I want to stress that regardless of the size of the deal and regardless of who the parties to the deal are, make sure you undertake a due diligence. I will always advocate for the most thorough due diligence you can afford, this is money, time and effort you should spend in order to save you money, time and effort later. Also remember, you often get the value of service you pay for, so don’t cut corners.

In researching this article I have been staggered to see how little information is readily available on public platforms on the subject of due diligence. What is available is very pricey and usually only talks to high level issues. This is worrying considering how vital a due diligence exercise is, especially to the first time business owner.

What is Due Diligence?

For the purposes of this article, Due Diligence should be understood as an exercise to be undertaken as part of the purchase of a new business. Simply put, due diligence is an investigation into a business with the purpose of proving to the initiator of the due diligence (typically the buyer) whether the facts offered up by the other party to the deal (typically the seller) are in fact a true reflection of the business.

Who should do the Due Diligence?

In order to do a due diligence well you will need two key role players:

1. Professional Assistance: Due Diligence’s exercises are technical in nature and if you have the funds available make use of a professional firm that has done these types of exercises before. Apart from all the certificates and client references that you will get from the firm you hire, check to see if any of the people who will work on your due diligence have ever run businesses before – you cannot under estimate the value of experience.
2. You: Your personal involvement in the due diligence process is vital. The professionals you bring on board work for you, but will not always understand, amongst other issues, precisely what your vision is for the business, what your appetite is for risk is and how you would deal with problems that will be encountered.

I would encourage a more hands on, engagement with your team so that at the end of the day you are getting a due diligence report that will allow you to take an effective decision. You don’t just want a report that says, “Yes do it” or “No don’t do it”. A due diligence is not simply a synopsis on the business you want to acquire or startup. In fact your due diligence report (which will be a detailed report on all aspects of the investigation) can serve as a great tool for guiding your future business plans and strategies for the business should you acquire it.
Some finance houses and banks will offer to do a due diligence for you. Be wary of this service; be wary of any due diligence exercise where the companies doing the exercise for you will profit from your deal outside of the fee you pay for the due diligence.

A Due Diligence Model

Non-Disclosure Agreement

The due diligence exercises should always start with a Non Disclosure Agreement (NDA). Characteristics of the NDA that you should be aware of are:

• The NDA is to be signed between yourself and the seller.
• This agreement essentially protects both parties from the having their confidential business information made public.
• A confidentiality period must be specified. Please remember that the confidentially clause does not apply to illegal activity.
• The NDA should talk to you requiring a Due Diligence and it should specify the high level areas that the Due Diligence will cover. The seller must agree to this. If the seller does not agree to this, walk away.

Due Diligence Areas

A good due diligence exercise will cover the following nine areas1. In addition you (or your team) will need to acquire from the seller the following documents for your due diligence exercise. These documents should be made available to you quickly as the seller should already have these available. If the seller is unable or unwilling to provide this information this would be a cause for serious concern. The fundamentals of running a good business are record keeping.

: *please note the Due Diligence Item column is not exhaustive*

Due diligence is your safety belt, often you only realize that you need it, when the deal has gone sour and your business is in crisis. Do not make that mistake and overlook this process.

We’ve noticed that many of our clients have struggled with conceiving their own knowledge management approaches. Sometimes their approaches seem to be driven by a fascination with new technology and other times the approach seems to be driven without consideration of the real cultural changes that need to take place within the organistion and its network; surprising organisations struggle to formalize the informal process of knowledge sharing.

This three-part slide excellently represents what knowledge management is, how it benefits the organization and what is needed to get knowledge management to work.

State of the Nation Address by His Excellency JG Zuma, President of the Republic of South Africa; Joint Sitting of Parliament, Cape Town

11 February 2010

Honourable Speaker;
Chairperson of the National Council of Provinces;
Deputy Speaker of the National Assembly and Deputy Chairperson of the NCOP;
Deputy President of the Republic, Honourable Kgalema Motlanthe;
Honourable Chief Justice of the Republic of South Africa and all esteemed members of the Judiciary;
Isithwalandwe President Nelson Rolihlahla Mandela;
Former President FW de Klerk;
Our father, Former President Kenneth Kaunda of Zambia;
Former Deputy Presidents;
Distinguished Premiers and Speakers of our Provinces;
Chairperson of SALGA and all local government leadership;
Chairperson of the National House of Traditional Leaders;
Heads of Chapter 9 Institutions;
The Governor of the Reserve Bank;
Special international Guests especially the Chairperson of the African Union Commission, Mr Jean Ping;
Former political prisoners and veterans;
Members of the diplomatic corps;
South African and foreign media;
Fellow South Africans,

Dumelang, molweni, goeie naand, good evening, sanibonani nonke emakhaya!

Siyavuya ukuba nani ngobubusuku bubaluleke kangaka.

I stand before you this evening, 20 years since President Nelson Rolihlahla Mandela walked out of prison.

We have chosen this as the day to call this Joint Sitting of Parliament to deliver the State of the Nation Address, to celebrate a watershed moment that changed our country.

The release of Madiba was brought about by the resolute struggles of the South African people.

You will recall that the masses of this country, in their different formations, responded with determination to the call to make the country ungovernable and apartheid unworkable.

We are celebrating this day with former political prisoners who we have specially invited to join us.

We welcome in particular those who have travelled from abroad to be here, Helene Pastoors, Michael Dingake from Botswana, Mr Andimba Toivo ya Toivo of SWAPO in Namibia.

We are pleased to be joined by members of the legal team in the Rivonia Treason trial – Lord Joel Joffe, who is now based in London and Judge Arthur Chaskalson.

We also remember and pay tribute to Mr Harry Schwarz, who sadly passed away last week.

He was amongst other things, a member of the Rivonia defence team.

We extend our gratitude to our friends and comrades in the international community, for fighting side by side with us to achieve freedom.

We extend a special welcome to the Mandela family.

They became a symbol of the sacrifices of many who bore the brunt of apartheid.

We greet the leadership of the ruling party and Alliance partners, for whom this is an extra special occasion.

Compatriots and friends,

On this special day, we must also acknowledge the contribution of those within the leadership of the National Party, who eventually realised that apartheid had no future.

Allow me to mention the role played by former President PW Botha.

It was he who initiated the discussion about the possible release of political prisoners.

President Botha worked with the former Minister of Justice, Mr Kobie Coetzee, who was in turn assisted by Dr Neil Barnard and Mr Mike Louw.

They played a significant role in the process leading to the release of Madiba.

Honourable Members,

South Africa is yet to acknowledge in full, the critical role played by the former President of the ANC, Comrade Oliver Tambo, who laid the foundation for this country to become a shining example of freedom and democracy.

It was his outstanding leadership, foresight and clarity of vision that led the ANC to intensify the pursuit of a negotiated settlement.

His wisdom was also displayed in the Harare Declaration which he wrote and championed.

It was this that laid the groundwork for the historic announcements by President FW de Klerk, 20 years ago.

In this, President de Klerk demonstrated great courage and decisive leadership.

On this great day, let me also acknowledge the role played by the late Ms Helen Suzman.

She was for a long time, a lone voice in Parliament, calling for change.

We also recognise the role of the leader of the Inkatha Freedom Party, Inkosi Mangosuthu Buthelezi, who also called for Madiba’s release, as well as that of other prisoners and the return of exiles.

We reiterate our heartfelt gratitude to the international community for its unwavering support to our struggle.

These moments in our history demonstrate our ability to come together, even under the most difficult of circumstances, and to put the country’s interests first above all other interests.

Deur saam te werk, kan ons meer bereik.

Honourable members,

During the course of this year, we will mark the centenary of the establishment of the Union of South Africa.

This created a unitary state.

Significantly, the exclusion of black people from this Union was one of the chief reasons for the formation of the African National Congress in 1912.

As we mark this centenary later in the year, we should reflect on how far we have travelled as a country.

Honourable Members,

We recall the words of Madiba on his release, when he said:

“I stand before you, not as a prophet but as a humble servant of you, the people.

Your tireless and heroic sacrifices have made it possible for me to be here today.

I therefore place the remaining years of my life in your hands.”

These words inspire us not to rest, until we achieve the ideals of a society free of poverty and deprivation.

In the two decades since the release of Madiba, our country has changed fundamentally.

President Mandela united this country behind the goal of a non-sexist, non-racial, democratic and prosperous South Africa.

As we celebrate Madiba’s release today, let us recommit ourselves to building a better future for all South Africans, black and white.

Let us pursue the ideal for which Madiba has fought his entire life – the ideal of a democratic and free society, in which all persons live together in harmony and with equal opportunities.

Honourable Members,

We called a joint sitting in the evening so that the majority in our country, workers and school children, can be part of the occasion.

We are impressed by the enthusiasm of the youth about the occasion.

Two hundred and sixty six children from all provinces participated in the pre-State of the Nation debate on the role of the youth in the fight against poverty.

We congratulate the overall winner, Charlotte Le Fleur of Worcester Secondary School and all the participants for the hard work.

Compatriots and friends,

We are meeting against the backdrop of a global economic crisis.

Last year, we experienced our first recession in 17 years.

The crisis cost our economy about 900 000 jobs.

Many of those who lost their jobs were the breadwinners in poor families.

In February last year, government, business, labour and community representatives agreed on a package of measures to reduce the scale and impact of the crisis.

We have put many of these measures in place.

We have implemented decisive anti-recession spending by government, especially on infrastructure.

To ensure a safety cushion for the poor, we brought social grant increases forward, and extended the child support grant to children over 14 years of age.

In the next three years, an additional two million children from poor households, aged 15 to 18 years, will benefit from the child support grant.

The Industrial Development Corporation has put aside R6 billion to help companies in distress.

Government introduced a “training lay-off scheme” to allow workers the option of a period of training instead of retrenchment.

These efforts were enhanced by our public works programme.

The nation will recall that during the 2009 State of the Nation Address, I announced that the Expanded Public Works Programme would create 500 000 work opportunities, by December 2009.

Let me reiterate that these are not jobs in the mainstream economy.

These are job opportunities created to provide unemployed people with an income, work experience, and training opportunities.

Honourable Members, Fellow South Africans,

We are pleased to announce that by the end of December, we had created more than 480 000 public works job opportunities, which is 97% of the target we had set.

The jobs are in areas like construction, home and community based care, and environmental projects.

We have identified some areas of improvement which we will effect going forward, including ensuring more labour intensive projects.

We know that these and other measures cannot fully mitigate the effects of the recession.

We are grateful for the spirit of family, community and voluntary work that inspires many people to help those most affected by the crisis, through these difficult times.

Honourable Members,

Economic indicators suggest that we are now turning the corner.

Economic activity is rising in South Africa, and we expect growth going forward.

The labour statistics released on Tuesday, show that the economy is now creating jobs rather than shedding them.

It is too soon, though, to be certain of the pace of recovery.

Government will therefore not withdraw its support measures.

Now is the time to lay the groundwork for stronger growth going forward, and for growth that gives rise to more jobs.

Our long-term infrastructure programme will help us grow faster.

Our education and skills programmes will increase our productivity and competitiveness.

Our Industrial Policy Action Plan and our new focus on green jobs, will build stronger and more labour absorbing industries.

Our rural development programme will improve rural productivity, and the lives of people living in rural areas.

Underpinning our strategy for economic recovery and growth, is our capital investment programme.

Over the next three years government will spend R846 billion on public infrastructure.

On transport, we will maintain and expand our road network.

We will ensure that our rail network is reliable, competitive and better integrated with our sea ports.

To ensure reliable power supply, we have established an Inter-Ministerial Committee on Energy, to develop a 20 year integrated resource plan.

Among other things, this will look at the participation of independent power producers, and protecting the poor from rising electricity prices.

We will establish an independent system operator, separate from Eskom Holdings.

Eskom will continue to build additional generation capacity and improve the maintenance of its power stations.

To ensure the promotion of an inclusive economy, to aid growth and development, we have established the Broad-Based Black Economic Empowerment Advisory Council, chaired by the President.

The most urgent focus of policy change must be interventions to create jobs for young people.

Unemployment rates for young people are substantially higher than the average.

Proposals will be tabled to subsidise the cost of hiring younger workers, to encourage firms to take on inexperienced staff.

A further expansion of public employment programmes is also underway.

This includes local infrastructure and literacy projects, home-based care, school maintenance and early childhood development initiatives.

Last year we launched the National Youth Development Agency.

We have directed the Agency to work faster to establish its structures, throughout the country, so that it can assist us to mainstream youth development programmes within government.

Honourable Members,

When this administration came into office last year, we undertook to work harder to build a strong developmental state.

We said it would be a state that responds to the needs and aspirations of the people, and which performs better and faster.

This year, 2010, shall be a year of action.

The defining feature of this administration will be that it knows where people live, understands their needs, and responds faster.

Government must work faster, harder and smarter.

We will expect the executive and the public service to comply with this vision.

We are building a performance-oriented state, by improving planning as well as performance monitoring and evaluation.

We also need to integrate gender equity measures into the government’s programme of action.

This action will ensure that women, children and persons with disabilities can access developmental opportunities.

We are pleased to announce a new way of doing things in government.

The work of Departments will be measured by outcomes, developed through our performance monitoring and evaluation system.

The Ministers who are responsible for a particular outcome, will sign a detailed Delivery Agreement with the President.

It will outline what is to be done, how, by whom, within what time period and using what measurements and resources.

As you are aware, we are committed to five priorities:
education, health, rural development and land reform, creating decent work, and fighting crime.

In addition, we will work to improve the effectiveness of local government, infrastructure development and human settlements.

We will undertake a number of key activities towards the achievement of these outcomes.

We have placed education and skills development at the centre of this government’s policies.

In our 2010 programme, we want to improve the ability of our children to read, write and count in the foundation years.

Unless we do this, we will not improve the quality of education.

Our education targets are simple but critical.

We want learners and teachers to be in school, in class, on time, learning and teaching for seven hours a day.

We will assist teachers by providing detailed daily lesson plans.

To students we will provide easy-to-use workbooks in all 11 languages.

From this year onwards, all grade 3, 6 and 9 students will write literacy and numeracy tests that are independently moderated.

We aim to increase the pass rate for these tests from the current average of between 35 and 40% to at least 60% by 2014.

Results will be sent to parents to track progress.

In addition, each of our 27 000 schools will be assessed by officials from the Department of Basic Education.

This will be recorded in an auditable written report.

We aim to increase the number of matric students who are eligible for university admission to 175 000 a year by 2014.

We urge parents to cooperate with us in making this a success.

We welcome last month’s statement by the three teacher unions, NAPTOSA, SADTU and SAOU, reaffirming their commitment to the Quality Learning and Teaching Campaign from the beginning of 2010.

Honourable Members,

We need to invest in our youth to ensure a skilled and capable workforce to support growth and job creation.

We therefore plan to increase the training of 16-25 year olds in further education and training facilities.

This will enable us to provide a second chance at education, for those who do not qualify for university.

We are working with higher education institutions to ensure that eligible students obtain financial assistance, through the National Student Financial Aid Scheme.

We have also set ambitious targets for skills development, to produce additional engineers and technicians, and to increase the number of qualified mathematics and science teachers.

We must also increase the number of youth who enter learnerships in the private and public sectors.

Honourable members,

Another key outcome is to ensure a long and healthy life for all South Africans.

We will continue to improve our health care system.

This includes building and upgrading hospitals and clinics, and further improving the working conditions of health care workers.

We have partnered with the Development Bank of Southern Africa to improve the functionality of public hospitals and their district offices.

We are also collaborating with the DBSA and the Industrial Development Corporation, in a Public-Private Partnership programme to improve hospitals and provide finance for projects.

Honourable Members,

We must confront the fact that life expectancy at birth, has dropped from 60 years in 1994 to just below 50 years today.

We are therefore making interventions to lower maternal mortality rates, to reduce new HIV infections and to effectively treat HIV and tuberculosis.

We will also reduce infant mortality through a massive immunisation programme.

We will reinstate health programmes in schools.

We will implement all the undertakings made on World Aids Day relating to new HIV prevention and treatment measures.

Intensive work is underway to ensure that this work is on schedule.

We will also continue preparations for the establishment of a national health insurance system.

Fellow South Africans,

We are working hard to ensure that everyone in South Africa feels safe and is safe.

We will take further our work to reduce serious and violent crimes, and ensure that the justice system works efficiently.

We are implementing plans to increase the number of police men and women by 10% over the next three years.

We have identified the fight against hijacking, business and house robberies, as well as contact crimes such as murder, rape, and assault, as top priorities.

We all have a role to play.

Let us participate in community safety forums.

Let us stop buying stolen goods.

Let us always be ready to provide the police with information about criminal activity.

Tshebedisano mmoho etla lwantsha botloko-tsebe.

Compatriots and esteemed guests,

Local government must work.

Municipalities must improve the provision of housing, water, sanitation, electricity, waste management and roads.

We held a meeting with mayors and municipal managers last year.

This provided valuable insight into the challenges in local government.

We also visited various communities and municipalities, including Balfour in Mpumalanga and Thembisa in Gauteng.

After the Balfour visit, we sent a nine member Ministerial team to visit the area to address the issues that had been raised by the community.

A number of issues have already received attention.

I have directed the Ministers to attend to the outstanding matters.

We reiterate, that there are no grievances that can justify violence and the destruction of property.

We have directed law enforcement agencies to take a tougher stance on lawlessness in Balfour and other areas.

In December 2009, Cabinet approved a turnaround strategy for local government.

This will ensure that local government has the correct management, administrative and technical skills.

During this year of action, let us work together to make local government everybody’s business.

We are working to upgrade well-located informal settlements and provide proper service and land tenure to at least 500 000 households by 2014.

We plan to set aside over 6 000 hectares of well-located public land for low income and affordable housing.

A key new initiative will be to accommodate people whose salaries are too high to get government subsidies, but who earn too little to qualify for a normal bank mortgage.

We will set up a guarantee fund of R1 billion to incentivise the private banking and housing sector, to develop new products to meet this housing demand.

Bakwethu,

Ngonyaka odlule sathi, abantu basemakhaya nabo banelungelo lokuba nogesi, amanzi, izindlu zangasese ezigijima amanzi nemigwaqo.

Sathi kufanele babe nezindawo zezemidlalo kanye nezindawo zokuthenga ezinkulukazi eziphucuzekile njengasemadolobheni.

In this regard, we launched the first pilot site of the Comprehensive Rural Development Programme in Giyani, Limpopo in August last year.

Since then, 231 houses have been built.

Progress has also been made in providing infrastructure to support agricultural development, and training for community members.

Access to health and education facilities has improved.

We are implementing similar programmes in seven sites across the country, benefiting 21 wards.

By 2014, we aim to have sites in 160 wards.

We want 60% of households in these sites to meet their food requirements from own production by 2014.

Kancane kancane kuze kulunge, phela bakwethu, kuthiwa nempandla iqala ngenhlonhlo.

We also need to better integrate land reform and agricultural support programmes.

Our success in this area will be measured by the increase in the number of small scale farmers that become economically viable.

Honourable Speaker and Chairperson of the NCOP,

We are not a water rich country.

Yet we still lose a lot of water through leaking pipes and inadequate infrastructure.

We will be putting in place measures to reduce our water loss by half by 2014.

Honourable Members,

As part of our efforts to encourage greater economic growth, we are working to reduce the cost to communicate.

The South African public can look forward to an even further reduction of broadband, cell phone, landline and public phone rates.

We will work to increase broadband speed and ensure a high standard of internet service, in line with international norms.

Fellow South Africans,

This government will ensure that our environmental assets and natural resources are well protected, and are continually enhanced.

Together with Brazil, India and China, and joined by the United States which represented the developed world, we made a significant contribution to the accord adopted at the Copenhagen Climate Change Summit in December last year.

Although it does not go as far as required, it is an important step forward as it commits all countries to respond to climate change.

We will work hard with our international counterparts towards a legally binding treaty.

As South Africa we have voluntarily committed ourselves to specific emission reduction targets, and will continue working on our long term climate change mitigation strategy.

Honourable Members,

We will intensify efforts to promote the interests of South Africa globally.

We will support efforts to speed up the political and economic integration of the SADC region, and promote intra-regional trade and investment.

South Africa continues to play a leading role in continental efforts to strengthen the African Union and its organs, and to work for unity.

We will focus energy on revitalising the New Partnership for Africa’s Development, as a strategy for economic development on the continent.

Fellow South Africans,

The public service has to respond to the call to make this term one of faster action and improved State performance.

We require excellence and hard work.

We need public servants who are dedicated, capable and who care for the needs of citizens.

Government is already working on the development and implementation of a public service development programme, which will set the norms and standards for public servants in all spheres.

Honourable Members,

We continue our efforts to eradicate corruption and fraud in procurement and tender processes, and in applications for drivers’ licences, social grants, and identity documents, among others.

We are pleased with the progress government is making in some areas.

This week, we terminated 32 687 fraudulent social grants payments, valued at R180 million.

Our Inter-Ministerial Committee on Corruption is looking at ways to decisively defeat corruption.

Nga u shumisana rothe ringa bveledza zwinzhi.

Compatriots,

As you are aware, we introduced the Presidential Hotline to make government and the Presidency more accessible to the public, and to help unblock service delivery blockages.

The Hotline represents our determination to do things differently in government.

It has made a difference in the lives of many South Africans.

We can mention Mrs Buziwe Ngaleka of Mount Frere, whose call about her late husband’s pension was the first we took on the first day of the service.

She is with us here tonight.

We also have among us Mr Nkululeko Cele, who was helped to obtain identity documents which allowed him to enroll at Tshwane University of Technology.

These are just two among many success stories.

From these and other examples, we identify weaknesses that should be rectified by various spheres of government.

Through the Speaker, we have invited a multiparty delegation from Parliament to visit the call centre, so that MPs can get a first hand account of the work done.

Compatriots and friends,

I have outlined the main elements of our plans for 2010, our collective commitment as government to the people of South Africa.

The State of the Nation Address provides a broad overview of our action plan.

Ministers will provide the detail in their respective Budget Vote speeches.

Honourable Members, Fellow South Africans,

In November this year, we will mark the 150th anniversary of the arrival of Indians in South Africa.

It provides an opportunity to recognise the important contribution of the Indian community in the fields of labour, business, science, sports, religion, arts, culture and the achievement and consolidation of our democracy.

Compatriots and friends,

Let me take this opportunity to once again extend our heartfelt condolences to the government and people of Haiti on the monumental tragedy that has befallen them.

We are pleased that our rescue teams were able to go and assist.

I would like to especially recognise one South African who never fails to assist in times of disasters, and helps us to promote the vision of a caring society.

We welcome Dr Imtiaz Sooliman of the Gift of the Givers in this House.

Ladies and Gentlemen,
Fellow South Africans,

The hosting of the FIFA World Cup makes 2010 truly a year of action.

We have spent many years planning for this World Cup.

We only have three months to go.

And we are determined to make a success of it.

The infrastructure, security and logistics arrangements are in place to ensure a successful tournament.

As a nation we owe a debt of gratitude to the 2010 Local Organising Committee for their sterling effort.

We wish the LOC Chairperson Irvin Khoza, CEO Danny Jordaan and Bafana Bafana coach Carlos Alberto Parreira all the best for the months ahead.

President Mandela was central in assisting the country to win the rights to host this great event.

We therefore have to make the World Cup a huge success in his honour.

Compatriots, let us also stand behind the national team Bafana Bafana.

Most importantly, ithikithi esandleni bakwethu!

Let us all buy tickets timeously to be able to attend the games.

Fellow South Africans,

As we celebrate Madiba’s release today, we recommit ourselves to reconciliation, national unity, non-racialism and building a better future together as South Africans, black and white.

We are guided by what Madiba said in the dock, that:

“During my lifetime I have dedicated myself to this struggle of the African people.

I have fought against white domination, and I have fought against black domination.

I have cherished the ideal of a democratic and free society, in which all persons live together in harmony, and with equal opportunities.

It is an ideal which I hope to live for, and to achieve.

But if needs be, it is an ideal for which I am prepared to die”.

Inspired by our icon Madiba, it is my honour to dedicate this 2010 State of the Nation Address, to all our heroes and heroines, sung and unsung, known and unknown.

Let us work together to make this year of action a successful one for our country.

I thank you.

This report presents a detailed analysis of changes in both poverty and inequality since the fall of Apartheid, and the potential drivers of such developments. Use is made of national survey data from 1993, 2000 and 2008. These data show that South Africa’s high aggregate level of income inequality increased between 1993 and 2008. The same is true of inequality within each of South Africa’s four major racial groups. Income poverty has fallen slightly in the aggregate but it persists at acute levels for the African and Coloured racial groups. Poverty in urban areas has increased. There have been continual improvements in non-monetary well-being (for example, access to piped water, electricity and formal housing) over the entire post-Apartheid period up to 2008.

From a policy point of view it is important to flag the fact that intra-African inequality and poverty trends increasingly dominate aggregate inequality and poverty in South Africa. Race-based redistribution may become less effective over time relative to policies addressing increasing inequality within each racial group and especially within the African group. Rising inequality within the labour market – due both to rising unemployment and rising earnings inequality – lies behind rising levels of aggregate inequality. These labour market trends have prevented the labour market from playing a positive role in poverty alleviation. Social assistance grants (mainly the child support grant, the disability grant and the old-age pension) alter the levels of inequality only marginally but have been crucial in reducing poverty among the poorest households. There are still a large number of families that are ineligible for grants because of the lack of appropriate documents. This suggests that there is an important role for the Department of Home Affairs in easing the process of vital registration.

This report presents a detailed analysis of changes in both poverty and inequality since the fall ofApartheid, and the potential drivers of such developments. Use is made of national survey data from 1993,2000 and 2008. These data show that South Africa’s high aggregate level of income inequality increasedbetween 1993 and 2008. The same is true of inequality within each of South Africa’s four major racialgroups. Income poverty has fallen slightly in the aggregate but it persists at acute levels for the African andColoured racial groups. Poverty in urban areas has increased. There have been continual improvements innon-monetary well-being (for example, access to piped water, electricity and formal housing) over theentire post-Apartheid period up to 2008.2. From a policy point of view it is important to flag the fact that intra-African inequality andpoverty trends increasingly dominate aggregate inequality and poverty in South Africa. Race-basedredistribution may become less effective over time relative to policies addressing increasing inequalitywithin each racial group and especially within the African group. Rising inequality within the labourmarket – due both to rising unemployment and rising earnings inequality – lies behind rising levels ofaggregate inequality. These labour market trends have prevented the labour market from playing a positiverole in poverty alleviation. Social assistance grants (mainly the child support grant, the disability grant andthe old-age pension) alter the levels of inequality only marginally but have been crucial in reducingpoverty among the poorest households. There are still a large number of families that are ineligible forgrants because of the lack of appropriate documents. This suggests that there is an important role for theDepartment of Home Affairs in easing the process of vital registration.

Trends in SA Income Distribution

Cross reference this study against this presentation for more depth.

Social Cohesion looks at what brings us together as a community and as a country. South Africa systematically went through a process of reverse Social Cohesion during the Apartheid years, the separation of the races was designed to keep cultural groupings apart deliberately and to maintain a form of Social Cohesivness only within that cultural (racial) grouping.

Under the democratic dispensation South Africa is struggling to rebuild its Social Cohesion. Studies (sanctioned by Government) indicate that South Africans are seeing themselves less and less as South Africans and align themselves more by their racial grouping.

Why does it appear that the Rainbow Nation is splitting along racial lines? Has Government failed at unifying its people?

I would argue that its not Government that has failed the people, but rather the people who have failed themselves and failed their country. Government has put into place the necessary mechanisms and frameworks (our constitution for example) to allow its people to connect and bond and to form that common identity. We as South Africans are still dragging the Apartheid mindset with us.

How best then to start practically rebuilding a nation? Sixteen years since the first democratic election and it appears we are moving away from each other. The foundation institution for starting the process of Social Cohesiveness must be at our schools and this is where we are failing, this is where our teachers and principals and school governing bodies are failing. We no longer view the school as the centre of the community (even more central than a Church, a Temple or a Mosque).

What do you think?

India is fast becoming a superpower, says Shashi Tharoor — not just through trade and politics, but through “soft” power, its ability to share its culture with the world through food, music, technology, Bollywood. He argues that in the long run it’s not the size of the army that matters as much as a country’s ability to influence the world’s hearts and minds.

The strategy states that the root cause of much of the failure in municipalities is because of:

• Inappropriate national and provincial government policies, practices and onerous requirements;
• Socio-economic conditions prevailing in many municipalities that are not been adequately addressed through macro, micro-economic and industrial policies and plans of the State;
• Political parties that are undermining the integrity and functioning of municipal councils through intra and inter-party conflicts and inappropriate interference in councils and administration;
• A breakdown of values at a societal level that is breeding unethical behaviour, corruption, culture of non-payment, and lack of accountability;
• Communities that are engaging in destructive forms of protest including withholding of payment for local taxes and services;
• Those municipalities that are not geared for delivering basic services and are not responsive and accountable enough to residents; including to failure to involve communities in their own development;
• Absence of communications resources (people, technology, equipment processes) and no accountability for how and when municipalities communicate to communities

For the most part the strategy is impressive. However (unfortunately this is a common gap with public sector strategy documents ), there is zero allowance for the possibility that this turnaround may not meet the deadlines or intentions it sets.

The local government sphere is not homogenous, the department (Cooperative Governance and Traditional Affairs) is going to need to be aggressive about the implementation of this turnaround strategy.

This is the presentation delivered by Prof Haroon Bhorat at Parliament earlier this month (should have put it up earlier), he and his collegeaues used the 1995 and 2005 Income and Expenditure Survey reports to give an overview of inequality and poverty over the past ten years in South Africa.

Their research shows that:

• Inequality in South Africa increased in the period 1995-2005.
• Absolute levels of inequality remained high and race as well as gender was still critically associated with poverty.
• Income inequality was rising and was very high by international standards and income inequality between African and white people were driving the overall inequality.
• Since 1995 a disproportionate share of economic growth has gone to the top of the income band and social transfer programmes were a key source of rising incomes at the bottom end of the income band.
• South Africa was entrenching its reputation as a very unequal society.
• Social grant transfer programmes were a key source of rising incomes at the bottom end of the income band
• The international trend showed a declining share of national income across a number of countries.

The question raised by Minister Ebrahim Patel (Minister for Economic Development) was whether the country was seeing market outcomes based on economic activities over the last couple of years, regarding rising inequality, with state interventions that partially mitigated the effect on inequality.

This study when compared against the rest of the data coming out of government’s review of its performance shows us the magnitude of the challenge still facing the country.

Last night the Riverlea community took to the streets protesting poor service delivery by local government. Riverlea is the latest community to vent its frustrations angrily about poor municipal service delivery.

Since the new national government administration has come in there has been a lot of change taking place in the local government space. A lot of reviewing, rethinking and restructuring has taken place.

The current Director General Elroy Africa delivered the presentation above yesterday at the Local Government Indaba. Its a frank, harsh presentation outlining the problem areas in local government, it’s great to see this type of presentation and suggestions it contains.

However I still think there is one thing missing what is the model that we are hoping to building local government into? Setting targets around which services should be delivered and improving the execution ability is good but without knowing what the game plan is, we could be spending a lot additional time and money to arrive at a similar state later, because everyone busies themselves with being busy.