In addition to the financial and social strains of the pandemic, SA still needs to overcome historic hurdles that put the country on the back foot during the lockdown.

These include the slow pace of government reforms; the skills-readiness of our workforce to gain employment in a fourth industrial revolution (4IR) workplace; the devastating impact of rapid climate change in a country already gripped by drought; and an energy crisis that is straining our economy.

The sixth annual Directors Event, presented by the Sunday Times Top 100 Companies and in partnership with BCX, took place online recently, where these issues were debated and brainstormed, and potential solutions recommended.

Sunday Times editor S’thembiso Msomi said President Cyril Ramaphosa needs to be brave in forging ahead with actions to establish SA as an economy that investors can trust again. Achieving that will take commitment, hard work and the co-operation of both the public and private sectors, he said.

“SA is poised for a future where our fundamental industries will be revolutionised, and it is imperative that we harness this innovation,” said Mandisa Ntloko-Petersen, BCX chief marketing officer, adding that companies that embrace innovation will thrive rather than merely survive.

Chair’s report for 2020

Delivering the Chairman’s Report for 2020, Absa chair Wendy Lucas-Bull discussed what it takes to do business successfully in SA and what’s required to drive our economy forward. To address SA’s downward spiral requires drastic changes in the composition and efficacy of government spending. What matters most now is a clear response plan that all stakeholders can support, and a relentless focus on its implementation underpinned by a credible accountability framework.

The journey towards an economic recovery will require a socio-economic compact between the government, organised business, labour and civil society, said Lucas-Bell. In the short term, there is low-hanging fruit that could help to stop the downward spiral, including reforming state-owned entities into efficient economic growth drivers; ensuring a stable supply of electricity in a liberalised market; a review of regulatory frameworks to facilitate digital migration and release much-needed spectrum; amending SA’s visa regulations; and easing regulatory red tape for small businesses. In the medium to long term, unemployment needs to be addressed and the state’s capabilities bolstered, while infrastructure projects with multiplier impact need to be prioritised.

Saving Eskom a collective effort

In his keynote address, Eskom CEO Andre de Ruyter said if the power utility fails it will have dire consequences for SA. He acknowledged concerns about rising electricity tariffs but said that there was no avoiding an increase in the cost of electricity in future.

Eskom has identified a number of priorities to put the business on a more sustainable footing, including a focus on maintenance, the quantity and quality of coal, reducing its headcount, addressing its debt challenge, restructuring, and recovering a culture of excellence. He said fixing Eskom will require a collective effort.

How to revive an economy in ICU

The first panel discussion focused on strategies to revive the economy and included Ruth Hall, professor of poverty, land and agrarian studies at the University of Western Cape; Ted Blom, independent energy expert; and Tebele Luthuli, Business Against Crime MD.

The big issues from the discussions were about the Covid-19 pandemic and how it has become a humanitarian and food crisis, worsening structural inequalities. A basic income grant was one suggested solution. The high cost of doing business in SA — worsened by the growing cost of electricity — needs to be addressed, and the power grid needs to be opened up to households to self-generate. Other solutions included reform of labour regulations and better capacitation of the NPA, Hawks and the SA Revenue Service to create a more capable state.

The biggest takeaway, said Ntloko-Petersen, was the need for collaboration. “There is no question that an economic recovery will require a collective effort combined with effective policy and a sustainable energy supply.” 

Managing climate change to become self-sufficient

The second panel discussion focused on how SA needs to manage climate change to become self sufficient. The panel included Tasneem Essop, Climate Action Network International executive director; Dr Inga Jacobs-Mata, International Water Management Institute, Southern Africa country representative; Kekeletso Tsiloane, Ramtsilo Manufacturing & Construction founder; Shamini Harrington, Sasol vice-president of climate change; and David Nicholls, SA Nuclear Energy Corporation chair.

The main takeouts were that SA cannot afford to be unconcerned about climate change, given that it’s not just an environmental issue but also an economic and social issue. We need to implement an inclusive process to enable a just energy transition. A climate change programme done right will lead to better development and better growth.

However, while there has been progress in terms of policy evolution and development there is a lack of technical capacity to implement, and a disconnect between climate change and development goals. The argument for nuclear energy as the only viable alternative to coal was not accepted by all the panel members, many of whom called for a bigger focus on renewable energies.

4IR and jobs

The final panel discussion of the day put the spotlight on how 4IR will create jobs and grow the SA economy. The panel included Brian Armstrong, Wits Business School adjunct professor; Dr Michael Gastrow, Human Sciences Research Council’s director for science in society; Gur Geva, iiDENTIFii founder and CEO; and Shaheen Vawda, BCX chief sales officer.

The big takeouts from this discussion included the warning that SA does not have the luxury of time and needs to urgently embrace 4IR technologies to harness potential opportunities and become globally competitive. However, SA’s IT infrastructure has room for improvement. We need to ensure that the youth and those in marginalised areas have access to affordable data, and build science and technology skills for the 4IR. Connectivity is the biggest challenge facing the country, and the digital divide is at risk of growing even wider.

From a business perspective, digital transformation is a journey rather than a destination, and one that can’t be focused on cost cutting but rather on top-line growth.

Tangible areas to create jobs are building labour-consuming platforms (such as Uber and Airbnb); more globally traded resources; and creating a vibrant hub for the application of emerging technologies in an emerging market context — and then scaled up for export.

The Institute of Directors SA (IoDSA) has partnered with The Director’s Event since its inception. An event of this nature is even more important in a difficult year, said IoDSA CEO Parmi Natesan.

“It's in times of crisis that companies need their directors to steer them through choppy waters, and we realise how interconnected business, society and the environment are — having either a positive or negative impact. There is no question that business has an impact on our social and environmental capital,” said Natesan.

She added that boards need to be directing their companies to survive and thrive. However, this can only be achieved if the legitimate needs and expectations of stakeholders are taken into account.


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