B4SA's Martin Kingston says the Covid crisis presents us with opportunities we can take advantage of to forge a new social compact. Picture: FINANCIAL MAIL
B4SA's Martin Kingston says the Covid crisis presents us with opportunities we can take advantage of to forge a new social compact. Picture: FINANCIAL MAIL

Business has united to set out a detailed strategy for SA's economic recovery - and put pressure on President Cyril Ramaphosa and his cabinet to implement urgent action to turn the economy around.

The comprehensive economic document released on Friday by Business for SA (B4SA) has been endorsed by all of organised business, bringing together bodies such as the Black Business Council (BBC) and Business Unity SA (Busa) that have been at odds in the past.

And though many of its proposals for reform have long been on the government's own list, B4SA pointed out that none had yet been implemented, warning that time is running out rapidly, with SA at risk of losing all the economic gains of the democratic era.

"We need a compelling and stable environment that will attract investment and drive growth and employment, restoring consumer and business confidence," the 110-page document says.

The B4SA document was released just hours ahead of the ANC's own economic policy blueprint.

ANC economic transformation committee chair Enoch Godongwana said there were many areas of convergence between the documents, including their emphasis on infrastructure investment as a key driver of recovery.

B4SA expects SA's economy to contract 9.6% this year and to take three years to recover to pre-Covid levels.

But it says that unless decisive action is taken the economy could take five years or more to recover, with the risk of a sovereign debt crisis that could result in SA losing its economic sovereignty.

The umbrella business body called for an urgent social compact and for Ramaphosa to lead a joint task team to agree priority actions across sectors and implement far-reaching economic reforms.

"The Covid crisis presents us with opportunities we can take advantage of to forge a new social compact, building on the co-operation established during the crisis," said B4SA's Martin Kingston.

"We need a compelling and stable environment that will attract investment and drive growth and employment, restoring consumer and business confidence."

The private sector could help to access local and foreign capital, implement projects and create new businesses and jobs.

But he warned that SA, which will need a total of about R3.5-trillion in funding for its public and private sectors over the next three years, would be competing for capital with all other emerging markets coming out of the Covid crisis.

BBC president Sandile Zungu said: "This is a unified business proposal on the way forward. We were in a deep economic crisis even before the Covid crisis, and numbers don't lie - there is no more time for debate. As business and as social partners we are united and want to work with other social partners to take the economy in a new direction."

Busa president Sipho Pityana said B4SA was pleased that its exchanges with the government had been well received, and they provided an important basis for discussion. "We are ready to engage."

Busa CEO Cas Coovadia said the Covid crisis had created a situation where SA was at a T-junction: "The wrong choice takes us to a failed state; the correct choice puts us on a long, hard road to economic recovery."

B4SA says its modelling has identified 12 priority initiatives which, together with key policy reforms, could create 1.5-million jobs, increasing GDP by R1-trillion and tax revenues by R100bn annually.

Among these initiatives are a secure and affordable electricity supply and implementing Transnet's road-to-rail strategy, as well as expanding ports and road infrastructure and fully exploiting SA's digital spectrum.

It also lists 15 immediate actions that would require no policy changes but would lift consumer and business confidence, including a "zero-based" reconstruction medium-term budget in October.

Other such steps include ensuring that the government and big business support small and medium enterprises (SMEs) and pay them on time; fast-tracking infrastructure, energy and water projects; and freeing up spectrum.

The strategy makes it clear that broad-based BEE is key to inclusive growth - but B4SA has called for empowerment codes and legislation to be streamlined to ensure they deliver transformation as intended.

Business Leadership SA CEO Busi Mavuso said there was a specific focus on SMEs, especially black SMEs, and BLSA's member companies had signed off on a strategy this week to ensure support for these.

The B4SA document, accompanied by a longer analysis compiled by industry experts, sets out roadmaps for each sector and details priorities based on which sectors have the strongest multiplier effects on growth, jobs and exports.

B4SA says a "compelling new narrative focused on inclusive growth and investment" could persuade capital providers to invest in SA and could see SA lift its ranking on the World Economic Forum's global competitiveness index from 60th to 25th by 2030. It could also improve its ranking on the World Bank's ease of doing business index from 84th to 20th.

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