There’s an adage that says, “Never place your eggs in one basket.” Yet, as the election chatter grows louder, a concerning note keeps resounding above the noise. This is the idea that appears to place the responsibility for South Africa’s entire economic future squarely on the shoulders of whichever political party wins or coalition emerges.
The government and the president certainly have a vital role to play in shaping our economic and policy environments. However, it’s important to remember that the private sector, not the public sector, is South Africa’s biggest job creator. The private sector employs the vast majority of the country’s workforce and, as such, has an equally significant role to play as an economic driver.
To turn the ship around and reignite growth, both the public and private sectors must therefore work together to steer the vessel in the right direction. The challenges we face as a country are clear. We are caught in a low-growth trap, where a poorly performing economy is placing pressure on businesses and job creation, which is hindering the revenue growth essential for government investment in programmes and projects to stimulate the economy.
So, with the government’s hands tied by fiscal constraints and competing demands for limited resources, the private sector must also step up to the plate. The public sector needs to address regulatory hurdles and action the policies needed to attract investment and prevent financial mismanagement.
By partnering in infrastructure development, [businesses and investors] can benefit from being directly involved in vital projects
For its part, the private sector must contribute by directing capital, expertise and innovation towards the most productive or beneficial sectors of the economy, such as infrastructure, energy, manufacturing and agriculture. Critically, this is not an act of charity. Any successful business leader understands that where there is need, there is opportunity, and the potential for profits. And, as a developing economy, South Africa offers substantial growth potential for businesses and investors.
Consider that, according to the recent road map for the freight logistics system, underinvestment in underperforming ports means South Africa has sacrificed $26.7bn (about R502.3bn) in export revenues from iron ore and coal alone since 2010. The president has further indicated that, to achieve the country’s infrastructure goals by the 2030 deadline, the government requires nearly R3.2-trillion in private sector funding. This scenario presents significant opportunities for businesses and investors.
By partnering in infrastructure development, they can benefit from being directly involved in vital projects. Furthermore, by addressing critical issues in our port and rail systems, they also stand to benefit from expedited access to international markets and trade. As a result, acting now could position businesses to reap substantial long-term rewards. As mentioned earlier this year during the national budget speech, the government is well aware of the issues with regulatory and procurement policies that have prevented private sector participation, and are taking active steps to address these obstacles.
But as business leaders in the private sector, it is also important to explore and support the many bankable projects in this space that offer substantial returns. Likewise, we must recognise that another notable constraint to economic growth — load-shedding — appears to be easing.
Despite suffering the worst year of rolling blackouts yet in 2023, we have now enjoyed nearly two months of uninterrupted power, providing hope that, while load-shedding may not be over completely yet, there is a glimmer of light at the end of the tunnel. Load-shedding has cost the South African economy billions, and even trillions, of rand over the years.
However, eliminating its impact altogether could lead to a strong rebound in business activity, with positive outcomes for job creation, incomes and consumer spending, creating a virtuous cycle. Businesses that stay agile and invest in the capacity needed to capitalise on this growth stand to benefit substantially in terms of market share.
South Africa has often been seen as an underdog, but as we stand at this important juncture, the private sector has a unique opportunity to guide the country towards a positive trajectory for mutual gain. By investing in projects that drive growth and job creation, businesses can help transform South Africa into a modern, highly competitive economy while benefiting from its rebound.
Ultimately, this task is not a job for one person or one political party — it will require collaboration and collective effort. The choice is ours to make.
• Mogajane is the chair of the Government Employees Pension Fund, the CEO of The Moti Group, and a former director-general of the National Treasury
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