1 month ago
60
I’ve always considered business to be at the heart of wealth creation, innovation and the delivery of products and services.
Business attracts investments into the economy, which in turn, creates jobs and develops a country’s economic wellbeing and competitiveness — assuming the government plays its role by creating an enabling policy and regulatory environment in which businesses can thrive and be sustainable.
Since the official start of Cyril Ramaphosa’s presidency in 2018, the role of business in SA has changed and it has become more involved in society. In some instances, business has led in the government’s functions.
When Ramaphosa ascended to the Union Buildings, business was relieved. Ramaphosa was seen as being business and market-friendly; a man who understood how capital worked and appreciated that it depended on a stable political environment.
During one of his State of the Nation Addresses, Rampahosa said the task of creating jobs fell on the private sector and not the government. This was a step change from the Jacob Zuma presidency, which was often hostile towards business. There were deep divisions and a large trust deficit between the government and business during the Zuma years.
Over the past five years, Ramaphosa has brought business and some of his private sector pals closer to government functions to fix the country’s problems. This is set to continue in the next five years under the Government of National Unity (GNU), which Rampahosa leads.
A year ago, organised business (comprising about 150 CEOs) pledged its support to the government, offering expertise and money (mobilising R180-million) to fix the country’s problems in three key areas: electricity, transport and logistics, and crime and corruption.
Since 2020, the National Treasury has worked on a similar initiative with the private sector to implement pro-growth and investment reforms. The government’s partnership with the private sector has worked.
At Transnet, processes are under way to partner with the private sector to run trains and ports independently for a set period, while pouring in money to upgrade the flailing logistics infrastructure.
At Eskom, there is a renewed focus on monitoring the performance of power stations, which has resulted in no blackouts for almost four months. The private sector is working to deliver about 22GW (22,000MW) of renewable energy in the coming years, which would end the electricity crisis.
To tackle pervasive crime and corruption, business has offered expertise (even forensic) and raised more than R50-million to help law enforcement agencies investigate and prosecute complex corruption-related crimes at an “arm’s length basis”. The 10111 police line was capacitated with more resources to be able to respond to crime-related incidents.
After 18 years of inaction, digital spectrum was auctioned, which brought the promise of faster internet speeds and lower mobile data costs.
On Tuesday, CEOs met with Ramaphosa to brief him on their progress, which they do every six to eight weeks. At the meeting, the CEOs pledged their support for the GNU and committed to continuing their reform agenda and investing in the economy.
They also reflected on their work to support the government and identified the next set of crises that can be tackled beyond electricity, transport and logistics.
Business leaders are considering addressing the water crisis, with many parts of SA facing water shortages that threaten the quality of life, potential investment inflows and the sustainability of businesses. Ageing water infrastructure that is susceptible to breakdowns, as well as corruption and incompetence in managing water systems have worsened the situation.
Another priority that business has mooted is improving basic education standards in the public sector and increasing support for early childhood development programmes. Working with the National Treasury, business is also trying to find ways to support municipalities, most of which are dysfunctional.
Business has argued that it cannot stand by idly and watch the country regress further — it has to roll up its sleeves and help where it can because the alternative scenario is dire. If state failure worsens, there would be capital destruction, a halt to investments, economic growth slowing further and unemployment levels remaining high. It is a commendable initiative by business.
That said, business must not get over-involved in public sector functions to the point that the government is absolved of responsibility and accountability regarding service delivery.
Business must also be careful to not be used by the government to spin a positive narrative about SA and long-standing problems being suddenly fixed. After all, the country’s failures are the government’s fault.
SA is in deep trouble today because of a failure of leadership, bad policies and priorities, and a flawed obsession by Cabinet members to place the ANC over national interests. DM
