PETER BRUCE: Any more obfuscation and we’ll never know why Shell left

We are seized with whether Shell is leaving the country. It is selling its “downstream” business (the petrol stations) but it is holding on to its “upstream” businesses, mainly the exploration for, and production of, oil and gas. It has raised tempers.

Why can we not have a reasonable discussion about how we are doing? An election, I know, but still. About investment, and about the creation not only of jobs but the creation or arrival of investors to make the jobs happen in the first place? The moment things go wrong — and they are — people creep back into their trenches and we make no progress.

A lot has already been written about Shell. It is exiting petrol stations around the world so why should its exit here mean it is dumping us? Why all the fuss? It’s just a business decision, yes?

No, no tweeted Clayson Monyela, head of communications at the department of international relations & and co-operation at a tweet from DA leader John Steenhuisen to the effect that Shell was leaving the country because of ANC policies: “Factually incorrect,” wrote Monyela. “Simply NOT true ... Shell is NOT exiting SA but selling downstream businesses like petrol stations. They’re doing this in other markets too. They’re STAYING in SA & maintaining upstream businesses. SA remains an attractive market.”

Well, OK, but what, exactly, are Shell’s upstream businesses in SA now that its refinery is shut down? The attractive ones it’s sticking with? The answer is none. Zero.

The businesses Shell is “sticking” with exist on paper only and the only South Africans they will employ are lawyers. Shell has a right to explore off the Wild Coast, which is mired in the courts, and a possible fracking opportunity in the Karoo. It is pinning its remaining here on a purely extractive future. Surprise!

The only hope Shell has then is for fossil-hungry Gwede Mantashe to smash aside much of the political establishment and capture the state himself. It isn’t going to happen. So, yes, Shell is probably exiting the SA economy. In some countries where it has sold petrol stations it has invested in charging stations for electric vehicles (EVs). But our industrial policy is to incentivise the manufacture of EVs but not their consumption. So, no such opportunity here.

The decision not to encourage a retail market for electric vehicles rests with trade, industry & competition minister Ebrahim Patel, who almost never misses an opportunity to miss one. One way or another, Patel has been running industrial policy for 15 years and this week he published a review of his achievement, calling for the whole of government to align with a new industrial policy co-ordination council to be chaired by President Cyril Ramaphosa.

It is hard to imagine a bleaker prospect than being drawn into Patel’s centrally planned New Industrial Order. Nothing actually happens in this dream-state but an entire economy can apparently be brought to heel and grow at the same time. Enterprise is taught by bureaucrats and markets always get capital allocation wrong.

No-one loves this more than Ramaphosa, who cheers Patel on like a happy parent, delirious at his minister’s ability to produce conferences, prize-givings and an uninterruptible flow of jobs and investment charts — all of which show success piling upon success.

Launching the review, Patel said the economy had been badly hobbled by six shocks — Covid-19, the 2021 KwaZulu-Natal unrest, the war in Ukraine, flooding in KwaZulu-Natal in 2022, load-shedding and logistics constraints. He might also have added his own weak industrial policies but introspection outside the narrow ideological tramlines within which the ANC obliges itself to follow is impossible.

Instead he will present a colourful booklet to a gullible Ramaphosa marking the formation of 12 industrial master plans (most of which are already in various stages of derailment) and market inquiries into data, healthcare, the grocery trade and online retail as he had promised in the performance agreement he signed in 2020. Exports of manufactured goods to the rest of Africa had risen 58% to R447bn since 2018 and exports to the rest of the world had topped R1.1trillion in 2023, the second-highest number in the past 30 years.

Where Patel drops numbers it is worth examining them under a light. His export performance claims ignore the savage devaluation of the rand against the currencies of its main trading partners. He claims more than half-a-million workers now own stakes in the companies they work for but makes no accounting for the firms that have decided to take this route. The success is all his.

It’s a little like the R1.3-trillion his investment conferences are supposed to have raised during this presidency. A big number but in fact this represented capital investment of just about 13% of GDP a year, roughly half of what the economy needed to grow.

He has 1.8-million workers “covered” by department measures, as if this “cover” were a meaningful measure. There’s an uncheckable R20.5bn in actual savings he claims from the data market inquiry and 100,000 jobs “created or expected” through department measures generally. Expected? This time he at least left out jobs “saved”, which was an early favourite.

Ramaphosa will be ever so pleased and will probably, depressingly, give Patel his job back after the election. I had been hoping otherwise, with much of the business establishment who are sick of the minister’s cloying interference in practically every aspect of what they do.

Patel’s unionist heart though is putting business in its ideological place. His political protection while he does this is that he is also “transforming” it, so he is able to claim the creation of 1,700 “black industrialists”, a programme Jacob Zuma began in 2017. In his review, he said these companies employed 160,000 people and turned over R183bn a year.

Patel’s review is an application to the ANC (the president is already convinced) for reappointment. But scratch away. At a recent Black Industrialists Awards dinner prominent among the prize-winners were recently white-owned businesses that had been acquired by black shareholders.

Nothing wrong with that, but everything wrong with claiming you did it all yourself. Much more of this festival of fact avoidance and bogus successes and we’ll never figure out quite what Shell did here in 2024.

• Bruce is a former editor of Business Day and the Financial Mail.