The bosses are fuming, and they have good reason to.
CEOs of some of South Africa’s blue-chip companies have dispensed with the diplomacy and the niceties and are telling truth to political power.
MTN group CEO Ralph Mupita is the latest to add his voice to warnings issued last week by fellow captains of industry who all agree that unless urgent steps are taken to fix the economy, we are headed for big trouble.
“I’m not saying we are there (yet), but inaction could lead us there. Things we need to tackle: the energy crisis that we are experiencing right now. Sustained stage 4 load-shedding is going to inhibit growth in the country.
“There’s the logistics issue. And then there’s crime and corruption. Those are the things that we say could lead us to a failed state if we don’t act,” Mupita said on Monday at the release of his company’s results for the year to December.
As Business Times reported over the weekend, CEOs are fed up and no longer pulling punches when it comes speaking out on the crisis facing the nation.
In the past few weeks, Sim Tshabalala of Standard Bank; Mike Brown of Nedbank; Pieter Engelbrecht of Shoprite; Adrian Gore of Discovery Health have all found a firmer and louder voice to express unhappiness at the slow pace of reform and government’s seeming tolerance of the deteriorating order of things.
South Africa slumbering into a greylisting, despite repeated warnings that we have become a haven for all sorts of illicit activity, seems to be the straw that broke the camel’s back. Greylisting was swiftly followed by a downgrade of our credit rating outlook from “positive” to “stable” by S&P Global. It adds to the cost of doing business and discourages investment.
Business leaders didn’t take kindly to President Cyril Ramaphosa’s dig at the Mining Indaba in February when he told them to “stop moaning and get into the ring with us”.
As Business Unity SA’s Cas Coovadia points out, Ramaphosa is running out of goodwill because business has been in the ring with government all along.
“We’ve been busing out butts to work with the government. We don’t want to shout from the rooftop about what we do. If the president says we need to get out of our armchairs when all we have been doing is helping, then we must raise these issues.”
Coovadia is correct. Corporate SA has always responded too positively to government overtures. When Ramaphosa took over after the nine years of kleptocracy, there was a buzz. Here was a business-orientated leader who would not only dismantle state capture but understood the crucial need for reforms to unlock growth.
And he made the right noises at the beginning. He consulted with all social partners at Nedlac to seek consensus and buy-in for an economic recovery and reconstruction plan which placed at its core the revitalisation of network industries.
Private players would be brought in to help run rail and ports. Eskom would be broken into three divisions and extra generating capacity sought from the renewable energy sector.
Approval processes for water-use licences would be made less onerous, and environmental impact assessments speeded up. Digital migration was to be completed and high-demand spectrum finally auctioned.
Granted, there has been some progress on a few of these commitments, but it’s not enough and it’s too slow. The electricity market was liberalised and the threshold on embedded generation scrapped despite reservations by the energy minister. Transnet has announced a 20-year concession of the Durban-to-Joburg rail line, an economic artery.
Spectrum has been auctioned and digital migration will be concluded soon.
The appointment of an electricity minister is a positive sign, but the unbundling of Eskom is taking too long.
Load-shedding is stuck on stage 4, battering the economy.
We are being held back by a bureaucracy that is hopelessly inept at implementation.
Look, it’s not ideal for business and government to be at each other’s throats. I know some of the ANC’s red allies will dismiss CEOs’ concerns as emanating from fat cat executives sitting in ivory towers and earning millions in salaries, bonuses and share options while paying workers peanuts.
But let’s not forget that whenever the president has asked big business to come to the party, it has brought the food, cake and drinks.
But let’s not forget that whenever the president has asked big business to come to the party, it has brought the food, cake and drinks.
At the outset of the Covid lockdown, corporate SA and local philanthropists donated handsomely to the Solidarity Fund to assist those whose livelihoods were rudely interrupted by the pandemic. Since taking over, Ramaphosa has held successful investment conferences where the private sector has pledged billions in job-creating investments. Expect more pledges at the next one in April.
Leading business organisations have offered skilled managers to Eskom and Transnet to help sort out their mess.
Business for South Africa (B4SA) recently responded to a request from the president to help capacitate the national energy crisis committee (Necom). The organisation raised R100m from its members in no time. B4SA chairman Martin Kingston said the money would be used to set up a project management office for Necom staffed by specialists in law, engineering, and energy modelling.
Basically, CEOs have put their money where their mouth is. It’s no wonder they are gatvol and are speaking out.
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