DUNCAN WANBLAD: SA at another watershed

SA is once again in a battle to fulfil its destiny. The battle is being waged on several fronts, but broadly deals with confronting the forces of corruption, the crime and violence that flow from it, and the resulting damage to the economy and social fabric. 

At the same time, a committed corps of leaders and citizens is agitating hard to pull the levers that support economic growth and the remaking of a more just and prosperous country.  

The stakes are nothing short of the livelihoods of the 60-million people. We call for all leaders to stand up, put self-interest aside and step into writing a new story for SA. We must usher in a new era of collaboration — defined by unquestionable honesty and sure-footed action — to urgently deliver workable and sustainable solutions.

The great SA writer Alan Paton once said, “the tragedy is not that things are broken; the tragedy is that things are not mended again.” We cannot afford to allow our current predicament to become normalised. We must start mending, and now. 

Much of SA’s public infrastructure has deteriorated to the point where it risks being beyond repair. Corruption and crime hinder our progress, while the energy crisis — which is depriving the economy of much-needed activity — has stifled the daily lives of every South African.

This toxic combination hampers our ability to function. It is deeply dispiriting and certainly hinders the confidence and investment we desperately need. The end result? A beleaguered and fragile economy, with millions of our people knocking at the door of opportunity and no-one answering. 

Five years ago President Cyril Ramaphosa set an ambitious target to raise R1.2-trillion in investment over five years to reconstruct and fuel our economy. As SA’s largest mining company, and one of its major investors, Anglo American certainly answered that call. By the end of last year we had substantially exceeded what we indicated at the time — from an initial R85bn to R117bn of investment — and also contributed R345bn in taxes and royalties for the SA fiscus in that same five-year period. 

Continuing to invest to sustain our businesses in SA is the responsible thing to do, and we plan to invest R29bn this year to do exactly that. In our case, more than 40,000 people depend on us directly for their livelihoods, and hundreds of thousands beyond that indirectly. Our contribution extends far beyond our mines, providing employment and stimulating economic activity through supply chains and local communities, while also providing an array of health, education and other basic services.

Renewal of belief

All of this takes investment and relies on a renewed belief in SA’s future. Our investments are real and significant. In the past few years we have developed and trialled the world’s first hydrogen mine-haul truck, supporting prospects for a hydrogen economy. We also set the ball in motion to build out renewable energy infrastructure as part of a system designed to generate 3.5GW-5GW of clean energy by 2030. Construction of 600MW of wind and solar projects is expected to start this year.

And we are busy completing the Venetia Underground Project, the largest investment in SA's diamond industry in more than 20 years, creating 3,000 jobs in Musina and contributing significantly to regional socio-economic development. 

These investments are what we have been able to justify today, but I know how much more potential SA mining has and the sort of investment levels a truly thriving SA mining industry could attract if local conditions were more conducive and globally competitive. 

A successful nation-state requires two key components to sustain itself and grow: a progressive public sector that innovates its regulatory regime and invests the nation's wealth wisely for the benefit of the whole population; and a thriving private sector that is able to contribute significantly to the fiscus. So, why are we stuck in a cycle of low growth and missed opportunities?   

Anchored in action  

In the absence of meaningful action, investment in the form and quantum required for SA is unlikely to materialise. We must urgently move beyond talk and get to delivering action. Our reality is that only through proper collaboration between business, government and civil society will we solve these challenges. And we cannot afford to wait any longer.  

That is why any agenda that moves us away from this goal of investability not only threatens jobs and contributions to the fiscus, but it would be nothing short of economic sabotage on a scale beyond anything we have seen before. 

Models of successful collaboration between the public and private sectors around the globe are breaking down old misconceptions and creating a paradigm of entrepreneurship and inclusivity that SA can and should readily embrace.  

Where collaboration is nurtured, the results are apparent. Two examples in SA are the creation of the Energy Council of SA, which since its establishment one and a half years ago has acted as a cohesive force in driving the development of a sustainable energy sector; and the launch of the Resource Mobilisation Fund, which uses private sector funds to support the National Energy Action Plan, backed by Anglo American and numerous other organisations. 

We are all adept at expressing our respective interests: business keeps arguing for regulatory certainty and an attractive investment climate; labour agitates for better wages and working conditions; and government has objectives it pursues through policy — the paramount one being transformation. But what we lack is the ability to build and strengthen real consensus. We need to lean in when we listen and not do it for the sake of proverbially ticking boxes.

Mutual reinforcement

The heart of the matter is that we must foster a sustainably growing economy that catalyses transformation. Growth and transformation are not mutually exclusive; quite the opposite, they are mutually reinforcing and it’s time we put growth at the centre of SA’s transformation agenda.   

We will never agree on everything and, frankly, we shouldn’t. There is great value in disagreeing with one another, but in my view this should always be done with the view of strengthening and not weakening our country.  

Far too often we slate each other with broad strokes without examining the merits of our respective arguments. This is lazy because instead of using the various viewpoints to come to build consensus, we end up in a logjam where nothing happens: crucial legislation is left hanging on a thread, with widespread confusion about the direction of policy and intent. Ultimately, the result is an economy left highly vulnerable and a country that is failing to live up to its potential. 

Consensus is not necessarily a perfect agreement: no society, company or relationship can ever have that. We should rather strive to  build and deepen our consensus on how SA can best unlock its full potential.  I believe we can learn lessons from the Codesa negotiation process in the turbulent 1990s, where negotiators from both sides adopted the principle of “sufficient consensus”.

 This principle was effective because it recognised that while the negotiators of our democracy would never achieve “perfect consensus” on all the line items, they had to make strategic concessions and focus on the bigger goal. So, their consensus to focus on the big vision of ushering in an inclusive and democratic SA, and not that which divided them — our painful and unjust past — was sufficient to move things forward. 

We are at a watershed moment in our history yet again. SA will improve the lives of all its people only if we can kick-start and sustain high levels of inclusive economic growth. Whether it is securing affordable and clean energy, implementing wide-ranging reforms to state-owned entities, tackling the unacceptable levels of corruption and crime or investing in modernisation, every sector of society can play a part in building the country we all want and deserve.

Agility and creativity   

The consistent link across all of this is the importance of infrastructure. SA’s infrastructure has steadily deteriorated because of corruption, crime, negligence and a lack of investment.  

To compete globally for the investment the country so dearly needs we must find new ways of funding, developing and operating economic and social infrastructure — such as railways and ports — in an agile and creative way. The result of this would be faster and more inclusive economic growth — a win-win. 

Decisive leadership and bold action, aligned with a growth mindset, could see SA delivering economic growth in the order of 5% a year, doubling GDP over the next 10 years and materially reducing unemployment and inequality in the process.   

That should be our driving focus; choosing to stubbornly hold on to what’s broken simply leaves us with a poorer SA that is starved of investment capital because that capital will have moved elsewhere.  

We certainly do not have all the answers, nor can anyone do any of this alone. First let’s imagine what unconstrained investment could bring to SA — a country where progress reigns over stagnation, where action is prized over talk.  

Leaders must do more than imagine; we must lead, come together and act. 

• Wanblad is CEO of Anglo American Plc.