Business owners that received insurance payouts from the July riots and looting will have to decide whether they will use the proceeds to rebuild their businesses here in South Africa or take the money to restart somewhere else in the world.
This decision will largely depend on their confidence in South Africa’s future, says Business Leadership South Africa (BLSA) chief executive Busi Mavuso.
Writing in her weekly open letter, Mavuso said that choosing to rebuild in South Africa or not is ultimately an investment decision, and there needs to be high confidence that the returns will justify the risks.
“There is no longer a sunk cost, and businesses can instead decide to use insurance proceeds for other purposes – including building elsewhere in the world or giving the money to shareholders – rather than putting it at risk,” she said.
“There are businesses large and small, locally-owned and foreign-owned, that must make these decisions now. For all of us invested in the South African economy, we must all hope that they choose to reinvest.”
That is how the government will protect jobs and generate tax revenue, and the supply chains that the rest of the economy depend on will be maintained. It is something both business and politicians should be singularly focused on supporting, Mavuso said.
“We have a window of opportunity to rebuild that confidence. Immediately after the unrest, there were strong political statements. Organised businesses rallied to support the security services and assess what would be needed to drive the reconstruction and reinvestment process. We remain ready to assist the government in many ways, but the momentum has slackened.
“There are many distractions – the pandemic, and now an election, among others. But the time is now – if we miss the opportunity to give companies that were affected a positive shot of sentiment, the destruction of July will be locked in and a component of our economy gone forever.”
Mavuso said that businesses now need to be directly supported, both to rebuild by offering the right services but also with a positive political message that demonstrates how the violence was a once-off and that government wants to see them rebuild and will do what it takes to create the right environment for businesses to thrive.
“We (Busa) know what it will take – engaging with business owners, hearing out their concerns about the future, demonstrating how the environment is going to be positive for them and their businesses. Many business leaders want to rebuild – they have emotionally invested in their businesses and the people they employ.
“But they cannot do it without a sense that government and the rest of the country has their back. That the unrest they faced was an aberration that all of us across the country are determined to put behind us and never see again. Let us focus on doing it – the time is now.”