GARETH ACKERMAN: State and big business must get small entrepreneurs involved in the supply of goods
We need risk-takers, and creativity from banks and NGOs to aid them with start-up finance
SA’s arrival at an economic crossroads has been made more apparent by the impact of the Covid-19 pandemic, which has laid bare the deep economic and social divide in the country.
It is estimated that more than 3-million jobs will have been lost in SA by the end of 2020; GDP could contract by 7%-9%; many companies have closed and some in the small and medium-sized enterprise (SME) sector may never reopen; livelihoods have been affected and household food security has worsened; businesses have lost and continue to lose income given a weak economy and sustained trading restrictions.
Against these grim statistics the launch by President Cyril Ramaphosa of the SA Economic Reconstruction and Recovery Plan represents an opportunity to restore business and investor confidence, create jobs and improve the livelihoods of many South Africans still living in poverty.
However, its success will be only as good as its implementation, and this requires enormous collaboration between the government and the business sector. Any plan needs to be anchored by key policy pillars if the government is to achieve what it needs to.
The imperatives requiring the most focused attention include policy and regulatory certainty and consistency; reducing the cost of doing business; investigating and successfully prosecuting corruption and the abuse of public funds; accelerating investment in infrastructure; ensuring the reliability of cost-effective power supply; reducing crime; improving food security through sustainable, climate-friendly agricultural production and reducing food waste and loss; embracing digital technology; and continued private-public sector partnerships and investment in skills development.
To get our economy back on track efforts must be made to encourage the creation of small businesses. There are enormous opportunities for SMEs and we must make every effort to encourage them to open and get involved in the supply of goods. We need entrepreneurs who are prepared to take risks. At the same time, we need the banking and nongovernmental financing sector to look at creative ways of providing start-up finance.
We also need small-scale producers to grow food and supply fresh produce directly to consumers. Significant progress with the goals of food security, environmental sustainability and better access to food can be achieved if the government and the private sector work together to create and support small producers and focus on reducing food waste at all levels of the supply chain.
Tackling food waste is a global challenge. But it has added urgency in Africa where so many people still go hungry. That is why this month, food manufacturers and retailer members of the Consumer Goods Council of SA (CGCSA) launched the SA Food Loss and Waste Voluntary Agreement with the support of the government. This agreement commits the signatories to reducing food waste to achieve the UN’s sustainable development goal to halve global food waste by 2030.
The government’s most important role is to focus on what it’s good at — policy formulation. This will help create an enabling environment for the business sector to invest, grow and create jobs in. It also needs to be consistent in the application of policy, and provide both confidence and certainty so that it earns the support and respect of all South Africans.
In this respect some of the lockdown regulations did not appear to be coherent, particularly the tobacco ban, which has since been removed, although the damage in terms of shifting trade to the illicit, unregulated sector will take years to put right. The liquor ban has also been relaxed, but it remains unlawful for a customer to buy alcohol from a shop on a Saturday or Sunday, to consume in the privacy of his or her home. This makes no sense when that same customer is perfectly free to go to a tavern, club or bar on a Friday night, Saturday or Sunday and consume alcohol on the premises. Ministers have never explained this discrepancy, and so it has never been understood by the public.
The reason this is important is that we need public policy — and the Covid-19 restrictions — to be understood and supported more today than ever before. The virus has not gone away, and we cannot relax our guard while the risk of a resurgence remains very real. Retailer and manufacturer members of the CGCSA will play their part to keep their people and customers safe. At the same time, the government has a duty to ensure its rules are justifiable and proportionate. That is why they need to remove the remaining restrictions on the sale of liquor.
Our government needs to be grasped by the same sense of urgency as the private sector. SA does not have the luxury of time to fix what is broken or not working. Nor does the country have the time to continue to tinker with solutions when faced with a frightening unemployment crisis and the threat of social instability.
We urge the government to trust the business sector in implementing the economic recovery plan. We can achieve what we need to together.
• Ackerman is Pick n Pay chairman. This article is written in his capacity as co-chair of the CGCSA.
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