RUWAYDA REDFEARN: Business must lead the way and invest in South Africa’s economy

Good evening, distinguished guests, honourable deputy finance minister, captains of industry, esteemed colleagues, and members of the media. It is a privilege for Deloitte to be associated with the Sunday Times Top 100 Companies.

Tonight, is not just about recognition of business excellence and outstanding achievements of companies and individuals — it’s about celebrating and acknowledging the journey that got you here. We recognise that behind every achievement is a story of grit, resilience, and often the courage to fail, but most importantly to keep going when things are tough.

Entrepreneurs are often driven by the belief that a better future is possible. I thought I’d share a few stories from across the world and at home to remind us of the greatness that is in this room and in our country; and what that means for our collective efforts in truly living a purpose beyond profit, and making an impact that matters.

The first is a story about a nation that refused to give up and showed courage to build a brighter future for itself. It is the story of South Korea during the Asian financial crisis of the late 1990s. Prior to the crisis, Korea had experienced three decades of incredible growth averaging 8% a year. Then in 1997, the Asian crisis hit, and the economy crashed, contracting 6.7% — the worst in its modern-day history.

Just imagine the possibilities of a small tech start-up in Nairobi gaining access to millions of new customers across the continent. Or patrons in a restaurant in Abidjan enjoying a chilled glass of South African chardonnay with their dinner

Foreign investors fled and rating agencies downgraded South Korea’s sovereign rating, resulting in a reclassification of its debt securities as junk bonds.

The future didn’t look good at all. However, something truly remarkable happened. The people of South Korea decided to take their future into their own hands, and in two months, some 3.5 million South Koreans donated 226 tons of personal gold worth $2.2bn (R39.7bn) to the government. This helped the government to repay a $58bn IMF loan three years ahead of time and ultimately for the country to return to investment grade in just over a year — and that’s a world record.

In June this year, I travelled to South Korea for our Global Deloitte meeting, and Koreans from all walks of life told me the story of how patriotism, a deep sense of unity and trust in the government turned the country’s fortunes around.

Back to South Africa; the last few years have been challenging. We survived a pandemic, dealt with frequent power cuts, faced high inflation and an increasingly complex and unpredictable global environment. However, in recent months, the sentiment has shifted, and in my conversations with other business leaders, there’s a shared sense of optimism. The JSE continues to be the largest and most sophisticated in Africa, with a market capitalisation that places us among the top 20 markets globally.

To put the size of the JSE into perspective: the market cap of the Sao Paolo Stock Exchange is roughly three-quarters that of the JSE, even though the Brazilian economy is more than five times larger. The German economy is more than 10 times the size of our economy, but the market cap of the Frankfurt Stock Exchange is not even twice the JSE’s. It seems the JSE is punching above its weight. Trade is a game changer and an incredible force for economic growth and prosperity.

How do we build companies that can take full advantage of the African Continental Free Trade Area (AfCFTA)?

The World Bank estimates, that since 1990, more than 1-billion people have been lifted out of poverty — thanks to economic growth, underpinned by open trade. The rise of China from an agrarian society to a global economic superpower within a mere generation is a story of export-led growth and industrialisation. Looking at China’s success, it is no secret the establishment of the AfCFTA is seen by many as a potential game changer for Africa’s economic fortunes.

The expectations are high that the AfCFTA will lead to export-led economic growth by creating a common market of close to 1.5-billion people and a combined GDP of about $2.85-trillion. The creation of a common market is one thing on paper, but it will take hard work on the ground to make it work. We, as business leaders, need to relook our supply chains, and need to engage with governments to turn this common market and its potential into an African reality.

Just imagine the possibilities of a small tech start-up in Nairobi gaining access to millions of new customers across the continent. Or patrons in a restaurant in Abidjan enjoying a chilled glass of South African chardonnay with their dinner.

How can business leaders reshape now?

It is time to act with urgency. We need to lead the way and invest in our economy and not wait for foreign investors to do so. After all, how can we expect others to invest in our country if we’re not prepared to do so?

According to the Reserve Bank, corporates in this country sit on more than R1-trillion. The corporate savings rate has been hovering around 14%-16% of GDP in recent quarters. Yes, having sufficient cash reserves is important for companies and provides banks with liquidity to work with, but it also poses the question: what would it require for companies to plough some of this money back into the economy? What needs to be done to increase trust and confidence into the economy to unleash this money?

As business, our role is not merely about generating profit — it is also about creating value. And that value must extend beyond the balance sheet. We remain committed to working with the government and we have seen positive sentiment through this collaboration of this partnership. Together, let us be the ambassadors, the flag-bearers of our country to turn sentiment into action, by investing in our market. Together, let us be confident and invest in South Africa, rather than wait for foreign investment to flow.

We have many opportunities coming, such as the World Economic Forum in Davos and here on home soil, the Group of 20 Summit. Let us use such opportunities to demonstrate that we’re not just open for business, but also to show that South Africa is a viable and attractive market to be in.

Together, let us be the architects of unlocking our growth because the only way we make progress is by working together. For this to happen, we must ensure that trust remains the bedrock of purposeful and sustainable business. In an era where markets are volatile, supply chains are global, and consumer expectations are higher than ever, trust is no longer a luxury — it’s a necessity. It is the foundation upon which your reputation is built, and, ultimately, it will be the measure by which future generations judge our success.

Purposeful business isn’t just about making a profit. It’s about understanding the impact of our decisions in the ecosystem in which we operate — on our employees, on our communities, and on the planet. This is how we will create true shared and inclusive value.