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Articles by Tim Cohen
TIM COHEN: Why everybody suddenly wants to be a bank
I live close to a small town, Prince Albert, as I have mentioned before (some would say endlessly). We in the rural areas have an informal town-rating system. If you have a Pep, you have made it onto the first rung. We have one. Tick. We are what might be called a “one-Pep town”. The next step up is a Spar. We have that too. And we have an Absa. In the next-sized town, you get all of those plus a Standard Bank and, possibly, if fortune has smiled upon the municipality, a Checkers.
TIM COHEN: The Liz Truss theory of municipal finance
One of the more extraordinary facts underlying the National Treasury’s latest confrontation with local government is not merely that it has temporarily withheld July’s equitable share transfers to 69 municipalities. It is that nearly half of South Africa’s municipalities have apparently thought it perfectly acceptable to pass budgets they had no realistic prospect of funding. You almost have to admire the optimism.
TIM COHEN: Beneficiation is not a spell
There are few words in South African economic policy more seductive than “beneficiation”. It has everything: moral uplift, industrial ambition, a pleasingly muscular rhythm and the promise that somewhere, just beyond the next cabinet lekgotla, a lump of ore will be persuaded to become a dishwasher, a turbine blade or perhaps a small electric car by force of patriotic will. It is the sort of word that makes policy documents stand up straighter.
TIM COHEN: Why ANC likes joblessness stats
Sometimes it’s so much more enlightening to speak to a retired CEO than a current one. Existing CEOs obviously have enormous responsibilities, many of which entail not unnecessarily infuriating one or other constituency; staff or unions, or shareholders ... or government. It’s just endless. A jobless state But once they are retired, all those responsibilities slide away somewhat, and what’s left is a whole bucketload of experience and history and knowledge.
TIM COHEN: BEE’s problem is not its enemies. It is its friends
At the Nedbank Top Empowerment Conference in Sandton last week, trade, industry & competition minister Parks Tau addressed the criticism that broad-based BEE (BBBEE) has “failed” because huge “gaps” remain. He made the following revealing comment: “The argument is not new, and it is not neutral. The global backlash against affirmative action is a politically driven campaign by those who have always opposed economic redress.” The problem with BEE is not its enemies.
TIM COHEN: The department of grand plans and small results
South Africa’s industrial policy has always had the air of a committee trying to assemble a Boeing from a leftover Meccano set, three slogans and a strongly worded cabinet statement. The latest contraption is the new industrial development strategy, or IDS, which arrives just as manufacturing has once again reminded everyone that it is not in the mood to be the cavalry.
TIM COHEN: When Chuckles stop being funny
The Great Woolworths-Beyers Chocolates/Chuckles War began as a supplier-contract quarrel and has turned, at least in my mind, into a rather revealing South African argument about corporate power, intellectual property, local manufacturing and whether a packet of malted chocolate balls can carry the moral weight of an entire economy. And it’s interesting because from their own points of view, both sides are kind of right. The chuckles debate The facts as I understand them are these.
The bubble that isn’t quite a bubble yet
Once every decade, according to Chen Zhao, chief global strategist and founding partner of Alpine Macro, American markets get themselves into a bubble. It’s almost a constitutional obligation, as though the framers had tucked in a small mischievous clause requiring one act of financial madness per generation. Do we have one now?
TIM COHEN: Positively junk
It’s hard to believe, but journalists do sometimes just get tired of reporting bad news, so it’s with some enthusiasm that I record that two of the major ratings agencies have had good things to say about South Africa recently. But then you read closer, and well … actually the news is not that good after all. Moody’s did log a change late last month, but it was an outlook change — from stable to positive — not a ratings upgrade. Still, you don’t look a gift horse in the mouth.
TIM COHEN: A ticket to Mars, but no hand on the wheel
Is the proposed SpaceX listing the high-water mark of the modern cult of the founder — the moment public markets accept that an extraordinary entrepreneur should be allowed to take the public’s money while remaining largely beyond its control? Or is it the moment when, in their enthusiasm for the biggest flotation in history, American markets decide shareholder protection is best left on the launch pad? The question matters because SpaceX is proposing something unusually uncompromising.
TIM COHEN: NHI and the art of adulting
It may be my imagination, but it seems to me the world has recently been adding new words to the English language at a furious pace. Presumably it has something to do with the ubiquity of social media; new words get proposed, discarded or adopted very quickly, almost as if there were a new word clearing house. I wonder if there is a word for that? The great thing about the new words is that they often contain an element of sarcasm or humour.
TIM COHEN: This train goes to a castle in the air
Late last month, the department of transport released for public comment its draft national master plan to revitalise, modernise and expand South Africa’s rail system, covering freight rail, commuter rail, long-distance passenger rail and high-speed rail. I’m not a transport policy expert, but since the document is out for public consultation, and I’m a member of the public, allow me to spout forth. I love the fact that it’s very ambitious. I also worry that it’s very ambitious.
TIM COHEN: The legal sector’s transformation trial: the macrobiotic theory of BEE
History has almost forgotten the hippies — and some would argue this is no bad thing. Hippies introduced the world to some complete outrages, including bell-bottomed jeans, the idea that every meal needs lentils, hugely long guitar solos, drum circles and long, unwashed hair. And that’s just the men we are talking about. Many of the achievements of hippies are now disguised by their ubiquity.
TIM COHEN: Embracing crypto like it’s 1933
Last May, in Standard Bank of South Africa v South African Reserve Bank in the Pretoria high court, judge Mandlenkosi Motha held that cryptocurrency is not legal tender in South Africa and, for the purposes of the case, does not fall within the concepts of “money” or “capital” in the old exchange control regulations. Motha held that trying to squeeze crypto into the definition of money was “strained and impractical”.
Hail Mary
FirstRand was, until recently, South Africa’s largest bank by market value, built on an astonishing 28-year run since it was founded through the merger of Rand Merchant Bank (RMB), First National Bank (FNB), and insurance company Momentum. The bank, which occupies a sprawling block at Merchant Place in the heart of Sandton, incubated some of South Africa’s powerhouse financial service firms too, including OUTsurance and Adrian Gore’s Discovery.
TIM COHEN: An ubuntu ghost in the machine? SA’s ambitious AI roadmap
South Africa has developed a new proposed policy for AI, which was gazetted this month. So the obvious thing to do is to ask various AI models what they think of it. Irritatingly and suspiciously, they like it.
Blame game on the forecourt
Whenever something bad happens — and FirstRand’s R17.7bn provision for the UK vehicle commission scandal is pretty bad — the natural question is this: who is to blame? As it happens, there is quite a lot of blame to go around, and not all of it rests with the banks. To understand why, start with the bare facts.
TIM COHEN: Sorry, it’s about leadership
Some years ago I was, for a short period, editor of Business Day. The experience was exhilarating, brutal, exhausting, wonderful and — there is no other way of saying it — pedagogic. All of the other stuff was easy to anticipate, but the educational part was a surprise. Shortly after I became editor, an old mate, Patrick Bulger, who was night editor of Business Day for a long time, gave me a piece of advice. There are some things only the editor can decide, he said.
Unofficial Swazi royalty
Now, was the making of Natie Kirsh, even if South Africa was almost the unmaking of him. Kirsh cobbled together a consortium, intending to build a brewery in Swaziland. The Swazi government, however, persuaded him to buy a maize milling business from the Reilly family. eSwatini flag Over the next few years, Kirsh built that business into a formidable enterprise, helped by a milling monopoly granted by the government.
Jetro, and the deep value in being gloriously unglamorous
The blockbuster sale of Natie Kirsh’s US business, Jetro Restaurant Depot, offers three great lessons of entrepreneurship. Find a niche; serve it properly; and then just keep doing it, with religious consistency, for decades. Genius in the model That may sound too simple for modern tastes. We prefer our billionaires with rockets, code, electric dreams and names that trend on social media. Kirsh’s route was more prosaic — which is precisely what makes it so impressive.
TIM COHEN: The IPOs that could rewire capitalism
Before the end of the year, or possibly by early next year, three rather large IPOs are going to hit planet Earth: SpaceX, OpenAI and Anthropic. Journalists are renowned for being breathless, but this is all kind of mind-boggling. And it’s not just the size — though that is gobsmacking enough, probably around $3-trillion in collective market cap. But the broader significance is also shape-shifting.
TIM COHEN: Some driving lessons for auto policymakers
South Africa’s auto industry is in the middle of a very awkward traffic circle: one exit points to renewal, one to irrelevance, one to a future assembled in China, and one to the familiar national lay-by marked “nice, shame about the implementation”. Going in circles That, more or less, is the message of audit firm BDO South Africa’s new automotive sector report for 2024/2025. It is a sober, useful document, and also a mildly alarming one.
TIM COHEN: The price of pretending BEE has no price
Political discussion around BEE is in the ascendancy. The DA has at last found its voice on the topic, calling for a nonracial alternative. In partial response, one supposes, President Cyril Ramaphosa said in his state of the nation address (Sona) in February that the government would “refine, realign and strengthen our broad-based BEE framework to ensure that it supports greater transformation and inclusive growth”. Or to put it another way, Houston, we have a problem.
TIM COHEN: The Spike, the Squeeze and the Scar
One thing recently departed scenario planner Clem Sunter understood better than most is that the future is not a single forecast; it is a set of alternative roads, each littered with different hazards. Sunter, who died last month, liked to invoke scenario-planning pioneer Pierre Wack’s warning that it is better to be vaguely right than precisely wrong.
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