S.Africa: The New Corruption: The Rich People and the People: Public and private sector cooperation in SA is key to economic growth

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We are all acutely aware of the challenges and we need to address these now, with all hands on deck through partnerships with the business sector, civil society, labour movements, communities and other key stakeholders.

The announcement of a new Cabinet by President Cyril Ramaphosa marks the start of a new, uncharted era for South Africa which after 30 years of democracy is at a crossroads, confronted by structural economic and social challenges, among them a low growth cycle, infrastructural inefficiencies, unreliable energy supplies, high unemployment, inequality and poverty.

The new government has the formidable task of getting South Africa going, and in particular ushering in a new chapter in its relationship and engagement with the business sector, a key social partner in the wider national objective of achieving inclusive economic growth and prosperity for all South Africans.

While the challenges facing the country are immense, they are not insurmountable. They require bold, decisive leadership, with a purpose-led and solutions-based approach to resolving the impediments delaying or slowing down efforts to grow the economy.

The acid test for the new government is how political and ideological differences will be set aside to focus on what is good for the country. We expect that national interests will prevail over any differences because South Africa no longer has the luxury of time to keep debating ideological differences, what is wrong with the economy or what needs to be done to address these issues. We need action.

We are all acutely aware of the challenges and we need to address these now, with all hands on deck through partnerships with the business sector, civil society, labour movements, communities and other key stakeholders to achieve economic growth and business sustainability and create job opportunities and community self-sufficiency — our communities need to be empowered and liberated through access to basic services.

The business sector also needs to be empowered through reforms to tax laws to unlock effective public-private partnerships that will enable rebates if, for example, the sector spends money, and to repair public infrastructure that is hindering service delivery and business continuity.

We must do things differently and address missed opportunities to resolve fundamental structural issues related to tepid growth and the triple challenges of unemployment, poverty and inequality. In this regard, we look forward to a decisive government rooted in the principle of unity for a common and progressive goal.

Quick wins
There are quick wins that the seventh administration has to address.

First, energy security is critical to ensuring that the economy functions as it should. Energy policy reforms have already seen a significant increase in investment by the private sector in renewable energy, including a growing appetite by foreign investors to participate in renewable energy projects in South Africa. Our members have been investing in alternative energy sources and we expect the new government to continue providing a conducive framework that encourages further investment by our members and other sectors.

Second, infrastructure bottlenecks, particularly in the port and rail network, must be addressed through public and private sector partnerships. Our members have been forced to use expensive road freight owing to Transnet’s port and rail inefficiencies which have cost the country in terms of lost export earnings.

We are pleased with the bailout of Transnet to strengthen its balance sheet and the opening up of the rail network to the private sector. This approach should also apply to address water challenges due to poor water infrastructure which has not been regularly maintained or expanded to meet the rising demand.

Third, regulatory and policy uncertainty should be addressed as there is an urgent need to implement progressive policies that support growth and attract job-creating investment. Consumer Goods Council of South Africa (CGCSA) members continue to advocate for policy interventions that support their businesses and importantly, enable them to continue investing.

To enable investment and business sustainability, the CGCSA has, through the Red Tape Unit in the Presidency, called for the removal of regulatory red tape and escalating indirect taxes such as the health promotion levy, the subcontracting of government services to assignees and inspecting agricultural products on behalf of the government and for profit.

We hope that red tape in government will be removed through ongoing inclusive and transparent consultation between the government and the business sector, as well as other social partners such as labour. We acknowledge the progress that has been made through engagements with the Red Tape Unit and we continue to advocate for progress, given the Cabinet changes.

Fourth, tackling crime is critical, because an unsafe society cannot thrive. Crime rates, particularly of contact crime, are still uncomfortably high as is the number of organised criminal syndicates affecting the business sector. South Africa needs a decisive police force that is proactive and effective in dealing with crime at all levels. The CGCSA, through the Consumer Goods Crime Risk Initiative (CGCRI), is working closely with law enforcement and other stakeholders to fight the scourge of illicit and counterfeit trading.

Fifth, service delivery at both national and provincial government levels is vital; especially considering the deteriorating service delivery at municipal level. Water quality and delivery, energy security, crime and infrastructure inefficiencies have worsened. Poor service delivery affects the livelihoods of communities and chases away investors and consequently job opportunities, and stifles SMME growth.

Food security
The consumer goods sector represented by the CGCSA is one of the largest employers in the country, contributing to more than 1.2 million people in formal employment. It is one of the largest contributors to national GDP, accounting for more than R1-trillion — 20% of GDP. It is the lynchpin of national food security and offers the potential for growth through further investments.

Our members, who include major manufacturers and retailers of food and other essential products, as well as quick service restaurants and pharmaceuticals, take their role seriously of supporting national objectives to grow the economy, create jobs and ensure food security and sustainability.

This is a sector that, during the trying times of Covid-19, the 2021 unrest, the unprecedented rise in load shedding, extreme weather events, escalating inflation and the rising cost of living, ensured that consumers, our employees and supply chains were protected and insulated from devastation.

We hope the government will work with our sector and the wider business community for the good of the country. The CGCSA is willing to continue to engage and collaborate with the government to provide and implement solutions to further improve the investment climate and support growth.

The CGCSA intends to invite relevant ministers and government officials to a series of engagements to discuss how the government can effectively work together with captains of industry in the consumer goods sector. We hope that this time there will be more willingness to listen to and engage on matters related to our sector in particular and the wider economy in general. DM

Source: https://www.dailymaverick.co.za/article/2024-07-01-public-and-private-sector-cooperation-in-sa-is-key-to-economic-growth/?utm_source=Sailthru&utm_medium=email&utm_campaign=first_thing

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