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Investment summit report card: SA must listen to Jack Ma – Azar Jammine

29 October 2018 – Biznews
EDINBURGH — President Cyril Ramaphosa has been conspicuously courting the international investment community as part of his plan to reignite positive sentiment towards South Africa. He has had opinion pieces published in influential global newspapers, such as the Financial Times, in order to drum up interest in business opportunities in South Africa. His investment summit, meanwhile, has had the all-important job of drawing the public and private sectors towards each other after the relationship slowly deteriorated under corrupt former president Jacob Zuma, says leading economist Dr Azar Jammine. Assessing the details of the conference that attracted hundreds of delegates, Jammine emphasises that the key to turbocharging South African growth will be in working on long-term reforms to education, creating an environment in which entrepreneurship can flourish and improving government efficiency. None of this is rocket science or new information, however keynote speaker Jack Ma, a Chinese tech entrepreneur, used the three Es to create a typically Chinese mnemonic for this strategy. Jammine says following the three Es is essential if South Africa wants more than temporary improvements. – Jackie Cameron
By Dr Azar Jammine*
Cynics will argue we have heard it all before
It is commonly accepted that South Africa has been in a long-term economic decline since the beginning of the decade. Following early signs of newfound optimism at the beginning of the year in the wake of the election of Cyril Ramaphosa as new president, the optimistic business mood has given way to significant pessimism in recent times. It has therefore become a moot point as to whether or not the Jobs Summit held a fortnight ago and Friday’s Investment Summit represent initiatives that might restore some confidence and mark a turning point in the declining fortunes of the South African economy.
Leading South African economist Azar Jammine
Cynics might argue that such initiatives have been seen before and that they will lead to nothing. However, the intensity and magnitude of these two initiatives are geared towards ushering in a new element of hope and optimism for the economic future of the country.
First we had the Jobs Summit aiming towards the creation of 275,000 new jobs per annum over the next few years through a variety of 70 different targeted initiatives in agro-processing, mining, manufacturing, tourism and information technology.
Now we have the pledges made by a variety of both local and foreign companies to invest up to R290bn in a selection of investment projects identified in detail. They vary in scale, with the biggest being the intention of AngloGold Ashanti to invest up to R71.5bn in a variety of mining ventures and Vodacom intending to invest R50bn in cellular telephony. The two giant paper companies, Sappi and Mondi, have each pledged to invest around R7bn each in specific new plants in South Africa. The main automotive manufacturers, including Mercedes-Benz, BMW, Ford and Toyota have also joined the fray. There were slightly smaller investment commitments by companies involved in food processing such as Nestlé, pharmaceuticals such as Aspen, as well as by a few other IT businesses.
The structure of the summit was well thought out, with three breakaway panels involved in agriculture, mining and manufacturing; infrastructure, including water, energy and transport; and IT and business services and financial services. However, cynics will question whether this entails new greenfield investment or are simply plans that have been in place and whose implementation as projects was merely announced at the Summit because that was the appropriate forum in which to do so.
Optimists on the other hand will argue that some of these plans, even if they had been conceived already, may not have been put into effect had it not been for Ramaphosa’s charm initiative to ensure that these investment intentions do indeed see the light of day.
Magnitude of investment significant but not exceptionally dramatic
Setting aside the question of whether or not the R290bn worth of investment constitutes brand-new projects or not, one needs to put the order of magnitude of such cumulative investment into perspective. Overall capital formation in South Africa is currently running at around R920bn per annum. Seen in this vein, the R290bn worth of investment commitments is equal to approximately 30% of all capital investment.
Given that most of it is in the private sector, which accounts for around 70% of all capital investment, these commitments amount to more like 40% of annual private sector capital formation. The problem is that the R290bn of investment pledged probably refer to investment programmes that are likely to extend over several years.
Assuming that on average the R290bn is set to be spent over a five-year period, this implies that the average annual investment will amount to between R50bn and R60bn. Seen in this light, it represents around 5% to 6% of annual capital formation and a slightly higher percentage of around 7% to 8% of annual private sector capital formation.
This is substantial, but not massive. It will certainly provide some boost to capital investment but it should be borne in mind that with overall capital investment at just 19% of GDP, South Africa compares very unfavourably with other emerging markets where the ratio of fixed capital formation to GDP is 25% excluding China and 32% inclusive of China.
Recognising that capital formation provides long-term benefits in terms of enhancing the provision of goods and services in the economy, the manner in which South Africa has been lagging in terms of its capital formation is on its own one of the important reasons as to why the country’s economic growth has been flagging.
Interestingly, in its latest projections for the South African macro-economy, National Treasury had already forecast growth rates of 0.5%, 3% and 3.5% for fixed capital formation in 2018, 2019 and 2020 respectively. Bearing in mind that the Treasury’s forecast growth rates for overall GDP for these years are 1.1%, 1.5% and 1.9%, it does appear as if Treasury for one sees growth in capital investment accelerating beyond overall economic growth next year and the year thereafter even as it lags behind overall growth this year.
One wonders whether this projection was made deliberately taking into account possible benefits accruing from the Investment Summit. Some analysts have been inclined to add pledges made months ago by Saudi Arabia, Qatar and China of $10bn, $10bn and $14.5bn respectively. This implies a further $34.5bn (or R500bn) to the R290bn, or $20bn worth of investment pledges, preferring to talk about total pledges of $55bn (or R790bn).
The corollary to this is that Ramaphosa is already more than halfway towards his goal of attracting $100bn of investment over the next five years.
However, we would be wary of such optimism as we have struggled to get to the bottom of what kind of investment is implicit in these promises made by the three countries mentioned. Many suggest that these are merely loans which will carry interest rather than being true direct investment.
SA unduly dependent on portfolio investment rather than direct investment
It is important to distinguish between an initiative aimed at promoting direct investment such as the Investment Summit and the high quantum of portfolio investment that flows into South Africa and leaves its shores at a moment’s notice. Analysis of IMF data shows that more than three-quarters of all investment attracted to South Africa is in the form of portfolio investment, with direct investment contributing to less than 25%.
In most other emerging market countries, the ratios of portfolio investment to direct investment are the reverse, with a dominance of direct investment. The latter is preferable in the longer term because it increases the productive capacity of the economy and contributes towards higher employment levels.
With portfolio investment, on the other hand, whilst it may plug a gap in the short term with regard to helping to generate foreign exchange in the face of a large current account deficit, it does not contribute meaningfully towards the productive capability of an economy as avidly as does direct investment. Furthermore, high dependence on portfolio flows renders the country vulnerable to a reversal of these flows, with high currency volatility.
The latter is inimical to encouragement of solid investment planning that can help to generate increased direct investment and economic growth as a consequence. It is on these grounds that one should welcome the Investment Summit as an initiative aimed at increasing the ratio of direct investment to portfolio investment.
Biggest benefit is increased collaboration between private and public sectors
As cynical as one might want to be about the merits of the two summits, they did have one important goal in mind that seems to have been fulfilled. Ramaphosa clearly managed to get the buy in of the business community into the idea of these summits in a manner that has not really been seen in recent years.
Increasingly through the period of the Zuma regime, the private business sector came to be seen by the government as “the enemy” and efforts were made by politicians to convey such a message to the broader community, instigating increased antipathy towards employers by workers. The after-effects of this animosity are there still for all to see judging from the militancy of industrial action this year.
What the Ramaphosa regime’s initiatives by holding these Summits have tried to overcome is to kill off this notion of a huge divide between the interests of the private sector and the public sector. In a variety of industry-specific initiatives, Ramaphosa has tried to listen to business interests and in particular has been receptive to ideas put forward by business as to how a public sector whose efficiency has been deteriorating progressively in recent years, might stand to benefit by working together with private sector interests.
No way was he able to achieve this more readily on a more macro scale than in the Investment Summit.
Furthermore, the Summit attempted also to market South Africa’s investment possibilities to a foreign audience. This was a follow-up to the appointment of five high-profile “investment envoys” earlier this year to try and do his bidding in order to attract $100bn, or R1.4 trillion worth of investment over the next five years.
Marketing South Africa’s economy on a macro scale in this way does not appear to have much downside in its impact, only upside. The worst that can happen is that the funds spent on initiating such a marketing effort go wasted.
On the other hand, there could be a substantial boost to investment and through the multiplier effect thereof, to economic growth and employment creation themselves.
Attempt at reversing flagging business confidence
By all accounts the Investment Summit was highly successful as an event itself. To attract 1,300 delegates from both local and international sources and to organise such a giant jamboree in a successful manner, is no mean feat. It is almost like holding a mini World Cup successfully.
The big question of course will be to see whether the initiatives promised are implemented.
Even so, there can be no doubt that with both the Jobs Summit and the Investment Summit, President Ramaphosa has tried to uplift the general business mood which has been deteriorating so badly in recent times. The upbeat nature of the Summits seems to indicate that they have succeeded in instilling an element of renewed optimism that previously did not exist at all.
In the short term one is unlikely to see a major change in the course of economic growth purely on account of these Summits, but hopefully in the longer term they will elicit a slightly faster growth in capital investment than had previously been anticipated.
Jack Ma’s three E’s critical structural imperatives to concentrate upon to improve growth sustainably
Of course, one of the ironies of Friday’s Investment Summit was that the hugely positive mood at the Sandton Convention Centre contrasted with the negative mood for the Rand and the stock market. Both of these took a pounding and bond yields rose on the same day that all this commitment to large-scale investment was being made.
Part of the negative mood on financial markets was linked to the cellophane international stock markets more generally and the heightened risk aversion that this elicited. However, the Rand did depreciate by much more than other emerging market currencies. This was because Moody’s credit rating agency came out with a statement suggesting that it considered the Medium-Term Budget Policy Statement (MTBPS) tabled on Wednesday as “credit negative”.
This was not altogether surprising bearing in mind the manner in which the MTBPS surprised analysts with an overshoot of projected budget deficits and public debt to GDP ratios. However, this merely served to illustrate the manner in which South Africa’s fiscal parameters have been declining and are expected to continue to do so in the absence of appropriate structural reforms, including those related to government efficiency.
Jack Ma, chairman of Alibaba Group Holding Ltd., speaks during a Bloomberg Television interview at the company’s headquarters in Hangzhou, China. Photographer: Qilai Shen/Bloomberg
In other words, investment commitments alone are insufficient to generate confidence regarding a potential turnaround in South Africa’s economic fortunes from a longer term point of view. In this regard, it was gratifying to note the highlight of the Investment Summit being the interview with Jack Ma, founder and owner of Chinese Internet commerce giant Alibaba.
It was a riveting interview, culminating in Ma emphasising the imperative of concentrating on the three E’s as he called them, viz. Education, Entrepreneurship and Efficient government. These go to the heart of the structural weaknesses inherent in the South African economy in the presence of which economic growth will still not reach its full potential even in the presence of increased capital investment.
Without appropriate education and skills development, investment initiatives are likely to have short-term benefits rather than longer term ones and are unlikely to generate as much employment as they are capable of doing because the productivity and innovation that might stem from them will not be forthcoming.
Secondly, unless the South African economy is transformed in such a way as to break the concentration of power in the hands of big business, organised labour and government in such a way as to unleash the latent entrepreneurial talent and small business activity in South Africa, again the country will not be able to fulfil its two growth potential.
Finally, unless governance procedures within government are properly addressed and corruption and state capture rooted out and the civil service rendered more competent and efficient, no matter what the private sector tries to achieve, it is likely to fail to some extent simply because of the drag of government.
In conclusion, one may well welcome many positive aspects of the Investment Summit and the exercise does appear to have been worthwhile. However, unless Ma’s three E’s are addressed in their broadest terms, there will only be a temporary boost to growth from increased investment. Inroads that need to be made into attacking poverty, inequality and unemployment will be suboptimal.

Home Affairs in court after official tears up child’s passport

Home Affairs in court after official tears up child’s passport
31.10.2018 – The Citizen
Tinashe Bello has been separated from his mother simply because he wanted to represent his school in a German soccer tournament.
Home Affairs is once more embroiled in a legal battle. On 21 September court papers were filed against the minister and director-general for declaring a visa application by a Zimbabwean child fraudulent and banning him for five years from returning to South Africa.
As a result of the department’s action, Wadzanai Bello has been separated from her 16-year-old son, Tinashe Bello, since March. He has missed a year of schooling. She says it has caused her much pain. Her only contact with her son is by telephone twice a week.
Bello is being represented by the Legal Resources Centre. In her founding affidavit in the court case Bello states that Tinashe has been at Zonnebloem Nest High School since 2015. Then in February he was selected to go to Germany to represent his school in a soccer tournament. But for Tinashe to leave and re-enter South Africa the German embassy insisted he get a study visa, not the visitor’s visa for which Bello had initially applied at the Visa Facilitation Centre (VFS) in Cape Town.
On the advice of VFS, Bello sent Tinashe to Zimbabwe to apply for the study visa as an application can only be made outside of South Africa. Since she could not accompany her son because she was working in Cape Town, she relied on the assistance of her extended family in Zimbabwe and a South African family that assisted with supporting documents and money to enable Tinashe to apply for the visa.
In May, at the last of several frustrating appointments that Tinashe and his family attended at the South African Embassy in Harare, at which each time a different document was rejected, he was suddenly informed that his application was “a scam”. In her affidavit, Bello says the South African Home Affairs official then tore up Tinashe’s passport and threw it away. Tinashe was informed he was banned from returning to South Africa for a period of five years.
Bello’s affidavit says the action by the director-general (DG) to dismiss the visa application as fraudulent was substantively and procedurally unfair. Tinashe was not given an opportunity to make representations nor was he given an opportunity to exercise his right of review or appeal in terms of the Immigration Act.
According to Bello there were no reasonable grounds to conclude the application was fraudulent. She argues that irrelevant considerations were taken into account and relevant considerations were not considered, resulting in the decision being taken arbitrarily.
Also, although it is still unclear whether Tinashe was in fact declared a prohibited person, Bello’s affidavit says a fraudulent application is not a listed ground in terms of section 29 of the Immigration Act to make such a declaration, and the DG exceeded his powers as he does not have the necessary standing to declare a person a prohibited foreigner outside the ambit of the Act.
Tinashe was in possession of a valid passport and the information that was provided was correct, according to Bello’s affidavit. If there is any suspicion about the authenticity of the documents, there are other means available to the DG to verify the information.
GroundUp has been trying to get comment from Home Affairs for a week.

Malusi Gigaba violated the constitution and ethics codes, protector finds

31 October 2018 – Business Day
By telling ‘untruths’ in court, Gigaba has contravened several ethics codes and the president will now have to take action

Home affairs minister Malusi Gigaba violated the constitution and the Executive Ethics Code by lying in court, public protector Busisiwe Mkhwebane has found.
Mkhwebane said on Thursday that she investigated a complaint laid by DA MP John Steenhuisen after the high court in Pretoria found in December last year that Gigaba had told “untruths” under oath in the matter between himself, in his capacity as home affairs minister, and the Oppenheimers’ Fireblade Aviation in a legal battle about operating a private terminal at OR Tambo International Airport.
She has now directed the president to take appropriate disciplinary action against Gigaba for violating the constitution, the ethics code and parliament’s own code of ethics.
President Cyril Ramaphosa must advise Mkhwebane within 20 days of receipt of the report on action he takes. The speaker of the national assembly, Baleka Mbete, has 30 days from the publication of Mkhwebane’s report to provide the implementation plan on steps to be taken against Gigaba for breaching parliament’s code of ethical conduct.
Mkhwebane said the court also held that “by telling a deliberate untruth on facts central to the decision of the case, the minister has committed a breach of the constitution so serious that I could characterise it as a violation”.
Steenhuisen had said in his complaint that Gigaba not only lied under oath but, echoing the public protector, also acted in breach of his constitutional duties as well as the Executive Ethics Code.
Mkhwebane said Steenhuisen’s allegation was substantiated and gave Gigaba an opportunity to respond, but he failed to do so.
The Oppenheimers insisted in parliament on Tuesday that they obtained all the necessary approvals to operate a private terminal and dismissed claims they had bribed senior government officials ahead of the deal being finalised.
Responding to questions from MPs, Nicky Oppenheimer said Gigaba had lied to parliament when he stated he had not approved the family’s private terminal in early 2016.
He said he took offence at insinuations that the family had paid a bribe to obtain the approvals. He said Gigaba had said at the time he was delighted to approve the terminal, but the family was ‘‘astounded” when he later changed his mind, denying he had ever approved it.
The matter eventually ended up in court, where a judge found Gigaba had lied. Gigaba lost his appeal to a full bench of the high court‚ as well as an appeal to the Supreme Court of Appeal‚ and has decided to take the matter to the Constitutional Court.

Gigaba lied about Fireblade deal, Oppenheimers tell MPs

Gigaba lied about Fireblade deal, Oppenheimers tell MPs
31 October 2018 – The Business Day

Oppenheimers ‘astounded’ when Gigaba later changed his mind, denying he had ever approved the private terminal at OR Tambo International
On Tuesday, the Oppenheimers insisted they obtained all the necessary approvals to operate a private terminal at OR Tambo International Airport and dismissed claims they had bribed senior government officials ahead of the deal being finalised.
The Oppenheimers were summoned to appear before parliament’s home affairs portfolio committee to explain how their firm, Fireblade Aviation, came to operate a private terminal at OR Tambo airport without an official agreement granting them permission to do so.
Their appearance before the parliamentary committee got off to a rowdy start when members of Black First Land First (BLF) — an organisation that describes itself as a black consciousness, pan-Africanist and revolutionary socialist political party — led by Andile Mngxitama attempted to manhandle billionaire business person Nicky Oppenheimer and his son, Jonathan.
“Shut down Fireblade … the Oppenheimers are a criminal family … they buy the ANC, now they want to buy this parliament,” Mngxitama shouted.
The BLF then proceeded to lay charges of fraud, bribery and corruption against Nicky and Jonathan Oppenheimer, arguing that they had “illegally acquired an international airport terminal inside the OR Tambo International Airport”.
Responding to questions from MPs, Nicky Oppenheimer said home affairs minister Malusi Gigaba had lied to parliament when he stated he had not approved the family’s private terminal in early 2016.
He said he took offence at insinuations that the family had paid a bribe to obtain the approvals. He said Gigaba had said at the time he was delighted to approve the terminal, but the family was “astounded” when he later changed his mind, denying he had ever approved it.
The matter eventually ended up in court, where a judge found Gigaba had lied. Gigaba lost his appeal to a full bench of the high court‚ as well as an appeal to the Supreme Court of Appeal‚ and has decided to take the matter to the Constitutional Court.
Fireblade director Manne Dipico, a former ANC MP and Northern Cape premier, said he was disappointed that his “comrade [Gigaba] had lied to the committee”. He said Gigaba had “approved [the private terminal], finished and klaar… Maybe he needs assistance [remembering],” said Dipico.
Jonathan Oppenheimer said the terminal was not intended for the sole use of the family. “It was meant to be a gateway to SA … offering a high-quality, efficient service … Since inception, including domestic and international operations, we have had [about 14,000] movements — the vast majority of those have been domestic movements and the family itself has been responsible for 5% of those movements, so [the terminal] is not for exclusive use by the family,” he said.
Committee chair Hlomani Chauke expressed concern that there appeared to be no proper agreement for the operation of the private terminal.
He insisted that all documents regarding the approvals should be made available to the committee soon.

Oppenheimers to explain private terminal agreement at OR Tambo International

Oppenheimers to explain private terminal agreement at OR Tambo International
29 October 2018 – Business LIVE
Billionaire businessman Nicky Oppenheimer and his son‚ Jonathan‚ have been summoned to appear in parliament on Tuesday to explain how their company Fireblade Aviation came to operate a private terminal at OR Tambo International Airport without an official agreement granting them permission to do so.
Parliament’s portfolio committee on home affairs is seeking clarity on the drawn-out matter between Fireblade and minister Malusi Gigaba.
In early 2016‚ Gigaba granted Fireblade approval to offer an ad hoc international customs and immigration service at the airport. This is according to papers the company filed in the Pretoria High Court in November 2016‚ after Gigaba tried to backtrack on the agreement. In October 2017 the high court ruled that Gigaba had lied under oath and violated the constitution in reneging on the agreement‚ and that Fireblade could continue operating its VIP facility at the airport.
Gigaba appealed the ruling and concurrently launched an application in the Constitutional Court. This was dismissed with costs in March‚ with the Constitutional Court finding that the appeals court had to rule on the matter first. That same month‚ appeal court judge Malcolm Wallis dismissed Gigaba’s appeal‚ saying: “The minister cannot rely on his own unlawful attempt to circumvent the decision he had lawfully made to grant Fireblade’s application.”
Now the parliamentary committee is trying to make sense of the matter. Committee chair Hlomani Chauke said on Sunday that Gigaba had informed the committee that he would again approach the Constitutional Court. “We don’t know what is the process and what it is that is being appealed‚” he said. “Those clarities are very important.”
The committee is also looking to determine what effect the arrangement has had on the state’s coffers. An oversight visit to Fireblade’s offices in August found no record of a written agreement between the parties that delineates‚ for example‚ responsibility for the civil servants deployed to the terminal.
Chauke said this meant home affairs had not provided in its budget for staffing the terminal. He said other state departments‚ including health‚ the SA Revenue Service‚ and agriculture‚ forestry & fisheries‚ had also deployed officials to the terminal.
“We want a full understanding and to make sure every cent of the state is accounted for‚” he said. “As a committee representing parliament we feel very strongly that there must be accountability and clear agreements.”

Government to appeal decision on Muslim marriages

Government to appeal decision on Muslim marriages
Monday, October 22, 2018 – SA Gov News
Government has taken a decision to appeal the judgment handed down by the Western Cape High Court on Muslim marriages.
The case was brought by the Women’s Legal Centre (WLC) and Ruwayda Esau.
The WLC had argued that by not recognising Muslim marriages under common law, the law ignored the reality that women often lack bargaining power in marriages and were not afforded legal protection.
The judgment, which was handed down on 31 August 2018, ordered the executive and Parliament to pass legislation providing for the recognition and dissolution of marriages concluded in terms of Islamic Law.
In the ruling, the full bench gave government two years within which to enact such legislation.
In the absence of this legislation being passed, the full bench has crafted an order which will then regulate the recognition and dissolution of marriages concluded in terms of Islamic Law.
On Friday, the Justice Department announced that a decision was taken to appeal the judgment following consultation between the President, the Ministry of Justice and other members of the executive.
The decision to appeal was taken for three primary reasons.
“First, Mrs R Esau has lodged an appeal with the Constitutional Court because the full bench did not give her immediate relief in a marriage that has already been dissolved in terms of Islamic Law. The Women’s Legal Centre has not lodged a similar appeal,” said Department of Justice spokesperson, Mukoni Ratshitanga.
Second, the full bench decision has acknowledged that government is already in the process of researching an omnibus law that will deal with the recognition and dissolution of all religious marriages.
“Despite acknowledging this, the full bench has nevertheless ordered the executive and parliament to enact and pass legislation dealing with marriages under Islamic Law and to do so within a specific period,” said Ratshitanga.
The third reason, is the effect that the decision has immediate implications on all other religious marriages which have not been registered as secular marriages in terms of the Marriage Act.
“In short, the judgment impacts beyond the sphere of marriages concluded under Islamic Law. For these primary reasons, the President and the Minister of Justice have taken a decision to appeal the judgment of the full bench.
“They will do so upon the basis that they remain committed to complete the process that they have already commenced, and that is, to pass one law governing all religious marriages,” said Ratshitanga.
According to Ratshitanga, an appeal court decision will also bring certainty on certain fundamental constitutional principles, such as:
• the separation of powers and the extent to which courts may order government to pass legislation and to do so on a specific issue;
• the issue of inequality and discrimination of women generally and particularly those in religious marriages which have not been registered as secular marriages; and
• the permissible powers of the executive, and in turn, the legislature, in fulfilling their constitutional role in our democracy by determining how best to address such matters.
“For these reasons, the President and the Minister of Justice will shortly deliver an appeal against the full bench decision in both matters and will oppose the appeal of Mrs R Essau,” said Ratshitanga. – SAnews.gov.za

Home Affairs reopens refugee office closed in 2011

Home Affairs reopens refugee office closed in 2011
2018-10-23 – Groundup
The Port Elizabeth Refugee Reception Office was officially reopened on Friday by Minister of Home Affairs Malusi Gigaba.
The province has been without such a facility since the Department of Home Affairs unilaterally closed it in 2011, according to a GroundUp report.
Following years of legal action, public outcry and civil society activism, the Supreme Court of Appeal ordered the department in March 2015 to reopen the facility by July 1, 2015.
Years after that court deadline, the facility has at last reopened at new premises in Sydenham.
“The new office will provide adequate accommodation with which to extend better services to persons with legitimate claims. It has a streamlined process flow; open spaces; baby-changing stations; and multiple ablution facilities. Provision has also been made to accommodate the Standing Committee for Refugee Affairs, Appeal Board hearings and immigration inspectorate facilities,” the department announced.
“It was a very long and bruising battle,” secretary general of the Somali Association of South Africa, Mohammed Kat, said. “We won all the court cases we brought against them, but the Department of Home Affairs (DHA) kept appealing our victory until they reached the end of the tether. They had no choice but to abide by the Supreme Court of Appeal decision.”
Although he was happy refugees and asylum seekers would no longer have to travel to other provinces to apply for permits, Kat said the reopening was a bittersweet victory because a lot of time and resources had been spent fighting the government in court.
‘We were forced to shut down’
The Somali Association of South Africa, together with the Project for Conflict Resolution and Development, and aided by Lawyers for Human Rights, took the matter to court in 2011. The court ruled that the closure was unlawful but DHA appealed the decision.
“We were forced to shut down the office [in 2011] because of endemic corruption that had taken root at the office,” said Deputy Minister of Home Affairs Fatima Chohan. “The office was being abused by human trafficking syndicates who were bringing in migrants who were not refugees.”
Chohan said businesses around the old refugee office had a court order to close the old office because they said it was a nuisance to their businesses. She said the landlord also refused to renew the lease agreement for the building they were renting.
“The department could not cope with the existing budget but we had to abide by the court’s decision. The courts had spoken, we had to do it,” she said.
Minister Gigaba, who was there to reopen the centre, responded to two questions before an SABC reporter asked him about allegations of his involvement in the department’s procurement process.
“The minister does not deal with the procurement process. That is the question the director general can answer,” said Gigaba.
Gigaba spoke isiZulu to the reporter apparently to placate him. When the reporter persisted, spokesperson Thabo Mokgola stopped questions.
The Port Elizabeth Refugee Reception Office is located at 10A Gibaud Road, Telkom Building, Sydenham, Lakeside.

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