How does a business draw petty cash without a cheque?
This nagging insignificant question still remains to be answered by the commercial banks. All the suggestions offered comes down to one solution – get a bank card. But this does not solve the problem that cards present their own security risks. In all likelihood, only the boss will have the pin number for such a card. There is only one consideration nobody has given any thought: The bosses never draw petty cash themselves, they send somebody to do it, and until now, a signature on a piece of paper has served as the signal to honour the promissory note.
It seems nobody has given ample intellectual consideration to the function and role of cheques before the central bank issued a unilateral statement, telling the business world, cheque are a gonner.
This is the same feeling I got this week reading through the sparse documentation that accompanied the release announcing the New Equitable Economic Empowerment Framework Bill. It is arguably the single piece of intended legislation which has drawn the biggest response I have witnessed over the course of 25 years.
There is nothing wrong with the intentions of the New Equitable Economic Framework. It is based on noble concepts and on even nobler expected outcomes. The only problem is, based on the content of the bill as well as the accompanying documentation, it is highly likely that the expected outcomes will be very off the mark from the real outcomes.
The bill itself is thin, and only addresses the most basic issues of such a paramount decision to use the law to force a change in ownership composition of ALL private business. There are so many eventualities the bill does not address, or does not foresee, it clearly shows to be the work of a single individual – a one man one horse type of effort.
I still have to find one individual in the private sector who supports the bill in its current form. Of course there are many aspiring company owners who sees no fault in the bill, but I am sure nobody has yet informed them that when you share in a company’s ownership, you share in the profits as well as the losses. Has the drafter thought of this basic business truth?
And when a company does not make a profit in a particular month, or when cash flow is very tight like it was for most businesses over the past six months, then the shareholders are the last to pay, if indeed they get anything at all.
Perhaps the biggest eye opener is stated at the beginning of the official notice that was published on 11 November last year. “Alarmed by the continuing income disparities, skewed ownership of productive assets; low level of participation in business by the previously disadvantaged; lack of socio-economic transformation in traditional communities; high level of unemployment; continuing racial imbalance in the management control of enterprises; the economic status of women, youth and disabled people; and slow development of rural areas.”
This statement says it all. It is a circumspect acknowledgement that counter cyclical budgeting, TIPEEG, the Macro-economic Framework, the new Fiscal Policy Framework, and finally, the fourth National Development Plan, have not worked, or at least have not produced the results as intended. Now this shortcoming is laid in front of the private sector’s door.
I do not think the NEEEF principles are flawed. In fact, I think they are very real and based on observable inequality, but I strongly suspect that the process to get from the framework to the bill, was highly flawed.
First, it was a non-inclusive, non-consultative, unilateral process. Compare this to the drafting of the Constitution just over 26 years ago of which the outcome was embraced by all, and the positive results are with us to this day.
Secondly, I sense from reading the bill, expert consultation has not taken place. In other words, not a single mind with knowledge and skill in this potentially disruptive endeavour, has had any input in the bill.
As a very simple litmus test, try this one. Is a Chinaman a previously disadvantaged Namibian or not. And if he is not, is his company foreign-controlled or not? And if the rule of law is punted on every platform by every political leader, even if only for expedience, will the Chinese companies get their 25% new previously disadvantaged shareholders? Makes you think, hey.
The intentions are fine but the process resulted in a hastily contrived bill without thinking through the detail, the implications and the repercussions. Foreign investment is a dear commodity. We will find that out sooner rather than later. The bill urgently needs to go back to the drawing board. For that, six weeks are not nearly sufficient. I suspect a truthful, inclusive process will only start after the deadline for replies on 31 March 2016.