Hands up: who has not yet lost faith in the government's ability to deliver services? Even essential services, such as electricity and water, are on life-support of dubious quality.
The outlook is grim. Allow me to cheer you up: it's about to get a whole lot grimmer.
Eskom, Home Affairs, traffic and licensing departments, Water Affairs, Health, Alexkor, SAA - one is hard pressed to name a government department or state-run organisation, other than the taxman, that is running smoothly.
The Department of Communications is in as much disarray as Sentech and the SABC, the parastatals it is supposed to oversee. Besides unseemly legal wrangles between the minister and his director-general, almost everyone in the department stands accused of being ignorant of, and often flouting, the laws under which contracts must be awarded. All Parliament has been able to get out of the department, besides some yellowing file material on a conference held four years ago, was a qualified audit report for which it blames the dead.
All of this is survivable for the private sector, if it just gets on with delivering (or self-providing) services that the government fails to deliver. It doesn't help to toyi-toyi when you know the capacity and ability to deliver is simply not there. Just stop expecting service delivery, and do it yourself. This may be expensive, but it is certainly possible.
The disintegration of the Companies and Intellectual Property Registration Office (Cipro), however, raises matters to a whole new level. It can destroy the very fabric of commerce and commercial law in South Africa.
The situation appears to be critical for the bureaucracy that registers legal title to companies, patents and trademarks.
“If left unchecked, this endless trickle of scandals, examples of maladministration and poor leadership will lead to the slow and painful death of Cipro, and the DTI [Department of Trade and Industry] itself will not escape unscathed,” the Democratic Alliance's Jacques Smalle told ITWeb's Nicola Mawson. Smalle shadows the DTI's minister, Rob Davies.
One might expect the official opposition to exaggerate. However, the evidence is mounting that Smalle's description is objective, dispassionate and accurate. There are a slew of unanswered questions about tender irregularities involving Cipro. As a result, the DTI has had to take the hugely embarrassing step of delaying the implementation of the new Companies Act by six months, until April next year. It is anyone's guess whether Cipro will be ready to administer it by then. Despite a supposed database cleanup, which resulted in an astonishing 750 000 company de-registrations, news keeps breaking of more companies that were fraudulently established for fraudulent purposes, usually to divert tax rebates payable to legitimate companies into the coffers of criminals. The most high-profile case involved Kalahari Resources, a mining company that was, to put it plainly, stolen. Like one might steal a pen.
It doesn't help to toyi-toyi when you know the capacity and ability to deliver is simply not there.
Ivo Vegter, ITWeb contributor
The CEO of Business Unity SA, Jerry Vilakazi, is quoted as saying, rightly: "A fully-functional Cipro is critical."
To enforce contracts and transactions, it is essential to be able to prove rightful ownership of the assets, entities or goods under consideration. The most basic function of government, beyond protecting the lives of citizens, is to establish and protect their property rights. How can they be protected if the rights cannot even be established in the first place?
Economist Hernando de Soto famously blamed the lack of formal title to property in much of Africa for the continent's inability to pull itself out of its economic malaise. Without title, enforceable in court, assets cannot be used as collateral to raise capital for new or expanding business operations.
Title to companies, trademarks and patents is exactly what Cipro administers. Cipro should be an annoying bureaucracy that requires clay tablets carved in triplicate to be transported via mule train to officials who discuss soap operas over lukewarm instant coffee made beneath air-brushed posters of kittens with thought bubbles containing sickly-sweet quotations from the Dalai Lama, while forwarding chain letters that warn how greedy supermarket chains kill innocent babies or gangs of urban wolf-dogs spread rabid lycanthrope to unsuspecting virgins.
Sadly, this does not describe Cipro. It appears to have lost even the ability to attach animated 'smileys' to e-mails set in elaborately coloured Comic Sans.
If companies cannot use Cipro registration records in court, because they are incorrect or missing, and if they hold no provable legal title to their property as a result, how will they be able to transact with one another? Why should anyone bother to pay their debts if the very existence of their creditors cannot be proven in court? Why would anyone pay tax if the taxman cannot prove they exist, and sends refunds to criminal gangs instead?
The implosion of Cipro would reduce the entire formal economy to an undocumented, informal economy, without even the legal recourse to peacefully settle property and contract disputes.
Never mind Eskom or Water Affairs. You can buy a generator or a water filter. What you do need, however, is for companies that sell generators and water filters to exist and trade in South Africa. That - the fabric of commercial activity in South Africa - is what depends on a functional Companies and Intellectual Property Registration Office.
Critical? I think Mr Vilakazi understates the case.
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