Eskom’s unrelenting blackouts, SA’s stance on Russia that has agitated currency markets, and the government’s glacial pace in implementing structural pro-growth and investment reforms have caused angst among business leaders.
The business leaders, including the CEOs of leading companies, met President Cyril Ramaphosa and members of his Cabinet on Tuesday to raise their concerns about SA’s economic crisis. The meeting ended with the business leaders agreeing to collaborate with the government — providing it with skills and financial resources — to tackle problems undermining the economy and its potential for growth.
In recent weeks, business leaders have become more vocal in their criticism of how Ramaphosa has managed the economy over the past five years and fired warnings that SA risks becoming a failed state. Ramaphosa’s presidency has failed to stem the tide of rolling blackouts and to move with speed in implementing pro-growth and investment reforms in sectors such as transport (getting trains and ports operated by Transnet to run efficiently), and water (issuing water-use licences).
State Capture corruption cases are taking a lot of time and effort to prosecute successfully, and theft and vandalism of critical infrastructure have become rampant in industries, including mining and telecommunications. Morale and confidence dipped further when the rand plummeted to a record low against the dollar in May after the US accused SA of covertly providing arms to Russia.
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Workstreams
Captains of industry and the government have now agreed to set up workstreams targeting the implementation of reforms in energy, transport and logistics, and tackling crime and corruption.
The workstreams are designed to mirror groups and the collaboration seen in SA’s Covid-19 response, where the government and business leaders worked together to deal with the health, labour and economic impacts of the pandemic. Business and government also worked in unison to implement a nationwide Covid vaccine roll-out. One of the groups set up at the start of the Covid pandemic, Business for SA (B4SA), will be part of the workstreams, with Business Unity South Africa.
The organisations will work with the Presidency, government departments, state-owned enterprises and other relevant state institutions to ease or end Eskom blackouts by 2024, stabilise and improve the operational performance of trains and ports, and mobilise resources on an “arm’s-length basis” to help prosecute corruption cases.
Martin Kingston, the chair of the B4SA steering committee, told Daily Maverick: “In all these interventions, we must be mindful that we are not going to undermine or encroach upon the role of the state. But we want to partner with the state, bring in our skills and capacity.”
To form part of the workstreams, business has put forward the names of Sasol boss Fleetwood Grobler, Sanlam CEO Paul Hanratty, Sibanye’s Neal Froneman, Anglo American chair Nolitha Fakude, former Exxaro boss Mxolisi Mgojo, Toyota CEO Andrew Kirby and Remgro head Jannie Durand. The names of other CEOs are set to be added to the list over time.
Kingston said there is a feeling among CEOs that SA’s socioeconomic situation has become worse, causing many moments of frustration with the government.
“There has not just been frustration but also anxiety and concern that we are not moving quickly. There are some very real problems. They are not new problems, but they are increasing, and manifest in all sorts of ways.
“But we are rallying around some of those challenges and dealing with them. If we are frustrated, we have a duty to step up to the plate and work alongside the government to fix the problems and build back confidence,” he said.
Shaky relationship
The relationship between the government and business has not been smooth in recent years, with both parties deeply sceptical of each other. Since Ramaphosa first became President in 2018, he has attempted to remedy the trust deficit between the two, with much difficulty. Business has proposed solutions to SA’s pressing economic and social problems and pledged support. But its offer of help has been largely ignored by the government.
“There are understandable suspicions on both sides [between business and government]. The inability to address some of the economic and social problems has eroded trust and confidence,” said Kingston, adding that business is increasingly collaborating with the government to remedy the relationship.
Arguably, the latest workstreams initiative also risks going this route and failing to deliver demonstrable progress in the implementation of structural reforms — with the initiative ending up as a talk shop.
Kingston believes that the workstreams will result in “workable solutions”. Implementation progress will be tracked and communicated to the public regularly, he said. DM