Flogging an Eskom dead horse? You’ve got it all wrong

SO LONG as this country myopically persists with it’s strange obsession in maintaining the Eskom energy monopoly, there will be load-shedding and blackouts. Consumers desperately require choices in energy provider, options on who can connect their home grid, to power the toaster and microwave oven. But practically nobody here is speaking out on the lack of consumer choice when it comes to electricity.

Its as if energy analysts are brainwashed morons flogging the proverbial dead horse, each year they call for inquiries into why the horse died, reclassifying the dead horse as ‘living impaired’, arrange for officials to visit other countries to ‘see how they ride dead horses’, call for additional funding and training to ‘improve the dead horse’s performance’, or the hiring of outside contractors to ‘ride the dead horse’, and so on, but are simply too afraid to ‘let go of the horse’, lest they be out of a job.

What is wrong with you people?

A decade ago I attended a talk by David Lipshitz, founder and CEO of MyPowerStation. A company which aims to provide a ‘virtual power station’ solution via online billing and provisioning of energy services to consumers. His magnificent idea of introducing information technology to the sale of electricity to the end-user and consumer, has been stymied by a regulatory environment which is more in keeping with a 19th Century model of distribution than the 21st century.

Lipshitz’s website is now merely a link to his book, The Last Blackout, available via Amazon.

“What would happen if city dwellers in cities with more than 1 million people suddenly had no electricity?” asks Lipshitz in an ‘electrifying, shocking, and powerful thriller’, that is too close for comfort. The past week has seen some areas of South Africa experiencing 9 hour blackouts. The weekend was a series of 6 hours of load-shedding for my own household.

South Africa’s model of energy distribution requires urgent and drastic intervention. And I don’t mean to re-engage the debate on where our electricity should be coming from in other words, how it is produced. Doing so merely adds to the pile of doggy-doo dolled up by consultants, analysts and self-proclaimed experts dished up on national television on a daily basis.

Whether or not, electricity is provided by the state, or Independent Power Producers (IPPs) is of no real consequence in a system in which the end-user is placed at the forefront. There are no rational reasons why consumers should not be given the choice of purchasing energy from sustainable resources, whether women-owned utilities, or listed companies with a high ESG and BEE component. Let the people decide.

Unfortunately, and despite the mooted plans to open Eskom’s grid to the ‘wheeling of energy’ by third parties, there remain a number of obstacles. The first is the fact that our government and especially its Marxist Energy Minister Gwede Mantashe, continues to embrace a blind focus on centralisation. You can read my piece on why the state is rooted in an ideological fixation, the problem of ‘Socialist Complexity’, and my proposal for an Energy Commons. I continue to believe a commons is a ‘way out of the debt trap’.

Eskom is heavily in debt and clearly unprofitable when it comes to the generation of electricity, and is a prime example of why governments and bureaucrats are less efficient than the market and free enterprise when it comes to allocation of capital. Which is why we continue to see the introduction of tariff increases several times over the inflation rate. Is more money really going to solve the problem?

Not when we have the bizarre situation in which our Muni’s and Metro’s, alongside the corner Cafe ‘prepaid token’ store, are all added to the game of profiting off the bulk sale of electricity, energy provided by a grossly inefficient pyramid scheme by a solitary, underperforming producer of electricity. Nobody is fooled by people like Cape Town mayor Geordin Hill-Lewis promising the City will bring new capacity online, give or take a megawatt, or our President Ramaphosa, racing home to declare yet another electricity crisis requiring a crisis committee.

Without actioning on our rights as consumers, rights enshrined in our constitution, we will be left in the dark. It is essential for Eskom to open up the grid, not only to the ‘wheeling of electricity’ but to the dealing and virtualisation of billing and provisioning of new services. Then we might take a cue from New Zealand where deregulation has proven incredibly successful.

The country has 5 major electricity generating companies. Genesis Energy, Mercury and Meridian Energy operate under a ‘mixed ownership model’ in which the government holds a majority stake, while Contact and Trustpower are private sector companies. The country once struggled with a system very similar to our own, before dumping a socialist government.

Sadly, despite promises, there appears to be no genuine enabling legislation nor incentives in South Africa to allow a third party to purchase electricity, from either the state or the IPPs, and to resell the result on the open, rather than captive market, to the consumer. This is clearly why our system is failing. Embracing Lipshitz’s modest proposal and learning from the example of New Zealand, would be a step in the right direction.

In fact one does not have far to travel, to examine the case of another state monopoly, to see why deregulation when it comes to South Africa is the only solution. The fate of Telkom, once the country’s sole cable monopoly, provides us with a good case in point. If we had not opened up, we would still have a situation in which the only telephone available, was from the same company, with a single color, beige. Left to its own devices (excuse the pun) Telkom would still be in the copper age.

Look at how Internet Services Providers (ISPs), just like IPPs began to emerge in the 90s, while our government to its credit allowed a semblance of competition (initially only in the mobile market). With the result these companies grew up and essentially outflanked Grandma Telkom. In the process provisioning fibre cable infrastructure to the suburbs, and FTTH, all of which cost the taxpayer not a single penny.

Given enough time, our IPPs might eventually begin rolling out similar infrastructure. In fact they would be negligent if they did not. Best to get Eskom into open competition mode as soon as possible. The alternative is living with a permanent threat of massive grid failure just around the corner, alongside a collapsed economy.

Published by Cape Argus 17 October 2022

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Nigeria to establish special economic zone for Bitcoin, Crypto

MOVES are afoot for Nigeria to mirror the Dubai Virtual Free Zone. The NEPZA is in discussions with Binance and Talent City to establish a special economic zone for bitcoin and cryptocurrencies in West Africa to create a special economic zone for bitcoin and cryptocurrencies.

The country is seeking to create the first economic free zone for bitcoin and cryptocurrency in West Africa through the Nigeria Export Processing Zones Authority (NEPZA), per a press release.

NEPZA is in discussions with Binance, one of the leading cryptocurrency exchanges, as well as Talent City which specializes in building special economic zones. No explanation has been given as to why Nigeria has not approached African exchanges or included local crypto exchanges in its plans.

“Our goal is to engender a flourishing virtual free zones to take advantage of a near trillion dollar virtual economy in blockchains and digital economy,” said Adesoji Adesugba, NEPZA’s managing director.

In February of last year, the Central Bank of Nigeria issued a letter banning regulated institutions from “dealing” with bitcoin or cryptocurrencies. Following the ban, Nigeria saw an uptick of 27% in peer-to-peer (P2P) bitcoin transactions across the country.

Indeed, just last year Africa as a whole became the largest country in P2P transactions in the world by volume. Around the same time, Chainalysis reported a global adoption index which showed Nigeria in the top 10 countries worldwide for its adoption of bitcoin.

Moreover, as Dubai and Nigeria look to establish special economic zones to benefit bitcoin and other cryptocurrencies, we can take a look at existing economic zones. For instance, the free city of Próspera is an example of a customizable economic framework. 

Tokenomics Redux: time for a second look at crypto?

AS I WRITE this piece, crypto-markets are crashing. BTC has broken through its $19 000 support level and ETH is below the $1,500 price region. Of course all of this is happening in the run-up to the much vaunted ETH upgrade (or merge) and the Cardano Vasil hard-fork, and following Fed chairman, Powell’s Jackson Hole speech, signalling higher interest rates.

I’ve written about my misadventures with crypto-markets before. You should probably take a look here.

And had ample time to reconsider my strange journey. Lo and behold, I now find myself more interested in crypto than ever before. It’s no longer the FOMO that keeps me inserting coins and pulling the crypto-chain, but rather a return to first-principles. And yes, on second thoughts, my early experiments with these digital tokens wasn’t so crazy after all.

My latest take is entirely consistent with my initial summation.

Yep, like Warren Buffet I still don’t see BTC as anywhere near an investment grade instrument, not a traditional asset to put in one’s portfolio alongside an EFT or equity (at least not without a massive firewall). According to Forbes contributor Wayne Duggan “most cryptocurrencies are not tied to physical assets or intellectual property and don’t generate cash flow or pay a dividend or interest to investors. Instead, their prices are connected exclusively to supply and demand, making it difficult to assess their fundamental value.”

Tokenomics is the topic of ‘understanding the supply and demand characteristics of cryptocurrency‘.

In his investment book, Margin of Safety, value investing legend Seth Klarman explains that, “In the short run supply and demand alone determine market prices.” Stuart Langridge, Head of SEO at CoinMarketCap writes “If we believe that to be true and that it applies to cryptoassets using blockchain technology as well as the stock market, then understanding the factors that will impact either supply or demand are of vital importance to both speculators and investors.”

But investment in market supply isn’t why I find the cryptospace fascinating. In fact this idea of finite or rather predictable supply may be a chimera leading us astray. Who holds and who sells (i.e market supply) is not a factor of the innate rules of the blockchain (i.e total supply). Always check sites such as CoinGecko which show a cryto’s circulating, maximum and total supply. Ultimately, one only pays what you think a coin is worth at the spot rate, and we may all be driven by ‘greater fool theory’ if you believe Bill Gates.

Rather, I wish to focus here not on foolishness, but on the sheer utility of exchange, the logical expression of BTC unbridled innovation — the exuberant energy we observe behind the cryptosphere — energy which is being sorely tested right now by brutal financial markets. A ‘crypto winter’ event which may just put paid to any further misallocation of capital and the needless ‘dissipation of scarcity’ by the creation of unnecessary derivative coins? (Are you a crypto bull or a bear? Let me know in the comments below). Characteristics such as speed, efficiency, a rules-based monetary system and what Elon Musk calls ‘solving for scarcity’, in other words a trend driven by information science, towards creating a better financial system.

Blame for the energy crisis needs to be placed fairly and squarely upon the failed ideology of the ANC and its coalition partners.

In many respects the ANC policies of Black Economic Empowerment (BEE) and its flipside Radical Economic Transformation (RET) resemble the policies of Nico Diederichs’ ‘reddingsdaadbond’ whose Nationalists of the 1940s viewed the state as the primary instrument whereby the Afrikaner capitalist would come to the fore via ‘volkscapitalisme’. Like so many socialist experiments, the ‘capital of the state’ was seen as synonymous with the ‘capital of the Volk‘, as the party mobilised for a ‘transformation of economic consciousness’.

Version two of ‘state capitalism’ in other words, government-directed economics (dirigisme) under the ANC, the proverbial ‘mixed economy’ has certainly turned into an abject failure. In the process ordinary South Africans — small businesses, patients in hospitals, commuters, and other categories of workers, are being sacrificed to accommodate what is essentially a Marxist fantasy.

One has merely to look at the huge cost overruns orchestrated during the building of the Medupi and Kusile projects, involving continual extension of catered lunches and free banquets for personnel. At the time contracts to feed workers were among the biggest catering contracts in the country, proving that providing a reliable source of energy was certainly never the game-plan. The projects have essentially turned into white elephants, considering the related climate factors.

Anyone who suggests otherwise, is living in cloudcuckooland or like so many political analysts, groomed on our nation’s campuses, armed solely with the tools of radicalism instead of data-analysis, fails to draw truth from facts instead, myopically deriving ‘truth’ from an ideological position.

Wherefore the Genie in the Gini?

A good example is the endless repetition and political cant involving the Gini coefficient. While the country may have a high score on the Gini Index a measure of the distribution of income across a population, which is cause for concern (a higher Gini index indicates greater inequality), continually harping on about this unfortunate statistic, fails to take into consideration other factors — for example, the country ranks relatively well on the human development index with a score of 0.705, above Egypt and Bolivia but just below Indonesia.

Unlike the Gini, the human development index is a ‘statistic composite index of life expectancy, education (mean years of schooling completed), and per capita income indicators’, which are used to rank countries into ‘four tiers of human development’.

Incorrectly suggesting that South Africa is effectively ‘under-developed’ or that life-expectancy is somehow on par with Chad or Niger, belies the fact that as an emerging nation, South Africa has a lot to be positive about and despite current difficulties with energy supply and the fuel price caused by failure to implement policy already in place, for example policy when it comes to biofuels (see below).

It is not all that difficult to see which aspects of the economy prospered under the ANC, and which parts continue to create an unnecessary burden on both the treasury and the taxpayer. Despite financial head-winds, those parts of the economy remaining in private hands are still in relatively good shape, with the country recording consecutive trade surpluses, R28.35 billion in May, and even modest growth of 1,9%in the first quarter of 2022, with many corporates posting a return to profit following the decline under Covid.

South Africa has a “mixed economy in which there is a variety of private freedom, combined with centralized economic planning and government regulation” according to website GlobalEdge. It is this structural centralisation and focus on market intervention as opposed to Keynesian, social democratic welfarism, ‘based on the social rights of citizenship‘ which has received criticism from the World Bank and other aid agencies.

Far from providing for its primary mandate, Eskom and Transnet have become nothing more than massively costly exercises in sheltered employment for the party faithful, requiring efforts to trim down a bloated workforce. In both cases, these parastatals were used to siphon money into the pockets of Jacob Zuma and his cronies and are the subject of a 5 volume report into corruption.

Fuel or Fool?

Analysts continue to dress up the ANC and its SACP/COSATU “RET faction” ambitions of “transformation of economic consciousness” with phrases like “the working class” and “means of production”, essentially promoting failed economic policies — policies that are at the heart of the nation’s perennial inability to drive growth and economic expansion.

In 2019 cabinet approved a ‘biofuels regulatory framework‘ mandating blending regulations, feedstock protocols, subsidy mechanisms, selection criteria for projects, licensing of product storage and blending facilities, and containing environmental, water use and land use approval mechanisms.

The legislation was published by the Government Gazette and approved by Cabinet on 13 December 2019, this after some two decades of debate on the topic, including input from the environmental justice movement. By all measures the country should have been amply-armed and primed for the current global fuels crisis. Similarly plans to restructure and unbundle Eskom were proposed as early as 2015 and an energy roadmap released in 2019, so what happened?

Instead of embracing the constitutional imperative of sustainable development our Minister of Energy Gwede Mantashe took us all on a wild goose chase in the quest to mine the ocean for gas, promoting dodgy Karpowership deals, fossil fuel, nuclear power and big coal. Instead of embracing a just transition and change at Eskom, unions dug in their heels. Instead of seeking out environmentally-friendly alternatives and demand-side reduction, we are involved in the intrigues of Russia’s Gazaprom, the closure of refinery capacity and the collapse of the national power grid. We are all paying for it at the pump, and at the electricity meter.

Though the apartheid-era steel monopoly ISCOR was sold off to Mittel, and the telephone monopoly Telkom was listed in the face of competition from mobile providers, the government retained monopolies in rail transport, sea ports, energy generation and distribution, in other words Transnet, Portnet and Eskom.

The results are plain to see. Our government’s stake in listed entities like Sasol (8.4%) have outperformed its troublesome direct holdings — state-run enterprises have thus fared dismally — demonstrating why markets are more efficient at allocating capital than governments, and essentially represent the lesser of two evils insofar as our development path is concerned.

Note: There are currently over 700 state-owned entities dependent upon the treasury.

(You can read one of my earlier postings on this subject here)

SEE Volkskapitalisme: Class, Capital and Ideology in the Development of Afrikaner Nationalism, 1934–1948

Bitcoin bomb — long dark night of our beloved crypto?

PICTURE the scene. A man controlling a virtual avatar jacks into a digital ATM situated deep within the online multiplayer game SecondLife. He exchanges the games own digital token, Linden Dollars for BTC — the new deregulated currency being mined around the world by cryptophreaks. It was the dawn of the age of cryptocurrency and I was Kubrick, the SecondLife uber-hacker, cooking up bitcoin in my effort to topple the capitalist system.

I had downloaded the BTC open source client software the minute I found out about it on Reddit, and mined the coin, divided into Satoshis after mysterious founder Satoshi Nakamoto. I even completed online puzzles at “bitfaucets”, that trickled the currency into my blockchain wallet. Dreamt up several schemes involving alternative coins like lite-coin, feathercoin and ripple (all discarded as too energy intensive).

Little did I know I was becoming involved in a global financial cult, whose recent meltdown would not only correlate and imitate a decline in the S&P, but lead me to embracing traditional capitalism as a far saner, safer real-world alternative. (You can read my followup reappraisel here).

My first observation back around 2009, was that BTC was not exactly a great store of value (or as Warren Buffet called it in recent times, rat-poison-squared). As a novel means of exchange, it had some speculative value, as too the technology behind BTC represented financial innovation, whose utility was not solely the domain of BTC the currency, but BTC as in ‘the blockchain’.

Indeed the investment case behind crypto has proven to be somewhat flawed. The new ‘digital gold’ has turned out to be anything but gold, and is certainly not a ‘hedge against inflation’, in the process impacting upon the real world gold price and illustrating that financial systems based upon ever-shifting decimal places, and unstable ‘stablecoins’ have serious problems. In fact the only thing BTC has in common with Gold, is that both may be considered ‘non-productive’ assets, a quality which some crypto projects attempt to fix via ‘staking’ and generating ‘yields’.

Back then, merely getting the token exchanged for something of value in the real world, was itself a Promethean task, until the proverbial exchange of 1 BTC for one pizza happened in May 2010. I was one of the early adopters and pizza eaters, and like many geeks, at first promoted the new deregulated currency as a fair means of exchange outside of the conventional, an experiment in counter-economics and a possible world, a crypto-future free from the essential poverty caused by lack of exchange.

My online shopping spree eventually turned against me.

I had initially also embraced community currencies such as the Talent (hosted by Cape Town Talent Exchange), toyed with introducing a currency known as the ‘Woodstock Watt’ backed by the sale of electricity tokens and was now a willing participant on a digital roller-coaster ride. This story is a cautionary tale of what not to do in the face of unbridled innovation.

My puny holding of Second Life Linden Dollars which I exchanged for BTC, added to the few actual Satoshis I managed to mine alongside the trickle of BTC, allowed me to purchase altcoins via an exchange in Serbia. This was before the MtGox fiasco, which saw a leading BTC exchange go belly up, the victim of a double-accounts scam orchestrated by its founder.

While crypto-libertarian Ross Ulbricht also known as Dread Pirate Roberts was setting up Silk Road I was investing in Cryptostocks (disappeared) and Havelock Investments (ditto). None of my investments including a small investment in a ‘provable fair’ Bitcoin Casino panned out. Since before KYC, the sharks simply ‘pumped and dumped’ altcoins, burnt their rigs, or took your real cash for stock and then ducked to places far beyond, like Panama City.

In any event, bitcoin wallets could be stolen by computer virus attacks and brute forced, given enough time and CPU power, and thus I foresaw a moment in the near future when an artificial intelligence (AI) agent did something pretty similar, narrowing the limits placed on this guessing project by 1000x or more, and thus a coming crypto ‘space race’ in which the algo-kids good and bad, waged war against the algorithms. Burnt by Havelock, I threw in the towel.

Nevertheless a UCT computer studies associate of mine dragged me off to a Hacker meeting, in a shack under a bridge in Claremont, where I attempted to relate my tale, only to end up soaking in Ethereum (ETH) and hooked back on the cybersauce as it were. It seemed once the crypto bug had bitten, there was no way back from the edge of sanity, since nobody really understood, not least the pundits. Despite another shopping spree, my general enthusiasm slowly dwindled, the ETH venture-bus it seemed had already left the station.

About 18 months ago I was surprised to see BTC mainstreaming again, as Elon Musk put BTC on the Tesla balance sheet only to retract his support upon climate issues. Along with running jokes about Dogecoin, the proverbial FOMO had kicked in and I once again found myself feverishly investing my precious ZAR via an exchange called Luno. A small R6k investment rocketed up to R30k, but then hearing a tax consultant on the radio going on about capital gains and ‘BTC being taxable by SARS’, FOMO turned into FOCO (Fear of Cashing Out).

The past month has seen absolute carnage in the market, beginning with the Luna-Terra fiasco (two algorithmic ‘stablecoins’) and the latest Celsius debacle, followed by cryptoworld gobbledygook, ‘Eth1 stakes caused ETH to dislocate from BTC’, leading one to question the fundamentals. (Read about problems associated with another regulated stablecoin Tether here). Which brings me to my conclusion. Yes, blockchain technology is useful and yes we can thank the new wave of maths wizards for giving us fractional investment schemes, but like all monetary experiments, one needs to take the good and leave the bad.

I started investing in real-world securities because I learnt about balance sheets and underlying net asset value. I got involved with mainstream capitalism out of an urgent need to escape the wild-west of crypto and online investment scams, and can thank the cryptophreaks for introducing me to tradable indexes like the Top-40, All-Shares and S&P 500.

Does this mean I still want BTC on my balance sheet?

Not while its below USD 21 138,60 (as I write this) and heading towards 16 000,00 like a falling knife. When the Crypto-winter ends, another 12 months, I might just get back into the market, but for now, I need more predictable, less volatile financial instruments, dare we even call these assets?

If you consider BTC to be a measurement of confidence in the world of crypto (not a play on anonymous transactions cast as a commodity — nor even a Casinocoin gamble?), or a bit like the VIX is a fear index, then it may be an asset class for some. If you see the future of intellectual property as a play on blockchain, going long on BTC and Holding On for Dear Life (HODLing) may still turn out a winning strategy.

But for now, crypto schemes, despite their utility, are resulting in lay-offs and uncertainty.

Check out this video: https://youtu.be/6IRgSSBPrWY

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ANC hand is in cookie jar, Zondo & tax rands

WITH every revelation from the Zondo Commission of Inquiry into State Capture comes new evidence of the plot to redirect public funds into the private hands of politicians. It is remarkable that this arrives at a time when SARS has over-collected taxes by a whopping R38 billion, raising questions as to the overall tax regime in the country.

Botswana is doing incredibly well for its size with a corporate tax rate of 22%, sharing the same tax bracket as Indonesia, another success story and only slightly above Finland the ‘happiest country in the world’ at 20%. Botswana is one of the fastest growing economies in the world, averaging 5% over the past decade, this is in no small part due to its progressive tax system and intolerance of corruption.

South Africa at 28% corporate tax is still two points above the USA at 25% (a developed country) and has one of the highest maximum personal income tax rates in the world at 45% compared to Botswana, 25%. All of which acts as a disincentive to investment.

SARS has over-collected tax over the past 12 months following the lowering of interest rates during the Covid pandemic. Unlike countries where tax is put to good use, the revelations of the Zondo Commission show how tax has invariably ended up in the hands of politicians, whose sole motivation appears to be to rip off the exchequer.

Many on the left are running on a ticket of raising taxes whilst also raising salaries, essentially targeting the economy as if it were the enemy in an inflationary proposition if ever there was one.

The country has now embarked on an interest raising round driven by imported macro-economic inflation caused by the Russian-Ukraine war and quantitative easing in the USA.

In South Africa, all citizens irrespective of socio-economic position are taxed on the sale of goods via Value Added Tax which is a high 15% compared to Switzerland at 7.7%. Other taxes include a Fuel Tax and Capital Gains Tax. The Fuel tax was reduced temporarily to accommodate higher gas prices and the benefits of this experiment still need to be assessed.

Lower taxes are counter-intuitive, since they tend to drive local investment, act to boost entrepreneurs who sustain businesses, which in turn create jobs, with the resulting increase of economic activity. High taxes tend to constrain investment as they act as a disincentive. Merely lowering interest rates during the Covid epidemic resulted in a massive boost for local investment.

New SABC household ‘hut tax’ mooted

STATE-OWNED enterprise, the South African Broadcasting Corporation (SABC) has approached Parliament with a scheme to raise what is essentially a media levy on each and every household, irrespective of whether or not one possesses a television set. The scheme resembles the ‘hut’ taxes of old, which were used by the colonial authorities as a form of ‘poll tax’ (see below) to force people into the migrant labour system, and are unprecedented in modern times.

PetroSA for example, doesn’t levy fees on motorcars as such, but receives taxes at the pump. It certainly doesn’t tax those without vehicles, and the same may be said of Eskom, which charges fees for connection to the grid, but ignores the temptation to charge those without any access to electricity.

SABC now want an unusual ‘device independent’ tax to plug a gap in funding that has emerged as increasing numbers of South Africans turn to the Internet for content instead of media provided by the broadcaster. The broadcaster currently receives funding directly from the fiscus and also advertising revenue, and it remains to be seen whether or not it possesses any legal basis nor power, to implement such an extraordinary levy.

The earlier threat of a license targeted at general purpose computing and smart phones appears to have subsided somewhat, and there are a number of objections one may make when it comes to taxing the Internet, since many providers such as this outlet, provide content for gratis. In effect SABC would be charging consumers for content over which it does not possess copyright nor any resale royalty agreements.

Before the emergence of Multichoice, SABC were essentially a national broadcaster. The only pay-tv channel Mnet was that provided by a single private company. The SABC television license was thus essentially an operating tax on televisions, levied by the government, to kickstart broadcasting in the country.

The SABC is not a government entity as such but rather a corporation owned by the state, competing alongside other private companies. State-owned enterprises do not posses the power to tax the public and it is unprecedented for them to approach parliament in this manner. Telkom for instance, doesn’t tax its competitors and neither does the Post Office foolishly charge those who do not use its services, but rather email.

At the end of the day, it is the government which needs to fund its public mandate. It should do this via the usual channels — VAT, Capital Gains and Income Tax — not via introduction of a special tax, nor by attempting to create revenue streams that would place it in the world of commerce.

South African are unlikely to accept a Household ‘Hut Tax’, which is really just another way of saying ‘Poll Tax’ ( also known as head tax or capitation) which is a tax levied as a fixed sum on every liable individual (typically every adult), without reference to income or resources. In the case of a Hut Tax, the tax is levied on every dwelling or household.

Nor should we stoop to concede to the implementation of a separate tax for government media, in other words paid propaganda. Whether or not the public mandate will be fulfilled by the SABC or other service providers remains to be seen. There is no reason why other cheaper outlets for government information should be considered, instead of imposing yet another tax on already-stretched consumers.

Is this a cancel culture breakfast conspiracy, are our legacy brands under attack?

IT’S NOT just our politicians who are ‘twitching away the good drapery’. Global multinational food companies appear to be buying up local brands, only to announce their retirement and cancellation of legacy products, — some with generations of family support — and all in favour of their own particular lines of items.

A bewildering array of local products have bitten the dust in this way. A form of radical rationalisation and globalisation, in which market share is driven by what could be termed, a logical extension of cancel culture, the strategic sabotage of any opposition?

This years’ announcement of the demise of Redro and Anchovette was a real shocker, and has lead to many reactions on social media.

The shortage of well-known chocolate brands, treats from one’s childhood may not have aroused the same indignation from adults, but a total lack of support for our breakfast choices as a nation — a shortage of Marmite, the end of Rice Krispies (as anything to do with rice), surely heralds a move towards a future in which well-known brands such as Liqui Fruit (owned by Pioneer Foods) may become corn-syrup beverages, the fake fruit juices that are a world-wide, rationalisation phenomenon.

The manner in which large companies are gobbling up smaller companies is often attributed to simply meeting the needs of profit and capital, and, yes nothing lasts forever. But this announcement looks a lot like a well-known strategy of cheque-book removal of one’s opposition by Pepsico and Pioneer Foods with the result that we may end up with a food market in which nothing is truly South African, nor 100% homespun, and our diet simply an artificial, saccharine reflection of board-room decisions taken overseas by those unhappy with margin.

I know there is no real economic reason why the food bigwigs should preserve Chappie’s bubble gum (a dentists nightmare), or fight for Jungle Oats and Black Cat peanut butter (organic, if somewhat expensive), but the question arises, if a legacy brand disappears are we any better off? Is it really all about the bottom line?

As an Anchovette fan (who can afford caviar these days?) I don’t have any qualms with seeing its down-market substitute Redro disappear, but witnessing both classic items go the way of the Dodo, I can’t help thinking that we are living in the age of Solyant Green? A product made famous by science fiction only to appear as an actual ‘meal replacement product’ in 2013.

Does Pepsico/Pioneer Foods really expect us all to eat Pronutro exclusively for breakfast, surely a forerunner in science nutrition? As a wholesome wheatbix fan, do they really understand the local market? Heck, why not retire KWV Brandy for not being, well, Vodka? (Anyone have any history on our use of Cane Spirit as a substitute during WW2 rationing?)

What do South African’s eat for breakfast these days? What are your kids taking to school in their packed lunches? Did everyone just stop eating breakfast during lockdown?

Please let us know.

PS: If you miss eating real popped rice for breakfast, I highly recommend a substitute popped rice product from Happy Valley.

Sisulu steps in the proverbial ‘kakka’

FOR TWENTY years Imelda Marcos, the First Lady of the Philippines and her husband Ferdinand Marcos stole billions from the Filipino people, before they were convicted after mass protests that would later become known as the ‘People Power Revolution’. Imelda Marcos’s luxury shoe collection is said to have run into the range of thousands of branded items.

Similarly, South Africa’s ruling party has presided over state capture and massive looting under successive administrations. The party is implicated in the Zondo Report, the opening volume of which has dealt a massive blow to the credibility of the ANC, whilst MP Lindiwe Sisulu, faces opprobrium and censure from the country’s justice system for comments deflecting attention away from the findings.

In a move calculated to take the wind out of the sails of Zondo Commission by weaponising poverty to defend her position and authority, Sisulu went on the offensive this week, accusing the judiciary of being ‘mentally colonised’ and attacking the acting chief justice, and the ‘rule of law’, which she claims is merely a tool of neoliberalism.

The timing is significant and the result incredibly rich, considering the Sisulu’s are the main beneficiaries of a number of deals with the previous regime. Deals which resulted in the first black empowermenti firm, the creation of NAIL, and all leading to a round of state capture outlined here.

That there exists a link between state capture under Zuma, and the previous period of state capture under the National party, is clear and it would be remiss of me to omit to mention that this connection was neither the strict mandate nor the subject of the Zondo Commission, which focused primarily on the intrigues of the Guptas, SAA, Transnet, Nkandla and so on.

Given the extent of the looting, it was only a matter of time before the entire corrupt enterprise involving the siphoning off of state funds, under the guise of ANC deployment of cadres to the corporate sector, positioning of political representatives within the commanding heights of the economy, and attempts to rig legal proceedings, began to unravel, in one big awkward mess. A bewildering array of graft allegations has resulted in unprecedented attacks against democratic institutions becoming the order of the day, and include the torching of the national assembly by persons known and unknown.

Instead of empowering ordinary South Africans and seeking to move our country forward under democratic rule, it turns out that the inner circle of the ANC merely wished to step into the boots of the National Party, gaining a seat at the table of crookedness as it were. One can no longer remain silent in the face of thinly veiled attempts to disguise the result as a ‘people’s revolution’ or to sugar-coat the consequences as ‘radicalism’ or ‘opposition to capital’.

Like the removal of the Marcos Gang in the Philipines, it is going to take a lot more than a simple ‘democratic revolution’ to deal with the consequences. SA desperately needs its own Corazon Aquino, the  prominent figure of the 1986 Philippines Revolt, which ended the two-decade rule of President Ferdinand Marcos.

As I write this piece, government-sponsored propagandists continue to scapegoat our constitutional democracy alongside the justice system instead of answering the question, why it is that the ruling party has failed the people of this country?

History buffs may find another comparison, that of Angola’s Isabel dos Santos equally enlightening.

Theranos of the Nuclear Industry

THE WORLD has its fair share of prospective ‘revolutionary ideas’, objectives that have failed to pan out. Not for lack of trying, nor because a notion isn’t any good on paper but rather the expression of a thought may not be based upon sound physics, or could be missing a vital technological breakthrough or component. In the case of Theranos, the idea of a portable blood analysis machine was surely innovative, but the underlying technology did not exist and the project failed to deliver. The result is a fraud case involving over-sell — under-performance, gross deception and astonishingly optimistic claims by one Elizabeth Holmes.

Similarly in 2007 the Department of Environmental Affairs held a parliamentary inquiry into the nuclear industry, in particular the much vaunted Pebble-Bed Modular Reactor (PBMR) programme whose technology was essentially borrowed from Germany. As it turned out the programme was fundamentally flawed, and was deemed unsafe by the Germany government following a pebble bed reactor accident at Hamm-Uentrop.(1)

At this stage some R10bn had already been spent without so much as a working reactor. Submissions by civil society organisations Koeberg Alert and Earthlife Africa, provided engineering analysis of why Germany had dropped the thorium-uranium programme, in part due to the ‘tendency of the pebble fuel to disintegrate’. Other serious issues included problems of safety, lack of containment, waste fission products and a host of other technical issues.

This didn’t dissuade South Africa’s nuclear industry. Though government input into the programme seemingly ended with Minister Barbara Hogan cancelling further funds, the PBMR took on a new life under Kelvin Kemm, who began touting a gas-cooled version called High Temperature Modular Reactor (HTMR) produced by his own company Nuclear Africa, along with a supposedly ‘new fuel’.

Billions of rands of governmental spend was thus, for all intents and purposes, simply transferred to Nuclear Africa, under the auspice of Kemm who was then chair of NECSA in order to further acomplex prestige project, one which readily leads to economic dependency (see below).

Steenkampskraal Thorium Limited (STL) is a subsidiary company ‘in the business of developing and commercialising thorium as a clean safe energy source for the future.” The STL company site however professes “The primary goal of the HTR fuel development programme at STL is to produce fuel spheres containing uranium for irradiation testing in the short term, thorium/uranium in the medium term as well as thorium and plutonium in the long-term.”

Enter the X Factor, Yet Another Fuel

Meanwhile Eben Mulder and Martin van Staden announced their company X-energy was using a new modular reactor design alongside a brand new fuel. “X-energy has developed the compact Xe-100 reactor, which delivers 80MW of electricity and is about the size of an elevator shaft in a four-storey building,”. They further claim, “the US military has also signed a contract with the company in March to deliver its Xe-Mobile reactors”.

While Kemm’s project certainly has some merit in its purported use of presumably thorium instead of uranium, but certainly fails when it comes to the economics of producing Thorium Dioxide (see below) the X-energy project insists it has developed an advanced new nuclear fuel known as “Triso-X”.

Triso-X appears to be nothing more than a complex “tri-structural isotropic (TRISO) particle fuel” already developed within the nuclear industry. The company thus also claims somewhat disingenuously: “We manufacture our own proprietary version (TRISO-X) to ensure supply and quality control.”

If the claims are to be believed, TRISO fuel may significantly alter the burnup rate of fission products and change the melting of fuel within reactors. It is claimed to “double the previous mark set by the Germans in the 1980s” and thus is ‘three times the burnup that current light-water fuels can achieve—demonstrating its long-life capability.”     

According to pundits “TRISO particles cannot melt in a reactor and can withstand extreme temperatures that are well beyond the threshold of current nuclear fuels.”

A 2020 Nuclear Industry Journal article on ‘Uranium nitride tristructural-isotropic fuel particle’, demonstrates “testing of a novel coated fuel particle, uranium nitride tristructural-isotropic fuel” and claims “this fuel particle offers significantly higher uranium density over historic manifestations of coated fuel particles and may be more optimal for a range of advanced reactor applications”

There is however no consensus in the industry on the resulting fission products produced by the TRISO process impacting upon health and safety, nor the longevity of the fuel. One can only suggest that many of the objections to the latest Thorium-Uranium project, also apply. In fact many of the claims made by X-energy, beg the question, why Thorium?