[Richard Branson has recently made enormous investments in South Africa. He is starting by taking the cell phone industry by storm. Then he plans to enter the homeloan market.

He has people quite excited with his ideas, and they seem pretty good. I agree people have been getting ripped off in the cell phone industry, especially with cell phone contracts. I have experienced it myself.

But I think there is much more to this than meets the eye.

I have been pointing out for several months the various evidence pointing to President Mbeki’s CIA & MI6 influence and co-operation especially as they seem to have induced him to take action against Jacob Zuma who is an outright communist who would have been the next president.

Mbeki’s main theme since he became President is his great “African Renaissance”. They wrote books about it, and he gave many speeches. But as far as I can tell, his “African Renaissance” is largely a damp squib. Here and there the odd company managed to make a success in Africa. MTN, one of our more kick-ass cell phone companies expanded into Nigeria and other African countries and is even busy in Iran.

But… that African Renaissance otherwise is not happening.

Mbeki is in trouble. Using sleight of hand, they have been trying to claim that there is 5 or 6% economic growth – but nobody can explain how unemployment can remain at 40%.

Since the CIA mainly operates using MONEY and business, I can’t help wondering whether Richard Branson’s appearance in South Africa wasn’t aided by them.

I think this country is standing at the cross roads. I think the USA and UK Govts have seen the ugly head of fully blown communism rearing its head here in the form of Jacob Zuma. And I wonder if that is part of the reason why Branson is here. Maybe Sir Richard Branson is Liberal Capitalism’s Knight in shining armour come to save South Africa.

I often remarked that President Mbeki was talking loudly and boldy about the African Renaissance, in the hope that if he talks loudly enough that someone will actually do something. And it appears to me, little has actually be done. I know of many companies who tried to expand into Africa and they failed. But here in South Africa, nothing much has happened either.

The housing boom, as I wrote, is the result of Affirmative Action and the creation of a black middle class which is up to its eyeballs in debt buying houses and cars. Now interestingly, the new black middle class could be the people hardest hit by the rising interest rates. The interest rates are starting to rise. It looks as if our 2nd interest rate hike this year is due shortly. So this “boom” created by all this debt looks like it is coming to an end.

But our “boom”, was really just the increase in property prices. And that is topping out now. The top end of the market topped out almost a year ago. The medium level house prices are still rising, but at an ever slower rate. I actually work in a housing finance company, and I have seen internal company statistics which show the prices topping out.

Now let me tell you what is happening internally in the company I work for. The company I work for was probably the single biggest beneficiary of the housing boom which started in 2000. A friend of mine who is a property valuer told me that house price trends in South Africa work on a 5 year cycle. And the statistics confirm that we’re topping out and slowing down in the housing finance market. The company I work for controls just over 20% of the homeloan market in this country. And what is our management doing – the management who rode the crest of the wave of this boom? I’ll tell you: Cost cutting! There is a moratorium on hiring new staff. Everything is about cutting costs left right and centre. New managemeers have been appointed who are going through everything from contracts to worker’s timesheets to cut cost. We are battening down the hatches preparing for bad debt, etc.

Richard Branson is, in my opinion walking in on the back end of what was a boom in housing finance.

Now Branson is a talented man – I do not doubt that. He thinks big, and is a mover and shaker.

But can Branson actually take on South African businesses? Remember Black Economic Empowerment… BEE businesses hit the wall one after another as they tried to seize portions of South African industry. It turned out that the existing businesses are much tougher than people realised. The established businesses, which are largely run by white managers (though those percentages are falling), turned out to be tougher nuts to crack, and most of them ended up buying up the burned out shells BEE companies and using them for tax write offs as losses!!

Our Management may have their faults, but I wonder whether Branson can survive South Africa.

One concept which we whites from Africa try, with little success, to explain to foreigners is that in Africa “nothing works”. It is something you need to see to believe. Just because “democracy” or the “free market” works in Europe and America does not mean it works in Africa. Africa is another UNIVERSE. In this universe, the only true growth that was every achieved here was by Colonial/Apartheid methods – and these methods evolved over centuries of living here.

So we are at a point where we will watch naive Western Liberal Capitalism walk into this continent… set to change it. Keep in mind, that when Whites first came here, they also had liberal tendencies… but Africa CHANGES YOU. And if you don’t change… you will FAIL!!

I believe that our Colonial/Apartheid methods were perfectly suited to Africa and that these are the only methods that actually work. And Richard Branson may be the man to watch.

Many lesser businessmen… even from overseas… either invested here with caution, or were scared away by the crime, etc.

So perhaps the CIA and MI6 hope that Branson can achieve something great during the mediocre rule of President Mbeki. Maybe he is here to try, in the last dying gasp… to prevent this country from turning to the Dark Side and heading off into fully blown communism.

But this country is already highly socialist, and the labour laws and rules here undermine business.

So can Branson work in an environment where the very Govt he is trying to glorify is itself ripping the carpet from under his feet?

This country has seriously NEGATIVE legislation which sucks the profits out of companies.

I am going to watch Richard Branson’s progress with great interest.

In the cell phone market, he is making waves… and it looks as if he stands a chance there … but I am much more skeptical about his movement into the homeloan market.

The lower you go down the property market, the riskier it becomes. Now President Mbeki has attacked the banks for not helping the blacks there. But as I wrote … back under Apartheid… there was a *MASSIVE* move by huge consortiums of businesses back then to build lots of cheap housing. I know because I consulted to one company at the heart of it. The ANC encouraged the blacks to not pay their monthly premiums. So the ANC did everything they could to railroad and sabotage that capitalist initiative. And they succeeded. But the blacks these days, thanks to the ANC’s indoctrination over the years, are financially irresponsible and spiteful. They default on their debts. So I would actually like to see Richard Branson move into the bottom end market… because I think he will fail. The banks know, from experience, how risky loans to the blacks are.

So I am going to watch Richard Branson’s progress with GREAT INTEREST. He entered here all glitsy and glamorous-like… I’m all for capitalism. But I don’t think that capitalism and the ANC can co-exist. I think there are limits to how far the ANC will go to helping capitalism to succeed here. At heart, they’re really socialists – and the other half of them are outright communists.

I’d like to see how Branson does, and how much headway he makes here.

Do you remember Bill Clinton and his statements that investing in Africa gives you 30% returns!!! Yes, he said that. You would have thought every business on the planet would have invested in S.Africa after that. But they didn’t! MacDonalds arrived here. Now KFC had been here for decades. Hey we had KFC during Apartheid! But KFC is well established and knows its South African market well. Then MacDonalds walked in, thinking it would sweep all before it. And yes, MacDonalds was fun… and it was a novelty for a while eating MacDonalds, until we got bored with it. I have chuckled… because I think Clinton’s 30% remark was based on the very early, novelty years of MacDonalds. But I chuckle… there are some places where I see a large MacDonalds next to a small KFC outlet… and the KFC outlet has 3 times as many customers as the much bigger, glitzier MacDonalds standing next to it! Now MacDonalds is just one of many fast food outlets… and nothing special to boot either.

So is Richard Branson going to corner the Homeloans or Cell phone market, or will he in time also just in time become another boring outlet? Will he change South Africa? Will he actually walk out of here with a profit in 5 years time?

Our currency, which has been uncannily stable… has been moving downwards of late… suddenly… and I will be watching this. Will it start sliding even lower? Prior to its “unnatural stability”, about 5 years ago, the Rand was plummeting. I have a theory that the US and UK Govts must somehow have stepped in to try to stabilise it. But is even that stability coming to an end???

The next few years will be most interesting, watching the Western Liberals team up with our Black Socialists… while the Black Communists get ready to fight against them.

Who will win? Will Branson survive? Will he actually walk out with a profit in 5 or 10 years time?

This is a country with strong underlying social, racial, tribal and cultural dynamics which have been built up over 350 years, and I don’t think a few glitsy adverts will change anything.

South Africa is a tough country. I dare anyone to walk in here and just smile and think he is going to change South Africa. South Africa in a sense is like China. It is said that China conquers those who conquer it. Will Richard Branson conquer South Africa, or will South Africa be biting a chunk out of Richard Branson? Jan]