29 January 2019

BUSA statement on Business Economic Indaba

Business Unity South Africa (BUSA) believes South Africa needs to accelerate its efforts to optimise the trajectory of the economy towards a growth path.

 

In that context, the BUSA leadership conceived of the Business Economic Indaba in late 2018, which is being convened today (Tuesday 29 January 2019) with its Members and the wider business community for an honest, constructive and dynamic exchange as to how we forge a partnership with government to drive an agenda for inclusive growth and transformation.

 

The Indaba has brought together leaders of business who with government will reflect on sector plans for inclusive growth through the Private Public Growth Initiative, explore the scope for collaboration to drive investment and how to address poverty, inequality and unemployment frankly and constructively, as well as map a future vision for the economy.

 

The Indaba will undoubtedly highlight: the governance challenges in state-owned entities (SOEs), the crisis confronting Eskom, deepening unemployment and inequality, rising government debt levels, underpinned by the increasingly restricted fiscal space, and the impending wave of disruption that will be brought on by the 4th Industrial Revolution (4IR).

 

BUSA is of the view that the operating models of SOEs are not only outdated, but also unsustainable, making these entities the single, biggest risk to the fiscus. The need for urgency and speed is particularly pronounced at Eskom, where the scale, depth and pace of reform are out of step with the magnitude of the crisis confronting the power utility. Of concern is that Eskom remains without a clear and coherent turnaround strategy.

 

The future sustainability of the economy is predicated upon addressing the marginalisation of the majority of our fellow citizens. The high level of unemployment, widening inequality and poverty are untenable. The suitability of the policy environment to address these challenges will no doubt be an area of focus. Business, together with other social partners, is looking to find lasting solutions to these. Identifying how small business can play its rightful role as a major contributor to employment and driver of transformation will also be assessed.

 

The risk of breaching the already high levels of the debt-to-GDP ratio is heightened by continued borrowing.

 

Focus will also be given to the importance of the 4IR, including the consideration of an appropriate policy response and framework to optimise South Africa’s ability to compete in this new world of work and create jobs of the future.