Are we seeing significant change?

For many years, the economic development of South Africa – while the realm of the corporate sector – has been driven by Government in the fact that it was the mandate of Eskom to provide the power to run industry, and Transnet provided the logistical backbone to transport goods to key ports such as the Richards Bay Coal Terminal for export.

However, as the intro to the Lord of the Rings: The Fellowship of the Ring puts it, the world has changed. It has become glaringly apparent that Government does not have the necessary ability (will) to ensure that Eskom and Transnet can offer their services at the same level that they did 20 or 30 years ago. 

Government has acknowledged this shortcoming. President Cyril Ramaphosa has been outspoken about the need for Government to collaborate with businesses to improve the provision of key services to drive economic growth. Captains of industry are very excited by this. Adrian Gore, CEO of Discovery Insure, posted an update on LinkedIn discussing his thoughts (shared below).

An exciting time

This is an important time for our country. In the week of 5 June to 9 June, organised business met with the President (Ramaphosa), key ministers and senior government officials.

We agreed to urgently work together in partnership to address key challenges facing us so that we can achieve inclusive economic growth, create jobs, and generate positive sentiment. This has followed months of planning and work to set up structures and lay the groundwork for this important initiative.

Important aspects

I wanted to share some insights into important aspects of the structure that make it unique and potentially hugely effective:

• there will be a focus on key enablers that can turn the flywheel, create jobs, and change sentiment. We are focusing on three work streams that we agreed will “turn the flywheel” and create traction and momentum: energy, logistics (road, rail, and ports), and crime and corruption. Each of these are important enablers that have a fundamental effect on the economy, jobs, and the quality of life of all South Africans;
• there will be individual commitment and engagement from key CEOs – at scale. A significant number of CEOs of South Africa’s largest companies are directly involved, leading the three work streams or providing support, resources, and skills at the frontline. It has been remarkable to see business leadership’s belief in the potential of our country and their undertaking to help address the challenges we face; and
• there will be tight governance between business and Government under the auspices of the President. Clear governance and oversight structures have been established, with the work being directed through the government-led National Energy Crisis Committee (NECOM), National Logistics Crisis Committee (NLCC), and proposed Joint Initiative to Fight Crime and Corruption (JICC) – overseen by a Joint Strategic Operations Committee (JSOC). The partnership will report to the President every six weeks to ensure progress and unblock issues as they emerge.

In addition, research projects are being conducted on how best to accelerate job creation, noting that economic growth is the primary enabler and identifying initiatives that work that could be scaled.

Furthermore, a strong communications capability has been established to ensure that the public is kept up to date on progress and to instil accountability and transparency throughout the process.

Key lessons

In creating these structures, key lessons from the vaccine rollout have been drawn on, given they created a world-class, country-wide capability through public-private partnerships, focus, and structure.

This is a critical time for our country. Overcoming our challenges requires commitment, focus, and traction. It won’t be easy, it won’t be without issues, but we must move quickly.

Red flags

Gore is correct that addressing the country’s challenges is a significant step forward. Additionally, the meeting flips the traditional narrative that Government is confident that it has the skills to address these challenges alone.

However, there are red flags (or watchpoints) that need to be highlighted:

• Government is already falling short regarding governance issues in Eskom and Transnet. if there will be tight governance between business and Government under the auspices of the President, and if clear (hopefully Gore means transparent) governance and oversight structures have been established, who will drive this? Without sounding the corruption alarm bell, how will the autonomy of the people or structures driving this clear governance and oversight be assured? We have been promised that Government is free of corruption in the past, and these assurances turned out to be a blatant lie (Gupta Gate);
• what timelines are we dealing with? Politics worldwide is run by the maxim of politicians doing plenty of talking and very little doing. South Africa is already on a dangerous precipice when it comes to economic growth. Will it take being pushed over the edge for action to be accelerated? and
• how will the 2024 general election outcome impact what is agreed to in these meetings? Sure, the ANC may win the next election, but they won’t get the same overwhelming support they enjoyed in previous years.

As Gore said, we live in a time where there is an unprecedented collaboration between Government and business; this progress is excellent. But without sounding pessimistic, there are significant challenges ahead. Address these issues Mr Gore and the future looks bright for South Africa.