The backlog in processing mining and prospecting rights that is hampering huge investments worth billions of rand into the struggling economy could soon be a thing of the past, after President Cyril Ramaphosa appointed a team led by mining guru Sipho Nkosi to cut bureaucratic red tape in government departments.
Nkosi is chair of the Small Business Institute and former CEO of mining giant Exxaro. He is the former president of the then Chamber of Mines of SA, now called Minerals Council SA (MCSA).
MCSA welcomed Nkosi’s appointment, saying it was “vitally important” for removing unnecessarily complicated hurdles that have held up billions of rand worth of investment.
The challenges of timeously granting prospecting and mining rights have dogged the department of mineral resources and energy for years. Business Day reported a year ago that the highest percentage of backlogs lay with ministerial approvals for the transfer of mineral rights and renewal of rights, with 59% and 47%, respectively, of these applications lodged since 2004 yet to be finalised.
Addressing the nation in his sixth state of the nation address (Sona) in Cape Town’s City Hall on Thursday night — the National Assembly was gutted in January’s fire — President Cyril Ramaphosa bemoaned the fact that there were “too many regulations in this country that are unduly complicated, costly and difficult to comply with”.
This prevented companies from growing and creating jobs, he said, stressing that it was business and not government that created jobs.
“We are therefore working to improve the business environment for companies of all sizes through a dedicated capacity in the presidency to reduce red tape. If we are to make progress in cutting unnecessary bureaucratic delays for businesses, we need dedicated capacity with the means to make changes,” Ramaphosa said.
“I have therefore appointed Mr Sipho Nkosi to head up a team in my office to cut red tape across government.”
Ramaphosa said the “red-tape team” will identify priority reforms for the year ahead, “including mechanisms to ensure government departments pay suppliers within the required 30 days”.
The Public Service Commission (PSC), which is aimed at monitoring and evaluating the performance of the public service, has often berated government departments for nonpayment of suppliers within 30 days, a move that affected their balance sheet and threatened their survival.
The president said the red-tape team would work with other departments and agencies to unblock specific obstacles to investment and business growth. It will support current initiatives to simplify processes relating to property registration, cross-border trade and construction permits, he said.
Mining is one of the key sectors of the economy as it contributes about 9% to GDP, with about 450,000 people directly employed by the industry.
In a statement reacting to the state of the nation address, the MCSA said there were more than 4,000 mining and prospecting rights within the department of mineral resources and energy awaiting approval. It said MCSA members had R30bn in approved capital projects that could proceed quickly “if these outstanding prospecting, mining and related licences are resolved quickly”.
“We need to move from theory to practise and focus on the issues that will make a real difference right now. We have run out of time to keep doing the same things that simply have not worked and which have in fact pushed us into this economic crisis,” said MCSA CEO Roger Baxter.
Baxter said it could not be business as usual: “We must have a structural break and do things completely differently to get growth back to 5% per annum. We need the government to completely change its view of how investments work. It must move as quickly as possible on the critical issues President Ramaphosa has identified.”
The SA Reserve Bank has forecast GDP growth of 1.7% for 2022, 1.8% for 2023 and 2% for 2024.
Sizwe Pamla, national spokesperson of labour federation Cosatu, which supported Ramaphosa’s successful campaign for ANC presidency in 2017, said the address did not represent a “radical shift that the current moment demands”.
“The economy remains subdued, bogged down by electricity supply constraints, and low private sector investment amid the persistent global Covid-19 crisis. This moment does not demand gradual tinkering with policy in certain areas but calls for an overhaul of the overall architecture of the government’s policy,” Pamla said.
DA leader John Steenhuisen said the bulk of the Sona could easily have been a DA speech, and Ramaphosa “should be commended for at least saying some of the right things”.
“However, he has made the right noises in the past too, only to go missing when they had to be implemented. The proof of the pudding is in the eating, and so we caution all South Africans to hold the applause until these announcements become actions, if they ever do,” Steenhuisen said.
Steenhuisen said judging by the words alone, “this is a commendable Sona”, but stressed that words meant nothing until they were put into action. “And so we will reserve our assessment until we see movement on all these issues,” he said.
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