Johann Rupert (pictured), the billionaire chairman of Cie. Financiere Richemont SA and Remgro, berated South Africa’s government for failing to address corruption and power shortages.
“The leadership of this country, quite frankly, is becoming very, very hard to defend abroad,” Rupert said today at Remgro’s annual general meeting in Somerset West, near Cape Town. “The people who are running the country now were not given proper education. Wherever you look we have got stagnation and really worrying signs.”
South Africa’s central bank expects the second-largest economy on the continent to grow 1.4% this year, the slowest pace since a 2009 recession, as a series of blackouts caused by a creaking power-station network and strikes crimp production. The negative sentiment has been compounded by corruption scandals implicating President Jacob Zuma and his administration.
An inspection of 450 state entities by the nation’s Auditor-General uncovered R30.8 billion in irregular, unauthorized or wasteful expenditure in the 12 months through March last year, up from R30 billion the year before.
Thuli Madonsela, the nation’s graft ombudsman, alleged in a March report that Zuma unduly benefited from a 215 million-rand state-funded makeover of his private home. Zuma denied ordering the renovations, which included a swimming pool, chicken run and cattle enclosure.
“I’m concerned that we are not prioritizing the right things,” Rupert said. “We picked low-hanging fruit for a very long time. Those trees are now starting to run empty. How can a person not have electricity? How can we create jobs? ”
Remgro is an investment holding company with interests including banking and financial services, packaging, wine and spirits, and construction.
Asked by a shareholder about the company’s prospects, Rupert said the global economic outlook “is not looking too rosy” and that leading fund managers were focused on capital preservation.
“It doesn’t really matter who you listen to, whether it’s the IMF or whosoever, they are petrified,” he said. “The only way to get out of this is economic growth. I see nothing on the horizon to pull Europe out of its malaise. America will do better than Europe. Yes, India will grow, yes, China will grow.”
©2014 Bloomberg News