Economist.com Cities Guide: Johannesburg Briefing - July 2005

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Top woman

South Africa got a new deputy president in June, when President Thabo Mbeki appointed Phumzile Mlambo-Ngcuka to replace the sacked Jacob Zuma. Mr Zuma was fired in mid-June after his former financial adviser was convicted for corruption and fraud. On June 20th, the National Prosecuting Authority announced it would be charging Mr Zuma himself with corruption, and he subsequently appeared briefly in court on June 28th, when the case was postponed until October. His supporters—mainly in South Africa's powerful trade union movement—suspect political motives. The investigation against Mr Zuma was initially conducted by Mrs Mlambo-Ngcuka’s husband, the former national prosecutor.

The appointment puts Mrs Mlambo-Ngcuka, the respected minister for minerals and energy since 1999, in the highest political office ever held by a woman in South Africa. However, some wonder if she is linked to what has been dubbed the “Oilgate” scandal, in which Imvume, an oil company, made contributions to the ruling African National Congress, allegedly using funds provided by PetroSA, a state-owned company. Suspected links between Imvume and Mrs Mlambo-Ngcuka’s brother have also raised eyebrows.

Hitting the road

Mr Mbeki's anti-corruption campaign reached the country's parliament in June. Following a scandal now known as the “Travelgate” affair, 21 current and former MPs are facing fines and suspended sentences for defrauding parliament over travel expenses. Five MPs from the ruling African National Congress (ANC) who pleaded guilty have already been forced to resign.

The targeting of MPs comes amid a flurry of anti-corruption activity and announcements by Mr Mbeki. He formally spelled out his graft-busting intentions in his speech after delivering the budget in May. The ANC reinforced this by declaring that MPs found guilty of abusing the travel-expense system would lose their seats—a significant hardening of attitude by the scandal-plagued party. Recent moves against MPs have indicated that words are to be accompanied by action.

Let it BEE

South Africa's government issued a revised code of good practice for deal-making under black economic empowerment (BEE), South Africa’s version of affirmative action, in June. The new code is designed to clarify and address concerns about how the policy should be implemented. Transactions under BEE have been criticised by trade unions for failing to reach beyond a small pool of individuals with “insider” advantage. Critics point to a recent deal in which a consortium of black investors managed to take a 10.1% stake in Telkom, South Africa's largest telephone company. Questions about the financing structure of deals have also been addressed.

Despite the revisions, some businesses are complaining that the increasingly complex BEE rules are imposing an administrative burden on the private sector. If anything, the new code adds to this complexity. It is due to be presented to cabinet for approval in July.

Unhappy union

A wave of nationwide strikes, organised by the Congress of South African Trade Unions (Cosatu) in protest against unemployment levels, hit South Africa on June 27th. According to the South African Chamber of Business, an estimated 40,000 protesters marched in Johannesburg, out of a total of around 700,000 striking workers (or about 10% of the workforce). Cosatu puts the number closer to 2m. The impact was felt most in the mining, car manufacturing and textile sectors, which have been hit hardest by job losses.

Cosatu attributes the high level of unemployment partly to the strength of the rand, and has been demanding a policy to weaken the currency. The unions have also called for the government to review its trade liberalisation strategy. The ruling African National Congress (ANC) is due to hold a national council in June, where proposals to liberalise the labour market are on the agenda. These proposals are strongly opposed by Cosatu and the communist party, which are part of a political coalition with the ANC. Tensions between the ANC and the unions—already strained by the sacking of Jacob Zuma, the former deputy president—are expected to increase.

The strain on the train

After months of delays, on July 2nd the government finally named the Bombela international consortium as the winning bid for the Gautrain—a high-speed rail link between Johannesburg international airport, Johannesburg and Pretoria. Construction, expected to take between four and five years, should start before the end of the year. But delays in awarding the contract have fed concerns that it may not be finished in time for the 2010 football World Cup, which South Africa is hosting.

Rail lines between the airport and the two cities are considered key for reducing traffic congestion and stimulating investment. But the project, which includes ten new stations (three of which are underground), 20km of tunnel sections and 9km of viaducts and bridges, at a cost estimated at 7 billion rand (US$1 billion), has not been universally well received. A resident's association has objected to the train running above ground in Pretoria and is expected to bring the matter to court. The Johannesburg section of the route will run mostly underground.

Catch if you can

July 2005

Guy Tillim: Johannesburg Downtown 2004

June 17th-July 31st 2005

Guy Tillim, an award-winning photographer, has turned his lens to the radical transformation of Johannesburg’s inner-city. Having roamed the streets for five months, he concentrated on the private lives of people affected by the decay and renewal of the city’s buildings. They are witnesses of the government's ambitious project to return the central district—recently riddled with crime and deserted by businesses—to its past glory. Behind the intimacy of the photographs lies the question of whether the regeneration project will manage to embrace both poor and rich South Africans, as many face eviction from crumbling buildings.

Mr Tillim, a Johannesburg-born photojournalist who has worked for Reuters and Agence France Presse, has been known for his images of conflicts in Angola, the Democratic Republic of Congo and Sierra Leone, among other places. In 2004 he received the DaimlerChrysler award for creative photography, and in 2005 his work on Johannesburg’s inner-city earned the Leica Oskar Barnack prize.

Johannesburg Art Gallery, Joubert Park, corner Klein and King George Sts. Open: Tue-Sun 10am-5pm. Tel: +27 (0)11 725-3130

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