the way ahead
CAS COOVADIA: With brave leadership our story can be one of hope and recovery
All social partners — the government, business, labour and broader civil society — must jointly own and contribute to recovery
One often hears the phrase, “when you come to a fork in the road, take it”. But which of the two roads should one take?
We are faced with one of two choices: our trajectory of economic and service decline, where we meander towards a failed state; or decisively choosing a path of recovery and brave reform that creates a more inclusive and totally transformed economy. For me, there is one choice.
The book that tells our story as a country since 1994 is well known. The chapters, just like any good novel, are filled with suspense, tragedy and mystery. Tales of crime, destructive politics and economic hardship abound, as do stories of triumph, human development and hope.
Now the page falls open on a tragic chapter called Covid-19. We fear for our health and watch family and friends fight, succumbing to this disease. And the economy? The wellspring of our livelihoods and public services? It has been decimated. More than a million jobs have been lost, our state finances are in crisis, everywhere debt is spiralling, unemployment rocketing and business confidence declining. Yes, our economy had these problems before, but Covid-19 made them exponentially worse.
In the early stages of the pandemic, Business Unity SA (Busa) and the Black Business Council (BBC) sponsored the establishment of Business for SA (B4SA), a platform where the majority of SA business associations came together to partner the government and other stakeholders to combat Covid-19 and its impact.
Hundreds of CEOs, senior executives, former public sector leaders, industrialists and experts in banking, law, management consultancy and communications, and top health professionals volunteered to mobilise business’s capabilities to respond to the immediate crisis; restart the country after lockdown; and then develop a fact-based strategy for economic recovery after Covid-19.
We know that delivering the promise of 1994, a materially better life for all South Africans, means sustaining high levels of inclusive economic growth.
But how to make a rapid difference to jobs, growth and tax collection? We prioritised 12 projects and initiatives, from a list of more than 50, many of which are “shovel ready” and can be launched immediately across 10 high-impact sectors. Public-private partnerships, funded by business, are at the centre of the plan. We also identified 12 policy areas where improvements could increase GDP by over R1-trillion, generate 1.5-million jobs, and increase tax revenues by R100bn per annum.
The 12 “investable” projects are:
- Secure and affordable electricity supply;
- Fast-track the green economy;
- Implement Transnet’s road-to-rail strategy;
- Ports expansion;
- Road infrastructure;
- Full spectrum utilisation;
- E-learning and digital health platforms;
- E-commerce acceleration;
- Water infrastructure;
- Maximise commercial agricultural output;
- Import replacement focus;
- Increased financial inclusion and lower cost of capital.
The 10 high-impact sectors are:
- Small, medium and micro enterprises and township economic development;
- Energy and water;
- Financial services;
- Tourism and leisure
To drive such radical economic change fast, our assessment is that we need about R3.4-trillion of funding over three years, of which R2.4-trillion is needed by the public sector. We do not have enough money in SA. So we must source funding in global markets, competing against other countries also trying to rebuild their economies. To win, we need policy certainty, appropriate regulation, improving business confidence and ease of doing business.
Then let us be clear, broad-based BEE and sustained economic growth are totally compatible. Millions more “black” people creating wealth, gaining skills, participating in the economy and accumulating assets is good for everyone. To make this properly broad-based, we must simplify the codes and ensure empowerment reaches the people, not just the existing elites.
The B4SA strategy is emphatic that business, even the government, cannot do this alone. All social partners — the government, business, and labour, as well as broader civil society — must jointly own and contribute to recovery. For this we need strong, dynamic and brave leaders in all sectors of society who put the national interest first on the agenda, instead of our sectoral interests. And yes, this will mean compromise and trade-offs.
This calls for brave and decisive leadership. For the cynics who say this can’t be done, I say look at how closely what business says matches what the government and many in labour have already committed to: infrastructure, investment, transformation, anti-corruption, public-private partnerships and a capable state.
To recover from Covid-19 we can write a new chapter of our story composed not of fear, suspicion, decline and narrow self-interest, but of hope. Hope that an upswelling of goodwill could mobilise all partners to work together to improve the lives and prospects of all who live in our country.
SA business, for one, is ready for this!
• Coovadia is the CEO of Busa.
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