Driving private sector investment and confidence has been touted as “the only way” out of the Covid-19 crisis, following the release of Business for South Africa’s (B4SA’s) proposals for an accelerated economic recovery for South Africa.
Along with these “bold fightback measures”, Business Leadership South Africa (BLSA) CEO Busi Mavuso says the fiscal constraints on government are “simply too large” for it to be able to finance a recovery.
In a weekly newsletter, Mavuso referred to Finance Minister Tito Mboweni having “made it clear” in Parliament last week that the country was facing a debt crisis that would compound its economic problems.
“But while government does not have the fiscal muscle to lean against this crisis, it does have the policy tools to do it, and that is where we must focus,” Mavuso encouraged, adding that the right policy environment would mobilise private sector investment and spending.
However, in order to do this, a clear partnership between business, government and labour is required.
While this is often encouraged, Mavuso says the tasks that everyone must now take on are specific, with government responsible for creating policy certainty and an enabling environment. Businesses, on the other hand, are responsible for sourcing global capital to invest into projects to create growth and jobs, she adds, while labour “must bring ideas on how to create new jobs and ensure greater labour flexibility, rather than just protecting existing jobs”.
“We talk a lot about social compacting, but we mustn’t forget that every player has their capability set. Compacting cannot be a substitute for task assignment and action,” she comments.
To this end, B4SA – of which BLSA is a founding member – has brought several proposals to the table that could be job enablers and activate investment.
Energy security and a transition to green energy generation would deliver the energy security business needs to invest, while sparking an industrialisation process around green technology, while transport and logistics can improve the efficiency of the economy, moving freight off roads and onto rail, expanding port capacity and improving road infrastructure.
Additionally, B4SA has suggested that digital migration and spectrum auctions could lower the cost of data, enable e-learning and e-health and accelerate e-commerce, while better water infrastructure and an improved agri-industry could unlock greater agricultural potential.
Buying South African can boost domestic production while improved access to finance would increase inclusion.
Overall, B4SA identified 12 priority initiatives that would collectively grow gross domestic product (GDP) by R1-trillion, adding 1.5-million jobs and increasing tax revenue by R100-billion a year.
Unfortunately, Mavuso laments that, as has been said before, “South Africa is great at plans but bad at implementation”, noting that implementation and accountability must now be the focus.
“BLSA will work to identify implementation blockages and ways to unlock them. While talk shops can often be a substitute for real work, talks will be required to get alignment between business, government and labour. But then implementation must be ruthless, with programmes adapted according to performance,” she avers.