The CEO Initiative is putting its weight behind President Cyril Ramaphosa’s plans for increasing levels of investment and stimulating growth in the recession-afflicted South African economy.
The CEO Initiative draws in business leaders from various sectors and rose to prominence during Pravin Gordhan’s second stint as Finance Minister, after President Jacob Zuma’s highly criticised decision to remove Nhlanhla Nene from the position and replace him with Des van Rooyen.
The grouping worked with Gordhan to stave off a downgrade in South Africa’s credit rating to junk – an effort that was seriously undermined by Zuma’s decision to remove Gordhan in a late night Cabinet reshuffle in March last year. Currently, only Moody’s rates South Africa at an investment grade, after S&P Global Ratings and Fitch Ratings downgraded the country to subinvestment-grade in 2017.
The CEO Initiative includes Telkom and Eskom chairperson Jabu Mabuza, Standard Bank CEO Sim Tshabalala, Nedbank CEO Mike Brown, Seriti Resources CEO Mike Teke, JSE CEO Nicky Newton-King, Discovery CEO Adrian Gore, Long4Life CEO Brian Joffe, Public Investment Corporation CEO Dr Dan Matjila, Goldman Sachs in South Africa MD Colin Coleman and outgoing Investec Group CEO Stephen Koseff.
The initiative reported on Tuesday that it would be engaging with investors at the government’s upcoming Investment Conference as part of the delegation. The conference is scheduled to take place in Johannesburg from October 25 to 27.
Confirmation of its support for government’s $100-billion investment push follows a meeting of the President’s Economic Consultative Forum, held on September 14 in Pretoria. The meeting included both business and labour representatives.
Ramaphosa used the meeting to share details of a Cabinet-endorsed economic stimulus package, which he confirmed would be unveiled soon and would not deviate from government commitments towards fiscal consolidation and debt stabilisation.
The package would include a defined set of economic reforms covering issues such as mining, telecommunications, tourism and transport.
The meeting also discussed proposals to establish an infrastructure development initiative, which would draw in private sector funding and delivery expertise.
Earlier Nene announced that government was building a pipeline of investment opportunities and infrastructure projects in a bid address low levels of investment, which had been identified as the main inhibitor of growth.
Some 64 projects had already been earmarked through the Budget Facility for Infrastructure and 38 projects had already been subjected to rigorous financial and technical evaluation.
Nene has stressed, however, that government’s participation in the stimulus programme will be “through existing budget resources”, with a focus on unlocking efficiencies within the public sector. “Cabinet has already agreed that fiscal sustainability must remain the focus of government’s efforts in public finance management. This should be a statement that makes clear government’s intention to pursue a prudent fiscal policy that stabilises the debt-to-gross-domestic-product ratio over the long term.”
The CEO Initiative said it welcomed the urgency being shown by government in addressing the country’s severe economic challenges and reiterated its commitment to working with government and labour towards achieving inclusive and sustainable economic growth.
Co-convener Jabu Mabuza said in a statement that it was imperative for South Africa to act decisively in creating an investor-friendly environment so as to retain its investment grade credit rating and to attract local and foreign investment.
Confidence in the economy would be aided by a focus on fiscal consolidation and stabilising sovereign debt levels, as well as strengthening institutions that had been weakened in recent years.
Likewise, addressing policy incoherence, particularly in mining, land and health, was identified as critical, along with driving greater efficiency and productivity in government and the private sector.
“Periods of economic distress, such as that which our country is experiencing now, often require employees and business leaders to do more with fewer resources and make sacrifices over the short term, in order to build stronger businesses and a more efficient government that works for all its citizens,” Mabuza said.
The CEO Initiative also reported that both business and labour had expressed deep concern about current levels of lawlessness and the impact a disregard for the rule of law was having on investment in the country and economic growth.
Labour’s call to avoid retrenchments wherever possible was also noted by the initiative, which said that, in situations where retrenchments could not be avoided, re-training should be provided to enable workers to find alternative employment.
“As business, we remain committed to working with the government and labour to create an environment that is conducive to achieving sustainable and inclusive economic growth that benefits all South Africans,” Mabuza concluded.