Bonang Mohale, president of Business Unity SA (Busa), the country's apex business organisation, says the social compact President Cyril Ramaphosa promised within 100 days at his 2022 state of the nation address (Sona) demands bold and decisive leadership which the president has failed to provide.
“We're not seeing this. The proof of the pudding is that we have missed his target by more than 200 days.”
Given Ramaphosa's record of not delivering on promises this comes as no surprise to business, he says. But the litany of failed promises is hugely damaging to the country's investment prospects.
“We can't afford to be known as a country that sets itself objectives with no intention of meeting them.”
In bilaterals with the president, business told him that the National Economic Development and Labour Council (Nedlac), whose primary function is to facilitate social compacting between social partners, was “so dysfunctional there was no snowball's chance in hell that it would achieve anything in 100 days and he was setting himself up for failure”.
The process is supposedly being co-ordinated and overseen by the minister of employment & labour, but Mohale says it hasn't even started in any meaningful sense.
“It bedevils the mind that at a time of national crisis that calls for bold and decisive leadership from the president, he has outsourced this. What we are looking for is the type of leadership that doesn't only make big promises but commits to execution.”
For business, a social compact “at its most basic” calls for a government committed to rooting out state capture and corruption, to service delivery, to abandoning cadre deployment “which has led us to this crisis”, to law and order and to ending conflicts of interest that favour the ruling party at the expense of the country.
He cites as an example the ANC owning 25% of Hitachi Power Africa “instead of holding them accountable for the disastrous performance of the boilers they supplied to Medupi and Kusile power stations”.
A social compact would have to involve a commitment from government to meet timelines and deliverables in return for private sector investments in infrastructure projects.
It would involve other transactional elements such as an agreement by business to hold off on retrenchments in return for regulatory certainty and policy stability.
Labour would have to commit to zero above-inflation increases for the next five years and zero strikes in support of double-digit pay increase demands in the interests of South Africa being globally competitive, he says.
“We don't need a social compact to cut red tape or execute our climate change commitments. We do need a social compact to enable us to expand rural and urban economies through public private partnerships, to focus on productivity and growth, to invest in growing our own skills as business and growing more and larger black businesses.
“We need a social compact because without more rapid and direct private sector participation in Transnet it is going to inflict more damage on South Africa than load-shedding.”
A social compact is necessary to ensure that business, government, labour and civil society are on the same page and not talking at cross-purposes to each other.
“These things are not difficult to agree on,” he says.
So why is no such agreement in sight?
“We haven't even started teasing out yet what each of the social partners is committing to.”
The president is the one who needs to get the parties around the table. This is not something he should be delegating to another minister
He blames a lack of leadership from the top.
“The president is the one who needs to get the parties around the table. This is not something he should be delegating to another minister.
“He committed to a social compact in his 2022 Sona, and he needs to make sure it happens.
“In the final analysis he alone must be held accountable for making it happen. We as business have demanded from the president a leadership that accepts final accountability.
“He's the one who stood up in Sona and promised a social compact in 100 days. Now it's more than a year and there is still no sign of a social compact. Our expectation is that the president must lead this personally.
“We need to come together in the same room and decide how do we stop load-shedding fast, how do we create employment, how do we end poverty?
“The work hasn't even begun yet.”
Standing in the way of a social compact is ideology, he says.
“The ideologies that are preventing this need to be jettisoned. There is no country in the world that has prospered by sticking to ideological fixations.”
Government and labour need to learn from China's experience.
They were in a state of disaster until they dumped ideology 40 years ago to focus on one question: “What do we do to provide 1.4-billion people with sustainable jobs?”
“They said to do that they needed to grow the economy by double-digit numbers for a long time. That found its way into the Chinese Communist Party's policymaking and from there into the policies of the government.
“There is nothing that they do that is not done to help them achieve this one singular, solitary goal,” says Mohale.
For a social compact to be workable government needs to whittle down its multiple priorities to three or four.
“Look at Singapore. For 40 years they were driving just three things: meritocracy, pragmatism, honesty.”
There are also lessons closer to home which the government needs to take on board if it is serious about a social compact.
“In terms of public private partnerships, it can learn from examples like Nkosi Albert Luthuli Central Hospital which was properly PPP conceived, executed and invested in by the private sector in 1994 and is one of our best hospitals.
“Why have we not rolled this PPP model out everywhere where there are problems, like Transnet and Eskom?”
The last major problem for business is how “conveniently” the ruling party conflates party and state, he says.
“It's this attitude that stands in the way of a social compact even at this late hour.
“The big one is cadre deployment. As long as we have this little progress will be made towards a social compact.”
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