South Africa needs to aim higher: CEO
South Africa desperately needs to aspire to become a high-income economy—but to do so necessitates a “rethink of the macroeconomic growth policy and strategy.”
This was the view presented by Business Unity South Africa (BUSA) CEO Cas Coovadia in his remarks at the recent 2024 National Economic Development and Labour Council (Nedlac) summit in Johannesburg.
The BUSA CEO highlighted that Nedlac was established 30 years ago “as a critical platform, on which social partners enter dialogue to find each other on important matters related to the socioeconomy.”
He added that the Department of Employment and Labour and its partners have driven significant changes through groundbreaking reforms negotiated at Nedlac, such as the National Minimum Wage.
This “changed the landscape of labour relations in this country and demonstrated the collective effort of the social partners,” establishing a new participatory paradigm.
However, the business grouping highlighted that the world of work has transformed significantly over the past three decades, and thus they believe that “more work needs to be done to consider whether
Nedlac is fit for purpose in the current environment and the challenges that lie ahead.”
He said that as the business constituency, critical matters that need to be addressed in the coming period include:
| Critical Matters | Details |
|---|---|
| 1. Acknowledge and address crises | Resolve issues with the Unemployment Insurance Fund, including governance and corruption; extend to other funds like the Compensation Fund. |
| 2. Social protection reforms | Accelerate resolution of reforms from the Comprehensive Social Security team. |
| 3. Labour law reforms | Ensure effective implementation and oversight of labour law reforms; focus on improved inspection and self-regulation models. |
| 4. Business environment | Remove red tape and bureaucratic obstacles; implement outcomes of past Nedlac discussions. |
| 5. Evolving workforce | Adapt social protection and skills development to diverse employment forms and current labour market needs. |
| 6. Economic growth strategy | Rethink macroeconomic policies to transition to a high-income economy; focus on recovery, structural reforms, and effective policy implementation. |
| 7. Government efficiency | Reconfigure government for better delivery and coordination; harmonize efforts within and outside Nedlac. |
| 8. Infrastructure development | Implement NIP 2050 commitments; focus on leadership, accountability, and inclusive planning and stakeholder engagement. |
One of the points emphasised by Coovadia was that “we need to grow the economy and rethink the economic growth strategy” so that South Africa can become a high-income economy.
Although South Africa appears to have made progress on load shedding, it continues to face challenges such as high unemployment, sluggish economic growth (averaging under 1% annually over the past decade), deteriorating infrastructure, increasing inequality, systemic corruption, and poverty.
“Achieving this necessitates a rethink of the macroeconomic growth policy and strategy, along with a more concerted focus on strengthening the capacity of the State to implement economic growth policy.
“We must continue with the focus on economic recovery and structural reforms to unlock potential growth, resolve immediate constraints to growth and review institutional mandates that hamper growth and employment.”
Nedlac Executive Director Lisa Seftel reported that in the 2022/23 financial year, the council achieved a clean audit, met 92% of its performance targets, and saw a notable increase in bills passed by Parliament.
They said that key focus areas for social partnerships included promoting inclusive growth, public employment schemes, addressing hunger and poverty, supporting labour market transitions, and strengthening government responsiveness.
She noted that the government of national unity faced a tight path, balancing reforms for inclusive growth while supporting workers, businesses, and communities.
Seftel concluded that 30 years of democracy demonstrate that shared concerns among social partners can form a strong foundation for collaboration.
Employment and Labour Minister Nomakhosazana Meth said that reflecting on the past three decades, Nedlac’s role in fostering inclusive, consultative policy-making underscores its importance to South Africa’s democratic values.
“Nedlac stands as a beacon of collaboration, embodying the spirit of social dialogue and consensus. As we journey through the 21st century, Nedlac’s role becomes increasingly vital in fostering sustainable economic growth, ensuring equitable labour practices, and promoting social justice,” said Meth.
The minister highlighted the importance and efforts made in structural reforms (particularly in energy, water, freight and communications), infrastructure development, social security and state capacity and noted that more needs to be done.
Additionally, Meth acknowledged critical capacity issues in the Compensation Fund and Unemployment Insurance Fund, including skills and governance problems, as highlighted by the Auditor General.
She said that the department is addressing these through organisational changes and will “be acting accordingly against any official of the department that compromises governance processes.”
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