President Cyril Ramaphosa and key South African business players have joined forces again. This time to specifically deal with addressing the country’s energy, rail and increased crime challenges. The meeting took place on Tuesday, with the business fraternity reviving Business for South Africa, which came into effect during the time of COVID-19.
Specific targets have been set, with particular emphasis on putting an end to load shedding, which is costing the local economy tens of billions of rand every month. The business fraternity is anxious about the operating conditions in the country.
A lack of power, poor transport networks and the higher cost of doing business have already put many players out of business. Business Leadership South Africa (BLSA) CEO Busi Mavuso says the meeting with President Ramaphosa was positive and constructive.
“We definitely are reassured as business. We have no reason whatsoever to doubt that this is going to work and the discussion started way before this. They actually started around the investment conference, just before the investment conference. If you remember the President made that announcement at the investment conference that there is going to specific priorities and interventions on energy, transport and logistics and crime and corruption that business and government are going to be collaborating on,” adds Mavuso.
Mavuso says business has decided to resuscitate Business for South Africa, a vehicle created for cross cutting businesses to work together with the government to deal with the COVID-19 crisis and its effects at the time. It also has also revamped Business Against Crime. Business and government have set targets for progress and plan to meet every six weeks to ensure progress on the various work streams that have been assigned.
“From an energy perspective, we are looking at ending load shedding by supporting to drive the current six gigawatts energy capacity gap in the short-medium-term. From a transport and logistics perspective, we are looking at stabilizing and improving operational performance of strategic transport and logistics corridors and from a crime and corruption perspective, we want to assert the primacy of the rule of law through capacitating the NPA and developing an intelligence database and I think we’ve even quantified what this would mean from a GDP perspective,” Mavuso added.
While not specifically discussed at this week’s meeting, concerns remain around international perceptions of the South African government’s position on the Russia/ Ukraine conflict, which is part of the reason the rand tumbled in recent weeks, although it’s now showing some signs of recovery. But this has had the consequence of South African Government Bond yields rising to relatively high double digit percentages, which makes it even costlier for the South African government to borrow money.
“We are still worried about the fact that if something doesn’t change in terms of how SA postures itself in terms of its relation to Russia or if we really don’t keep to the neutral stance that we keep talking about, then there is going to be a loss of trade relations and the loss of those trade relations are going to be devastating for employment. They’re actually going to mean that the economy is going to be left to be far more reliant on raw material exports to other developing countries. There is going to continue to be ructions on our financial markets,” Mavuso explains.
But ultimately the meeting’s emphasis was on what’s happening here at home. There’s a concern that if decisive action is not taken now, the myriad of problems the country has will appear insurmountable going forward.