06/03/2023 | By Busiswe Mavuso
I spent last week visiting the leaders of several large companies among our membership. It was an opportunity to engage on the challenges they are facing and the efforts of BLSA to improve the business environment. You will not be surprised to learn that most of what I heard of was frustration. From the failure of local basic services to the young people coming out of the education system without the skills needed to work. It was clear to me that businesspeople currently feel that it’s very difficult to operate a business in this country and yet there is a lot of focus on trying to find solutions.
What can I tell them? The obvious starting point is that there is a lot that is improving. BLSA works closely with government on several initiatives, most obviously the National Electricity Crisis Committee (Necom) and Operational Vulindlela, the effort of the Presidency and National Treasury to unlock barriers to needed economic reforms. These have notched up some impressive achievements – concluding the long-delayed auction of spectrum, shifting the regulations around private generation of electricity, improving the ease of access to visas for both tourists and workers, improving the process to access water use rights. There is much more we are working on with government that will in time result in positive change.
The problem, of course, is that there are too few such examples. A major concern among business leaders is the state of our state-owned enterprises – Eskom most obviously, but the risk posed by Transnet as the foundation of a major part of our logistics system is huge. Many point to various local government failings as well as specific challenges they have with some national departments. There are also concerns about how industrial policy is being developed and the seemingly ad hoc nature of competition decisions. I also heard concerns about South Africa’s recent diplomatic advances to Russia and China that is putting our preferential access to the US market, among other things, at risk.
One trend those I met pointed out is that there seems to have been a loss of focus by government on engaging with partners and working towards solutions. Such engagements have often led to positive outcomes in the past, the obvious recent example being during the Covid crisis when business and government productively worked together to source equipment and roll out the vaccine programme. Business continues to look for ways it can support government, often putting significant resources into researching and developing constructive proposals. But there is a growing feeling that we are not making headway in dealing with challenges because of a lack of government engagement.
Business is not an armchair critic. When we point out problems that confront business, it is with an eye on solutions. Ultimately we benefit if local service delivery improves, if the policy environment for business is stronger, if challenges from loadshedding to road maintenance are resolved. We have every reason to be active partners in dealing with these challenges. But the frustration I am sensing from business comes from a view we are not making sufficient, and speedy, headway.
BLSA is committed to finding productive solutions to our challenges as a country. The conversations I had last week demonstrated the great deal of creative energy and passion for this country that is out there. We will continue to work together to resolve the frustrations that face those doing business, so that we can develop our country to provide opportunities to everyone in it. Inevitably those efforts will shift focus to where there are likely to be results. Those government counterparts who engage openly and work towards constructive solutions will get an enthusiastic response from business. But where business perceives engagement to be unlikely to result in productive outcomes, efforts will shift elsewhere.
BLSA will continue to work towards constructive engagement and solutions. I am always open to counterparts from government who want to work with us in the same spirit.
FATF’s decision to grey list SA, although expected, still comes as a yet another self-inflicted blow to SA’s reputation as an investment destination, I write in Business Day. Because of the increased compliance burden with doing business with South African companies or individuals, some firms may well elect to go elsewhere. The economic impact of grey listing will depend on how seriously SA is perceived to be working towards FATF compliance.
BLSA is a business organisation that believes in South Africa’s future and shares the values set out in the Constitution. In 2017, BLSA signed a contract with South Africa, committing business to playing its part in creating a South Africa of increasing prosperity for all by harnessing the resources and capabilities of business in partnership with government and civil society to deliver economic growth, transformation and inclusion.
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