Does the government have a plan to save economy battered by Covid-19?
The economic crisis we’re in is the most serious any of us has experienced.
To confront it, we need the very best from our leaders, from business, government, labour and other social partners. Their leadership needs to be focused on driving the implementation of plans and policies that will mobilise our resources to drive a recovery leading to sustainable economic growth.
While President Cyril Ramaphosa's announcement over the weekend of a shift to level 2 lockdown will enable much more economic activity to resume, this is not, on its own, a strategy for a recovery.
The recovery strategy needs a comprehensive set of economic reforms to drive a rapid turnaround in economic fortunes. Yet we are still stuck at the talking phase of those reforms.
At a National Economic Development and Labour Council (Nedlac) meeting of government, business, labour and community leaders last week, detailed plans were discussed. Business, united through Business for SA (B4SA), presented an overview of the plan it has developed. The detailed proposal numbers about 900 slides. Organised labour also presented detailed plans. There are common elements to these, such as the need to auction spectrum and grow investment.
Government also delivered a plan of sorts, the first time it has done so despite ministers having referred to the central role government’s plan will play in driving a recovery. However, the 17 slides presented a fragmented and uncoordinated vision that was described as a draft with no official status. It appeared to have been pulled together at the last minute from different sources without any discussion between them.
The energy vision, for example, is oddly focused on gas and mentions nuclear, but makes no mention of green energy. Elsewhere the document talked of the need for green bonds and “green economy interventions” as one of eight recovery priorities. This is not the same hymn sheet.
It feels as though government is the one social partner not pulling its weight when it has the most crucial role to play.Busi Mavuso
The president and others have put a lot of pressure on business to develop potential solutions for the challenges we face. But government also has responsibilities to put together the best minds it can gather to form a coherent strategy, and then to implement it. There are good people — inside the Presidential Economic Advisory Council and among the analysts at National Treasury, for example. But why are they not being mobilised to do the research to form a coherent plan? Is it a lack of leadership from the top?
The Nedlac meeting resolved that the social partners would now work together on a co-ordinated plan. But it feels as though government is the one social partner not pulling its weight when it has the most crucial role to play. Business and labour can only do so much. Government controls the policy environment within which we must all work. We need a president-led, cabinet-backed plan we can all get behind with a common vision. This is not something that can be done at Nedlac level. It needs clear, decisive leadership from the top.
As I have written before, the president had promised us a decisive economic plan with the structural reforms needed to kick-start this economy and put it back on a growth path. He promised in April we would have it “within days”. It was clear from the Nedlac presentation that not much has really been done since then.
Business is doing its part. We have mobilised significant resources to research and develop a plan. But we need an equally robust process from government. We need to engage with a focused, deeply researched and nationally co-ordinated plan that government must lead. However, alongside our partners, we are still waiting for that to come.
While we should already be deeply into the implementation phase, we are still stuck in talk shops.
I feel little more can be said beyond the obvious: as a country we will not be able to get back on our feet unless the president personally takes leadership of the economic recovery and drives a clear vision across government that we can all mobilise behind.
• Busi Mavuso is CEO of Business Leadership SA.