Show SA is open for business by cutting the red tape
SA is in desperate need of a model suited to quick innovation
In his opening address at the second annual SA investment conference in Sandton, President Cyril Ramaphosa announced that SA is open for business and he wanted to bring in billions in investment commitments. He called on fellow African leaders to keep the investment momentum rolling during the Africa Investment Forum, which ended on Wednesday.
This comes after finance minister Tito Mboweni painted a grim picture of the state of SA’s economy in his medium-term budget policy statement (MTBPS), with economic growth slashed from 1.5% to 0.5%. Add to this the fact that the unemployment rate is at its highest in 11 years, at 29.1%. This is no doubt hovering over Team SA as they scrape for increased investment.
As an entrepreneur, I believe these forums offer the ideal opportunity to have frank discussions about the country and the continent’s standing and the future of job creation and economic growth. Now, more than ever before, the government needs support from the private sector to boost economic growth and avert a downgrade.
What strikes me as the most important takeaway after the investment conferences is exactly this: the need to develop partnerships between business, the government and communities. Entrepreneurs are at the coalface of job creation in SA — they can offer valuable advice to the government and they can support and grow the government’s actions in communities.
If we involve business and communities in the state’s decision-making processes, we can create jobs. If the government and business work together, we can prove to the world that SA really is open for business.
According to representatives from large multinationals such as Naspers, Amazon and MTN, international companies are keen to invest in SA. However, to attract these investors and reach our investment target, our regulatory environment should be adapted to help businesses thrive.
When things change as fast and fundamentally as they do in the modern business world, entrepreneurs are often left playing catch-up, tied down by red tape and an inflexible regulatory environment.
I agree with the high-level speakers at the conference, that the country’s regulatory framework should be a catalyst for new business and investment, not a deterrent. Small and medium enterprises and entrepreneurial ventures can play a pivotal role in the much-needed economic turnaround and can have a meaningful effect in averting a downgrade.
The government owes it to the business sector to deregulate and ensure that the ecosystem for business and entrepreneurs improves. What is needed is an increase in the ease of doing business and a decrease in the cost of doing business.
In the drive to promote digital transformation in Africa, our regulatory environment must keep up. Too much regulation and red tape will cause businesses to stagnate, taking economic growth and job creation with it. We are in desperate need of a model suited to quick innovation. While we have come a long way in deregulation, there is still some way to go to remove bureaucratic and administrative hurdles. Flexibility and dynamism are key words in the future of our regulatory framework.
Ramaphosa told potential investors the country has a vibrant, young and able workforce and world-class infrastructure. We are a hub for development into Africa and we are at the forefront of digital transformation on the continent. This is a good starting point to boost GDP growth and employment figures.
Ramaphosa has an incredibly long to-do list. But if we are serious about the fight to save SA’s economy and turning the situation around, we have to focus on execution. SA has the potential to be a high-growth developing country. If we support local business and entrepreneurs, unemployment and economic growth are not insurmountable tasks.
SA is an attractive investment destination and the local business sector is willing to work with regulators so that business can flow to SA.
• Ferreira is co-founder and CEO of Osidon.