The chairman of Business Leadership South Africa and Business Unity South Africa chose to lament the state of the relationship between the business community and government last week, but also put forward a list of ideas that, if implemented, could improve the country’s economic prospects.
Mabuza was speaking at the Gauteng policy conference of the Black Management Forum held at the Industrial Development Corporation on Friday, which had been organised under the banner “Improving business and investor confidence in South Africa”.
Mabuza was frank in admitting that the political events over the last few months had “destroyed trust and confidence” in the economy. To get the country out of its depressed economic state, he offered seven suggestions on how the situation could be improved:
1. Strengthen the quality of the policy-making process in SA: referring specifically to the input of the business community in the process. Mabuza says that over time the quality (transparency, and the high degree of public participation and accountability) of the legislative process has been steadily eroded. He called on business to begin reversing this degradation by “strengthening its voice”. This entails committing time and resources to participating “constructively and meaningfully” in the country’s democratic institutions. Neither should organised business shortchange the process by sending junior employees or people with “nothing better to do,” he said. “If we insist on evidence-based decision making, we need to ensure our own evidence is objective and compelling.”
2. Improve the quality of relations between business and labour. Building a strong foundation of trust between the two naturally opposed parties would be a necessary precursor from which to undertake negotiations on reforms that could support employment creation and business growth while protecting the rights and interests of employees.
Mabuza made these comments with one eye on the fourth industrial revolution, which he says “will mean more automation, fewer jobs and a massive shift toward a high-tech, knowledge-driven employment market”.
3. Dealing with the problem of monopolies (black and white): addressing the problem of government-run monopolies (black) and the control of large swathes of the economy by white minority interests, Mabuza’s frustration was most evident. “Our state-owned enterprises are, in far too many cases, inefficient, poorly governed, deeply indebted, and unaccountable to the taxpayers who have to repeatedly bail them out.”
Despite the business sector making a number of proposals to support the strengthening and streamlining of the SOEs – something he noted that was positively received within government – Mabuza lamented there was no sign any of it was ever taken on board. In a thinly-veiled dig at Eskom he said: “In fact, certain current events would even suggest a complete disregard for the basics of corporate governance.”
Turning his attention to the private sector, he said: “The narrative of white monopoly capital – as problematic, politicised and populist as it is – has traction precisely because so many aspiring black businesses find it so difficult to compete in an economy dominated by big, long-established corporates with deep pockets and extensive business networks.”
While lauding the efforts of the Competition Commission to tackle some of these issues, Mabuza suggested that policy to assist the transformation of the economy could include easing regulatory barriers to entry, reviewing the availability and accessibility of government incentives, utilising special economic zones, and exploring government-private sector risk sharing arrangements to enable new ventures to get off the ground.
4. Addressing the critical challenge of weak public governance, Mabuza reiterated the idea of being able to speak up, in any capacity. “Speaking out about corruption is not a political act. We need to insist on greater transparency and accountability,” he said, while urging business leaders to ensure their own dealings were “untainted”.
5. We need to drastically improve the public education system. Probably the most common suggestion with strong support across the political spectrum, Mabuza’s speech would have been amiss if he had not mentioned this. But he also pointed out that education should be something that should extend well beyond school.
He also urged employers and business owners to take a chance on people who might not have had the same opportunities to a quality education as others. “We need to give a leg up and take a chance on someone. We need to invest in the next generation.”
6. How do we support inclusive growth? Commenting largely in respect of the ruling party’s most recent slogan of “Radical Economic Transformation”, Mabuza referred the audience to the formal definition of “radical” – “It’s change from the core. Our economy is not fit for our purposes. When our economy was growing, it did not transform. But now we have to transform our boards, management teams, and employees and do so while adapting to a rapidly evolving global economy.” This will not be easy.
7. You don’t need to be anti-white to be pro-black. But to begin changing these things, we need government to take urgent action.