Government giving businesses in South Africa the cold shoulder

 ·6 Mar 2023

Chief executives of businesses in South Africa have expressed growing frustration at the slow pace of action from the government in dealing with the various crises hitting the country.

And despite being proactive and presenting solutions to these problems, they feel like the government is not coming to the party.

According to Business Leadership South Africa (BLSA) CEO Busi Mavuso, business leaders feel like it is currently very difficult to operate in South Africa, despite a lot of focus on trying to find solutions.

While some progress is being made – such as business participation in initiatives such as the National Electricity Crisis Committee (Necom) and Operation Vulindlela – there are not nearly enough examples like this, she said.

Mavuso said that recent efforts from the Presidency and the National Treasury to unlock economic reforms have racked up a handful of achievements, including auctioning spectrum, allowing private energy generation and improving access to visas for foreign workers – however, it is still not enough to boost business confidence.

BLSA, as a representative body that collaborates with the government to provide the perspective of big business in South Africa, met with several large companies within the association.

Businesses said that state-owned enterprises are a major concern – especially Eskom. However, failures at the national freight and logistics company Transnet also pose significant threats to the economy, they said.

Business leaders also pointed to various local government failings and specific challenges they have with some national departments.

“There are also concerns about how industrial policy is being developed and the seemingly ad hoc nature of competition decisions,” Mavuso said.

The BLSA lead said that there were growing concerns surrounding South Africa’s recent diplomatic advances to Russia and China that are putting the country’s preferential access to the US market, among other things, at risk.

She said CEOs and other business people have noted a significant loss of focus by the government in engaging with partners and working towards solutions.

“Business continues to look for ways it can support government, often putting significant resources into researching and developing constructive proposals.

“But there is a growing feeling that we are not making headway in dealing with challenges because of a lack of government engagement,” she said.

It is not uncommon for the private sector to assist in areas where the government may not have the resources or will to fix a problem.

According to Mavuso, during the pandemic, businesses collaborated with the government to source equipment and roll out vaccines with efficiency.

She said that businesses tackle problems by approaching them with an eye on solutions.

“Ultimately, we benefit if local service delivery improves, if the policy environment for business is stronger, and if challenges from load shedding to road maintenance are resolved.

“We have every reason to be active partners in dealing with these challenges. But the frustration I am sensing from the business comes from a view we are not making sufficient and speedy headway.”

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