Business Unity South Africa (Busa) president Sipho Pityana has called for a “new framework for growth” that addresses, through public-private partnerships, the economic risk being posed by high levels of inequality.
Speaking at Busa’s inaugural Business Economic Indaba in Johannesburg on Tuesday, Pityana lamented the fact that millions of citizens remained on the margins of the economy, despite South Africa’s gross domestic product having more than doubled over the past 25 years, from $139-billion in 1994 to $315-billion today.
“Given the waves of discontent pulsing through our country, exemplified through violent service delivery protests, it is clear that a substantial part of our society has, understandably, become embittered not only with the excesses in our political system, but also with those who hold economic power.
“If unchecked, this rumbling resentment and the feeling of despair could trigger populism that may reverse all our democratic gains,” Pityana said in his address to an audience that included political, labour and business leaders from a range of sectors.
The new partnership framework, he added, should ensure that nobody is left behind.
Busa had identified five areas for immediate partnership with government, including:
- Equipping people with the means to earn a decent living.
- Developing new ideas to materially increase levels of investment in research and development.
- Building the right infrastructure in the right places to boost the earning power of people, communities and businesses.
- Improving the ease of doing business to ensure that South Africa is the best place to start and grow a business.
- And, ensuring that development is evenly spread across cities, towns and rural areas.
The Busa event also showcased actions being taken by various sectors under the so-called Public-Private Growth Initiative, which had been established to coordinate business’ response to President Cyril Ramaphosa’s call for higher levels of investment and job creation.
Leaders from the agricultural, automotive, banking, construction, renewable-energy, information technology, health, manufacturing, mining and tourism sectors shared their five-year growth and employment prospects, while also outlining key constraints to achieving those goals.
Presenting on behalf of the automotive sector Toyota South Africa president and CEO Andrew Kirby emphasised the important role that policy certainty had played in sustaining and growing the industry over the past decades. That certainty had been extended as a result of an update to South Africa’s automotive policy, which had recently been approved by government.
The South African Renewable Energy Council’s Mike Levington said that a similar level of policy certainty was required to support higher levels of investment, as well as to stimulate industrialisation and job creation, in the renewable-energy environment.
Since 2012, the sector had invested R259-billion in South Africa, which had led to a number of manufacturing spinoffs. However, a period of policy volatility in recent years had resulted in several factory closures. These factories could be reopened should there be greater consistency in the implementation of the country’s energy policy and if 1.5 GW of new wind and solar projects were added yearly.
Likewise, Hospital Association of South Africa outgoing chairperson Melanie Da Costa and the Tourism Business Council of South Africa chairperson Blacky Komani emphasised the need for policy coherence across government to unlock the potential of both sectors.
Finance Minister Tito Mboweni concurred, arguing in his input at the gathering that the restoration of policy certainty was key to addressing South Africa’s poor growth performance.
Certainty, he said, was needed across a range of issues and sectors, from inflation targeting and continued support for the automotive sector to the country’s approach to agriculture and the Fourth Industrial Revolution.
Pityana stressed that the restoration of policy certainty and the creation of partnership should not be confined to the creation of a conducive environment for business to thrive. If it were, it “might be perceived as opportunistic, self-serving and indifferent to the real challenges of the day”.
“In short, when government and business sit down to talk, our conversation should be more than about business contracts – more importantly it should be about social contracts. Business must define itself as a reliable partner with government in delivering economic justice.”