Martin Kingston, chair of Business for SA (B4SA), says the country is “on a knife edge” and only by ramping up the public-private sector collaboration that saved it from the worst of the pandemic can it be hauled back from the abyss.
B4SA was set up in response to the pandemic by organised business, which has decided that it should be used as a platform for priority economic interventions, Kingston says.
“Unless we bring the resources, skills and experience to bear in a co-ordinated, integrated manner in support of national imperatives, continuing economic decline is almost inevitable.”
But while business has made its commitment to the public-private partnership model clear, “government also needs to be clear that business is not a junior partner in this equation”, he says.
It needs to be an equal partner in dealing with the country's priority challenges, including the energy sector, water and transport infrastructure, and the criminal justice system, so that it can focus on “real and tangible initiatives” that generate jobs and growth.
“Business is committed to this. We need to have a fully committed, willing and co-operative counter-party.”
There needs to be a very open conversation about what is a priority and what is not
— Martin Kingston
It is key to the country's survival that business be treated as an equal partner “at the very least”, and that government openly acknowledge its role, unlike during the pandemic, he says.
“We recognised that government needed to lead that process, and accepted that our role didn't need to be openly acknowledged.”
It would have been “nice” but was not necessary, Kingston says. “In this particular case it is necessary, because business cannot move forward without the active collaboration of government.”
The government needs to acknowledge that business has got skills, experience, resources and human and financial capital that it is bringing to the party. And there needs to be “a very open conversation about what is a priority and what is not, and where as a country we need to collectively put our shoulders to the wheel.
“I don't think government can assume that business will bow to its instructions. It will not. It needs to be collaboratively enjoined into a process.”
Some people in government acknowledge that, he says. “Whether they do it publicly or privately is an issue, because business needs to feel it is a welcome partner, not an irritant on the periphery.”
SA could not afford to continue along a road where business was treated as a junior partner, with the government alone making decisions that influenced, often negatively, the investment environment.
“We're not going to get investment from the public sector, it is highly constrained. It is going to come, domestically or internationally, from the private sector. And that depends on one thing alone: the quality and predictability of the investment environment. At the moment we have a highly problematic investment environment.
When B4SA published its comprehensive economic recovery plan, largely ignored by the government
— July 2020
“Government needs to acknowledge that to attract investment, and for that investment to be translated from a headline commitment into the expenditure of rands and cents, all of the issues pertaining to structural reform, the ability to take difficult decisions and then implement those decisions, are precursors to the meaningful mobilisation of investment.”
There are too many in government who feel that everything must be put on the table simultaneously, he says. “We have said that some of these issues need to take a back seat in the current circumstances.”
That is a sticking point or, as Kingston says, “a matter of ongoing discussion”.
He believes there is an implicit acknowledgment by the government that business needs to play a leading role in the partnership if it is going to save SA.
“But, and this is a major 'but', government also wishes to make sure it can include everybody in the process, all of the social partners, and all of the issues everybody is raising.
“We don't believe we have the luxury of time as a country to try and do everything. The consequence of trying to do everything is that we do nothing. The consequence of involving too many people is that we default to the lowest common denominator.”
He points to the comprehensive economic recovery strategy B4SA published two years ago, which the government largely ignored.
“Since then very little has changed, other than that circumstances have deteriorated and the challenges have been magnified.
“We made it clear that if we have more than a dozen low-hanging fruit and key priorities, that's too many because we as a country have limited resources and we've got to channel our energy effectively and with impact.”
That process got “subsumed, unfortunately” into the government's reconstruction and recovery programme where 12 or so interventions became more than 100. “The moral of the story is, take the resources that you've got, make sure you can prioritise carefully and responsibly, and then bring all of your resources to bear.”
SA would have been in a better place today if the government had paid more attention to the B4SA strategy, he says.
He cites as an example its resistance to allowing more than 10MW of embedded generation when the B4SA strategy said it needed to be at least 50MW. Eventually, it was raised to 100MW.
“Now we're beginning to see movement, but we could be much further down the track if those decisions had been taken, people had been listened to and investment commitments converted into rands and cents expenditure.
“There are many such examples.”
Instead of being in the brighter place, literally and figuratively, it could have been in if the government had implemented the B4SA blueprint for action, “we're back at the same place two years on, with a much sharper focus, I think, on the realities”.
“If we continue to come up with generic, aspirational ambitions we will fail. We don't have the time for that. It is clear that we're on a knife edge now.”
Does he think the ruling party understands the urgency of the situation or will the country have to wait for a possible political realignment in 2024?
“I don't think we've got until 2024. I sincerely hope all of the political parties, including the ANC, will recognise the risk they're running in terms of their own survival if they don't dig us out of the hole, or we don't collectively dig ourselves out of the hole, long before 2024.”
