Last week, the next phase of the business-government partnership was launched, with over 30 CEOs committed to driving growth across energy reform, key economic sectors and investment confidence.
- The first two phases have delivered real results that have built confidence between business and government. The private sector has already invested over R360bn in new energy production and over R20bn has been committed to port and rail infrastructure.
- The focus must now shift from fixing what was broken, to taking advantage of established growth enablers to deliver.
- Both partners have agreed that we need to achieve growth over 3%, the level at which unemployment can start to be meaningfully reduced.
South Africa has enormous potential. We have brilliant people capable of achieving remarkable things, from our sporting achievements to globally flourishing companies. Mobilising our best people – from across business and government – to focus on the task of growing our economy by at least 3%, will result in success. And last week, at the launch of phase 3 of the business-government partnership, I had a real sense that we are heading toward success. In one forum, President Cyril Ramaphosa, cabinet ministers and several other senior government leaders sat together with CEOs and other business leaders, including BLSA chairman Adrian Gore.
Over 30 CEOs, among the best leaders we have in business, have volunteered to work across several workstreams with the single focus on achieving growth. That is a remarkable show of commitment to our country and achieving its success.
At the launch function, I felt very proud of what business is doing. We showed up in the room with a serious commitment of people, capacity and resources. As the president highlighted, the partnership is an expression of confidence from business and government. That shows how trust has grown over the previous iterations of the partnership, cemented by the success it has demonstrated. A government committed to reforms and creating a policy environment to support growth, coupled with a business partner committed to successful implementation, will likely lead to far greater levels of investment. We are seeing how that leads to growth through the huge investments into new energy generation, new logistics infrastructure, including rolling stock and port capacity. Private investment of over R360bn has flowed into new renewable energy projects. While still early, we have seen commitments of over R20bn to new port and rail projects, from the Durban Container Terminal to new locomotives and wagons.
The partnership’s renewal marks an important change in emphasis. We have been focused on fixing what’s broken. That has involved major reform and operational turnarounds in our critical network infrastructure, principally electricity and logistics. It has also seen much effort on getting the criminal justice system back into shape, enabling our exit from the FATF grey list. Government has also been highly effective in turning around the dire state of public finances to the point where we have received upgrades to our national credit rating. To be clear, there is still more to be done to ensure those reforms are properly concluded (including unbundling of the independent transmission system operator, the launch of the SA Wholesale Electricity Market, and the launch of the Transport Economic Regulator), but the results are now there to see. We have put load-shedding behind us and we are seeing improved performance in our ports and rail.
But these are growth enablers – they are not an end in themselves. And now the time has come to really focus on growing our economy. As the president said last week, the true measure of reform is not the number of policies that have been created or changed but the opportunities that emanate from them. We can see the green shoots starting to emerge in the economy and we are making real progress in fixing our broken infrastructure. This has been a demanding journey, but now we can see the opportunities emerging.
As Adrian Gore laid out at the launch, Phase 3 of the partnership is focused on unleashing the potential of our country’s assets to achieve a minimum of 3% growth – which is the level required to start turning around the unemployment crisis, the point when the number of jobs created starts to exceed the number of new entrants into the workforce.
This phase is built on three tiers. First, conclude the reforms required in the growth enabling sectors, energy and transport and logistics. Second, focus on a few key sectors in which SA has a global competitive advantage, have the potential to create many jobs, and which have underperformed relative to their potential – namely: mining, agriculture, tourism and infrastructure. Third, focus on the confidence multipliers that are key to marshalling investment – namely, crime and corruption, a more evidence-based “SA Inc” narrative, and the City of Johannesburg.
The test of this phase will be in the results. The numbers of additional international air tourists that arrive, the tonnes of agricultural output that are exported, the tonnes of minerals that are mined, the new construction projects that are underway, and the growth figures that result. This growth must be inclusive and result in jobs.
Joblessness, poverty and inequality are the Achilles heel of our country. Yet we know that when we work together, we can achieve remarkable things. The partnership that business and government have built is an example to the world of how social partners can work effectively together. I am often frustrated at the pace of reform, but last week was a moment to step back and recognise how far we have come, and how the opportunity ahead is real. The hard work starts now. BLSA will be actively involved in a few key workstreams and at the table pressing for results. Growth of more than 3% is the target we must all be held to. The jobs South Africa needs depend on us hitting it.
