Get more Mail & Guardian
Subscribe or Login

Mixed reactions to business sector letter to state

"Releasing a statement that says they are going to work toward arresting the situation isn’t something magical that will solve everything," said Ebrahim Fakir, political analyst at the Electoral Institute of Southern Africa.

On Sunday, over 30 prominent business figures from several companies called for the country’s companies to work together to prevent South Africa’s economic decline.

In an open letter published in weekend newspapers, the chairpersons and chief executives offered assistance to the state in squaring up to its challenges, but called on it to do more to ensure their policies are implemented and the National Development Plan (NDP) is followed.

Among the signatories were acting Lonmin chief executive Simon Scott, Gold Fields chief executive Nick Holland, AngloGold Ashanti chief executive Mark Cutifani, Nedbank Group chief executive Mike Brown, Investec chief executive Stephen Koseff, Shell South Africa chairperson, Black Management Forum president Bonang Mohale and newly appointed Telkom chairperson Jabu Mabuza.

The group further warned the country could "unravel" if challenges in education, corruption and unemployment were left unchecked.

“There is an urgent need to put our country back on track to realise our economic and social potential,” reads the statement.

The statement comes less than a week before the ANC’s elective conference in Mangaung, where discussions will be held over the country’s future policy decisions.

“I don’t think they’ve had a proper look at what is causing South Africa’s decline – it’s not just a perception issue,” Fakir said.

Fakir said business has been “complicit and guilty” in the country’s decline, in that they have shied away from local investment. "You could effectively call it an investment strike by South African business. If we continue in that way, no statement will ever change things," he added.

Fakir was referring to South African corporate savings, which are currently at a multi-decade high.

The South African corporate sector was sitting on roughly R520-billion in mid-2012 – the highest levels since 1995.

”Hopefully they have a sober look at what they can do from a structural perspective to address the problems we have,” Fakir said.

Fakir argued that business could assist in turning around the country’s economic fortunes through the expansion of services, more concentration on research and development, the introduction of new products and a focus on job creation.

“Business can do simple things that can be translated into major improvements if they are handled properly,” he added.

Fakir’s stance is mostly supported by the ANC. "Business has played their part, but they’ve been very conservative,” ruling party spokesperson Keith Khoza told the M&G.

Khoza said that while the weekend statement was a “step in the right direction”, more tangible actions needed to be undertaken. “There needs to be massive reinvestment and a collaborative effort from all parties to ensure our success,” he said.

“It is not only the responsibility of government to create jobs and build our economy.”

Khoza argued that business needs to pay special attention to beneficiation, in order to develop the production industry in South Africa.

“We need to build on our past successes thus far by changing the way we do business going forward,” Khoza said.

But, even though there is an argument for more investment into the economy from local business, there is a school of thought that argues government should provide more favourable conditions for investment.

“Business is facing an enormous amount of uncertainty,” Chris Hart, chief economist at Investment Solutions told the M&G. "For them to increase their investment they’d need support from government in some way or another.”

Hart said policy instability and uncertainty over the country’s political future has led to business to shy away from pouring money back into the economy. He added that currently the relationship between the two was one of “antagonism and suspicion".

“For us to move forward, we need to have less animosity,” he said.

“Business is already a massive investor in the economy and it isn't given enough credit for that.”

 

Acting government spokesperson Phumla Williams was unwilling to comment on the statement at this stage. "We will probably respond to that letter later this week, as it involves a lot of departments so I can’t say anything now," Williams told the M&G.

A previous version of this story incorrectly states that the government called on business to invest in the economy. This should, in fact, read the ANC called on business to invest in the economy.

Subscribe for R500/year

Thanks for enjoying the Mail & Guardian, we’re proud of our 36 year history, throughout which we have delivered to readers the most important, unbiased stories in South Africa. Good journalism costs, though, and right from our very first edition we’ve relied on reader subscriptions to protect our independence.

Digital subscribers get access to all of our award-winning journalism, including premium features, as well as exclusive events, newsletters, webinars and the cryptic crossword. Click here to find out how to join them and get a 57% discount in your first year.

Nickolaus Bauer
Nickolaus Bauer is the Mail & Guardian's jack of all trades news reporter that chases down stories ranging from politics and sports to big business and social justice. Armed with an iPad, SLR camera, camcorder and dictaphone, he aims to fight ignorance and pessimism through written words, photographs and videos. He believes South Africa could be the greatest country in the world if only her citizens would give her a chance to flourish instead of dwell on the negativity. When he's not begging his sub-editors for an extra twenty minutes after deadline, he's also known to dabble in the occasional poignant column that will leave you mulling around in the depths of your psyche. The quintessential workaholic, you can also catch him doing sports on the weekday breakfast show on SAfm and presenting the SAfm Sports Special over the weekend.

Related stories

WELCOME TO YOUR M&G

If you’re reading this, you clearly have great taste

If you haven’t already, you can subscribe to the Mail & Guardian for less than the cost of a cup of coffee a week, and get more great reads.

Already a subscriber? Sign in here

Advertising

Subscribers only

‘The children cannot cope any more’: Suicide in Calvinia highlights...

How Covid-19 has intensified the physical and emotional burdens placed on children’s shoulders.

Capitec Bank flies high above Viceroy’s arrow

The bank took a knock after being labelled a loan shark by the short seller, but this has not stymied its growth

More top stories

Council wants Hawks, SIU probe into BAT’s Zimbabwe scandal

The cigarette maker has been accused of giving up to $500 000 in bribes and spying on competitors

How Alpha Condé overthrew Alpha Condé

Since the coup d’état, Guinea’s head of state has been in the custody of the military officers. But it was the president who was the primary architect of his own downfall

‘The Making of Mount Edgecombe’: A view of history from...

Indian indentured labourers’ lives are celebrated in a new book, Sugar Mill Barracks: The Making of Mount Edgecombe

Case of men arrested with 19 rhino horns is postponed

Alleged rhino kingpin and a Mpumalanga businessman appeared in court on charges of the illegal possession and selling of rhino horns
Advertising

press releases

Loading latest Press Releases…
×