2017

Nothing is more demoralising than running into financial difficulties. Suddenly all your energies are focussed on survival rather than growing the business. The fun goes out of the organisation, rumours of retrenchment flourish and if management aren’t careful, the rumours can become self-fulfilling.

It is generally accepted that the most successful companies have visionary leaders, with good and empowered middle management to implement this vision. Yet conventional wisdom looks down on middle management – they are often associated with bloated bureaucracy where nothing much happens. As the famous quote goes “I was appointed to middle management; I didn’t know I could sink so low”. In fact, most middle managers won’t admit that they are middle managers – invariably a distribution manager will say he runs distribution.

TV and other media have extensively covered natural disasters recently – fires in Knysna, storms and floods in Gauteng and KZN and then more fires along Table Mountain. There is now no doubt that these events are occurring more frequently and, apart from loss of life, are causing extensive damage to property. As worldwide climate change accelerates and impacts on us (wherever we live in South Africa), so will the dangers of us not insuring against these risks multiply.

To date only our Rand denominated debt (about 10% of our total debt) has been classified as junk. On the 25th of October, the new Minister of Finance will present the Medium Term Budget Framework (MTBF). Ratings agencies will closely watch this and if the Minister does not satisfy these agencies, the country will probably be downgraded to full junk status. Our local currency debt was downgraded following the removal of Pravin Gordhan and his deputy from Treasury. Gordhan was respected by the rating agencies and he had convinced business leaders to help him lobby these agencies and other offshore financial institutions. This had gone a long way in keeping the country from being downgraded.