As much as things may seem to change in SA, they really just stay the same. I’m referring to the business-government relationship and the failure of business to learn from its mistakes.
The business-government relationship should have collapsed after then finance minister Nhlanhla Nene was fired in 2015 for failing to get out of the Guptas’ way, but business took nearly a year before it became outspoken against state capture.
Instead, it became preoccupied with the sideshow of developing technical plans and projects to rebuild confidence in the economy even as then president Jacob Zuma’s camp continued to ravage the institutions on which the economy relied.
Today we have Business for SA (B4SA). Then, we had the Presidential CEO Initiative, under whose aegis several business-government working groups were established during 2016 to expedite reforms and initiatives to boost investment and growth.
Towards the end of that year it became clear to business that Zuma had never had any intention of honouring this reform agenda. Not only had it been politically naive in believing him capable of real reform, but business had allowed itself to be neutered by its desire to work in partnership with the government in the mistaken belief it was rebuilding trust.
“Business failed to grasp that SA’s problems are political and require a political strategy,” said former Business Leadership head, Michael Spicer, at the time, “They are never going to be solved only by the generation of technical projects and plans.”
The environment under President Cyril Ramaphosa could not be more different. Business has seldom enjoyed a closer working relationship with the government and, until the Covid-19 lockdown debacle, had high hopes that real change was possible.
From the moment the pandemic hit, B4SA began working intensely on a recovery plan. It released the 110-page document, which is founded on the idea of a grand public-private partnership, on July 10. However, it was set back by the shock reinstatement of the alcohol ban not two days later, which halted billions of rand of planned investment in the beer and bottling industries.
The move undermined business’s assertion that its close, reciprocal relationship with the government was bearing fruit and has raised the risk that business is merely repeating past mistakes.
The real problem has always been that outside the National Treasury, the government mostly lacks the political will to drive an economic reform programme. As Spicer said, SA’s problems are political and are never going to be solved only by technical plans.
Moreover, B4SA’s plan assumes that the state has the technical capacity to implement a comprehensive reform agenda with just a little help from business. The work agenda it sets out could keep every state department busy for the next five years. In fact, the plan is so complex it will be a wonder if any politician ever reads the whole thing.
Business’s third mistake is a failure to think strategically. It has been said that a government may be made up of a thousand moving parts, but a president needs only a handful of priorities. B4SA should have presented a focused 10-pager that backed and updated the National Treasury’s growth document, not tried to rewrite the National Development Plan.
The issues are clear: over the past decade SA’s competitiveness has been eroded by a shortage of electricity, inefficient network industries, complex empowerment regulations and red tape, policy uncertainty, a lack of technical skills and tense labour relations. The way to restore growth is to fix these things to make SA an easy, welcoming place to run a business. End of story.
This is not to say that business hasn’t put sound, technical ideas on the table. It’s just that, as ever, political and capacity constraints make meaningful reform unlikely. Meanwhile government corruption and incompetence are fast turning hope into cynicism and despair. Without reform and a resumption in confidence, the economy will continue to atrophy. And so, we go round and round. No wonder SA never gets anywhere.
• Bisseker is a Financial Mail assistant editor.
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