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13 February 2024 Photo SUPPLIED
Prof Sethulego Matebesi
Prof Sethulego Matebesi is an Associate Professor and Head of the Department of Sociology at the University of the Free State (UFS).

Opinion article by Prof Sethulego Matebesi, Associate Professor and Head of the Department of Sociology, University of the Free State.


President Cyril Ramaphosa’s 2024 State of the Nation Address (SONA) has, as expected, drawn mixed reactions. The speech placed strong emphasis on addressing significant sources of discontent and division within the country, such as gender-based violence, unemployment, crime, load shedding, poor service delivery, and corruption. The speech underscored the President’s commitment to economic reform and job creation through initiatives such as the Presidential Youth Employment Intervention

At a time when South Africa is on the eve of national and provincial elections, where the youth hold immense potential to shape the outcome – if the registrations can translate into voting – it is interesting to note that the President’s approach of using the analogy of young ‘Tintswalo’ has drawn considerable debate.

‘Tintswalo’ and President Ramaphosa’s soft-line approach

While the President’s approach in utilising the positive life trajectory of Tintswalo – a young girl born in democratic South Africa – may have been intended to inspire hope and showcase progress for many since the end of apartheid, critics argue that it overlooks the persistent challenges that many young citizens still face. But is focusing on a single success story providing a misleading impression of the overall state of the nation and downplaying the continuous challenges South Africa faces?

Public opinion can vary, and different individuals and groups may have different perspectives on the nation’s current state. For many, the ANC-led government has created a nurturing environment through various policy interventions, and a system of social transfers geared towards sustainable and productive investment in citizens. This view was supported by the World Bank, which described the country’s policies and programmes for the poor as ‘effective, well-targeted, and providing sizeable benefits to the poorest households.’ 

Indeed, the post-apartheid environment and individual agency enabled today’s Tintswalos to prosper. These deliberate programmes and policy interventions provide an environment that fosters educational attainment, instils values, and encourages personal growth. However, it is important to acknowledge that not all young people have equal access to resources and opportunities.

President Ramaphosa did not appear harsh, but rather dignified in using political persuasion to convince the world of the government’s resolve to strive for equitable access to education, health care, and social services to ensure that all young people have a fair chance to prosper. 

And, of course, relying on political persuasion is not hard. 

The President, an advocate of the soft line approach, has perfected the art of smothering citizens with embraces – smothering that has lately been peppered with the phrase: ‘ba rata kapa ha ba rate (whether they like it or not), we have done well.’ He did not appear harsh each time he uttered this phrase, but dignified in the conviction of the achievements of the government he has been leading since February 2018. However, the effect of the Tintswalo analogy – accentuating the state’s weaknesses rather than obscuring them – is the opposite of what was intended.

The bottom line is that the number of unemployed, politically disengaged, and disgruntled youth is growing, as is their ferocity.

Shrinking fiscal resources and the central role of institutions

As South Africa achieves a significant 30-year milestone of political freedom, the protection of individual freedoms and the establishment of institutions to safeguard democratic values stand as noteworthy achievements. However, amid the celebrations, shrinking fiscal resources and the overarching impact of increasingly reduced budget cuts for the higher education sector will hamper the progress of a new generation of Tintswalos. It has repeatedly been proven that education is an essential pillar of a country’s economy.

In Why nations fail: The origins of power, prosperity and poverty, Acemoglu and Robinson underscore the significance of inclusive economic institutions. They argue that countries differ in their economic success because of their different institutions, the rules influencing how the economy works, and the incentives that motivate people. 

Consider for a moment the difference between teenagers in North and South Korea.

According to these scholars, those in the North grow up in poverty and know that they will not become prosperous due to the propaganda they are fed in school. Those in the South obtain a good education, with incentives encouraging entrepreneurial initiative and creativity.

In South Africa, one of the most disheartening anomalies of our nation’s state is the blatant failure to ensure consequential management for the recurring unauthorised, irregular, fruitless, and wasteful expenditure by municipalities and state institutions reported by the Auditor-General. This is indicative of political power that is exercised arbitrarily.

In steering its future development, a South Africa that embraces diversity, prioritises economic recovery, invests in education, and leverages the incentives provided by state institutions will ensure equitable access to services and opportunities and allow all young people a fair chance to prosper, regardless of political affiliation.

News Archive

Producers to save thousands with routine marketing strategies, says UFS researcher
2014-09-01

 

Photo: en.wikipedia.org

Using derivative markets as a marketing strategy can be complicated for farmers. The producers tend to use high risk strategies which include the selling of the crop on the cash market after harvest; whilst the high market risks require innovative strategies including the use of futures and options as traded on the South African Futures Exchange (SAFEX).

Using these innovative strategies are mostly due to a lack of interest and knowledge of the market. The purpose of the research conducted by Dr Dirk Strydom and Manfred Venter from the Department of Agricultural Economics at the University of the Free State (UFS) is to examine whether the adoption of a basic routine strategy is better than adopting no strategy at all.

The research illustrates that by using a Stochastic Efficiency with Respect to a Function (SERF) and Cumulative Distribution Function (CDF) that the use of five basic routine marketing strategies can be more rewarding. These basic strategies are:
• Put (plant time)
• Twelve-segment pricing
• Three-segment pricing
• Put (pollination)(Critical Moment in production/marketing process), and
• Pricing during pollination phase.

These strategies can be adopted by farmers without an in-depth understanding of the market and market-signals. Farmers can save as much as R1.6 million per year on a 2000ha farm with an average yield.

The results obtained from the research illustrate that each strategy is different for each crop. Very important is that the hedging strategies are better than no hedging strategy at all.

This research can also be applicable to the procurement side of the supply chain.

Maize milling firms use complex procurement strategies to procure their raw materials, or sometimes no strategy at all. In this research, basic routine price hedging strategies were analysed as part of the procurement of white maize over a ten-year period ranging from 2002–2012. Part of the pricing strategies used to procure white maize over the period of ten years were a call and min/max strategy. These strategies were compared to the baseline spot market. The data was obtained from the Johannesburg Stock Exchange’s Agricultural Products Division better known as SAFEX.

The results obtained from the research prove that by using basic routine price-hedging strategies to procure white maize, it is more beneficial to do so than by procuring from the spot market (a difference of more than R100 mil).

Thus, it can be concluded that it is not always necessary to use a complex method of sourcing white maize through SAFEX, to be efficient. By implementing a basic routine price hedging strategy year on year it can be better than procuring from the spot market.

Understanding the Maize Maze by Dr Dirk Strydom and Manfred Venter (pdf) - The Dairy Mail


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