Thursday, June 23, 2011

Province no. 10: Swaziland

The last few weeks have been rather busy for South Africa. We were meant to celebrate SA's successful hosting of the 2010 FIFA World Cup, but this celebration was marred by flashbacks of the sad and sudden passing of Nelson Mandela's grand-daughter tragically killed in a car accident en route home from a pre-World Cup concert. Condolences Tata & family!

Ironically, we also lost a Mother of our Liberation, Gogo Albertinah Sisulu two weeks ago. The nation bid their farewell to this icon in a packed Orlando Stadium, a historic football stadium a few kilometres from the arena where Siphiwe Tshabalala scored the first World Cup goal exactly 12 months ago. A fitting farewell to a true Mother of a Nation. Siyabonga Gogo for sharing all of yours with us!

Then we started with the “pick of the week” being the upcoming ANC Youth League Elective Conference. As I write this, I've just heard that  Malema's rival Maile was nominated and declined the nomination, paving the way for Malema to be re-elected unopposed. I wish the media spent as much editorial time and space on the ANCYL's economic policies deliberated at conference, as they did on the uneventful leadership race (what race?). Perhaps, we would have actually learned something about the League's argument for nationalisation of mines and banks and their policy of land redistribution.

But remember they are free not to teach us anything! It's called freedom of the press!

Anyway, Congratulations Juju!

In the latter part of last week, news hit the wires that Zimbabwe has asked the SA government for a R14 billion loan. This coming from a country whose national airline cannot afford to buy jet fuel as suppliers cut credit lines due to non-payment. Hint, Hint SA!

And while we were trying to get out heads around the idea of lending Zimbabwe ANY money, we hear that King Mswati III is having secret talks with President Zuma on a R10 billion loan. This is the same country with national GDP (+R26bn) less than the annual budget of The City of Jo'burg (+R28bn).

Who told everyone we won the Lotto?! I thought the white guy in Bloem got the R100m a few weeks ago? Or did he buy government bonds with his windfall? Why are our neighbours asking us for cash?

I'm no economist, but based on my UKZN Economics lectures, I'd say we are faced with somewhat of an commercial no-brainer, but a political conundrum.

When a lender, SA in this case, lends to a borrower, he would be concerned with the security of his debt, closely followed by the borrower's ability to service and eventually settle, even before he considers what return could be earned on the risk assumed. With due respect to the Sovereign State of Zimbabwe, I think it's safe to say neither debt security nor serviceability is feasible at this point, so a responsible lender would respectfully decline the application and duly encourage the would-be borrower to work on getting back to 'lendable' Net Asset Value and generate sustainable free cash flows.

But you see, SA can't really do that. Allow me to explain. They say "In the land of the blind, the one eyed man is King". You see a responsible King can't allow His subjects to proceed on a course of blindness irrespective who is responsible for such. And please note, it's the fact that He has one eye that makes him King. He is not anointed. There is no birthright. He doesn't ask to be made King, he is King by default, simply for having one eye among those with none. You see, SA has no choice. It's his duty to play King. It's not his choice. He must serve (and save) his people. Save them from themselves. After all, he's the guy with the eye! Right?

As for Swaziland, I have a rescue package for you Your Highness. Let's do a deal. You need some cash. I need to save your economy. Remember I'm the guy with the eye, so I kinda have no choice. All those other pale-skinned guys (read “countries”) with (apparently) two good eyes and bad weather, are gonna be looking at me saying: "How did you let this happen, SA? You have an eye, dude! You could see where this was going!". Operative word: "see"!

Anyway, I digress. Here’s the deal: I give you the R10 billion you want. To make the deal sweeter, you don’t ever, ever have to pay me back. To make it even more compelling, you don't have to even spend the money on your people (let's just assume that's what you would've done).

R10 billion, Your Excellency! In cold hard cash. Wonder why they call it cold!? Or hard?! I digress again!

All that Your Excellency for 100% of the country.

Come on, what do you say? With that kind of money, imagine how many more “you know whats” you can get? Last time I checked you were on 13. You could double that at a heart beat with R10 billion! What about the cars? The number of Mercedes-Benz's you could get with that kind of money? All bullet proof, Your Highness!

If you feel 100% is too much too soon to give up, I'm prepared for you to start out as my BEE partner. What does that mean? Well we got this thing called BEE in SA. Basically I take what's yours and sell it back to you at market, but then I make you feel really great about it cos I give you a BEE discount of say 10% of the value and then I assist you in raising funding to buy my shares in this thing that I actually took from you for close-to-nothing, but we need to get around a Companies Act thing that actually doesn't allow me to assist you in buying shares in myself, but at a fee advisors will find a complicated enough structure that will confuse everyone that it's okay and we can do our deal.

You get a front page article in the biggest business daily in town (you do have one of those, right?) and you become very popular among other broke people (but then again, you are already (in)famous), I get some BEE points and of course your country as my 10th province!

Understand? I thought you would!

Think about all the benefits of this merger (Its a takeover really, but one doesn't use such emotive language at such a sensitive stage of negotiations). All the Swati people in SA are all automatically naturalised South Africans, No more Swazi border, all the South Africans in Mpumalanga who only speak Swati don't have to feel bad anymore, we finally bring Ster Kinekor to Mbabane, all the good black Swati golfers can play for South Africa and we can finally have a black golfer, and South Africans can stop claiming Phutuma Nhleko as their own, he actually becomes one of our own!

The possibilities are endless your Excellency. I patiently await your response.

PS: For my services in brokering this deal for you all I want is a young, hot “you know what”. Sadly I'm still on number 1.


  1. A very well written witty and still very informative article. You see chief, the bottom line is we're basically taking over your country, more like the US took over Iraq but we cannot refer to it as takeover, it is merely financial assistance. If you read a bit of the accounting standards, IFRS 3 talks about control, you basically become our subsidiary and we have control. You become our asset and don't ommit the part about Us realising the future economic benefits from your country.