Business is under no illusion about the scale and urgency of the problems SA faces, Eskom being just one of them. What is the appropriate response?
While making our voices heard, we must focus on providing the critical support needed to bring the country back from the brink. If anything, we must scale up our support and continue to engage and help solve problems.
In the budget presented last month, finance minister Enoch Godongwana lowered the government’s outlook for economic growth for 2023 to 0.9%, from the 1.4% expected last October. Behind those numbers lurks the real tragedy of foregone social spending because of the crises in electricity and logistics, alongside unacceptably high levels of crime and corruption.
The good, and possibly surprising, news is that there is still an environment in which progress is possible. In some areas this is more conducive than it has been for some time. There are areas in which SA is becoming more open to development. There are plans and actions in place that must receive our focused effort.
Business is providing support to Operation Vulindlela, a joint initiative of the presidency and the Treasury initiated in 2020 to co-ordinate crucial reforms and drive economic growth that has made tangible, necessary progress in terms of main sectors. Importantly, its work encompasses the fundamental change in the architecture of how energy is produced and procured in SA.
Eskom is in terrible operational and financial shape, but we’re also witnessing concrete, game-changing steps at the highest levels to decentralise energy generation. If successful, the effect over the next decade is going to make SA unrecognisable. Eskom is being restructured. The licensing threshold for embedded generation has been raised. National Energy Regulator SA processes for licensing larger projects are being streamlined. New generation capacity is being procured. And municipalities have been enabled to procure power from independent power producers.
Vulindlela is making progress in several areas:
- Telecommunications — the spectrum auction is complete.
- Water — the licence application process is being improved, the Blue and Green Drop system is being revived, a National Water Resource Infrastructure Agency and independent economic regulator for water are being established, and a revised raw water pricing strategy is being finalised.
- Transport — Transnet National Ports Authority is being corporatised, the White Paper on National Rail Policy has been published, and third-party access to the freight rail network is being finalised.
- Tourism — a revised critical skills list has been released, the policy framework and processes for work visas are being reviewed, and visa waivers are being expanded.
Some of these initiatives fix self-inflicted problems, and some are woefully delayed. But they do mark concrete improvements to areas of vital concern.
We have capable technocrats and leaders at the helm of the finance ministry. Last month Godongwana delivered a budget that outlined concrete measures being taken to address Eskom’s debt and incentivise solar installation by households and businesses, and called for private sector participation in the extension of transmission capacity. For the first time government gave a clear signal that the resolution of the electricity crisis does not revolve solely around Eskom.
Godongwana also announced that R1.3bn had been allocated to the National Prosecuting Authority (NPA) to support the implementation of the recommendations of the Zondo state capture commission and the Financial Action Task Force. An additional R265.3m was allocated to the Financial Intelligence Centre to tackle organised and financial crime, while additional police officers are being employed. A total of R14bn was allocated to fight crime and corruption, up from R9.1bn in 2022.
This fiscal support expands the capacity of a crime-fighting apparatus marked by public-private collaboration. The Eyes & Ears initiative, a joint venture between the police and Business Against Crime SA, is significantly boosting state capacity in the critical area of intelligence gathering. Furthermore, Business Leadership SA (BLSA) signed a memorandum of understanding with the NPA in 2022 to mobilise private sector skills and capabilities in selected areas.
Partnerships in other areas are stronger than ever. In addition to BLSA support to Vulindlela and other state organs, work is being done in support of the Presidential SOE Council, making the economic case for the restructure of state-owned enterprises.
In drawing attention to progress we shouldn’t minimise the real and serious challenges we face. But at the same time this is not the time for business to renounce its responsibility. We have agency, we have talent, and we have the resources and ability to build a better country.
Business must work alongside the government and society so that the headlines change for the better. The future of SA depends on it.
• Mavuso (@BusiMavuso2) is CEO of Business Leadership SA
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