South Africa is showing the signs of a failed state: business leader

 ·27 Jan 2022

Economic recovery is expected to take front and centre stage during finance minister Enoch Godongwana’s maiden National Budget Speech in February.

Although fiscal consolidation and other prudent budgetary measures are crucial, the country can’t ignore the link between the rule of law and economic reform, says business leader and chancellor of the University of the Free State, Professor Bonang Mohale.

Speaking in PSG’s Think Big webinar on Tuesday (25 January), Mohale said that South Africa’s current socio-economic realities, coupled with the findings of the Zondo Commission’s report on state capture, are telling characteristics of a ‘failed state’ – one that can only be pulled back from the precipice by decisive action and single-minded focus.

“When we take a step back to examine the evidence and what the Zondo Commission’s findings mean for broader society, we see that inequality is widening, racism is at an all-time high, black graduates are roaming the street unemployed, our public education and hospital sectors are in states of disrepair and the general climate in the country is one of lawlessness,” said Mohale, who also holds several notable board positions including chairmanship of the Bidvest Group.

“Before we consider whether South Africa is ‘recoverable,’ we need to come to recognise the magnitude of the problem and acknowledge that as a country, we find ourselves at an all-important turning point,” he said.

Mohale stressed the link between socioeconomic reform and the forthcoming reactions of the independent judiciary, given the evidence at hand.

Ultimately, he argues that we should not underestimate the centrality of justice to economic recovery. The responsibility to set a precedent of swift, decisive action now rests on the shoulders of the independent judiciary, he said.

Business is the epicentre of creating future markets

Mohale is a strong advocate for the need to adopt a national charter against corruption, as well as an independent public procurement anti-corruption agency that will include a council, a litigation unit, an inspectorate, a tribunal and a special court of appeal.

This is aligned with Justice Raymond Zondo’s recent recommendations put forward in the report on state capture.

“When the loop has been closed on state capture and the guilty have been brought to book, a prime opportunity will emerge for businesses to take the reins and realise its role in promoting job creation so that the self-respect and self-worth of so many struggling South Africans can be restored,” Mohale said.

“The business sector is not an isolated entity, it is in fact at the epicentre of creating the markets of the future. Our real market should be the 1.3 billion people in Africa who stand to benefit from instruments such as the African Continental Free Trade Agreement. Until the broader African community reaps these rewards, South Africa will never stand true to the precepts laid out in the Constitution.”

Vaccine policy an example of missed opportunity for public/private partnership

Business, however, requires regulatory and policy certainty.

Here, the vaccine rollout serves as a good example of a missed opportunity on behalf of the government to allow the private sector to bring its economic strength and authority to the table, Mohale said.

In his opinion, had the vaccines, for example, been placed in the hands of Roger Baxter, Chief Executive Officer at Minerals Council South Africa, thousands of workers would have received access to vaccines and the 90-day target could have been reached.

As a result of the state not taking a cooperative stance on the rollout, 400,000 miners are now struggling with a lack of access to Covid-19 vaccines, Mohale said.

“These are the kinds of issues that are at the centre of socioeconomic reform. They are the issues that will need to be addressed quickly and decisively if South Africa is to curb the mass exodus of skilled workers and talent from the country in search of better prospects.

“People are the business, not brick-and-mortar establishments or products and services. Our challenge therefore as a country, is not only an economic one but one concerning human resources and social justice,” he said.

“When fisherwomen cannot go out to sea, they repair their nets. We need to ask ourselves, ‘what are we doing now to repair our nets? How can we place ourselves in a strategic position so that when recovery is on the horizon, we are in a position to be competitive?”

Read: New case tackles mandatory vaccinations at work in South Africa

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