SA business wants action, not words, on economic recovery
Business groups have spent four months drafting a plan to get the economy back on track, but confidence the sate will implement is is ‘very low’
SA business leaders are growing increasingly concerned that the government doesn’t have the will or capacity to overcome the economic devastation wrought by the coronavirus pandemic.
Business for SA (B4SA) expects the economy to contract as much as 10% this year and has spent the past four months drafting a plan to get it back on track. About 250 experts worked for free on the proposals that could potentially add R1-trillion to GDP, but they have gained limited traction with the authorities so far.
“My confidence in the government implementing this is very low,” Busi Mavuso, CEO of Business Leadership SA, which forms part of B4SA, said in an online briefing with Bloomberg. “I can’t say the government jumped for joy in receiving the plan.”
The R5.1-trillion economy, which was already in recession before the coronavirus struck, went into a tailspin after the lockdown was imposed in late March. A study by a group of 30 academics and researchers estimated that 3-million people lost their jobs between February and April, while 1.5-million others were furloughed.
The government could have done a better job in managing the lockdown and the ensuing fallout, Cas Coovadia, CEO of Business Unity SA (Busa), another B4SA member, said at the same briefing. Still, he said the business groups had supported the need for a lockdown.
If all the work business has done on how to orchestrate a revival “goes to waste because of inaction, history will judge us”, he said. “The ball really does lie in the government’s court. Leadership has got to come from the government.”
President Cyril Ramaphosa has announced a R500bn package to shore up the economy and support individuals and business that have lost their income, with part of the money to come from redirecting existing budgets. He also aims to galvanise R2.3-trillion in new infrastructure investment over the next decade that could create more than 1.8-million jobs.
The B4SA plan calls on the government to fulfil long-standing pledges to make it easier to do business, clamp down on graft, and overhaul badly managed state-owned enterprises. The group opposes tinkering with the Reserve Bank’s mandate or threats to its independence and dictating pension funds on how to invest.
“It is not as though we don’t know what decisions need to be taken and what then needs to be implemented,” said Martin Kingston, who heads B4SA’s steering committee and is deputy president of Busa. “Where there is scepticism or concern among the leadership of business is that leopards don’t change their spots. The hallmark of inaction and indecision is going to carry on.”
Kganki Matabane, CEO of the Black Business Council, voiced similar concerns. “We are always announcing plans,” he said. “There is no action that follows the words. We need to find a way to put more pressure on government to start implementing and stop talking.”
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