Private sector 'must play its part'

The government continues to try to woo the private sector into playing a greater investment role in the economy.

Deputy President Kgalema Motlanthe said on Friday at a forum on growth in Africa hosted by Ernst & Young that the private sector should help build inter-regional trust in Africa to spur economic growth.

"It is probably easier for the private sector to lead the way on regional industrial policies at first, with the support of governments," Motlanthe said.

In his budget review and subsequent interviews last week, Finance Minister Pravin Gordhan repeatedly emphasised the importance of private businesses "coming to the party" to help realise the government's investment plans and growth projections.

But while the manner in which Gordhan made these pleas hinted towards some tension between the government and the private sector, Motlanthe denied on Friday that any tensions existed between government and business and labour.

"I think we have excellent relations. Our model of engagement was even adopted by [other countries]. We responded to the global financial crisis of 2008 together by dialogue between business, government, organised labour and civil society."

Motlanthe said the one weakness in these relations, which needs immediate attention, is that the different groups are "not organised tight enough".

"On the business side I have had discussions with CEOs of South African companies to say they need to organise themselves better than just having Busa [Business Unity SA] as an umbrella body, because at that level they do not discuss operational issues very seriously. They have high-level discussions and sometimes just 'feel-good' discussions."

While last week's budget review asked for greater private sector involvement in the economy, it also attracted criticism for increased government spending and involvement in the economy.

Motlanthe said government involvement in the economy is not a problem.

"Government has to lead to inspire confidence in the private sector," he said.

"If government is not prepared to lead, then the private sector may only commit to projects on onerous terms, the kind of terms which would mean that these essential projects only happen once every 50 years."

Motlanthe said the reality of South Africa is that of two countries in one.

"The one part has infrastructure that is so developed that it could successfully host the World Cup. But there is another part which is so underdeveloped that we still need to provide people with running water, a sewerage system, properly paved roads and electricity."

Government has to lead in these areas, he said, as it is not as easy to enter into partnerships with the private sector on such projects as it is on the construction of rail or other infrastructure in which the private sector has a direct operational interest.

Motlanthe denied that the government's policies are not always clear and transparent.

"The truth is that government policies and the policies of the ruling party are very clearly stipulated and are articulated all the time," he said.

"It is in the nature of a young democracy such as ours that people will engage in debates. The trick is knowing which views influence policy decisions and how policy is adopted."

Motlanthe said it is normal in a democracy to have a "plethora of ideas".

"But we think we are doing very well in terms of national cohesion," he added.