SA's rule makers resist having rules applied to them

Published Jan 27, 2009

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Yesterday the bill was the subject of public hearings and deliberation in the national council of provinces (NCOP) select committee, where parliament's accounting officer, Zingile Dingani - better known as the secretary to parliament - came out against the legislation. Jenkins sat by his side very quietly.

The bill - originally drafted about six years ago by University of Cape Town academics Christina Murray and Conrad Barberton - has been the subject of a battle between finance minister Trevor Manuel and the executive authority of parliament, in the form of the speaker and NCOP chairman Mninawa Mahlangu.

The former speaker - Baleka Mbete, who is now deputy president - spearheaded the process to get the bill passed, in an effort to give parliament to have a greater say over its own financial management.

After the victory of the Jacob Zuma faction at Polokwane in December 2007, the stage was prepared for the bill's passage.

The treasury has wondered all along why the Public Finance Management Act - which governs budgets and the spending of government departments and the judiciary - is not good enough for parliament.

Parliament, however, wanted to boost its independence. The bill was passed last September by the national assembly.

Now the NCOP looks set to delay the legislation. Finance select committee chairman Tutu Ralane says mandates still have to be negotiated with the nine provinces, which the NCOP represents.

The jury is out on whether the process can be completed by the time the election takes place, probably in April, but the bill seems to be contradictory on just who is accountable for the financial management of parliament. It appears to specifically exclude the speaker - who is now Gwen Mahlangu-Nkabinde - and the NCOP chairman from responsibility for the oversight of parliament's budget preparation.

Three years ago parliament fired its chief financial officer, Harry Charlton, who exposed the Travelgate travel coupon saga, for "an indisputable colossal contempt" for parliament's prescribed policies and procedures. Charlton, who subsequently won a labour court action, which is still being appealed by parliament, is now apparently happily living in Australia. His matter is before the labour appeal court.

Parliament had better get its own rules about financial management right.

The SIM card shuffle

Vodacom continues to lose market share, though not on a large scale.

The latest figures show a decrease of 1 percentage point to 52 percent for the three months to December. About two years ago, it had 58 percent market share.

Last year Vodacom attributed the reason for the fall in market share to the cancellation of about 2.5 million non-revenue generating SIM cards. Those should be deleted by now.

Vodacom's customer defection rate, or churn, fell by 1.1 percentage points to 47 percent for prepaid, while that of contract remained steady at 9.7 percent. This could probably explain the slight decrease.

Nevertheless, Vodacom is still signing new customers, despite predictions that the industry is reaching saturation.

Vodacom has always been adamant that it can still increase its subscriber numbers by targeting people who don't have cellphones. The 26.5 million subscriber increase is mainly due to people who are adding to their SIM cards, not new people buying their first SIM cards.

Whether Vodacom will be able to reach first-time cellphone users remains to be seen, given current economic conditions.

But during the festive period cellphone operators experience many new connections because people have extra disposable income after receiving Christmas bonuses from employers. There are also special deals to entice them.

Hence analysts are questioning whether the increase in prepaid average revenue per user will be maintained.

Looking at the latest figures from Vodacom, there is still room for growth in South Africa and the continent. page 19

Too late for mom and pop

While it was the initial intention decades ago, when Clicks was established, for it to be a traditional US-styled drugstore - selling prescription medicines, soda pops and just about any non-health and beauty products that consumers would buy - this move was thwarted by the government.

So Clicks sold only over-the-counter medicines, cosmetics and an assortment of small appliances and tableware.

Pharmacies, on the other hand, were limited to selling drugs, toiletries and make-up.That all changed in 2004.

Privately owned Dis-Chem pounced and New Clicks followed with its Clicks chain. But just as Clicks started putting dispensaries into its stores, then health minister Manto Tshabalala-Msimang came in with rules to limit dispensing fees, where pharmacists earn their margins.

This move may have had good intentions, but it made some mom-and-pop pharmacies unviable. In some small towns the drugstores closed, forcing the poor to travel further afield for medicines. It now appears that current minister Barbara Hogan may give a little margin back to the pharmacies by pursuing an out-of-court settlement with independent chemists.

But while Hogan, who is also notably a champion of HIV/Aids activists, might be doing a lot to undo the work of her predecessor the Drugstore Cowboy, many neighbourhood pharmacists may not be saved.

Dis-Chem and Clicks' introduction of the economies of scale that allow deep discounting could be too heavy a blow. This could lead to corporate pharmacy continuing to gain at the expense of independents.

Edited by Peter DeIonno. With contributions by Donwald Pressly, Thabiso Mochiko and Tom Robbins

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