SURE KAMHUNGA: Business and the government need each other more than ever

For the first time in months some of the country’s top business leaders and organisations representing the private sector have been unanimous in their frustration about what they perceive to be a tardy government that is playing Russian roulette with the struggling economy.

The CEOs of Nedbank, Standard Bank, Discovery, Shoprite, Business Unity SA and the Consumer Goods Council of SA have all expressed dismay over the deteriorating economic conditions and government lethargy in responding to these concerns.

That the economy is in trouble is not in doubt. Fourth quarter GDP in 2022 came at a shocking 1.3%, weighed down by more than 200 days of nonstop load-shedding; unemployment is still high; infrastructure decay is accelerating while investors are on strike, fretting about uncertainty and concern about the direction of the economy.

There is clear evidence that business executives are losing patience with the government, having given it the benefit of the doubt when President Cyril Ramaphosa took over as leader of the most advanced economy in Africa with a promise to usher in a new dawn. That, together with a commitment to be more engaging and collaborative with business and other social partners, injected a new dose of optimism that the so-called nine wasted years under the Zuma administration would be redeemed.

Admittedly, Ramaphosa didn’t have much time to start demonstrating what he had promised when the country was caught up in the Covid-19 pandemic, which became the world’s worst medical crisis since World War 2. The government had no choice but to spend time and resources to save lives and livelihoods, protect businesses from collapse and support the most vulnerable people who bore the brunt of the intermittent lockdowns imposed over almost two years.

As if the pandemic was not enough, the country experienced the worst civil unrest since democracy when an orgy of looting and violence caused economic damage of more than R50bn in large parts of KwaZulu-Natal and Gauteng. The human cost was also colossal, with more than 350 killed. This was soon followed by the worst flooding in nearly six decades in KwaZulu-Natal, dealing another body blow to economic recovery in the region and across the country.

Be that as it may, the government has been slow to respond to other key macroeconomicic shocks and challenges, including accelerating structural reforms to unlock the potential for growth. Added to this is the worsening electricity crisis and poor infrastructure, particularly the rail and port sector, with warnings that Transnet is fast becoming another Eskom disaster given the growing inefficiency at the ports and crumbling rail infrastructure.

Ramaphosa said at the Mining Indaba in Cape Town in February that business should stop shouting from the roof and join the government in addressing the problems facing the country. Unsurprisingly, some business leaders bristled at the suggestion that they were not engaging with the government and preferred to stay on the sidelines criticising it.

The fact is that business leaders and associations have and continue to try to engage with the government. They have made numerous failed attempts to meet ministers and also submitted a raft of what they believe are solutions-based proposals to inject a bit of growth into the moribund economy.

The message coming from the business leaders is that the government is good at acknowledging the problems facing the economy, and also acknowledging their suggestions. Where it fails dismally is in decision-making and implementation. There is intense frustration with the policy inertia and bureaucracy that is choking the life out of an economy that is struggling to grow enough to sustain job creation and improve living standards for the poor in particular.

Business leaders complain about a silo approach in the government to addressing the problems facing the economy, ministers who are either too busy to engage with them or are simply not interested in considering proposals submitted by business. Some have been outright hostile to implementing these proposals.

This disconnect between government and business is worrying considering that the country no longer has the luxury of time to talk about solutions. There is no shortage of solutions or ideas; there is a lack of consensus between the government and business on what needs to be done. One therefore hopes that the noises being made by business leaders will inject urgency into the government to collaborate further to address the concerns they have raised. 

This is not to say there is nothing positive happening; examples abound of what is taking place in the renewable energy sector, the successful four investment conferences held so far, the growth in the e-commerce sector and big-ticket investments some companies have been announcing. But the process could clearly be accelerated if the government was to demonstrate greater commitment and urgency. The economic environment must improve to underpin efforts by business to invest and create jobs.

Now that Ramaphosa has reconfigured his cabinet, including the appointment of a minister to deal with the load-shedding crisis, one hopes these ministers will not disappoint the country but roll up their sleeves to implement policies and projects that will help grow the economy. To do anything less is going to be catastrophic politically and socially.

For the governing party it means the jury is out whether it can resolve the electricity crisis ahead of crucial elections in 2024; for the government, the prospect of facing a growing population of restless, frustrated young unemployed people is too ghastly to contemplate.

Therein lies the challenge. It is in the interest of both the government and business to put their heads together and begin to work as a team for the benefit of the country. It can’t be that difficult.

• Kamhunga is a former financial journalist now working in corporate communications.