11 minute read
LOCAL GOVERNANCE
from African Leader 2022
ANALYSING THE LOCAL GOVERNMENT
LEADERSHIP LANDSCAPE
Is time running out for a slowly declining majority party? Professor Mcebisi Ndletyana analyses the results of the last local elections in light of the national general elections in 2024
That the ANC’s recent electoral decline below 50 per cent tells of an impending loss in the 2024 national election has deservedly attracted extensive analysis.
Equally noteworthy though are new activities the organisation initiated as part of its nomination process. A newly established Electoral Commission, chaired by former deputy president of the party and the third president of the republic, Kgalema Motlanthe, steered the nomination process. Candidates for the mayoral positions were interviewed by a panel that included individuals familiar with the technical intricacies of running local government. While showing a party that is possibly changing, these new initiatives are also instructive of what it takes for a party to initiate change. However, it is doubtful whether these initiatives are sustainable for a considerable period into the future.
Motlanthe’s Electoral Commission represents a notable shi . Previously, the nomination process had not received dedicated and impartial attention. It was part of many functions undertaken within the secretary general o ce (SGO) and only received attention as and when elections approached. e SGO, in turn, relied on its provincial and regional counterparts to oversee processes at the local level. is operational format exposed nominations to bias and
Professor Mcebisi Ndletyana
manipulation. Both provincial and regional leaders are not uninterested parties in the process, they tended to rig processes in favour of their candidates, some of whom were incumbents that had proven hopelessly incompetent during their tenure.
MANIPULATION AND RIGGING
Public participation was then introduced, just ahead of the 2011 local election, to neutralise internal party manipulation. Although the party was still allowed to run its selection process, the selected candidates were subjected to public examination in their respective wards. Since residents were most familiar with the candidates, the idea was that they would choose the best candidate based either on previous performance or reputation and encounters in the community. Besides seeking to inject fairness into the selection process, involving residents was also a test of how each candidate resonated with the general electorate, who would ultimately decide who got elected.
Not much changed, however. Rigging continued to happen. Candidates, or their faction, made sure that attendance at public participation sessions favoured them or their candidates. Meetings started at a di erent time to the one communicated earlier. Some residents would be locked out, or the screening committee would simply forward a di erent name to the one endorsed by residents. e extraordinary level of fraud even triggered widespread protests in the various wards throughout the country. is prompted the party to institute an investigation led by Nkosazana Dlamini-Zuma. e ndings of the task team con rmed widespread rigging. Competent candidates endorsed by residents were disquali ed based on disability. Some were nominated for wards in which they were not resident – a clear violation of guidelines. Others were disquali ed purely based on rumours that they were ‘Cope-moles’ in the ANC.
Dlamini-Zuma’s ndings stressed the importance of an independent body to oversee the nomination process. at need had been realised a long time ago. In June 2005, the party’s National General Council was presented with the proposal to set up an independent body such as the Electoral Committee. e proposal was rejected. Local party elites were intent on keeping national headquarters out of the nomination process. ey even overturned Jacob Zuma’s decision, which the National Executive Committee had accepted, to take leave of his duties as deputy president of the party, following his corruption charge. Zuma’s predicament was iconic of what they considered profound pain – accounting for their conduct to the national o ce.
Sense prevailed, somewhat, at the 2007 national conference. e proposal to set up an Electoral Committee was adopted. Even then, it would take 14 more years for the resolution to see the light of day. In the end, it took 16 years from presenting the idea, adopting, and eventually implementing it. In the meantime, the state of local government was deteriorating with every passing year due to the poor selection of councillors.
One of the major weaknesses, in addition to the neglect of one’s duties, was lack of “papers” – educational quali cations – to meet the requirements of the position. Councillors, for instance, exercise oversight over o cials. is entails more than just “noting” reports presented by o cials; it includes understanding the content and asking relevant questions. In 2021, for instance, roughly 70 per cent had not gone beyond matric, while others hadn’t even reached Grade 12. e conduct of most showed that they never cultivated the habit of reading.
It’s only in the 2016 elections that the party woke up to the importance of technical competence. Candidates were required to present CVs. But, even that doesn’t seem to have improved the level of quali cations among their councillors. e party hasn’t given up entirely on quali cations, albeit it’s applying the criterion unevenly. Now they’re focusing closely on mayoral candidates instead of the whole cohort of councillors. In this previous election, they set up a panel of experts to interview elected councillors. ree candidates were forwarded for interviews. e process was not without the usual shenanigans. Some of the nominated candidates hardly had any matric or post-matric quali cations. In some cases, this was deliberate: the intention was to have only one strong candidate because they wanted that strong candidate appointed. Not that there were no other candidates with comparable quali cations; regional leaders just did not want their favourite candidate to face competition.
For a party that has taken numerous study tours to China, the lacklustre attention to educational quali cations is telling, for example, they’re full of praise for the Communist Party’s prioritisation of technical competence as a prerequisite for public o ce. However, the ANC’s failure to emulate what it claims to adore shows a horrible lack of desire for innovation and disregard for the damaging impact on society. Leaders place a premium on being elected. is means getting support from whoever o ers it. ose leaders, in turn, support the appointment of their “runners” regardless of competence.
LACK OF RESOURCES AND PROFESSIONALISM
e party’s president, Cyril Ramaphosa, continues to make promises of better performance, nonetheless. is will be achieved, he claims, through rigorous and constant monitoring of councillors to ensure they ful l their duties. It’s hard to see that happening. Technical competence remains a glaring problem. It is also doubtful that the organisation has the capacity for constant monitoring. Regional o ces, upon whom this responsibility will fall, su er from poor administrative capacity. ere’s insu cient sta , and some o ces can’t even pay for municipal services, resulting in constant power disconnections. e problem of poorly run o ces has been around for some time, long before Luthuli House’s nonpayment of sta made headlines. Even the recently formed Electoral Commission su ered from a lack of administrative and logistical support.
Ultimately, the ANC suffers from a fundamental problem of lack of professionalism. The party hasn’t quite appreciated that it needs to professionalise its operations to function optimally. This explains inadequate staffing in the SGO, the office responsible for the administration of the entire organisation.
At some level though, what appears odd to some, may be intentional. e malfunction bene ts some of their leaders. eir mischief goes without being noticed by higher structures. When it does turn the corner, the party better hope that the electorate will not have found new suitors among the emerging community organisations and independents. Many had a good showing in this past election, which explains the record number of hung councils. And, the likely poor performance from the party’s councillors will trigger even more alternatives for voters. Time is running out!
Mcebisi Ndletyana is professor of political science at the University of Johannesburg and is the author of Anatomy of the ANC in Power: Insights from Port Elizabeth, 1990-2019
ANATOMY OF THE ANC IN POWER
GAINING TRUST STARTS WITH OPENNESS
While regulations govern how con icts of interest between clients and nancial services providers need to be managed, rms only have one choice: put the customer rst or eventually fail, writes Ola Leepile, CEO of Novare Holdings
Ola Leepile
The nancial services industry is a hotbed of inherent self-interest that constantly pits clients’ needs against those of the business.
Effectively navigating the tensions between professional values and the economics of an organisation begins with a deliberate strategy to be fully transparent with customers right at the onset of the relationship.
A firm’s longevity depends on the success – and trust – of its clients.
A survey of American adults by global research firm Morning Consult found that investment and wealth management companies experienced the biggest loss of trust among financial services firms over the past year as markets and economies experienced unprecedented uncertainty and volatility because of the coronavirus pandemic. e COVID-19 outbreak has also disrupted the traditional ways of nurturing relationships through regular face-to-face interactions.
Investors seek to grow their wealth or the pension fund assets they help oversee at the highest possible rate and lowest cost. e advisers or fund managers hired to help them reach these nancial goals have an added responsibility: they need to make money for themselves or the rms they represent through consulting charges, commissions on product sales, performance fees, or increasing funds under management.
Many nancial services companies run an array of operations, all under the same umbrella. ese could include asset managers, private equity or real estate funds, investment consulting businesses aimed at big institutional investors, tied nancial advisers targeting individuals, life and short-term insurance, banking or even brokerages. While cross-selling opportunities abound, so do the risks of not doing what is suitable for customers.
TRANSPARENCY, DISCLOSURE AND ENGAGEMENT
While South African regulations recognise the industry’s intrinsic conflicts, failing to communicate and regularly emphasise these to clients could lead to signi cant reputational harm, misunderstandings, or withdrawals. e General Code of Conduct for Authorised Financial Services Providers and their Representatives requires that any personal interest that could lead to a potential con ict must be avoided. Providers must disclose if, for some or other reason, this isn’t possible. All reasonable steps need to be taken to mitigate the con ict of interest to treat the client fairly.
These disclosures don’t invalidate the role of a financial services provider; they are customary and generally accepted industry practices to ensure that investors or the board of trustees of a pension fund are comfortable with the position of conflict. Trustees must ensure that the situation doesn’t undermine their governance structures and decide whether to go ahead.
MANAGING CONFLICT OF INTEREST
Like most other nancial services companies, Novare Holdings has adopted a con ict-of-interest management policy, which, as its guiding principle, clearly spells out that the welfare of our clients must always come before those of the business. e group o ers real estate funds with exposure to sub-Saharan Africa, impact investments, actively managed investments allocated to external money managers (typically hedge funds), and investment consulting across a range of asset classes.
A governing body appraises all contracts upon inception and regularly afterwards to ensure that the company’s different businesses operate objectively toward our clients, free from bias.
There are many situations where potential conflicts can arise. An unscrupulous asset manager could decide to make a profit or avoid a loss for the firm at a client’s expense, desire an outcome or service that clashes with the customer’s needs, or even favour one client over another.
Clients can guard against some of these risks by engaging investment managers as long-term partners, where clear roles and responsibilities for all parties are outlined right from the start. Investors should regularly assess their managers against their mandates, peers, benchmarks, and the set targets and metrics. Compensation structures must align with the financial goals of both parties, be transparent and easily understood by all.
Avoid nancial services providers that don’t have a con ict-of-interest management policy. Agreements must be open to regular scrutiny with the ability to evolve to changing circumstances.
Policies are meaningless if not implemented and demonstrated in each interaction with a client – clearly and boldly, not in the ne print.
If an adviser recommends a group product to a client or board of trustees, the reasoning must be justi able, comparable, and backed up by data. On the ip side, if an investment adviser believes a client will be better o by withdrawing funds from the group and placing these with another fund or manager that person should feel empowered to do so without fear of backlash.
TRUST AND CONFIDENCE ARE ESSENTIAL
Trust is the bedrock of the financial services industry, which plays a crucial role in an economy’s growth and development. The pandemic has made most consumers poorer, posing risks to the savings industry as unemployment increases and consumers cut costs.
South African savings, as a percentage of gross domestic product, fell to 14.8 per cent last year – the lowest level since 1998 – compared with a global average of 22 per cent, according to data compiled by the World Bank.
A higher savings rate is crucial to accelerating economic growth, as this capital is put to productive use by financing investments, infrastructure developments, lending, or even corporate expansion strategies. Confidence is the underlying force that binds all this together.
Financial services rms exist because of their clients. Doing good by them is the most credible way of building a thriving savings and investments culture and a prosperous, sustainable business.
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+27 (0) 11 447 9605 info@novare.com www.novare.com
