Private businesses cough up millions to help government fix South Africa

Over the past nine months, private businesses have been digging deep into their pockets to help the government address the country’s various crises relating to energy, logistics, crime and corruption.

President Cyril Ramaphosa gave an update on this collaboration following a meeting with members of his cabinet and senior business leaders on Tuesday (5 March), saying that the partnership between the government and private sector is slowly but surely yielding results.

The collaboration was initiated in June 2023, “with the aim of significantly growing South Africa’s economy and restoring public and investor confidence through critical interventions to address” the country’s numerous challenges impeding its economic growth, said Business Unity South Africa.

Co-convener of the business delegation, CEO of Discovery Limited Adrian Gore, revealed that over the past nine months, “the private sector has contributed more than R170 million of support directly into this partnership, and has mobilised over 350 technical experts” in hopes of turning things around.

The partnership was initially sparked out of the country’s electricity crisis, with the Resource Mobilisation Fund being established by private business following a request from the President for the business sector to help capacitate the country’s National Energy Crisis Committee.

To date, the fund has raised approximately R100 million, with R25 million already having been drawn down to fund expertise to support the committee.

With the country’s logistics crisis, as well as crime and corruption further hampering an economy already up against the ropes due to the energy crisis, businesses are looking to scale up this funding model to support the National Logistics Crisis Committee as well as the Joint Initiative on Crime and Corruption. 

Earlier this year, South Africa’s government and the business community set a target of boosting the economic growth rate by as much as six percentage points by fixing the country’s collapsing ports and freight-rail network.

They predict that cracking down on crime and corruption may save as much as R300 billion a year.

“We need to capitalise on the momentum and urgently implement the necessary reforms [which] will help to improve societal and investor confidence in South Africa’s potential and mobilize much-needed investment to grow the economy inclusively,” said Gore.

Ramaphosa, a strong advocate for public-private partnerships, has hailed these efforts.

“We are beginning to see the tangible results of this collaboration in reduced load shedding, improved performance of our rail network and ports, and a reduction in security incidents targeting energy and logistics infrastructure,” said Ramaphosa.

Read: South Africa’s plan to boost growth by 6% and save R300 billion every year