July has been a tumultuous month for South Africa and while the problems remain formidable, the country is in a more positive space at the moment, business organisation Business Leadership South Africa (BLSA) CEO Busi Mavuso says in her weekly newsletter.
“We jailed a former President, repelled forces that tried to tip the country over into anarchy and now we have concrete plans not only to address the immediate impact of the violence and looting but also longer-term plans that promise a better future with sustainable economic growth.
“It’s been a torrid 17 months since the initial hard lockdown and the civil unrest that decimated so many businesses, small and large, nearly brought our country to its knees. But after a glimpse of what such a future holds, ordinary citizens stepped forward to help repel the looters,” Mavuso says.
She posits that, even before July, government displayed signs of shedding ideology for pragmatic solutions.
Mavuso highlights the corporatisation of the Transnet National Ports Authority and selling a majority stake in South African Airways as two examples of this.
She adds that this also sets precedents for some of the country’s other beleaguered State-owned enterprises – “bring in the private sector, run the entities along business principles and remove the drain on the fiscus”.
Mavuso also mentions President Cyril Ramaphosa’s intervention to ensure private companies could themselves generate 100 MW of electricity without needing a licence as another example of pragmatism.
“This went against the 10 MW proposed by the Department of Mineral Resources and Energy’s draft amendment to the Energy Supply Act, while the market was hoping for 50 MW at best.
“This move alone opens the way for much investment as mines and industrial companies in particular can operate plants and develop new ones without having to rely on an unreliable State-owned power utility in Eskom. We believe that as much as 15 GW could enter the grid over the next five to seven years with the medium-term investment amounting to around R100-billion,” Mavuso acclaims.
She mentions that, in her talks with CEOs of BLSA member companies, the feeling is that following the announcement of Finance Minister Tito Mboweni’s package to provide immediate relief to those affected by the violence and destruction to property, the country can swing its priorities back to ensuring the long-term trajectory remains a healthy one.
“Only with sustained economic and employment growth can we begin to hope to address the very real grievances of the millions of South African who cannot find jobs and feel excluded from the economy.
“Minister Mboweni’s package must be seen in that light – it’s a short-term solution to address short-term problems. We cannot afford to be distracted from the longer-term plans and in that sense it’s a good relief package, extending R36.2-billion in relief measures to those directly affected by the violence without putting a drain on the fiscus.
“That is to be topped up by a further R2.7-billion to be sourced from the reprioritisation of budgets at the departments of Trade, Industry and Competition and Small Business Development,” Mavuso emphasises.
Following this short-term solution, she highlights that it is important to accelerate the long-term solutions that the economy so desperately needs.