Jabu Mabuza. Picture: SUNDAY TIMES
Jabu Mabuza. Picture: SUNDAY TIMES

BIG business emerged this week from its deep funk in the wake of the axing of Pravin Gordhan and Mcebisi Jonas in March, and renewed its high-level interactions with the government. It was probably about as much fun as going to the dentist.

South Africa is just one notch above sub-investment grade following last week's Moody's downgrade, and is the most economically vulnerable it has been in 18 years. The Bureau for Economic Research confirmed on Wednesday that business confidence in South Africa was at its lowest levels since 2009.

This downswing in the business cycle is 43 months old - the second-longest in South Africa after the 1989-1993 period.

That's a terrible indictment of the country's toxic politics.

Business finds itself in a Catch-22. If it fails to talk to the government because it's sulking over the president's failure to comprehend the consequences of his fateful reshuffle, it will be condemned for not fighting its corner. But by keeping the channels of communication open, it runs the risk of being seen to be compliant.

 The elephant in the room at the discussions this week was the integrity of the new finance minister and his deputy.

Malusi Gigaba has asked to be judged on his actions as finance minister rather than on the growing body of evidence challenging his integrity thanks to the "Gupta e-mail leaks". He urged South Africans not be distracted by what he described as a "sideshow" - while admitting he had used his power as home affairs minister to facilitate the naturalisation process for members of the Gupta family after they had been turned down by the department. He did not say why he'd chosen to make an exception for a family with whom - according the leaked e-mails - he has a close relationship.

Gigaba's deputy, Sfiso Buthelezi, stands accused of benefiting from dodgy railway contracts at the chaotic, corruption-riddled Passenger Rail Agency of South Africa, when he was chairman.

While big business does not always cover itself in glory, there is at least a sense in corporate South Africa that once you are caught out you step aside and there is a chance prosecution will follow. There is less certainty when it comes to politically connected individuals.

The relationship between business and labour has seldom been good. It should never be cosy, but it should be productive. Former Venezuelan government minister Ricardo Hausmann has warned that the South African government's repeated populist assaults on big business could be an irrevocable mistake with dire long-term consequences.

The government, which claims to be pro-poor, needs to understand that it cannot help its key constituency unless it embraces business in a way that allows the corporate sector to generate sustainable profits through making long-term investments in an environment of stability and policy certainty.

Nothing is simple in South Africa.

Big business knows it cannot work in a dysfunctional economy and needs to do all it can to ensure the government does as little damage as possible. For the government, dealing with business is akin to supping with the devil.

It's like a rotten marriage neither party can afford to leave. They have massive debts and mounting family obligations, and as much as they can hardly bear to be in the same room as one another, they simply have to grin and bear it.

Unless there is a dramatic intervention, it seldom ends well.

Telkom chairman Jabu Mabuza, who is at the helm of the thrust to restore confidence in the economy since the start of the CEO Initiative, admits there is a sense of deep betrayal among business leaders, who see the risk of downgrade to sub-investment levels as practically inevitable.

South Africa needs to get to a point where good politics equals good business: where politicians can see the benefit of a solid corporate sector that competes fairly for access to contracts. Business understands, too, that if it fails to deal with the government of the day, it will create a vacuum in which dysfunction will flourish.

Whitfield is a public speaker on the political economy and an award-winning financial journalist and broadcaster

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