In early March one of the richest countries both in resources and people credit rating was downgraded to junk status by S&P. The country which was downgraded was South Africa and the status relies heavily on current President Jacob Zuma. In his years of being President, every year he becomes a little more corrupt. It started slowly, first the Presidential compounds became more lavish; then it was a select group of people who essentially do the work of government and collect its taxes which made his friends wealthy. However, in all governments there are usually bodies or people which can offer a different viewpoint and keeps the government reasonably honest. In late April, President Zuma crossed the line with regards to ousting his finance officials for delaying or not implementing his desire to be or live like a billionaire.

The new Finance Minister who previously had little administration authority in the Cabinet, was telling the press he did not think a downgrade was going to happen, cabinet had been purged of opponents before. It turns out Minister Malusi Gigaba either did not understand what the President has been or trying to do with the South African economy or was overly optimistic.  South Africa’s economy will be stories in the future.

Linking to dividend paying stocks, governance matters. Good administration matters. Any fool can loot a treasury, it takes ability to ensure it does not happen and the company makes a profit and can pay a dividend. When your annual report comes out watch for the top executives, how much pay did they receive and are they worth it?

There are more questions than answers, till the next time – to raising questions.