How Will Nelson Mandela’s Death Impact South African Politics, Business, and the Procurement Sector?

africa

There have been enough panegyric articles written about the late Nelson Mandela already. To summarize for those who have spent the past week on an island far away from any source of information: as an elder statesman, Mandela was an outstanding leader (with a few exceptions such as ongoing ANC corruption and ignoring some South African healthcare issues); as a young, wild-eyed Communist revolutionary, well, the less said the better.

Clearly his passing is a great loss for South Africa, and what happens next will be of enormous importance not only to South Africa, but the entire continent.

Earlier in the year, we wrote about what might follow in the inevitable power struggle after his death:

“The Englishman graded the surrounding areas and largely reinforced the views expressed thus far in this series with one interesting exception: South Africa. He was extremely negative on South Africa, describing it as a powder keg about to go off at any time. I inquired as to the trigger, and he suggested that when Nelson Mandela is no longer around as a behind-the-scenes power broker, that is the time to be concerned.” (highlight added for emphasis)

This particular Englishman was in charge of UK embassy security in Mogadishu, Somalia, with obvious access to British security briefings for the region. In other words, he should be somewhat in the know about matters regarding security.

We will have to wait and see how the power game plays out. Even if Mandela was physically more or less gone from the official political scene for many years because of severe health issues, he was a calming factor. The current South African Prime Minister, Jacob Zuma, is a life-long left-winger (Communist Party member, self-proclaimed socialist) and shrouded in the corruption scandals that follow the ANC.

With the next South African general elections coming up soon – in the April-July period of 2014 – the timing of Mandela’s passing allows for little time for the country to adjust to life post-Mandela before going to the polls.

What are current sentiments in South Africa like? We have spoken with some of our contacts in the country involved in procurement and supply chain activities and these are some direct quotes:

  • “Some people do think S.A. may encounter new problems after the funeral. Mbeki said last night all the rumors are unfounded. The difficulty is we do not know. The corruption is at an all time high.”
  • “It is a bit of an unknown at this stage…. but definitely unsettling. We will have to wait and see. Many thought all hell would break loose in 1994, but it did not. It gradually got there in many ways…. over many years.”
  • “(South Africa) stays an interesting country. It is so rich in minerals with so many people who can lose if things go wrong, that they tend to keep it together… somehow.”
  • “The masses of left wing ANC youth is probably the biggest unknown. They are huge in numbers and they believe they have nothing to lose….. or so they think!”
  • “The ZAR (South African Rand) is very weak at this stage, so SC (supply chain) for imports are expensive. I do not foresee any disruption in SC though. Countries don’t hate SA, like in the 80′s, and SA do not have enemies, so it is not remotely comparable to some other countries in Africa.”
  • “SA is a first-world country in many ways, locked up in a third-world continent…. it brings all sort of challenges, but it is not doomsday although, due to corruption and murders, the sentiments vary hugely by race and class!”
  • “The extremely expensive food and energy assist in a very negative view from the middle class and taxpayers…. which are a small percentage of the population – something to take note of.”

As you can see, cautious optimism prevails in the comments we have gathered – despite the many negatives referenced.

A quick comment on the corruption in South Africa: to put things in perspective, on an international scale, South Africa compares with Italy, scoring at the identical level as Brazil, and fares slightly better than China and Greece – and actually does far better than Mexico, Russia, India, Vietnam, and Thailand.

As you can see, most if not all of Spend Matters readers do business with countries that are far more corrupt than South Africa. Surprised to hear this?

Those among our readers with news of their own from South Africa, please contact us directly – we’d love to hear from you. In the meantime, we’ll be putting together some recommendations for the region for our Plus/PRO subscribers this week. Check back and stay tuned.

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