Founder: Turnaround Talk
With South Africa’s SOEs in the state that they are in, urgent intervention is needed if South Africa is going to realise the growth objectives set out in the National Development Plan.
Acknowledging that the country’s economy is in a desperate state, President Cyril Ramaphosa announced last year that, while SOEs will still be the primary driver of economic growth, there will be increased involvement from the private sector.
To date, we have seen the beginnings of this. However, there have yet to be any visible signs of a significant urgency to fast-track this. Despite this, 115 CEOs have signed a pledge to help Government get South Africa back on track.
115 strong
The article points out that 115 CEOs of SA’s top companies have pledged their support for a business-led initiative to assist the government in getting the economy back on track and fix the country’s energy, logistics, and security problems.
The initiative comes as SA faces crippling power cuts, a deteriorating freight rail capacity, and a growing threat from criminal groups that have laid siege to public infrastructure. It also comes as government and business present a united front to save the country’s relationship with the US and remain part of preferential trade arrangements, despite the perceived sympathy with Russia in its war on Ukraine.
The article adds that the pledge states:
As South African business leaders, we firmly believe in the immense potential of our country. We are committed to building it and have come together to address the current challenges to achieve sustainable, inclusive economic growth. Through strategic partnerships and focused interventions, we have the power to make a significant and positive impact on our nation, creating hope for all South Africans. We are resolutely committed to being a force for good.
The companies and CEOs behind the pledge reach across all sectors of the economy. Together, they represent listed entities exceeding a value of R11 trillion, employing more than 1.2 million people.
Image By: News24
Key inspiration
The article points out that The inspiration for the initiative came from the success of the joint government and business working groups established to take on the Covid-19 pandemic.
In March, the model was extended to the energy crisis with big business raising R100 million to fund the technical work of the National Energy Crisis Committee (Necom) in the Presidency.
In June, the Necom model was expanded to include a logistics and a security and justice workstream.
The article adds that the three workstreams include top private sector technical experts and their government counterparties and are championed by CEOs of the biggest SA companies. The workstreams contract private capacity to undertake specific pieces of work and are project-managed by the Presidency.
Unprecedented scale
The article points out that the unprecedented scale of the intervention and level of involvement in work previously regarded as the domain and responsibility of government underlines the urgency business feels to reverse the current trajectory.
Adrian Gore, BUSA Vice-President and group CEO of Discovery, expressed his admiration for the commitment and collaboration demonstrated by fellow South African business leaders:
This CEO pledge is not just a symbolic gesture but a concrete commitment to drive change in key sectors essential for our economic recovery. With a growing number of CEOs on board, representing a wide range of industries, the magnitude of this pledge cannot be underestimated. By translating these partnerships into a collective action plan, the transformative power of these actions can extend beyond mere statistics – it can profoundly impact our nation, our communities, and each individual citizen.
Image By: Discovery
The article adds that Martin Kingston, Chairperson of the B4SA Steering Committee, which ran the joint business-government response to the Covid-19 pandemic, said the same approach was necessary to address the prevailing crises. “As a business community, we are clear that we need constructive interventions – now,” he said.
Actionable interventions
This is only the first step on the recovery journey. Government not only has to create opportunities for private sector involvement, it has to make sure that its SOEs are operating optimally.
Take Transnet, for instance. The logistics provider is aiming to transport the same amount of coal and other exports to key ports as it did seven years ago in 2016. How do we justify seven years of regression? A prominent economist pointed out that the South African economy would have grown by 10% in 2022 if Transnet operated optimally. It’s one thing saying the right thing about increased private-sector involvement. This needs to be backed up with interventions to help facilitate this.
