21 June 2019

BUSA response to President Cyril Ramaphosa’s State of the Nation Address

As the apex organisation representing South African business, Business Unity South Africa (BUSA) welcomes the President’s focus on the economy and transformation, as well as his unequivocal endorsement of the South African Reserve Bank’s constitutionally enshrined mandate and independence.


The SONA comes at a time when South Africa is at an economic T-junction, underscored by pedestrian growth, high levels of unemployment and endemic inequality. It is against this backdrop that BUSA believes that there needs to be recognition among social partners that the country is in crisis, and that SA Inc must mount a collective effort to reverse this trend. Social contracts must form the core of this effort, and we will be doing all we can to strengthen relations with government, labour and civil society to ensure a concerted effort.


The President’s pronouncements on Eskom are broadly in alignment with business’ view on how to deal with the crises engulfing the power utility, particularly the imminent appointment of a chief restructuring officer. However, timeframes were not announced by the President and we urge the President to publicly announce a clear timeframe, with milestones, for the implementations of recommendations of his Advisory Panel. This is so given the prominence of Eskom in any discussion around economic revival. Furthermore, a comprehensive plan and strategy on state-owned enterprises is still outstanding, even as the contagion spreads and poses a major risk to public finances, which increases the spectre of a sovereign credit downgrade. We urge the President to provide this detail at the earliest opportunity.


BUSA agrees with the focus on education, skills and health. A fit-for-purpose education and skills framework will be a key enabler of innovation and job creation. Conversely, the poor state of the country’s education system and its skills mismatch with industry demand have been identified as the main hindrances to South Africa realising its economic potential.


We also welcome the emphasis on capable and ethical leadership. It is only through capable and ethical leadership that the country will be able to regain lost ground and start making inroads on its myriad challenges. But BUSA is concerned that, with the calibre of many of the recent appointments of parliamentary committee chairs, SA Inc will not be able to address its various challenges in a forthright and comprehensive manner.


Business welcomes the planned changes to the current visa regulations, which have impeded tourism and hindered South Africa’s ability to attract scarce skills. However, we urge the President to suspend the current regulations which have made it difficult for tourists to visit and skills to come into the country. The government must address this with urgency and in consultation with social partners.


BUSA also notes the commitment to start the process of rolling out much needed spectrum.


The government must make good on its promise to place the National Development Plan as the point of departure of economic policies to ensure alignment in action and the design of policy and regulations.


The President said, at the start of his address, that it is now the time for implementation. However, we did not hear much on real implementation plans. Instead, the SONA is a restatement of the myriad challenges SA faces and a broad sweep of what we need to do. We now urge the President to engage with business to put on the table hard plans with clear implementation timeframes and milestones.


BUSA welcomes the President’s commitment to a social compact in the national interest and we stand ready to work with him, but within a context of taking hard decisions and unequivocal messages that build investor confidence.


“We are well aware of the challenges confronting the country. But the time for talking is over, we must enter the realm of implementation, and we must do it quickly. The Fourth Industrial Revolution is upon us, and South Africa must prepare to adapt or risk economic displacement. That is a scenario we can ill-afford as a country.


“As business, we stand ready and willing to play a meaningful and constructive role, as we believe that the government cannot go it alone. But we need detail, and we need it soon, if we are to strengthen confidence at home and abroad,” said BUSA President Sipho M Pityana.


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