Little can be done to drive an economic recovery without a clear understanding between business and government, says Business Leadership South Africa CEO Busi Mavuso, who joined other business representatives in a meeting with President Cyril Ramaphosa and his senior colleagues at the end of September.
The meeting served to discuss what was needed to get South Africa’s economy back on track, with Mavuso saying it revealed a “close alignment on diagnosing the problems”.
“[Ramaphosa] is clearly focused on the issues that constrain business from investing, ranging from the red tape that increases the cost of doing business, to the structural reforms we have often highlighted as crucial to improving the functioning of the economy,” she says.
However, implementation is what “really matters”, Mavuso stresses, adding that she has both an appreciation for Ramaphosa’s focus on getting things done through mechanisms like Operation Vulindlela, and also some sympathy given the challenges that stand in the way of certain reforms. These challenges include the skills available in the public sector and the political blockages caused by vested interests.
“I took away from the meeting that fixing the working of the economy must be a joint endeavour,” she says.
In this regard, Mavuso says Ramaphosa acknowledged the resources that organised business has put into supporting the government in key areas where capacity is needed, such as through the Technical Assistance, Mentorship and Development initiative, which has brought engineers, project managers and finance professionals out of retirement to fill important gaps in the public sector.
But, she says, many of the issues that constrain reform require business to be active stakeholders in the way regulation and public services are provided.
“Spectrum is one such issue. Independent regulators like the Independent Communications Authority of South Africa [Icasa] . . . are independent of government for good reason. It is why the end-users affected, including business, should be making their case clearly to Icasa directly.”
The management of the pandemic has “obviously” been important to the economic recovery efforts, adds Mavuso.
“An effective vaccination programme is very important to allowing the economy to fully reopen. I welcome the government’s move last week to adjusted Alert Level 1, making it easier for economic sectors like entertainment and hospitality.
“However, I am concerned by the apparent slowdown in vaccination rates,” she says.
Mavuso says that although government has done well to get its vaccination programme working with good capacity, not all South Africans have done as well to take advantage and get vaccinated.
“Vaccine mandates are one mechanism that we all need to consider, both to ensure workplace safety and to ensure greater take-up,” she suggests.
Meanwhile, Mavuso says Ramaphosa is also rightly concerned about the unemployment crisis and has devoted considerable effort to addressing it through his Presidential Employment Initiative. “The President is rallying the whole government to confront it, strengthening its capabilities in key areas to be able to deliver.”
However, because business is the largest employer, she says, it has a crucial role in dealing with the unemployment challenge.
“Growth, of course, is essential. Businesses that are expanding are also going to be employing more. But we can work harder to increase the employment intensity of that growth.”
In this regard, part of the red tape that Ramaphosa wants to free businesses from is that which makes it difficult to employ people, says Mavuso.
“There is also room for industrial policy that accelerates labour-intensive industries particularly. The business process outsourcing sector is a notable example that has been a good source of employment growth for several years.”
Nonetheless, she acknowledges that change is difficult – an aspect businesses know well.
“It is no less hard in the public sector. Engaging with the Presidency is helpful not only to discuss the change we think is important, but also to understand what makes change difficult. That builds trust but also allows business to work on solutions that can support government,” Mavuso says.
She adds that Ramaphosa’s efforts were complemented by Finance Minister Enoch Godongwana towards the end of September when he gave an important speech on his policy objectives.
“These also strongly focus on improving the business environment to drive the economy.”
The alignment is another positive indicator that government is focused on doing what is needed to get the economy growing, Mavuso says.
“It helps support business confidence and faith that it is safe to invest into this economy. Of course, it is delivery and implementation of reform that matters, rather than plans, but we appreciate the efforts to deliver and see the way to success on many fronts.”