A very interesting email was sent to me stating that there was a concern about the South African Government being listed in America on the Stock Exchange.
This is quite normal for various foreign governments who have dealings with other companies in that country. It is all to do with how foreign sovereign governments and their political subdivisions offer and guarantee debt securities registered in the US and issued under Schedule B of the Securities Act of 1933.
I quickly did a search on South Africa’s Annual Report on Form 18-K under the Exchange Act of 1934 for the fiscal year ended March 31, 2012. The figures supplied by the government for the period 2007 to 2013 don’t look all that good to me. I am the first to admit that I don’t have all the knowledge or insight into the statistics of our economy, but when I see how things such as unemployment, Government expenditure, budget deficit and the Net Borrowing Requirement have all increased, I can only wonder if there is any possibility of reversing these trends?
What does concern me is that we have all these loans overseas which are coming up for repayment. Just quickly of the top of my head I know of:
1) Telkom who took a loan of US$1,500,000,000 with interest compounded at 4.665% as from 17 January 2012. Repayments need to take place twice a year, 17 January and 17 July, until the 17th January 2024 when the loan must be repaid. The calculator on my phone gave up trying to work out the interest being generated! Will leave it to those of you with financial calculators to work out what it costs us taxpayers for something that we don’t even see the benefits of yet.
I also see in the agreement between SEP, Telkom and Thintana Communications LLC there is mention of, Disadvantaged Groups” meaning South African groups historically discriminated against on the grounds of race, colour, origin or gender in South Africa. So Whites, Coloured and Indians will not be employed. Isn’t this racial discrimination and what what all the fuss was about 20 years ago?
Other loans which the government needs to repay:
2) Arms Deal – It involved US$4.8 billion (R30 billion in 1999 rands) purchase of weaponry by the African National Congress government finalised in 1999. It has been subject to repeated, seemingly substantive, allegations of corruption. (source Wiki)
3) Toll road around Pretoria and Johannesburg – The controversial Gauteng toll road system will cost taxpayers R5 billion more than the Gautrain because costs have skyrocketed over R2bn in a year.
If memory serves me right the government used R17 billion of government official’s pension to buy bonds in Sanral. This needs to be paid back. The government, apart from using the funds illegally, is hoping that some of the 1.3 million civil servants, who drive to work daily, will help fund the project. So they will be paying their hard earned pension back as well as funding the toll roads. So it’s a case of robbing Peter to pay Peter (not Paul)!!
This new costing brings the full amount of the roads and toll system, as well as the toll operating costs for the Gauteng freeway Improvement Project, to nearly R35bn over 10 years (source IOL). The largest percentage of the profits that were supposed to be made on the tolling of these roads was to go overseas to the coffers of the Swedish and Austrian branches of the traffic technology company Kapsch which holds a joint 65% stake in the tolling venture. A South African company TMT holds the remaining 35%. To raise additional capital for the venture TMT got KapschTrafficom to invest in the company and now Kapsch owns 56.8% of TMT. So even more capital is going to leave the country! (check out companies Gijima (formally AST) and ETC who also have links to the tolling saga.
Gijima made headlines last year when it’s Who Am I Online contract with the home affairs ministry, estimated to be worth about R4 billion, was cancelled. It isn’t suprising to know that Gijima’s chairperson, Robert Gumede, has strong connections with the governing ANC. There is also some dodgy scheming going on with the companies that are supposed to pave the way for smart-chip technology such as electronic passports and smart identity cards (you could check out Mac from the president’s office?) .
– Please explain to me how the government financial advisor said in February 2012 that South Africa can afford to push our national debt to an amount of R1 trillion thereby pushing our debt up from 45% to 75%? WE CANNOT EVEN SERVICE OUR EXISTING LOANS!!