5 things you need to know in SA business today and why Boris Johnson's extraordinary leap to power could soon come crashing down
1. Ahead of his State of the Nation address being debated in parliament this week, president Cyril Ramaphosa’s presidential campaign finances may be under investigation, the Sunday Times reported yesterday. The public protector Busisiwe Mkhwebane is apparently investigating Ramaphosa for alleged money-laundering related to donations of more than R400m to his ANC presidential campaign. But in a statement yesterday, Ramaphosa’s representatives slammed the report as "bizarre" and "baseless".
2. Over the weekend, the state capture commission heard about a suspect contract awarded by SA Express to a company. According to the testimony, the contract may have benefited both Lynne Brown, former minister of public enterprises, and Dipuo Peters, former minister of transport.
3. City Press reported yesterday that former Eskom chief executive Brian Molefe, who received an irregular pension benefit amounting to R30 million, is heading to the Constitutional Court in a bid to keep the money. A high court and the Supreme Court of Appeal both ruled that the money he received should be paid back. But Molefe says he did not have a fair hearing.
4. The embattled chemicals company Omnia is expected to post large losses this week. The company is struggling with debt of almost R3 billion. But the cement producer PPC is expected to announce a healthy profit increase thanks to price hike of between 8% and 12% that were implemented in January.
5. Later this week, producer price inflation (price changes for manufactured goods) will be released, and it’s expected to confirm that inflation is heading higher. Last week, consumer inflation rose to 4.5% in the year to May from 4.4% in April. Still, with the rand at a bouncy R14.30/$, the Reserve Bank is expected to cut interest rates on July 18th.
Why Boris Johnson's extraordinary leap to power could soon come crashing down
Reported by Thomas Colson
The conventional wisdom among Conservative MPs since Boris Johnson resigned as foreign secretary, was that he had little chance of ever becoming Britain's next prime minister.
"Three-quarters of the Cabinet and at least half of the party would do anything to stop Boris becoming leader," one Conservative MP told Business Insider in January this year. "He's got no chance."
Yet in the final round of this week's selection process, Johnson won the support of over half the Conservative parliamentary party, ensuring his place in the final two alongside the current foreign secretary Jeremy Hunt, and all but guaranteeing that he will ultimately win.
The speed and success of Johnson's campaign has been nothing short of extraordinary.
He picked up 160 votes from colleagues in Thursday's three-way leadership ballot, more than half the 313 available, with second-placed Jeremy Hunt receiving just 77. He now faces a month-long series of hustings after which he appears almost certain to be crowned prime minister.
Yet even among those who now back his campaign, there are fears that the coalition of support which has lifted him almost to the door of 10 Downing Street, could very quickly crumble to the ground once he walks through it.
Conservative MPs hope Johnson can save them from Farage
The key to the shift in Johnson's fortunes came in the recent European elections where Nigel Farage's Brexit party surged into first place, leaving the Conservatives in a distant fifth place.
With polls now putting the party as low as fourth nationally, many Conservative MPs, who still hold deep reservations about Johnson, have decided to park those reservations in the hope that Johnson could yet save them from electoral oblivion
"It was in the bag for Boris from the night of the European election results," one former Conservative minister, who is a critic of Johnson told Business Insider.
"One of my friends, a Boris supporter, said: 'backing him is a risk but we're in such a hole, sometimes you have no choice apart from turning over the table and seeing what happens.'"
Another Brexit-supporting MP, who opposed Theresa May's deal once then backed it twice, echoed many colleagues when he said he was supporting Johnson because he believes he can win the Tories an election.
"My support for Boris is not primarily about Brexit," said the MP. "Brexit is important but keeping Corbyn out of Downing Street is much more important to me."
Echoing the lines trotted out by his campaign team and backers on the news, many MPs point to his two election wins as London Mayor, a city where a majority of voters traditionally back Labour.
But Boris's coalition of support could soon implode
The key to Johnson's success has been his remarkable success at persuading Conservative MPs on both sides of the Brexit divide to back him.
He has the support of diehard Brexiteers like Dominic Raab, Steve Baker, and Jacob Rees-Mogg, who have lent Johnson their support on the grounds that he is best placed to take the UK out of the EU with or without a deal on October 31.
But he is also supported by many dozens of Remain-supporting MPs who are desperate to avoid no-deal in October, such as the Conservative MPs Robert Buckland and Damian Green.
How Johnson, who led the campaign to leave the EU, has managed this is unclear. However, the simple answer appears to be that, in a series of one-on-one meetings, he has simply told both Brexiteers and Leavers very different things.
One Brexit-supporting MP who backed May's deal told Business Insider: "I had a one-to-one conversation with Boris. The view there was much more about changing the current deal - not just about the backstop, although that was the most significant part."
This suggests that Johnson's plan is really just to make some changes to Theresa May's withdrawal deal and push it through parliament, rather than rip it up altogether, as some of his Brexit-supporting backers expect.
Other moderates have jumped on the Boris bandwagon because they believe that Theresa May's personal unpopularity was the reason why she failed to pass her Brexit deal and that the more charismatic Johnson will be much more successful at persuading MPs.
However, that belief clashes strongly with what Steve Baker, who lent his support to Johnson two weeks ago, appears to believe about Johnson's plan.
"Boris Johnson is crystal clear that under his leadership, we would leave the EU by October 31, with or without a deal," he said. "The Withdrawal Agreement is dead. A Clean Managed Brexit is the way forward."
That has led some to conclude that Johnson's coalition of support could quickly collapse just as Theresa May's did before him, with the main difference being that Johnson starts off from a much weaker position than his predecessor.
While Johnson's team were keen to point out that he won the support of more than half the parliamentary party, Theresa May had significantly more support from her parliamentary colleagues when she was elected as Conservative leader back in 2016.
She hoovered up the support of 60.5% of her colleagues in the second and last round of voting, while Johnson managed just 51%.
For this reason Johnson's time at the top of his party could be short-lived.
As one Conservative MP told Business Insider: "It's going to implode."
"A campaign that includes Robert Buckland and Steve Baker? Someone's going to be disappointed."
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