USA, Germany face massive loss in S.African trade

Louw Pieter CAN THE WEST AFFORD TO LOSE SAFRICAN TRADEOur offer of 30 new Airbuses at a whopping saving of US$900-m for South African Airways was ignored because our small team made the mistake of being born white…

Can USA, Germany really afford to lose their SA trading share due to the BRICS convention?

May 5 2011. DOKKUM, the Netherlands. By Adriana Stuijt. When South African Finance Minister Pravin Gordhan complained during the parliamentary budget debate that ‘our hotels are standing empty because we do not have enough airplanes to bring in the foreign tourists’, Pieter Louw, 49, a retired military finance-expert,  immediately started enquiring with his  extensive network of international contacts for the obvious solution.

What was clearly needed, said Louw, was a lucrative deal in which the State could buy a new fleet of Airbuses for state-owned South African Airways to bring in more tourists which in turn would fill up those empty hotels again.  He talked it over with German and American business contacts, and soon they managed to put together a cost-saving package — offering 30 new Airbuses at a whopping savings of some US$900-million to South African airways…

Each Airbus would normally have cost $110million each – this international team was offering them at a discount of $60-million each. It would be perfect for South African Airways said Louw:  its maintenance infrastructure is already geared towards the Airbus.

Mr Louw, before his forced ‘retirement’, was a top financial expert for the SA national defence force, and in the past has put together many deals on international level, thus also building up an international network of contacts over the years. He has the skills, the expertise and the technical knowledge required to purchase such a new fleet.

The three international business-partners on three continents then submitted their lucrative offer to the Departments of Transport, of Tourism and to state-owned South African Airways  — and the negotiations moved to step two… and came to a screeching halt….


BEE cash register purchase strip shows percentage of blacks who worked on the productpicture left: under South Africa’s anti-white black-economic-empowerment laws, all its cash-register slips have to show the exact percentage of ‘ black ’ labour which went into manufacturing each product. South Africa’s trading partners exporting products to the country also have to provide proof with socalled ‘BEE-certificates’  — if they want to keep on doing business with the country.. The South African definition of ‘black’ in their legal context refers to anyone who is not ‘white’ i.e. ethnic-European or as the North Americans say, Caucasians.


“If we had been given time to find a ‘black-diamond elite partner’ we could have secured the deal’

Louw writes: “Our firm had the opportunity to present this capital-intensive equipment to the South African state-owned enterprise at a huge discount.  And if we had been given the time to find a black partner from the inner circles of the new ‘black diamond elite’, we may very well have secured the deal. “

Alas – since submitting their firm and very lucrative proposal, they have heard nothing ever since: ‘The suppliers did not heed my requests to tackle the job systematically, instead insisting upon a hasty approach,’ said Louw. “Without a black-economic-empowerment certificate, we apparently cannot do business in South Africa.

“It is ridiculous: to secure this deal, one has to apparently find a black guy who has no knowledge or involvement in any of one’s own business and then let him get the lion’s share of the deal. In other words: “Mr Black sits in a beer-drinking place and gets a call from me. Then I ask him: would you like to make money in dealing with government? He then has the power to dictate to me what percentage he insists upon, even if it is 95%. Bear in mind: he is a total stranger and has no expertise or anything worth mentioning to contribute to any such transaction other than his skin-colour and his greed. Eventually he gets paid for doing nothing.’

Louw warns that the recent BRICS convention is going to take away a huge cut in trade with South Africa and all its Western trading partners – and especially from the USA and Germany.  “ It is going to hurt American and German investors and trade partners as all that business will now be replaced by trading with Brazil, China, India and Russia.  Immediately after Mandela came to power, he already severed South Africa’s lucrative ties with Taiwan.  And the president thereafter, Thabo Mbeki’s corruption was revealed by Jeffery Jenkins in his books like the “The Merger” or “Money Laundering.”

South African Finance Minister Pravin Gordhan strongly supports the country’s move away from Western trading partners: in 2011 he has signed several thus-named ‘BRICS” agreements with Brazil, Russia, India and China. “Over the next five years, these economies will account for 36 per cent of world economic growth,’ he said in his February 2011 budget speech to parliament.

Asked Louw in conclusion: “Can the USA and Germany really afford to lose their share in trading with South Africa?”

Pieter Louw
Cell +27834702203
Skypechat:     exiled.boer


‘To secure a deal with a state-owned enterprise in South Africa, one has to find a black guy without any expertise… from any pub:  under its anti-white black-economic-empowerment laws, the ANC-regime now will only deal with enterprises which are 100% black ‘


sources, background:

Budget Speech 2011: Finance Minister Pravin Gordhan announced that the country’s budget would be raised to R104billion by 2013/14 — of which R77billion would be needed to service South Africa’s massive foreign banking debts:  South Africa has less than 5,9-million personal income taxpayers;  1,9m_companies and 685,623 value-added tax vendors : together they contributed R10,4-billion (i.e. only 10% of next year’s budget) to the national treasury coffers.

The South African revenue service has on its books less than 5,9million individual taxpayers, 1,9m companies and 685,523 value-added-tax vendors – and together they are the largest source of tax-revenue (80%). A total of R10.4billion was raised from these sources in 2009/10.

Pravin Gordhan strongly supports South Africa moving from its current Western trading partners and has in 2011 signed several ‘Brics” agreements in which South Africa increasingly is alligned with the BRIC economies [Brazil, Russia, India and China]. “Over the next five years, these economies will account for 36 per cent of world economic growth,’ he said.

Total expenditure from the National Revenue Fund of R889 billion is provided for in 2011/12, which is 9.8 per cent more than the revised estimate for 2010/11. Debt service costs will amount to R77 billion next year, rising to R104 billion in 2013/14. The size of the budget deficit results in debt service costs rising faster than any other category of spending over the period ahead.The budget framework includes an unallocated contingency reserve of R4 billion in 201 1/12, Ru billion in 2012/13 and R23 billion in 2013/14. This allows for unforeseeable and unavoidable spending requirements next year, and future policy priorities over the medium term. This leaves R808 billion to be allocated between national, provincial and local government in 2011/12, up from R743 billion in 2010/11 and rising to R926 billion by the end of the MTEF period. National departments are allocated 47 per cent of the total, provinces 44 per cent and municipalities just under 9 per cent. National transfers to local government have increased substantially, and will amount to over R70 billion in budgetary assistance and infrastructure grants in the 2011/12 year.

A total of R12.8 billion goes to the departments of Police, Justice and Constitutional Development, Correctional Services and the Independent Complaints Directorate. The budget provides R2.1 billion for the increase in police personnel to 202 260 in 2013/14, from about 190 000 at present. An additional R670 million is allocated for the upgrade of information technology over the MTEF period, and R490 million is for construction of courts, including new high courts in Nelspruit and Pietersburg.Total expenditure on public order and safety functions will amount to R91 billion next year, rising to R105 billion in 201 3/14.

Allocations of R10.3 billion are made over the MTEF for transport infrastructure and services.* This includes R3.8 billion for maintenance of the coal haulage road network, financed from the increased levy on electricity collected from Eskom. An additional Ri .5 billion goes to provinces for road maintenance and weighbridges, as part of a new conditional grant for roads infrastructure. Funds are also stepped up for the Passenger Rail Agency of South Africa, for replacing signaling infrastructure and refurbishing rail coaches. A further R2.5 billion goes to municipalities for public transport systems and infrastructure. Consolidated government transport spending will amount to R66 billion next year, rising to R80 billion by 201 3/14.

These investments are largely financed through borrowing, with costs recovered from future electricity consumers and road-users.As part of a long-term strategy for modemising public transport in metropolitan areas, the Passenger Rail Agency of South Africa is embarking on an 18-year programme to replace its coach and locomotive fleet, at an estimated cost of R86 billion.While infrastructure spending in the lead-up to the Soccer World Cup assisted in moderating the impact of the recession on South Africa, there has been an apparent deterioration in government construction spending over the past year. The challenge of intensifying infrastructure spending over the period ahead will require attention to planning, budgeting and contract management in national and provincial departments and municipalities.

Businesses that employ fewer than 50 workers account for 68 per cent of private sector employment. We need to get our small business sector growing. Allow me to share just a few inspiring examples.* Miondolozi Kosi is a young man with a passion for building skills in his community, Willowvale. He set up a ICT training Centre training more than 120 black people IT skills. Norman Mpedi is an ex-MK combatant, who after being forced to live off the bush in Angola discovered the umviyo fruit and has grown this into a thriving juice-making, Nguni Juice. Antonio Pooe started Exactech Fraud Solutions in 2007 as a small one-man business operating out of his home and has since grown it to a company with offices in Johannesburg, Cape Town and Durban and he now employs 24 black people.

South Africa has nearly 5,9-million personal income taxpayers;  1,9m companies and 685,623 value-added tax vendors:

 The South African revenue service has on its books less than 5,9million individual taxpayers, 1,9m companies and 685,523 value-added-tax vendors – and together they are the largest source of tax-revenue (80%). A total of R10.4billion was raised from these sources in 2009/10.

Tourism Minister Marthinus van Schalkwyk said in his budget speech this year that SA Tourism wants to  market South Africa in such a way that there would be many more annual arrivals and that the tourists would spend much more money there. He even approved of the idea of building luxurious black-owned gambling resorts in the world’s most famous and most pristine wildlife reserve, the Kruger Transnational Park. South Africa’s 2011/12 Tourism budget is R1.242.876-bn. The issue of race at times fell into utterly ridiculous racist-comparisons during the department’s parliamentary debates, with ANC-MPs pointing out to the fact that for instance there were ‘huge racial disparities in the city-centre of the harbour-side city of Cape Town, with most of the accommodation being white-owned –  whereas in (the black bedroom-suburb of Gugulethu) one would find small concerns that were wholly black owned.”

About Adriana Stuijt
Retired South African-Dutch journalist formerly Sunday Times Johannesburg

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