SIPHO PITYANA: Halting the slide to a failed state
Business has long pressed President Cyril Ramaphosa to take tough action. But the government fails to see the urgency
Business, like the rest of society, is edgy. It has no more appetite for platitudes and promises, or contradictory and reactive assurances from President Cyril Ramaphosa.
It’s clear we’re in a fast-deteriorating economic climate with no discernible path out of the quagmire. As corporate citizens, we’ve used every opportunity to share our thoughts with the government on the paths well trodden by many other countries in similar positions; painful and difficult options have been chosen. Nations have to take short-term pain for long-term gain.
Wrongly, however, our government seems to be adopting a contrarian view that there’s no pain to be taken and we will be all right.
It seems to labour under the misguided expectation that business will shut up, invest and create jobs regardless of the state’s singular mismanagement of the macroeconomic environment. It forgets that we risk our own capital, or the capital entrusted to us by others, including pensioners.
On January 14 Business Unity SA (Busa) will host its Business Economic Indaba, where we’ll share these concerns with the government.
Business has given Ramaphosa more than enough time to provide worthy leadership. It’s not as if the options aren’t clear — we all know the choices that must be made. And where we do see decisive leadership, we can be counted on to be part of this journey.
Hard choices must be made today. We can’t wait until all SOEs are in business rescue
But it means developing a focused approach to addressing reality. We need a clearly defined economic recovery plan to take us forward, stop the slide towards a failed state, and reassure everyone that we’re responsible custodians of our future.
Such a recovery plan needs to include urgent steps in five key areas:
• Security of energy supply, without which the country, let alone business, can’t survive. This is our single biggest concern.
• Fiscal consolidation by cutting government expenditure and debt. We need a credible plan, with clear timeframes, to achieve this.
• Reform of state-owned enterprises (SOEs). They are fundamental to our economy, but the contagion from the crises that beleaguer them reverberates across our businesses.
• The appointment of competent and ethical leaders in all state institutions, to ensure we have a capable state. The repeated appointment or retention of people known to be unsuitable and corrupt makes a mockery of any commitment to "good governance".
• A blueprint to revive the economy focusing on key strategic sectors and interventions.
These are the issues Ramaphosa must be seized with. They should provide the framework for next month’s state of the nation address and be the pivot around which he begins to rebuild the economy, attract investment, provide hope to the unemployed, and stave off a ratings downgrade.
Yes, there are political realities he has to confront — not least of which is a divided governing party that seems set on eating itself, and SA with it. But we need unity of vision and purpose, and clear direction from Luthuli House, if we are to end broken promises.
For any plan to work, Ramaphosa must accept that the state is in desperate need of repair.
It is broken, even destroyed in some places. The proliferation of corrupt deployees during the state capture years facilitated looting, but it also led to public services breaking down.
There’s no other option — hard choices must be made today. Yes, they may cause unhappiness, but we can’t wait until all SOEs are in business rescue.
We can’t wait for more lekgotlas and bosberade before the government reaches consensus on key macroeconomic policies.
We cannot waffle on about the fourth industrial revolution while there is no electricity, little spectrum, and economic stagnation.
As organised business, we hope to emerge from the economic indaba with a joint plan of action. It will probably be the most important meeting we’ve ever had with Ramaphosa.
• Pityana is president of Busa