R50bn in terms of theft, damage to property and lost production. But the truth is that the cost will be far greater and harder to measure in investment decisions withheld and businesses started elsewhere. 

And while the announcement by President Ramaphosa regarding the decision to amend Schedule 2 of the Electricity Regulation Act and increase the licence-exemption cap on self- or distributed-generation plants from 1 MW to 100 MW is to be lauded, it remains unclear how this decision is aligned to the Integrated Resource Plan.

Equally unclear is Public Enterprises Minister Pravin Gordhan’s announcement that Takatso, a consortium consisting of Harith General Partners, which manages two private equity infrastructure funds, and Global Aviation, an airline leasing company, is to acquire 51% of SAA, while the government will retain 49%. The due diligence is still being undertaken. While Takatso has undertaken to invest R3bn in SAA over three years, political infighting has already turned up a few notches, with heat being applied to Harith co-founder and Takatso chair Tshepo Mahloele, who is also chair and founder of Lebashe. 

What the events of July have reminded us is that time is a luxury South Africa does not have in reserve. And this brings me to my point about a decision made by the Competition Commission to block the acquisition of Burger King from Grand Parade Investments by US private equity firm, Emerging Capital Partners through its ECP Africa Funds, on public interest grounds relating to transformation. The decision in both legal substance as well as ideological form has been widely and resoundingly rebuked by businesspeople who have a vested interest in seeing growth in South Africa. The same growth that is the only sustainable way to truly transform the country. The same growth that will ensure the country’s dreams aren’t steamrolled into dust. 

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