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Books on South Africa
REPUBLICAN REFERENCE
Area (sq.km)
1,219,912
Population
43,586,097
Capital
Pretoria
Currency
rand
President
Thabo Mbeki
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Update No: 049 - (30/01/06)
The trials of Jacob Zuma
President Thabo Mbeki started the political year delivering his January 8
statement marking the 94th anniversary of the African National Congress (ANC).
The occasion was also be used to launch the party's manifesto for this year's
municipal elections. In February the president will give his state of the nation
address to a joint sitting of Parliament. Contrary to his political style, Mbeki
will have to acknowledge the paralysis brought to his government last year by
the dismissal of former deputy president Jacob Zuma. 2006 will be a year with
issues requiring his attention at government and party level. Government has to
be at the forefront of efforts to end poverty, reduce unemployment, fight crime
and corruption, improve service delivery and find a strategy to rescue local
government from near collapse. Most of these challenges will rest on the
performance of the economy. Government has said it needs growth of more than 6%
a year to meet its goals of halving unemployment and poverty by 2014. While
statistical indications are that South Africa's economy is on its way to
achieving this target, it is far from clear that 6% growth will solve South
Africa's problems.
The politics of 2006 will be dominated by events that had their origins in 2005.
Much of what started last year will also only be resolved in 2007. Last year's
political calendar was marked by the political downfall of former deputy
president Jacob Zuma. Once a presidential hopeful, he now finds himself
increasingly isolated inside and outside the ANC. For Zuma, 2006 will be the
year he goes into battle to stay alive politically, fending off rape and
corruption charges. Given Zuma's refusal to quit the succession race, despite
facing two criminal trials, this year will determine whether the ANC's
succession question will be partly resolved in a court of law. That he had to be
forced to resign from all leadership structures of the ANC only after he was
charged with rape is the mark of a desperate politician holding on to his bid
for ultimate power in the ruling party. In July Zuma will return to court to
face corruption charges. Depending on how the trial proceeds, Mbeki could be
called as a witness by Zuma's defence team.
Parliament to Roll Out Red Carpet for Zuma
Former deputy president Jacob Zuma will be one of the key dignitaries
invited to attend President Thabo Mbeki's state of the nation address in
Parliament February 3. Zuma will join about 650 diplomats, business people,
trade unionists, traditional and religious leaders and other personalities when
Mbeki reviews progress and states his vision for the year ahead. Zuma, as a
former deputy president, is invited just as former deputy president FW de Klerk
is. Other key dignitaries include former president Nelson Mandela and Archbishop
Desmond Tutu. But Democratic Alliance chief whip Douglas Gibson said treating
Zuma as an honoured guest was a further indication of the tolerance shown by the
ANC towards corruption. Rape Crisis has slammed parliament's invitation to
former deputy president Jacob Zuma to attend as a VIP guest and has also taken
issue with the National Press Club for making the embattled politician its
newsmaker of the year. Zuma, who remains the ANC's deputy president in name
only, pending a rape trial, also faces a corruption trial this year. Zuma will
appear in the Johannesburg High Court on February 13 on a charge of rape, 10
days after President Thabo Mbeki's address in parliament. The Cape Town Rape
Crisis organisation said it was "shocked and frustrated at the lack of
political will and complete disregard for survivors' rights that the government
had demonstrated in its response to the rape charges" against the former
deputy president. Whether Zuma was found guilty of the rape or not was not the
point, it said. "The point is that there are allegations and enough
evidence has been gathered to continue with a trial," a statement said
"The invitation reinforced the perception that if you are a
parliamentarian, a government official, a prominent person or you have lots of
money, there will be no serious consequences to a charge of rape and that it
would lead rape survivors to believe that if and when they speak out, they will
not be taken seriously and supported."
Chairing the G-77
South Africa became the chair of the Group of 77 (G-77), the largest
coalition of developing nations, which promotes the socio-economic interest of
poor nations. Foreign Affairs Minister Nkosazana Dlamini Zuma attended a
ceremony at the United Nations headquarters in New York January 12. The G-77
provides the means for the countries of the South to articulate and promote its
collective economic interests. It also promotes economic and technical
co-operation among developing countries themselves. Foreign Affairs spokesperson
Ronnie Mamoepa said it would be South Africa's high priority to maintain the
effectiveness of the G77. "South Africa will during its tenure as Chair of
the G-77 be committed to enhancing the position of the Group as a constructive
and responsible partner in promoting North-South relations in support of the
development agenda of the South," said Mr Mamoepa. Priority issues of the
G-77 are to ensure that the development challenges of Africa and other
vulnerable groups of countries are addressed and the achievement of the
Millennium Development Goals (MDGs) to halve poverty and underdevelopment by
2015. It has to ensure that resolutions from all major UN conferences and
summits are implemented.
More Jobs
At least 658000 new jobs were created by September last year although the
unemployment rate remained virtually unchanged at 26.7 percent compared to the
same month in 2004, Statistics South Africa reported January 24. Releasing the
Labour Force Survey, Acting Deputy Director-General for Population and Social
Statistics Liz Gavin said although the figure remained virtually unchanged for
that period, at least 658000 new jobs were created. Dr Gavin said there had been
major changes especially in the construction sector, which had created a number
of jobs. "After several years of decline, employment has generally been on
an upward trend in recent years. Over the period September 2004 to September
2005, as many as 658000 additional jobs were recorded. In the year to September
2005, agricultural employment continued a downward trend but this was offset by
employment gains in trade (which increased by 482000 jobs), finance (up by
148000) and construction (up by 111000). Over a longer period, from September
2001 to September 2005, job gains in the labour market were over 1 million
(1120000), of which 960000 were in the non-agricultural formal sector.
Exporters missing out the EU
A lack of awareness about South Africa's free trade deal with the European
Union (EU) means South African exporters are missing out on opportunities in
that market, according to a new survey. A foreign direct investment survey
released January 17 by BusinessMap and the London School of Economics said
government should market the agreement, signed in late 2000, to local
businesses. The survey explored the link between foreign direct investment and
the free trade deal, but the result was inconclusive. Net investment in South
Africa announced by EU companies had risen from an annual average of 0,4% of
gross domestic product in 1994-97 to 1,1% in the period between 1998 and 2005,
but this was not necessarily a result of the treaty, it said. The foreign
investment response to the trade deal seemed likely to evolve over time,
however, said BusinessMap. EU companies are a key source of new foreign
investment for South Africa. The survey shows that EU investment in South Africa
has risen since the late 1990s, partly due to new investment by former South
African multinationals now domiciled in the UK. Deeper analysis of the deal is
expected as part of a review under way by the EU and government.
NPA to Prosecute Apartheid-Era Criminals
Perpetrators of up to 20 criminal cases during the apartheid era could soon
be prosecuted, South Africa officials say. The head of the National Prosecuting
Authority (NPA), Vusi Pikoli, told the media January 24 that new amendments to
the Prosecution Policy had armed prosecutors with enough to go after
perpetrators of gross human rights violation during the apartheid-era. He would
not identify those targeted in the cases, which date from before the end of
white-minority rule in 1994. They focus on those denied amnesty or those who
failed to appear before the Truth and Reconciliation Commission. Mr Pikoli told
a news conference that the authorities were currently prepared to prosecute in
five of the cases, while 15 others required further investigation. According to
the new amended Prosecution Policy, the crimes must have been committed on or
before 11 May 1994. "We are dealing with conflict of the past. There were
two forces pitted against each other, the apartheid forces with all their
sympathisers and supporters and forces of liberation movements. This is what we
are going to address," said Mr Pikoli. The TRC was established after the
country's democratic dispensation in 1994 for victims of gross human rights
violations and their perpetrators to apply for amnesty for the sake of national
reconciliation. The TRC heard the testimony of some 21,000 victims and
perpetrators during its eight years of hearings. Some 1,200 perpetrators were
granted amnesty and 5,500 other applications were rejected. A number of key
figures, including the former South African president, PW Botha, refused to
appear before the commission, prompting the families of victims and others to
put pressure on the government to pursue the cases. Archbishop Desmond Tutu said
that South Africa should have prosecuted all perpetrators of apartheid-era
atrocities who did not seek amnesty when he was interviewed to mark the 10th
anniversary of the foundation of the TRC.
South African Bid to Defuse Iran Nuclear Crisis
South Africa has called for restraint from both sides in the growing crisis
over Iran's controversial nuclear energy programme and has agreed to try to help
them resolve the impasse. After a meeting between Deputy Foreign Minister Aziz
Pahad and Iran's acting foreign minister, Mehdi Mostafavi, in Pretoria January
18, the Department of Foreign Affairs urged further dialogue with Iran. This
implicitly opposed the plans which the European Union and the US are making to
refer Iran to the UN Security Council for possible sanctions. They believe Iran
is planning to produce nuclear weapons. Iran says it only wants to produce
nuclear energy for peaceful uses. But the South African statement also contained
an implicit call on Iran to avoid repeating actions which raised the temperature
of the crisis. "We appeal to all parties involved to refrain from any
action that could further increase tension and confrontation." The decision
on whether to report Iran to the Security Council is expected to be made on
February 2 and 3 by the IAEA's 35-nation board of governors at a meeting in
Vienna. Mostafavi came to Pretoria to consult South Africa because it is an
influential member of the board. He told reporters that he believed
"consultation between our two countries will help restore peace and
stability". SA denies it has proposed a resolution to end the standoff.
However, what has become known as the "South African proposal"
involves SA selling Iran uranium-derived yellow cake, which would then be
processed into the feedstock gas for enrichment by Iran. This would then be
stored by SA, to prevent the enrichment of weapons-grade material. The US
opposes any enrichment activity by Iran. SA has also backed a Moscow proposal to
allow Tehran to conduct its enrichment activities in Russia. SA maintains that
countries that do not possess nuclear weapons have the right to enrich their own
uranium in accordance with the Nuclear Non-Proliferation Treaty.
Unrest Over Refugees in South Africa
Violent clashes between foreigners and South Africans who resent the
presence of immigrants from the rest of the continent have so far been
attributed to xenophobia on the part of the locals but it may be time for
African leaders to take responsibility by acknowledging that these hostilities
are symptomatic of something more serious. The latest confrontations, which
occurred at a squatter camp near Pretoria resulted in the death of five
Zimbabweans. The violence erupted as the foreigners, who included Mozambicans,
returned to the area after having fled an earlier outbreak of hostilities. South
Africa has been inundated with a flood of immigrants from the rest of Africa
since the advent of a new democratic dispensation following the abolition of
apartheid about 10 years ago. The new arrivals head for the continent's economic
powerhouse to escape grinding poverty, unemployment, persecution and untenable
political situations in some of their own countries. There is nothing remotely
"quietly diplomatic" about the increasingly tough stance South Africa
is taking against desperate Zimbabweans forced to seek economic sustenance in
his country. They are regularly deported and allegedly routinely harassed by
South African law enforcers. Last month, a planeload of Zimbabweans were
forcibly flown to Harare. This would seem to imply that Mbeki's government is
prepared to get tough with the victims of the economic and political crisis in
this country while continuing to appease the political leadership responsible
for the situation. What is happening now is not normal immigration but a
stampede from countries that have failed their own people. Searching questions
must now be asked about what needs to change in those countries to make it
worthwhile for their nationals to remain at home. The only hope for reversing
the rot in misgoverned and impoverished African countries is to insist on the
observance of the NEPAD principles.
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AUTOMOBILES
SA Vehicle Sector Record-Beating 2005
CASH-flush South Africans bought more new vehicles last year than in any
previous year, underscoring the healthy state of the industry and record-high
consumer confidence. New vehicle sales including cars, trucks and buses -- are
estimated to have raked in R125bn last year compared with about R96bn in the
year before. Domestic vehicle sales figures for 2005, released January 10, show
a 28,5% jump to almost 617500 units, far exceeding the most optimistic
expectations of the industry and economists. This is almost double the number of
new vehicles sold five years ago, beating the previous record of 482000 units in
2004. SA was probably the best- performing market internationally, the National
Association of Automobile Manufacturers of SA (Naamsa) said after releasing the
figures. The figures include total sales by Naamsa and non-Naamsa members, which
account for 8% of SA's market. Lower interest rates are widely credited as the
single-biggest stimulus behind booming car sales, making vehicles more
affordable to more people, especially black South Africans. "The emerging
market was a major factor," Naamsa head Nico Vermeulen said. McCarthy
chairman Brand Pretorius said his company's sales to black customers had
increased substantially. He estimated that McCarthy sold one of every four or
five new cars, and one out of every three used cars, to black customers.
Pretorius said these figures correlated with those of WesBank, SA's largest car
financier. The finance house said that the emerging market, along with women
buyers and the youth, were a "major contributor" to the record growth.
The record performance will boost the fortunes of the vehicle industry which, if
the after-sales market is included, contributes about 7,4% to gross domestic
product. The industry smashed not only domestic sales records, but also set new
production and export records. Employment figures were at a seven-year high and
climbing. Car makers operating in SA pushed production to a record 530000 units
as they squeezed plants to stay ahead of demand. But it was importers that
gained most ground. Associated Motor Holdings, the largest car importer in SA,
is expected to report a sales increase of up to 70% last year from 2004. Export
figures have not been collated but Naamsa estimates that close to 145000
vehicles would have been exported from the country last year, substantially
higher than the 110507 units exported in 2004. The increase in exports follows
the introduction of new export programmes by Toyota and Ford, among others. The
new programmes disguise the negative effect that the rand's gains has had on
exports, however. The automotive industry has emerged largely unscathed from
last year's Competition Commission investigation of allegations of, among
others, excessive car pricing and industry collusion. Pretorius said, however,
that consumers had become far more demanding and discriminating. "Trading
has become intensely competitive," he said. Pretorius said vehicles had
become more affordable thanks to lower interest rates and virtually stable car
prices over the past two years, among other factors. It now took an average
South African household in the living standard measure 10 category about 37
weeks' earnings to buy a car, from 71 weeks three years ago, he said. This was
still far more than the average 26 weeks it took a US household to buy a car.
The US is arguably the cheapest country in the world in which to buy a car. The
industry is bullish about growth prospects but expects the growth rate to come
off the past two years' record pace.
Empowerment Company Beats Competition to VW Contract
An empowerment company has beaten off international and local competition to
secure a contract worth up to R5m a year initially to make Volkswagen trucks and
buses in SA. The German multinational's South African arm announced last year
that it would start producing these vehicles in addition to passenger cars in
SA. Mzantsi Truck & Bus, which won the contract, is owned by 53 previously
disadvantaged employees at Volkswagen. Most or all of the shareholders had been
working for Volkswagen for more than 12 years, Volkswagen spokesman Songezo Zibi
said January 16. Mzantsi was among nine bidders, including Volkswagen's global
logistics partner, Schnellecke of Germany, hoping to win the contract. The award
was part of Volkswagen's empowerment strategy. Mzantsi is wholly owned by
Abakhuseli Savings Club, one of several stokvel groups operating at Volkwagen's
Uitenhage car manufacturing plant. Abakhuseli, which made a tidy profit on its
Telkom shares last year, will provide the working capital for Mzantsi.
Volkswagen will invest about R300m in the development of the assembly plant and
dealership network. Zibi said Volkswagen would pay Mzantsi a monthly fee in
terms of the production contract. In the initial stages, the contract would be
worth between R3m and R5m, depending on the volume produced, Zibi said. Bus
production will start in the third quarter of this year, followed by truck
production next year. The plant at Volkswagen's Uitenhage plant was "well
advanced", but equipment had yet to be installed, said Zibi. The company is
aiming to sell 200 buses and 800 trucks a year in SA within its first year,
giving it a market share of 20% and 10% respectively. The local market for these
vehicles has grown in leaps and bounds over the past few years. Last year, truck
and bus sales grew almost 32% over those recorded in 2004. Zibi said that, to
his knowledge, the award of the contract to a company outside the car maker was
a first in the automotive industry in SA. All of the 53 Mzantsi shareholders
will retain their employment at the car company, with the exception of Vusi
Mancapa, who has been appointed production manager of the new company.
Fiat Auto SA Merges With Brazilian Counterpart
Struggling car maker Fiat Auto SA, probably the only car maker in SA to have
lost sales and market share in last year's booming market, has been taken under
the wing of its bigger brother in Brazil. Fiat Auto SA said January 12 that it
had merged with Fiat Auto Brazil, whose output alone is almost equal to SA's
entire vehicle production. The company said the rationale for the move was to
capitalise on synergies and opportunities but Fiat Auto SA appears to be in poor
shape and the future of its assembly activities in SA hangs in the balance as an
assembly deal with Nissan expires in 2008. Fiat's sales in SA dropped 200 units
to 7800 last year and its market share declined from 2,6% to 2,1% after it ran
into vehicle and parts supply problems. The company could not afford to import
sufficient numbers of vehicles and a new parts ordering system had resulted in
delays in getting parts to customers. Fiat Auto SA MD Giorgio Gorelli said there
were also supply constraints at the company's local vehicle assembly facilities
but he would not elaborate. Gorelli would not say whether Fiat Auto SA was
profitable. The firm did not usually comment on its financial position, he said.
Gorelli said Fiat's "stable" sales and the "marginal" loss
in market share last year stemmed from the firm's restructuring of its
dealership network to enhance the number of units sold at each. He said the
number of dealerships had been reduced from 100 to 35 and revenue was now R25m
at each dealership compared with R5m before. Sales were deliberately kept
"stable" while executing the dealership restructuring strategy and the
company was now in a position to grow, he said. Gorelli said the local operation
would be able to learn from its sister operation in Brazil, which had a 25%
share of the total vehicle market in that country. He has not ruled out the
possibility that the company may import vehicles from Brazil instead of
assembling them in SA. Fiat cars are presently assembled at Nissan's Pretoria
plant. The agreement with Nissan expires in July 2008 and Nissan has declined to
renew it. The Brazilian plant now produces only left-hand-drive vehicles but
assembled right-hand-drive units in the past. "The goal is to try to find a
way to keep assembly facilities in SA," said Gorelli. The potential loss of
Fiat's local assembly business would deal a blow to the domestic car industry's
ambitions to double output to about a million units over the next few years. The
industry notched up a record production figure of 530000 units last year and
hopes to increase this to 610000 this year. Quicker parts sourcing was expected
to be among the benefits resulting from the merger. Gorelli said that the South
African operation's parts supply lead time would be reduced by the merger, as
Italy would be cut out of the supply chain from Brazil to SA.
Tata Aims to Double Sales
Tata, the Indian car maker that has taken the South African market by storm,
hopes this year to double last year's sales in the country, to about 22000
vehicles. The car maker, which launched its passenger cars and bakkies in SA at
the end of 2004, sold 11000 units last year. That far exceeded Tata's and local
distributor Imperial Group's most optimistic expectations. "We sold about
double the number we hoped to sell initially," said Phonnie Cilliers, chief
operating officer of Accordian Investment, which is owned by Tata and Imperial
subsidiary Associated Motor Holdings. Cilliers estimates that Tata could sell
between 18000 and 20 000 units this year. The Tata marque was the star performer
in the Associated Motor Holdings stable last year, accounting for a large part
of an estimated 60%-70% increase in Associated Motor Holdings' total vehicle
sales. The group is the largest importer of cars in SA, representing Renault,
Hyundai and Kia, among other marques. Tata's hopes to double sales should be
helped by the planned introduction of about five new models over the next year.
The new offerings may include a 4x4 and a half-ton bakkie, said Cilliers. A key
market for Tata is the hatchback category of cars, where it has already notched
up a 4% market share. The company is aiming to gain a 10% share of this
category. Tata's share of the total South African market is between 2,2% and
2,4%, and is growing. The marque's performance over the past year has been
helped by booming consumer demand for new vehicles. South Africans bought more
cars last year than in any other. Total sales of new vehicles came to 617500 for
the year, up 28,5% from 2004, which was also a record year. Based partly on its
success in the local market, Tata has expanded to neighbouring countries,
opening dealerships in Botswana, Lesotho and Namibia. The company has about 45
dealerships in southern Africa, and it aims to have increased the number to 65
by the end of the year. The car maker's unexpectedly strong growth in SA
resulted in shortages of vehicle parts last year, but Cilliers said the bulk of
parts supply problems had been resolved. Tata and Imperial recently opened a new
warehouse and headquarters in Johannesburg that was developed at a cost of
almost R20m. Cilliers said the company was localising as much of the vehicle
parts sourcing as possible. Several key parts, such as radiators, were already
being sourced in SA.
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AVIATION
Price War Benefits Consumers
The price war that played itself out between national carrier South African
Airways (SAA) and the country's low-cost carriers during December is likely to
cut profits for the airline, if its previous performance is anything to go by.
Although intermittent low ticket prices allowed SAA to compete with low-cost
carriers kulula.com and 1time, SAA has admitted that discounting is hurting its
bottom line. The airline says in its 2004-05 annual report that although its
international routes are doing well, it continues to face tough competition from
low cost-carriers. "To remain competitive, SAA has offered competitive
prices. This led to a decrease in the average yield (adjusted to foreign
exchange rate impact) of 1,8%, said SAA's chief financial officer, Tryphosa
Ramano. SAA said its domestic revenue remained flat in 2005, despite an increase
in domestic passengers from 3,7-million to 3,9-million. Moreover, SAA's parent
company, Transnet, said last year that its interim results for the six months
ended September were "dampened" by SAA's operating loss of R240m. The
loss was attributed to tough competition, high fuel prices and labour strikes.
The advent of no-frills airlines in the domestic market, as in many parts of the
world, has been welcomed by customers peeved about the high airfares charged by
full service carriers. Low-cost carriers in SA have not only drawn customers
away from SAA, Nationwide and British Airways (BA), which is operated by Comair
in SA, but their entry has also encouraged more people to fly. Analysts say the
arrival of SA's two no-frills airlines has increased the size of the domestic
travel market 30% in the past three years. Kulula.com says it enjoys between 20%
and 36% of domestic market share, while 1time says it has 10%. SAA's market
share is estimated at 50%, a fall from the 69% the Competition Commission found
the airline enjoyed in 2001. SAA's dominance has been to the detriment of
passengers and rivals in the past. Last year the Competition Tribunal fined SAA
R45m for anti-competitive behaviour. The tribunal said it had found conclusive
evidence that SAA had abused its dominant position by offering incentive schemes
to travel agents "to sell more SAA tickets and fewer of its rivals'
tickets". Such practices are in breach of the Competition Act. The changes
affecting SAA are not unique: the growth of budget carriers is causing headaches
for many full-service airlines across the globe. Wolfgang Kurth, CEO of low-cost
carrier Hapag-Lloyd Express, said recently that budget airlines in Europe had
"cannibalised" between 30% and 40% of the customers from full-service
carriers such as BA and Lufthansa. He predicted that low-cost carriers would win
25% of the European market by 2010. In a bid to compete directly with the
low-cost operators, SAA says it will consider launching its own no-frills
carrier. SAA CEO Khaya Ngqula said about 20% of the domestic market prefer to
fly without the frills. "The other option for us is to sit back, do nothing
and hope for the best. And the best might never come ... meaning we will just
disappear as an airline," Ngqula said last November.
African Civil Aviation Commission crackdown on Dangerous Operators
African countries and airlines running unsafe planes face a crackdown from
the African Civil Aviation Commission. AFCAC president Tshepo Pheege said it
would name and shame airlines operating what he called "flying
coffins". Nearly 400 people died last year in air accidents in Africa,
which has a crash rate six times the world average. At the same time, Nigeria
has grounded a third domestic airline. Nigeria's president launched a task force
on air safety after two major crashes in 2005. "One of the most important
things in choosing an airline is how safe it is," said Mr Pheege. "You
don't want to fly out as a passenger and come back as cargo." Africa
accounts for only 4% of global air traffic but 27% of all air crashes. Last
year, 15 air accidents were recorded in Africa. AFCAC, a specialised agency of
the African Union, will be following up on whether its recommendations are being
adhered to. Mr Pheege said lack of transparency among many African states had
resulted in safety concerns being ignored. The Nigerian presidential task force
created to improve aircraft safety grounded Executive Airline Services, the
third Nigerian carrier to be targeted under new safety rules. A spokesman for
the company said the order related to administrative, rather than technical
irregularities, and flights would soon resume. More than 200 people were killed
in two air disasters in Nigeria within a month last year. Two airlines which had
been ordered to stop flying have since had the restriction lifted. These include
Sosoliso, the owner of a plane which crashed in Port Harcourt in December,
killing 117 people. Aside from the Nigerian accidents, the biggest culprits in
2005 were Russian-built planes, Mr Pheege said.
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BANKING
Foreign Reserves Top $20bn
SA's foreign reserves grew rapidly on the back of a strong rand and higher gold
price in December, experiencing their biggest monthly increase in six months,
the Reserve Bank said January 9. Although the value of reserves increased 3,7%
from $19,9bn to $20,65bn, equal to 3,8 months' import cover, they are still
considerably lower than the international standard of six months. Given this and
the continued surge in the rand since then, it has gained 4% since the beginning
of the year, the Bank is expected to keep building reserves at a steady pace,
said analysts. "Gross reserves are now slightly above what may be perceived
as an 'optimal' level of $20bn, although the import-cover ratio of 3,8 months is
still relatively low by international standards. We could therefore see mild
accumulation of reserves through 2006," Standard Bank economist Shireen
Darmalingam said. The import-cover ratio is the extent to which gross reserves
can cover average imports. With the gold price remaining above $500/oz, and
commodity prices expected to remain strong this year, analysts expect the Bank's
holdings of gold reserves to increase further this year. The Bank reported a
higher market gold price of $514 at the end of last month, compared with $494,8
at the end of November. Gold reserves climbed to $2,05bn ($1,97bn). "With
the gold price hovering above $500/oz in December, there was no doubt that the
level of gold reserves would increase," Darmalingam said. The rand
strengthened by as much as 16c against the dollar last month, allowing the Bank
to buy $664m ($460m) of forex during the month. Forex reserves increased to
$18,6bn last month. Net reserves, also known as the international liquidity
position, rose to $17,2bn ($16,5bn). "The trade-weighted rand is now at its
strongest level since early 2005, which means that the Bank should continue to
be an active player in the market in January," JP Morgan economist Marisa
Fassler said January 9. She said the size of reserve purchases in January would
send an important message about the Bank's tolerance for a strong exchange rate.
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CONSTRUCTION
Waco Sells for R5,4bn
The market's hopes of seeing the largest JSE listing since Telkom's took place
were dashed January 17 when industrial group Waco announced that it had been
sold for R5,4bn. Private equity groups CCMP Capital Asia, JPMorgan Partners
Global Fund and management bought the South African group in what was the
largest foreign private equity leveraged buyout in SA to date, according to
Waco. The group, which provides construction-related equipment and services,
among other things, had been expected to raise up to R4,7bn in an initial public
offering. The company said last year that it would list on the JSE, but the move
drew wide interest from potential suitors whom Waco declined to name. Industrial
conglomerate Bidvest and Citigroup's CVC International, however, are reliably
believed to have been among those who submitted bids for Waco. Waco
International CEO Royden Vice, one of the new shareholders, did not rule out a
future listing in SA. He said that one of the reasons Waco had opted for the
sale was that it offered a significant premium compared with what the company
expected to raise through an initial public offering. Vice said the acquisition,
CCMP Capital Asia's first in Africa, reflected confidence in the South African
investment climate. CCMP is the largest new shareholder with 57%, followed by
JPMorgan with 28% and management with 15%. Vice said the acquisition meant that
the two private equity firms saw substantial growth potential in the company.
Existing owner Ethos Private Equity led a consortium buyout of Waco five years
ago with an enterprise value of R2,4bn, which was the largest pure private
equity transaction in SA at the time. Vice said Waco, which generates most of
its estimated R2,5bn-R3,5bn revenue from activities abroad, in countries such as
Australia and the UK, would remain based in SA after the acquisition. The
company's strategy, management and staff would remain unchanged, Vice said. Waco
is expected to benefit from the anticipated growth in construction activities in
SA as government steps up investment in infrastructure. In SA, Waco provides
equipment and services used in construction and building maintenance. The
industrial company has undergone major realignment and transformation since the
takeover by Ethos. A programme aimed at overhauling Waco was introduced by a
management team led by Vice, who was appointed in 2002. Ethos senior partner
Danie Jordaan said Waco had produced "exceptional" revenue and
earnings growth through an acquisition strategy. Recent acquisitions include a
leading UK company called Interlink Support Services and a New Zealand
scaffolding and forming business called Australasian Pacific. Waco recorded
compound annual growth in earnings before interest, tax, depreciation and
amortisation of 27,7% in the three years to June last year.
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FINANCIAL SERVICES
Skandia Bosses Throw in Towel As Defeat Looms
Skandia's directors, who were hostile to Old Mutual throughout
the duration of its eight-month fight to get control of the Swedish life assurer
appeared finally to throw in the towel January 19. This seems to signal the end
of any meaningful resistance from the Skandia board, coming towards the end of a
week in which Old Mutual said it already had 69,7% of Skandia's shares. After
Old Mutual said that its takeover of Skandia had been approved by the UK's
Financial Services Authority (FSA), Skandia issued a short statement yesterday
saying it would call an extraordinary general meeting. Skandia spokesman Harry
Vos said "the board came to the conclusion that now that the FSA has
approved (the deal), it is time to prepare for the meeting". He said this
was an unsolicited move on Skandia's part. Vos would not comment on whether this
apparent acceptance of the new order, with Old Mutual as Skandia's majority
shareholder, signified a softening of the earlier opposition to Old Mutual. Now
that the UK regulator has approved the deal, it is likely Old Mutual will
declare the offer closed at that point. Old Mutual spokeswoman Miranda Bellord
said that Old Mutual was "pleased to see they have recognised a change of
ownership". "But an extraordinary general meeting was always going to
have to be called, and it was always up to their board to do so," she said.
Skandia's resigned tone would seem to suggest its board is preparing to quit, an
action which analysts believe would have been foisted on the board by Old Mutual
in any event. Bellord would not comment on this possibility. "It's clear
that it's been difficult but Old Mutual's sentiments (that it harbours no
particular animosity to the Skandia board) have never really changed," she
said. Skandia's Vos would also not comment on whether any members of the board
had any intention of quitting. "I would think we have to wait for a final
statement," he said "but the composition of the board will be an item
on the agenda of that meeting and I cannot say if there will be anything
else," he said.
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FOOD & DRINK
SABMiller Joint Venture in Vietnam
Global brewer SABMiller has added another country to its rapidly expanding
network, forming a R300m joint venture in Vietnam with the Vietnam Dairy
Products Company (Vinamilk). SABMiller confirmed January 13 that it would plough
$22,5m of its own cash into a joint venture with Vinamilk that would see it
produce up to a million hectolitres of beer a year that could be sold through
Vinamilk's 120000 outlets. While some analysts were surprised by the project in
Vietnam, it follows SABMiller's efforts to expand in the fastest-growing beer
market in the world, China, and its takeover of Colombian brewer Bavaria last
year, indicating it has no intention of slackening its strategy of buying into
high-growth emerging markets. SABMiller confirmed it was entering Vietnam which,
although it is still selling far less beer than China's 250-million hectolitres
a year, is still the second-fastest growing beer market, at 15-million
hectolitres a year. "We will use Vinamilk's extensive distribution platform
to roll out products and our initial investment will be used to build a
greenfields brewery just outside Ho Chi Minh City," said SABMiller
spokesman James Crampton. While this is a relatively small deal for SABMiller, a
million hectolitres is less than 1% of the 175-million hectolitres that
SABMiller is expected to produce globally with Bavaria under its wing, it is a
strategically important move. One analyst, said that SABMiller had already
missed out in "Indochinese" countries such as Vietnam, Cambodia and
Thailand and this move would go some way to correct that imbalance.
"Companies such as Heineken and, in recent times, Carlsberg have been
strong in that region. SABMiller started late." Another analyst said that
while SABMiller may be a relatively late mover compared with Heineken, this gave
it exposure to a new area through an amount of money it would typically consider
"pocket change". According to Vietnam's industry ministry, the beer
industry in the country has grown at 8,3%, compounded, over the past three years
and it expects its sales of 15-million hectolitres a year to balloon to about
25-million hectolitres by 2015. Vinamilk plans to list on the Ho Chi Minh City
Securities Trading Centre, although Crampton denied SABMiller had any intention
other than to form a joint venture with Vinamilk. The listing would make
Vinamilk the largest listed company in the country, say news reports. These
reports say the company's market capitalisation would be $421m, nearly that of
the combined $480m value of the other 33 companies listed on Vietnam's emerging
exchange. Even though SABMiller spent $7,8bn to get its hands on Bavaria last
year, the Vietnam deal is a sign that the company plans to keep expanding in
emerging markets, either through acquisitions or partnerships. Press speculation
abounds in India that SABMiller will buy the Mohan family's interest in New
Delhi-based Mohan Meakins brewing business. Although this would give SABMiller
stronger leverage in the competitive Tamil Nadu area, insiders say the media
speculation is premature and that while negotiations have been continuing, no
deal has been struck. As it stands, SABMiller is already the second-largest
brewer in India and has a 13% share of the Chinese market.
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MANUFACTURING
China To Cut Exports
The South African clothing and textile industry has responded favourably to an
announcement that China is to voluntarily reduce its clothing and textile
exports to SA. A reduction in Chinese imports would help revive the domestic
industry, said Aaron Searll, CEO of SA's biggest clothing and textile
manufacturer, Seardell Investment Holdings, January 20. He said that clothing
imports from China had risen 40% in the past nine months. "It cannot be
allowed to continue like this, it is overwhelming," Searll said. China's
ambassador to SA, Liu Guijin, said his country would limit export of garments
and some textile items to SA. Searll said more clarification was required on the
form the limitations would take, and whether they would mean a percentage cap on
the volume of imports, as promoted by the World Trade Organisation (WTO).
"The industry also needs to know how long is it to be enforced for and who
will enforce it," he said. The import of high-quality textiles and clothing
to the South African market by China has put increasing strain on the domestic
manufacturing industry, leading to the demise of a number of companies,
including KwaZulu-Natal's largest textile manufacturer, Whiteheads. The company,
which closed its doors at the end of 2004, blamed cheap imports from India,
China, Pakistan and Indonesia for a R200m loss in turnover in the last two years
that it operated. Clothing company Rex Trueform said in its annual report last
year that highly competitive trading conditions in the industry resulted in
larger-than-expected losses in manufacturing, which in turn resulted in
retrenchments at all levels. Despite the massive job losses, which Searll put at
60000 in the past four years, he said the curb in imports would benefit the
sector. Executive director of the Textile Federation of SA, Brian Brink, said he
was not aware of the exact terms of the Chinese offer. "I do not know what
has been negotiated, although every little bit would help," he said. Brink
said that the WTO agreement, in which members are allowed to limit Chinese
textiles and clothing imports to 7,5% a year of the current level of imports
until 2008 was one possibility. Brink said he doubted the Chinese would stick to
the particular limit as it was not a binding figure. "I feel that it was a
bit of a pre-emptive move by the Chinese as the announcement was made by them
instead of SA." The trade and industry department set up a task team in
April 2004 to investigate the industry's need for protection against Chinese
imports.
Rand Threatens Manufacturing Recovery
The manufacturing sector showed further signs of recovery in December, but the
strong rand is threatening its continued wellbeing, according to the latest
Investec purchasing managers index (PMI). The rand strengthened to R6,30 to the
dollar as last year drew to a close, and its rally has continued almost unabated
since then. A strong rand deprives manufacturers of export revenue and gives
them more competition in the form of cheaper imports. Stunted growth in the
sector, the economy's second-largest, accounting for more than 16% of gross
domestic product (GDP) would dent SA's overall economic growth prospects at a
time when government is seeking to boost annual GDP growth to an average 6%
between 2010 and 2014. The Investec PMI rose to 52,5 in December, ending a
string of monthly declines that took it to 50 in November. A reading above 50
signifies expansion in the sector, while a number below 50 indicates that
manufacturing output is shrinking. But Andre Roux, head of fixed income at
Investec Asset Management, warned January 16 that despite the improvement,
"currency strength continues to have a dampening effect on the growth in
the manufacturing sector". This was reflected in the large decline in the
PMI's price index, which dropped from 68,6 in November to 60,8 in December.
"The buoyant growth and demand conditions experienced in the wider economy
bode well for prospects in the (manufacturing) sector. However, sustained rand
strength may limit the opportunities in this regard," Roux said. The sector
continued to shed jobs in December, although at a slower pace than the previous
month, with the seasonally adjusted employment index improving from 45 in
November to 48,7 in December, he said.
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MINING
Angloplat Earnings Up 65%
The higher rand prices of platinum group metals sold will help grow Anglo
Platinum Corporation (Angloplat) headline earnings 60%-65% for the year to
December compared with restated figures for the previous year, it said January
19. The 2004 headline earnings have been restated to 1120,6c a share following
the adoption of International Financial Reporting Standards relating to
share-based payments. The market downgraded earnings expectations for Angloplat
after its Polokwane smelter accident in September, as the group warned this had
cut its 2005 refined production forecast. As a result of strong platinum group
metal prices towards the end of last year, analysts upgraded its forecasts
again. The price of platinum started last year at $862/oz and ended it at
$970/oz but it traded between $900 and $1000/oz in the last three months.
Palladium, which started the year at $180/oz, traded as high as $295/oz in
mid-December. Angloplat said the increase in the group's earnings a share would
be even higher at between 77% and 82% than the rise in headline earnings because
of capital gains associated with its Mototolo, Marikana and Elandsfontein
transactions. In August Angloplat said that it and Xstrata would each pay half
the costs of building a R1,35bn platinum mine at Mototolo in a pool and share
agreement, similar to its existing agreements with Aquarius Platinum at the
Marikana and Kroondal mines. The Marikana pool and share agreement was made in
July. Last month Angloplat said it would sell some of its undeveloped platinum
properties at Elandsfontein to Ngazana, a black consortium. Angloplat shares
gained 1,8% or 802c to R450,90 on the JSE yesterday, more than double the
12-month low of R205. The platinum price rose 1,4% to $1036/oz while palladium
gained 0,74% to $273,50/oz. Angloplat accounts for about half of SA's platinum
output, and SA is the world's biggest producer of platinum. Angloplat would
publish its annual results on February 13, the group said.
Gold Miners' Benefit From High Price
The stronger rand gold price in the December quarter is expected to help South
African gold producers. Gold Fields and Harmony, report pleasing cash profits in
the forthcoming round of gold quarterlies. Sanlam Investment Management fund
manager Stephen Roelofse said the average gold price in the December quarter was
about R101652/kg, against R91751/kg in the September quarter. That would make a
difference of about 11% in operating margins for South African gold companies,
depending on their costs. A second analyst said cost increases in the December
quarter should be subdued. The effect of the wage settlement agreed with the
unions in July had entered the cost base in the September quarter, so December's
wage costs would be similar to September's, though they would increase on a
year-on-year comparison. The December quarter would also reflect higher
production in the industry after a period of consolidation, he said. But
Afrifocus Securities analyst Mark Madeyski said that as tonnages increased, the
grade of the ore tended to drop, so it was difficult to increase gold output.
Roelofse said increases in the cost of fuel, which would be expected to affect
operations in countries such as Ghana, Tanzania and Australia, were less
material in SA. They were likely to be evident in the overseas operations of
companies such as Gold Fields and AngloGold Ashanti. Although costs were
difficult to predict, South African miners had worked hard at cost containment
and the benefits of those measures would still be evident for some time,
Roelofse said. Madeyski said South African mines had been cutting costs
aggressively for some time and there would come a point when it was difficult to
make any further savings. Harmony CE Bernard Swanepoel said at the September
quarterly presentation that management would try to cut costs to R68000/kg in
the current financial year to June, from R85718/kg in September. Gold Fields CEO
Ian Cockerill said in October that the company would be in a stronger position
in the December quarter than it was in September due to a higher gold price and
better cost controls. AngloGold Ashanti forecast in its September quarterly
outlook that its fourth-quarter production would be 1,5-million ounces compared
with 1,53-million ounces in the September quarter.
Mining Production Down
Platinum group metals production fell in the three months to November, dragging
down total mining production figures, according to the latest data from Stats
SA. Total mining production in the three months declined 3,8% from the previous
three months. Production of the group that includes platinum, palladium,
rhodium, ruthenium and iridium fell 13% in the quarter to November from the
three months before. Coal production for the period declined 2%. Platinum metals
and coal account for almost half of mining output. According to the latest
Johnson Matthey interim review for the platinum industry, global demand for
platinum is forecast to rise 2% to a new high of 6,71-million ounces last year,
mainly because of robust purchases of platinum for use in vehicle catalysts.
Supplies of platinum, however, would be only 6,59-million ounces, the report
said. Platinum touched a near 26-year peak of $1022/oz, having risen from about
$850/oz a year ago. Palladium, which was trading at about $190/oz a year ago,
touched $295 last month and is currently at about $275/oz. TheBullionDesk, a UK
precious metals information service, forecast in a report this week that
platinum could reach a record high of $1250/oz this year and palladium could
touch $480/oz. Analysts and industry sources said January 12 that the fall in
local platinum production in the period to November could reflect a short-term
lack of refined metal from Anglo Platinum as a result of a smelter shutdown.
Angloplat accounted for half of SA's projected annual production of about
5,1-million ounces for last year. However, refined platinum production would
pick up again in the first half of this year. The company said in an update on
its Polokwane smelter shutdown in October that normal operations would resume in
mid-December. It forecast refined platinum production for last year would fall
to 2,45-million ounces from 2,6-million ounces. Stats SA figures show November's
metals and minerals production fell 3,4% from November 2004, reflecting an 11,3%
decline in gold production as well as of coal and platinum group metals. Gold
production has been in decline for several years due to the closure and
restructuring of unprofitable mines in response to the strength of the rand. In
2004, SA's gold production fell 9% to 342 tons, its lowest since 1931, and in
the first half of last year it fell another 15,5%, according to Chamber of Mines
figures. SA earned R12,5bn from metals and minerals sales in October, according
to Stats SA, which was a 19,5% improvement on the corresponding month a year
earlier, as prices of metals had risen. Sales of gold fell 10,6% to R2,1bn while
sales of non-gold minerals rose 28,3% to R10,4bn. SA is the world's biggest
producer of platinum and gold. According to the Chamber of Mines, the platinum
industry was SA's single biggest export earner in 2004, accounting for about
8,1% of total exports.
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PETROCHEMICALS
Sasol Starts Work On R2bn Plant
Petrochemicals group Sasol said January 16 that construction of a R2bn 1-octene
plant in Secunda, Mpumalanga, had started. Sasol operates two 1-octene plants
with a combined capacity of about 100000 tons a year. The group said the new
plant, scheduled to start production in the second half of next year, would
double its octene output to 200000 tons a year, making the company one of the
biggest producers of the chemical in the world. The chemical is used as an
additive to polymetric formulations to enhance elasticity, flexibility, impact
resistance and strength. The product is often used in conjunction with hexene
and pentene in products such as plastic for wire coating, automotive interiors,
raincoats and shopping bags. Sasol deputy CE Trevor Munday said the company had
decided to build the facility because of growing global demand from plastic
manufacturers for 1-octene. The plant would enable Sasol to capture a sizeable
part of that market. Sasol spokesman Johann van Rheede said global 1-octene
production grew 6%-8% a year on average. Current global consumption figures of
1-octene were not immediately available but former Sasol CE Pieter Cox was
quoted two years ago as saying that consumption was approaching 500000 tons a
year. Sasol has appointed German gas and engineering group Linde "to detail
engineering, procurement and construction" of the facility. The new plant
is the third 1-octene facility to be constructed by Linde. The group said the
new plant would be the sixth Alpha Olefin plant that Linde would be erecting
within Sasol's Secunda complex. "Linde and Sasol started their business and
technology co-operation more than 50 years ago," said Aldo Belloni, a
member of the Linde executive board responsible for gas and engineering. "Linde
is very proud to be associated with this great South African enterprise,"
said Belloni. The octene plants are run by Sasol Olefins & Surfactants, the
group's hydrocarbons division. The multibillion-rand investment comes shortly
after Sasol's announcement that it would double capacity to produce methyl
isobutyl ketone, a solvent used in tyres and pharmaceutical products. Sasol said
at the time that the new plant would have a capacity of 30000 tons a year,
increasing the group's total capacity of the solvent to about 60000 tons a year.
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TELECOMMUNICATIONS
Cellular Operator Shares Up 28% on Takeover Talks
One of Africa's largest cellular operators might be taken over by a larger
international player, with Millicom saying January 19 that it is assessing
offers to end its independence. Nasdaq and Stockholm-listed Millicom had a
market capitalisation of $2,8bn January 18, but news of a potential takeover
sent its shares soaring 28,8%, making calculations of its potential value
tricky. The going rate for cellular take-overs could easily see bids of $4,5bn.
Acquisitions last year were conducted at an average of $570 a subscriber, so
Millicom's 7,9-million users would price it at $4,5bn. However, the cost a
subscriber has leapt 11% since August, according to Merrill Lynch, which would
price Millicom at a massive $5bn. Since that would be well above the $3,3bn paid
last year for its larger rival Celtel, Dobek Pater of Africa Analysis expect
bids of closer to $4bn. The speculation could be premature, as Millicom may not
be sold at all, CEO Marc Beuls said. That seems unlikely, however, as it has
received "a high number of unsolicited approaches". The board was
happy with Millicom's strategy and its healthy cash pile of $600m was ample for
its aggressive growth plans, but the board had a fiduciary duty to seriously
assess the takeover bids, said Beuls. He would not name the potential suitors,
nor say whether MTN was among them. Such a move would fit MTN's stated expansion
policy, if the price a subscriber did not spiral too high. MTN came close to
buying Celtel for $2,67bn, until its bid was dwarfed by the $3,3bn from Kuwaiti
operator MTC. Beuls said Millicom regularly received propositions, but "the
frequency of offers in the last couple of months and the seriousness of their
intent has increased", he said. "We don't know whether it's going to
lead to a transaction. We are doing very well, our growth rates are higher than
our peers' and our profitability is excellent, but the board has to look at this
seriously." Beuls would not speculate on the kind of premium bidders are
likely to offer. "The numbers are very high these days, so clearly there is
an appetite," he said. Telecoms companies in the developed markets had two
problems -- no growth and too much cash, he said. "Companies seeing
negative growth rates know they need to go to the emerging markets where there
is high growth and profitability." Millicom runs networks in 16 countries
in Africa, Asia and Latin America. In Africa, the company operates in Senegal,
Sierra Leone, Ghana, Democratic Republic of Congo, Chad, Tanzania and Mauritius,
clashing with Africa's major players MTN, Vodacom and Celtel. Its largest
shareholder is Stockholm-listed Kinnivik with 38%.
Telkom Considers Expansion Into Botswana
Faced with tough competition from cellphone operators at home, fixed-line
operator Telkom has added Botswana to a list of five African countries it
considers ripe for investment in its bid to seek new sources of revenue. Telkom
spokeswoman Lulu Letlape said January 23 that the company would focus on
Botswana, Angola, Nigeria, Democratic Republic of Congo and Kenya. It is the
first time the company has expressed an interest in investing in Botswana.
Telkom has previously discussed only the other four countries. "We have
appointed a person in the company who is looking at all these countries and is
holding talks about any opportunities there," Letlape said. She said the
company would consider investing in state-owned monopoly Botswana
Telecommunications Corporation (BTC), which plans to privatise this year. "Privatisation
of the incumbent is one of the ways we could enter Botswana, or maybe via a
mobile (cellphone) company if one becomes available," Letlape said.
Diamond-rich Botswana, which has a population of 1,8-million, currently has two
cellphone operators with a market penetration of 30%. Fixed-line operator BTC
has a market share of about 8%. The advent of cellphones in SA more than 10
years ago has proved strong competition. The fixed-line operator currently has
about 4,7-million customers, down from 5,5-million in 2000. SA's three cellular
operators: Vodacom, MTN and Cell C have taken market share from Telkom as people
have swapped fixed-line phones for cellphones. SA currently has 25,8million
cellphone users and analysts expect the number of users to rise to 32-million by
2009. Telkom, together with its 50% subsidiary Vodacom, said they also wanted to
invest in the lucrative Nigerian market, where MTN already has operations.
Analysts said Nigeria, with a population of about 120-million, had huge
potential. "At present Nigeria is by far the most vibrant of the African
telecommunications markets with opportunities for mobile operators, service
providers, investors and equipment vendors," said Australian-based research
and consultancy firm Paul Budde Communication. The group said fixed-line
teledensity, the number of lines per 100 people, in Africa was about 3% while
cellphone penetration had reached 8%. It said alternative technologies such as
satellite, wireless and cellular were now making the task of connecting Africa
far easier than it has been with traditional cable-based technologies.
"This suggests that fixed-line access may become an outdated measure of a
maturing telecommunications infrastructure and follow-on services like internet
access are likely to focus on mobile handsets instead," the research group
said in its 2005 report. The African Telecommunications Union said about
3-million people were on waiting lists for a fixed telephone line in Africa. The
organisation, which promotes the development of information communications
technology, said there was a demand to support an additional 60-million lines,
particularly in remote areas.
OTHER NEWS
President Mbeki Pays Tribute to South African Tycoon
One of South Africa's best known business leaders and
industrialists, Anton Rupert, has died aged 89. During the country's apartheid
era he built up a business empire in tobacco, liquor and luxury goods, which
eventually spread to 35 countries. He was listed among the 500 wealthiest people
in the world by the Forbes List. Coming from a humble background in rural South
Africa, he was also respected as a philanthropist who took an interest in the
arts and wildlife. Anton Rupert's first business went bankrupt but he then built
up a tobacco and industrial conglomerate called Rembrandt, which he had founded
in 1947. Later he moved into the liquor industry and the luxury goods market.
Although he was an influential Afrikaner, and was welcomed into nationalist
organisations like the Broederbond, he remained critical of apartheid. However,
he avoided open confrontation with the leaders of white South Africa. A recent
biography has raised questions about whether the course of the country's history
might have been different, had Anton Rupert chosen to enter politics rather than
the business world. Nelson Mandela's spokeswoman, Zelda le Grange, said that
with Anton Rupert's death, South Africa had lost "a giant of a man".
President Thabo Mbeki said Dr Rupert had played a significant role in supporting
and initiating the transformation of South African business. Mbeki described Dr
Anton Rupert as having played a crucial role in transforming the country's
private sector, especially the industrial and commercial sectors. He was a
pioneer in the establishment of South Africa's footprint in the global financial
and commercial world. "Not only will he be remembered for his business
acumen, but also for his total devotion to nature and environmental conservation
as shown by his immense contribution to the establishment of numerous
Trans-frontier Parks. A true philanthropist," said President Mbeki.
Mandela to Be Patron of Africa Forum
A select club of former African heads of state has been
established in Maputo, with former president Nelson Mandela as its patron. The
veterans have formed the Africa Forum as an informal network to help strategise
plans for the development of the continent. Its members also include former
United Nations secretary general Boutros Boutros-Ghali of Egypt and former
Organisation of African Unity (OAU) secretary-generals, William Mboumouma of
Cameroon and Ahmed Salim Ahmed of Tanzania. "It is a group of elders.
Elders do not reprimand, they advise. This is a forum aimed at networking and
complementing work in the area of peacemaking," said Mr John Pesha, interim
executive secretary of the Africa Forum. Mr Pesha is a former Tanzanian diplomat
based in South Africa. Former Mozambican president Joaquim Chissano, who
spearheaded the initiative, was elected chair, while former president of Benin,
Nicophore Soglo, is his deputy. Mr Chissano said that the forum was an informal
platform where former African leaders could map out strategies to assist the
political, economic and social development of the continent. "After a
reflection, we saw that it was necessary for our experience to contribute to the
positive development of our continent," he said. In a press statement the
veterans said they were encouraged by the emergence of democracy and a culture
of peace in Africa. They were also pleased that more heads of state were
relinquishing their power when their terms of office expired. Its brainstorming
sessions will keep in mind the goals of the African Union, which replaced the
OAU, and the New Partnership for lAfrica's Development (Nepad). The forum's
first annual meeting will be held in mid-2006. Mr Pesha said an executive
secretariat would also be established at that time. He said the forum would
approach the South African government about the possibility of basing the
secretariat's offices in South Africa. The forum has been established with the
support of the Africa Institute of South Africa. Other former presidents who are
members of the forum include Norbert Ratsirahonana of Madagascar, Carl Ossmann
and Cassam Eteem of Mauritius, former Tanzanian presidents Benjamin Mkapa and
Hassan Mwinyi, Henrique Rosa of Guinea-Bissau, Aristides Pereira and António
Mascarenhas Monteiro of Cape Verde, Miguel Trovoada of São Tomé and Príncipe,
Kenneth Kaunda of Zambia, Yakubu Gowon of Nigeria, Jerry Rawlings of Ghana,
Quett Masire of Botswana, Pierre Buyoya of Burundi and Bakili Muluzi of Malawi.
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