Economic review

Our population growth stands at 1.7% and our economic growth for this year is forecast at 0.4%. Given that inflation stands at some 6.7%, we are all, on average, getting poorer.

Measured in US dollars, South Africa has the 8^th-largest pension fund nest in the world. Although only 3% of the pension fund assets of the US, it is twice that of Denmark and Mexico.

We have plummeted in our cost-of-doing-business rankings: we have dropped some 15 notches in the past 9 years in the ranking of 160 countries to position number 73. The issues are well known: policy risk, regulatory issues, operational costs, labour and community risks and so on.

Infrastructure building is good, yes? Such spending supercharges economic growth, provide jobs and is an ideal way to resist recession. Not necessarily: I read an article referring to Japan having thus invested in order to combat their economic sluggishness. That country had spent $6.3 trillion on construction-related public investment. This produced engineering marvels but did little for its growth rate. In essence, infrastructure spending is a form of investment and one needs to ask how future returns will compare with current costs, like any other investment.

Why do people move to cities? Generally, to escape poverty. Yet this does not seem to work well in Africa. Why? The reason is ascribed to wealthy Africans not paying sufficient tax, difficult land registration and lack of accountability of city leaders. The Economist

Business review

TransNet and RailRunner have come up with a concept in which truck trailers will be rolled around on rail bogeys from next year. Containers will not need to be lifted off trucks on to railway carriages because; instead the truck’s trailer is suspended on rail bogeys. The idea is that it will allow truckers to focus on the “last mile” in the logistics chain where rail cannot operate. All this sounds great but has been done before. In the old days, think late 70s, TransNet had a system whereby a trailer, holding a container, was hauled on to a flatbed and, on arrival at its destination, was simply hauled to its final distillation. This worked admirably but was dropped for some reason or another.

The MeerKAT radio telescope array project has made the top 10 of the Innovation in Asset Performance category of the Bentley’s Year in Infrastructure 2016 awards.

Property review

IOLProperty reports that purchasers of property, situated on the Atlantic seaboard, are increasingly unwilling to pay the inflated prices which sellers demand. If they are correct, this can go but one way.

An interesting aside that I came across this week, held that we, as an income-poor country, are, relatively speaking, asset-rich. We have a home ownership rate of 66.4% despite 12% of our population living in traditional areas, in which they cannot technically own their own homes. Our population has a median age of about 25 years with a homeownership of well over 60%, of which 78% live in formal houses. This is far higher than most emerging market countries. Furthermore city percent of South African state that they have a 2^nd home compared with only 4% of Europeans. It must be great being an estate agent in South Africa.

Just as I was waxing lyrical about a lender who would finance home loans in former tribal areas, VBS Bank is reportedly facing an investigation in which it is reputedly flouted lending and recruitment policies and had lent money to borrowers in which board members had undeclared interests. We shall have to wait and see.

FNB reports a shift to improved housing affordability as our real house price levels slow.

China, a Goldilocks housing market no more: it is reported that some 70% of Chinese household wealth lies in housing. Banks have gone on a lending spree and outstanding mortgage loans value have risen more than 30% with new mortgage growth standing at hundred and 11% since last year. This must be indicative of a problem in that market.

Practice review

Transfers pursuant to divorce settlements: the latest sadj has a note on these and states that, where a divorce settlement provides for the transfer of immovable property to a 3^rd party, this may be done (only) if the agreement is made an order of court. In KZN settlement agreements are generally not so dealt with and I do not understand the reason for the distinction. If any of our readers has an opinion on the matter, I would love to hear it.

The sadj also has a summary of its view on the purpose of section hundred and 18 of the municipal structures act. This governs the practical effects of the issue of rate certificates health care

The Sectional Titles Schemes Management Act and the Comm unity Schemes Ombud Services Act will come into operation on October 1. Practitioners should acquaint themselves properly with these acts as they introduce significant changes to sectional title management disputes.

Cases and such

Proof of sum owing

Most bank repayment contracts contain clauses which purport, generally speaking, to shift the onus of proof in certain matters, including usually the balance of the sum outstanding to the bank. In the case referred to below, the typical clause had been presented as follows: This certificate or other form of evidence as the case may be, will upon the mere production thereof be binding on us and be proof of the contents of such certificate on the face of it and the fact that such amount is due and payable in any legal proceedings against us, and will be valid as a liquid document against us.” In this case the court refused to give summary judgement as there was no rebuttal allowed to the plaintiff in a summary judgement surety case. One cannot oust the jurisdiction of our courts to enquire into and determine the accuracy and validity of fact in dispute.

This is an important case as it has the inevitable effect that all Nedbank’s contracts (and one should remember that standardisation is a part of that industry) which have similar provisions, cannot be relied upon for summary judgement purposes.

Nedbank Limited v McGlashan http://www.saflii.org/za/cases/ZAGPJHC/2016/231.html

Quotables

“Statistiek is als een lantaarnpaal voor een dronken man: meer ter

ondersteuning, dan ter verlichting.”

(I was quite surprised at how unliked statisticians are! See below)

Comment

Some of the latest nonsense on happiness, is a theory which holds that our graph for happiness is U-shaped; i.e. one is happier at the beginning and at the end of one’s life. This presents an entirely new perspective on becoming an old fart! I had not realised I was happier now than ever before and is set to get happier!

Our Labour Department has an interesting take on the court ruling to the effect that (will-not-die) Motsoeneng was irregularly appointed. Does this mean he now has to be reinstated in his previous job at the SABC? Probably.

You-owe-us students on a fast-burn track: one can safely say that most of us would not begrudge students receiving a free education; all education is good, right? The dilemma, as Friedman points out, is in the allocation of funds that are available. Free universities are affordable only if programs that serve the poor; social grants, primary health and so on, are reduced. His take on the issue is that the Brazilian experience of similar circumstances actually increased inequality: Brazil affords such education by limiting places in the best public universities. Since the affluent can afford fancy schooling and get better marks, they are admitted at the expense of the poor, which widens inequality and so on. In fact, shortage of funds in South Africa is starting to bite, as may be seen from the non-funding of NGOs that used to provide such services (vide the farce when the Department of Health closed such an institution and some 35 of the inmates died).

One watches photos of distraught students wounded in the struggle with police. Frankly, if that was my child, my first question would be, what he was doing, demonstrating instead of studying. If you are up there, mixing it with the cops (where your pals are burning down buildings), you cannot expect them to be nice to you.

Shriven? An interesting question posed by Prozesky, an ethics researcher, is whether Zuma’s Nkandla debacle is now to be put to rest? No: the basic moral problem is about transparency which is fundamental to ethical practice. The number of questions outstanding are legion. We also need to know why the sum paid, can be considered an appropriate compensation for all manner of luxuries.

The new mayor of Johannesburg has called up the provincial government to pay its outstanding rates and taxes – some R259m. High time.

Lighten up

Logic is a systematic method for getting the wrong conclusion with confidence.

Statistics is a systematic method for getting the wrong conclusion with 95% confidence.

Statistics means never having to say you are certain.

A statistician is a mathematician broken down by age and gender.

A statistician is someone who loves to work with numbers but doesn’t have the personality to be an accountant. (And you know what they say about accountants…)

A statistician's wife had twins. He was delighted. He rang the minister who was also delighted.

"Bring them to church on Sunday and we'll baptize them," said the minister.

"No," replied the statistician. "Baptize one. We'll keep the other as a control."

Don’t we like statisticians? Probably.