There’s a rescue plan for South Africa – if the government is willing: CEO

 ·13 Jul 2023

Busi Mavuso, the CEO of Business Leadership South Africa (BLSA), believes that public-private sector partnerships can “rescue” South Africa from its current crises

Mavuso noted, however, that for it to come to fruition, it will rest heavily on the government’s constructive use of its policy tools in support of the skills that the private sector contributes.

Speaking at the latest PSG Think Big webinar, Mavuso said that the public sector does not have the resources, capability and time that the private sector holds.

She said it is, therefore, important for the private sector to step in and support where necessary.

According to PSG Wealth, Mavuso believes the solution lies in putting in place necessary interventions that will remove obstacles to inclusive economic growth and job creation.

To do this, the business, alongside the government, has co-created and put forward what it believes to be a credible and adequately funded plan.

In cooperation with state entities, the private sector must work in these sectors:

  • Energy
  • Transport
  • Logistics
  • Crime and corruption

Mavuso said a targeted approach to tackling these critical areas would be driven by clear objectives.

“We refer here to the 80/20 principle, where getting 20% of matters right as a country would give us an 80% shift in the creation of a conducive business environment,” said Mavuso.

From an energy perspective, for example, Eskom will lean on private sector capability to provide the necessary engineering expertise and support as the power utility aims to unlock rapid generational capacity.

Timelines for the achievement of these aims have been, and there are very clear tangible outputs.

“It is important that in these engagements, we get to have robust and constructive conversations so that the implications of our decisions are clear to all,” said Mavuso.

The CEO added that the advantage that the private sector has is being privy to key investment conversations.

“We sit in boardrooms that they don’t, we sit with investors, we sit with the fund managers and we do the investment road shows, and we have insight of the concerns of the investor and global community, and the overarching sentiment of the international community is that South Africa has mounting weaknesses which is a huge cause for concern,” said Mavuso.

She pointed out that the minimal foreign direct investment that South Africa is currently seeing is illustrative of these concerns.

According to Mavuso, South Africa used to be the gateway into Africa. However, she says that if the environment is not an enabling one, then capital quickly moves on to the next feasible environment – she points to an investment shift from South Africa to East Africa as an example of this.

“The private sector and government need to be driven by this notion that we’re losing credibility in the foreign business landscape, and we need to (focus on regaining our credibility) as the goal because if you can’t get investment, the economy is not going to grow at the right levels which means we’re not going to be able to address the approximately 46% unemployment rate (using the expanded definition),” she said.

Energy crisis

Resolving the Eskom crisis is imperative and fundamental for improving the country’s trading environment and growing our economy. Mavuso believes that this can be tackled by private and public partnerships.

A handful of positive developments involving private business can be seen with the en masse rolling out of independent power producers (IPP) however, there have been a few hiccups on the side of policy.

In early July, new rules imposed by Eskom regarding the national transmission grid imposed greater costs and compliance steps on IPPs wanting to fast-track development and feed energy into the grid.

The trouble with bringing much-needed private producers online come as the country was pushed to stage 6 as a result of failing generator units and increased demand.

With commentary from PSG Wealth.

Read: Dark clouds for South Africa

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