Tag: BUSA in Parliament

As the country prepares for its sixth general election on Wednesday 8 May 2019, Business Unity South Africa (BUSA) calls on business to do everything possible to encourage workers to exercise their right to vote.

 

This is a constitutionally enshrined and hard-fought for right which we all cherish. For this reason, BUSA appeals to businesses that are operating on the day to come to practical arrangements that will make it possible for employees who wish to vote on Wednesday to do so.

 

It is in this spirit that BUSA urges all employers, including those that may it be our members, large and small, to ensure that they encourage workers to get to polling stations to cast their vote.

 

BUSA wishes the IEC, as well as election observers, well as they shoulder the noble responsibility to ensure that the electoral authority conducts a credible, and free and fair election. We wish the county’s citizens and all the political parties the best in South Africa’s quest towards a successful sixth democratic election.

Business Unity South Africa (BUSA) is encouraged that manufacturing was one of the biggest contributors to the 1.4% growth recorded in the fourth quarter (Q4) of 2018. However, the 0.8% overall growth rate documented for the year is disappointing, especially because of the contractions in mining, construction and gross fixed capital formation, which remain a concern.

 

“Although moderate, the 0.8% growth recorded in 2018 is welcome, particularly on the back of a 4.5% improvement in manufacturing in Q4. However, the annual growth rate remains off target for the country’s goals of creating a sustainable, competitive economy and of ensuring that we generate jobs. It is a symptom of the overall structure of the economy, which remains concentrated, is not dynamic enough and agile. This is apparent in the low levels of participation by small business,” said BUSA CEO Tanya Cohen.

 

“Economic growth is a key prerequisite for South Africa improving its sovereign credit ratings, as well as retaining its only investment grade rating. There are encouraging signs, so BUSA remains cautiously optimistic that, with the right policy mix, the alleviation of uncertainty, reforms in state-owned entities, particularly Eskom, together with the political will to implement economic reforms, that South Africa can turn a corner,” Cohen said.

 

• Lacks reforms to turn the tide on low economic growth
• Government debt remains high, State finances continue to deteriorate
• Public sector wage bill remains largely unchecked
• SOEs continue to drain fiscus

 

Business Unity South Africa (BUSA) is disappointed at the lack of bold steps in Finance Minister Tito Mboweni’s Budget to contain Government debt and ensure South Africa retains its remaining investment-grade sovereign credit rating.

 

While we appreciate that Minister Mboweni delivered his maiden Budget speech amid weak economic growth, a low investment climate and high inequality, we believe he has failed to address the fundamental challenges facing South Africans and the economy.

 

In particular, the Budget speech has not introduced the much-needed and far-reaching reforms necessary to turn the tide on the low economic growth trend, arrest the State’s deteriorating finances and high debt, confront the governance and financial challenges besetting state-owned entities (SOEs), and to decisively address the root causes of the rising public sector wage bill.

 

While Minister Mboweni is to be commended for presenting a realistic assessment of the country’s challenges, the Budget came up short on concrete steps that need to be taken to lift the South African economy from its current prolonged slump and radically improve the investment climate.

 

The economy is projected to have grown by less than 1% in 2018, and the growth estimates for the medium term remain low relative to the country’s ambitions to get the economy going. This is further compounded by a weakening global economic growth rate. In addition, the Budget speech has not gone far enough to alleviate policy uncertainty, which is the primary factor cited for the country’s low investment rate.

 

The State continues to walk on a shaky tightrope with reference to revenue and expenditure, and its debt-servicing costs. A projected debt rate ratio of 60% to GDP is not only unsustainable, but also threatens to undermine Government social spending.

 

In reference to SOEs, BUSA considers the power utility the greatest risk to the economy, and its ongoing operational, structural and debt challenges require resolute and urgent action. BUSA notes the R23bn-a-year allocation to Eskom in the absence of a comprehensive, aligned position between the power utility and its stakeholders on how to effect a restructuring. BUSA welcomes the announcement that Cabinet will take steps to ensure that the State no longer advances guarantees to SEOs for operational purposes. However, there are no proposed modalities on what form, shape or function SOEs will take to offload their pressure on State finances.

 

BUSA is also disappointed at the lack of appropriate acknowledgement of the risks posed by land expropriation without compensation and, by extension, the protection of property rights, with reference to investment. The Budget also failed to reinforce the independence of the Reserve Bank and signal support for inflation targeting.

 

BUSA notes the announcements with reference to bolstering SARS and ensuring that the tax authority is well-capacitated and resourced to undertake its mandate. We also welcome the fact that there were no increases in personal income tax and corporate income tax in this tough economic and operating environment. In addition, BUSA welcomes efforts to strengthen the National Prosecuting Authority’s state capture unit.

 

“We previously characterised Minister Mboweni’s medium-term budget policy statement in October 2018 as a reality check,” said BUSA President Sipho M Pityana.

 

“This Budget is a wake-up call that South Africa has run out of time. It affects all of us, and we should all be concerned. Drastic interventions are needed by Government to provide clarity on economic policy, manage Government debt, and contain the increasingly negative economic impact of ailing SOEs.”

 

 

 

While circumstances and the timing of Nhlanhla Nene’s resignation are regrettable, business welcomes the appointment of Tito Mboweni as the new Finance Minister. Mboweni comes with a long track record in government and brings with him the necessary credibility among social partners, as well as the expertise to provide steady leadership in National Treasury.

 

National Treasury is the custodian of SA’s fiscal policy and has, over the years, become the bulwark of the country’s contested supply chain management system, which has been at the centre of state capture. The institution’s performance, or lack thereof, has a bearing on market sentiments about SA and the country’s ability to grow its economy, stimulate investment and raise capital at competitive rates to plug its widening budget deficit. Added to that, is the fact that National Treasury’s stewardship of the budget process is a key lens used to assess the country’s sovereign credit ratings. It is in this context, that the need to maintain stability and ensure credibility at National Treasury are key.

 

National Treasury has been beset by leadership instability and has had no fewer than five political principals since 2015. We have now come to know that the December 2015 reshuffle of the Minister of Finance was motivated by state capture. At the time, it was unknown how deep into our system state capture’s tentacles extended. The March 2017 reshuffle of the finance portfolio led to immediate downgrades of SA’s sovereign credit ratings by both S&P Global Ratings and Fitch. It was widely hoped that the February 2018 reshuffle would bring leadership stability to National Treasury. Today’s development represents another instance of how far deep the stain of state capture has sunk into the institutional fabric of our society and country, but it also signals the seriousness and determination with which the current leadership in the government, under President Cyril Ramaphosa, is viewing state capture.

 

Business emphasises the importance of maintaining commitments made in the February Budget as the country heads into the Medium-Term Budget Policy Statement. Fiscal stability and working within our current fiscal envelop are critical, states BUSA.

 

Business underscores the important signalling that we need an accountable and credible government. What is clear is that a Commission of Inquiry into the Public Investment Corporation is required. We need to implement the lifestyle audits for key positions, which the government committed to in the Jobs Summit agreement, and we need to ensure greater transparency in the appointment of people to key positions in the government and state-owned enterprises, notes BUSA.

 

BUSA President Sipho M Pityana said: “It is important to emphasise that there can be no dark cloud hanging over the institutional head of National Treasury. Today’s development does not spell the introduction of a new fiscal direction, rather a move to entrench stability and demonstrate how seriously the government is taking state capture.”

 

Business commends Nene and thanks for him for doing the honourable thing by resigning. He should use this opportunity to answer any lingering questions. Business challenges President Ramaphosa to use this window of opportunity to clean out his Cabinet of elements associated with state capture. Business calls on other members of the executive who have been implicated in state capture to follow Nene’s example. In the same breath, the Zondo Commission of Inquiry into state capture should be given the space and time to conduct its ongoing work.

Jobs Summit 

Thursday 4 October 2018 

Address by Business Constituency Leader at Nedlac: BUSA President Sipho M Pityana 

Programme Director,

Your Excellency President Ramaphosa,

Your Excellency Deputy President David Mabuza,

Honourable Minister in the Presidency Dr Nkosazana Dlamini Zuma

Honourable Minister of Labour Ms Mildred Oliphant,

Honourable Ministers, Deputy Ministers, Directors General, Leadership of the Community Constituency in Nedlac,

Leaders of the Trade Union Movement, Business leaders, Executive Director of Nedlac Mr Vilakazi,

Members of the Media,

Distinguished guests,

Ladies and Gentlemen,

 

Introduction

 

Our presence here is a response to your clarion call and challenge, Mr President, during your State of the Nation Address in February, in which you stirred the nation from its slumber. You called on us to embark on a search for answers, a hunt for solutions. You implored us to roll up our sleeves, and to adjust our trajectory upwards, from the downwards spiral that we seemed unable to escape.

 

Since then you have led from the front. You have made enormous – and difficult strides — to reclaim our sovereignty from the clutches of state capture. You set a clear, strong tone against corruption. You set an agenda to restore the credibility and integrity of the state.

 

In your travels abroad, you have sought to reclaim our place as a nation committed to world peace, multilateralism, free trade, human rights, democracy and stability. You have sought to re-establish our good name as a state which cares deeply about the plight of the poor and marginalised. In less than a year, South Africans are able to say, without equivocation, that we once again have a leader worthy of representing the South Africa nation, and all that it stands for.

 

You have enjoined us to search for durable solutions to the deep, structural challenge of unemployment. If we don’t solve this conundrum, we will condemn many more of our compatriots to a life of poverty, and the social ills that come with a yawning gap in equality.

 

With the long list of contributions that our individual enterprises and sector organisations have proposed, we as business say Thuma Thina, Thuma Mina, Mr President.

 

We want to be there when you start to turn it around. We, as business, want to lend a hand in the urgent collective struggle against poverty, unemployment and inequality. Send us, Mr President.

 

Structural Unemployment and Economic Downturn

 

We meet as our economic growth is sluggish and our businesses are bleeding jobs. Just last week Stats SA revealed that almost 70,000 jobs were lost in the second quarter – 13,000 of those come from the manufacturing sector alone.

The IMF expects the situation to get worse still, with our jobless rate reaching 28.3% next year. That is worse than it’s ever been.

 

Fitch sees our economy growing at a pedestrian 2.2% annually over the next decade, with our progress held back by power shortages, strikes and continued malaise in the mining sector. We will continue to lag our global peers.

 

The data shows that our Government simply has no fiscal headroom to catalyse growth, without risking our sovereign credit rating and raising borrowing costs for a generation. To be sure, we remain precariously placed for the rating reviews that will follow the medium-term budget later this month.

 

The reality we face is that we must grow consistently at more than 6%, for us to make a dent in unemployment. That target is a long way from where we are, especially in a global environment with more headwinds than tailwinds.

 

We are under no illusion that the Jobs Summit will stem this tide of job erosion.

 

But we are gathering here today to generate innovative ideas of stimulating employment creation across our economy. We are here to decide on pragmatic ways to protect jobs wherever possible, and to identify and nurture the potential for new jobs that will help turn back the tide.

 

We are not only hopeful, as we embark on this job-creating expedition, but also clear that our path will be full of challenges that will require tough and painful choices to resolve. But these hardships cannot deter us from taking on this important task.

 

We will need to fully leverage our multilateral forums, such as Nedlac, in order to find ways to confront – and resolve — the structural problems that underpin this economic crisis.

 

We’ve been hard at work crafting a policy framework that is conducive to investment while also honouring our constitutional mandate to transform society and achieve socio-economic justice. Your recently announced stimulus package alludes not only to this important balance, but also the need to prioritise state spending to jump-start the economy

 

We welcome the intent of the stimulus package. Few can argue with its emphasis on better planning and improved use of existing resources to boost growth and employment. The advancement of outstanding reforms also remain crucial if we are to reinvigorate economic growth and make our economy more inclusive.

 

We are painfully aware that our rising public debt requires urgent attention if we are to stabilise the economy. Equally urgent is the imperative for fiscal consolidation, reigning in leakage from corruption, and choking off wasteful and irregular expenditure to halt the never-ending call for bailout from our SOEs.

 

We applaud the clean-up we’ve seen in some state companies, and we continue to urge employment of competent, experienced and scrupulous leaders as custodians of the state’s capital and the ambitions of its people. We are encouraged by your administration’s appreciation of the pressing need to find solutions to the plethora of challenges you’ve inherited. Business remains ready and willing to assist

 

I mention these, Mr President to suggest that if this Jobs Summit is viewed in isolation from all these other initiatives, we will mislocate its purpose. It is only one of a range of mutually reinforcing arsenals we are employing to navigate our way out of this challenging environment.

 

So, as we wrestle with the complexity of assembling the right basic ingredients for successful growth: budget allocation, taxes, monetary policy, trade and industrial policies, to name just a few — we must agree that that there is no painless, quick-fix solution to our employment predicament.

 

As we deliberate today and tomorrow, we need to bear in mind the challenging work of crafting the policies that will indelibly influence the lives of millions of our people: their job prospects, their health, their education, their access to basic amenities like water, and the overall quality of their daily lives.

 

Labour Market Disruptions of the 4th Industrial Revolution

 

The most pressing task, of finding employment for a largely low-skilled population, must also not undermine our longer-term goal of cultivating a working population with the skills to thrive in a rapidly changing modern economy.

 

The future of work in SA is likely to be impacted by these changes including automation, artificial intelligence and robotics. The World Economic Forum predicts that 41% of all work activities in South Africa are susceptible to automation.  That’s a staggering number.

 

So, as we contend with the structural impediments that are a legacy of our past, we are also keenly aware that the Fourth Industrial Revolution is upon us.

 

The digital economy, innovation, artificial intelligence, robotics and machine learning are already bringing structural changes within industries and labour markets – and all at dazzling speed. These seismic-technological changes stand to disrupt our labour market, and change methods and types of jobs required by the economy. We know that this Summit doesn’t address this in any systematic and meaningful way.

 

With the advent of electric cars, what’s the future of petrol attendants? Like the luddites of 19th Century Europe, the cab drivers of today who see enemies in the Uber drivers, are in fact assailing their future allies in the coming struggle against driverless cars.

 

What will happen to farmworkers when smart farming methods are introduced more widely? White collar jobs won’t be exempt, as we’ve seen with online banking. We no longer have CD shops in every main street, or DVD stores in every suburb. There are fewer book shops. The list is endless.

 

It’s our mistake that we often reflect on these challenges of the digital era, without the digital generation leading the charge. We must rediscover the value of the young in the redefinition of our future. The grey hair – or lack of any hair at all – at this gathering is not, I say this with all due respect, equipped to alone define a radical path for the digital era.

 

If we fail to prepare in anticipation of these disruptions, our current unemployment problems will soon seem like prosperity in comparison with the employment calamity we’ll face. We must have bifocal vision — fixing the challenges of today, and preparing for the future.

 

Part of the preparation entails reforming of our education system to deliver suitably skilled workers in the numbers required. We are currently battling technology illiteracy, a shortcoming which makes many of our people unemployable in the rapidly growing gig-economy.

 

To build a pipeline of future skills, Mr President, our educators should design future-ready curricula that encourage critical thinking, creativity and emotional intelligence. We must also accelerate the acquisition of science, technology, engineering and mathematics (the STEM skills), as well as the information and communication technology skills to match the way people will work and collaborate in the Fourth Industrial Revolution.

 

The Job Summit Accord

 

Eight months since SONA and after three months of collaborative work at Nedlac, we as the social partners – community, labour, government and business – have responded to the call of Thuma Mina. We have put our heads together and dedicated considerable time and resources in our collective quest for answers to the universal socio-economic questions that have stalked the Republic since independence: how to grow the economy to create sustainable employment while addressing endemic poverty and inequality.

 

During the 80s, as an ANC and SACTU activist in exile in the UK, I joined a huge People’s March for Jobs in solidarity with the struggles of the local people who formed the backbone of the Anti-Apartheid Movement. It symbolised a nation united in the common cause of finding find lasting answers to a challenge that was on a smaller scale to the one we now face. Harnessed correctly, this Summit and its defined processes, have the same potential.

 

Unlike previous Summits, the approach taken here has been bottom up. We are engaging the conversation from a micro perspective. Some of the proposals before us are from companies that don’t operate in the sector for which the interventions are targeted. While these innovations are crucial, we must resist focusing only on the numbers on the table – we must also factor in, that these proposals catalyse growth and change, sparking a multiplier effect with results beyond what the data suggest.

 

The Jobs Summit is cognisant of the full set of economic challenges we are confronted with but does not pretend to have all the answers – only some. We cannot underestimate the requirement for long-term economic restructuring. This will be the subject of a follow up process.

 

Positives from the Jobs Summit process 

 

We are building on the accords reached among social partners both in and outside Nedlac. We recognise for instance, Mr President, the centrality of finding solutions to the education crisis as a long-term solution to the scourge of unemployment. The National Education Collaboration Trust, which was initiated by business in collaboration with labour and government, went beyond merely diagnosing the problems of education, but proceeded to develop a programme to resolve these in a collaborative way. Its pilot programmes must contain clear results and signals of how we progress our interventions more broadly.

 

For a low skills base country, it is an unforgivable extravagance – and an intolerable waste — to have jobless graduates. That is irrespective of the discipline of their training. It is noticeable that some of the agreements seek to address this challenge targeting TVET graduates for learnerships and apprenticeships, as they should those from universities of technology, among others.

 

The three major ratings agencies who previously characterised South Africa’s labour environment as unstable and volatile, and a credit risk to our country, have commended the National Minimum Wage and Labour Relations Amendments as an important step in our long-term development. That process saw the Nedlac constituents coming together in a collective effort to find middle ground, for the greater good.

 

It’s a good example for us to emulate here. The Jobs Summit process is only the start of the continuing conversation we must have about the type of economy we are building, taking into account the pressures and opportunities of the Fourth Industrial Revolution, and our location on the continent.

 

I believe Business has rightly consolidated its place as a valued, long-term partner and generator of tax and employment. It is in that context that we welcome the action orientation of the Jobs Summit framework agreement, and the way social partners have agreed to once again co-operate for the common good.  We are excited about the potential evident in the proposed projects, such as those identified for the agricultural sector, nursing, youth employment and in early childhood development.

 

We need to sustain and deepen these interventions, as we move to the Medium-Term Budget Policy Statement, the Investment Conference and beyond.  As we conduct these processes and introspect on what course will carry us through as a collective, the world will be watching.

 

We can choose whether it sees a South Africa that is full of unrealised potential because of self-inflicted domestic factors. Or one that overcomes these real, and daunting challenges to realise the promise enshrined in our Constitution and the Bill of Rights, of an economy that can support our ambition of dignity, equality and true freedom for all.

 

We are fortunate that our institutional framework remains intact. We have a vibrant judiciary and the exemplary custodians of our fiscal and monetary policy in the National Treasury and the Reserve Bank respectively. We have a loud and free press and a vibrant, multifaceted civil society.

 

In our toolkit we now have an economic stimulus package and will soon add the outcomes of this Jobs Summit, to help us to conduct our ongoing dialogue about which economic path to take. What is comforting and encouraging is the return of due process not only in the policy space, but also in the nature of engagements among economic role-players and the social partners at Nedlac. We are not devoting all our time and resources to protecting our institutions but are instead able to focus on tangible solutions to undo the damage caused by years of maladministration.

 

South Africa withstood the global economic meltdown because of its robust countercyclical policy instruments, which it deployed to good measure. Those instruments shielded South Africa from a financial battering.

 

Social partners were able to come together at Nedlac because there is no longer the mistrust that pervaded institutional frameworks. The current political environment is conducive to dialogue. Our discourse is no longer dominated nor coloured by scandal. Substance has returned to public rhetoric as the political noise has died down. The paradigm has shifted from public scandals to social partners collaborating on the Jobs Summit.

 

We have come a long way and the Jobs Summit is not the complete answer but is rather one of the answers to the call of Thuma Mina. This process is the short-term curtain-raiser, if you will; the stage-setter for what we expect to be long-term and ongoing engagements about how best to grow the economic pie and ensure we address inequalities.

 

We have made thoughtful and well-considered inputs to enrich the process in collaboration with the other three social partners.

 

As Business, we assure you of our commitment to the outcomes of the Jobs Summit.

 

Thank you.

Business Unity South Africa (BUSA), today welcomed President Ramaphosa’s first cabinet reshuffle, saying the return of Nhlanhla Nene to the Finance portfolio and the appointment of Pravin Gordhan, as Minister of Public Enterprises reinforces the requirements for a strong, accountable and successful economic cluster.

“BUSA believes these appointments signal a strategic placement of capable individuals with a track record for delivery into key positions in the executive,” says Tanya Cohen, BUSA CEO.

“The appointment of Mr Nene will re-establish much needed certainty and credibility with both local and international investors.  Our members, also welcome the return of Mr Gordhan, who will need to work hard and fast to put state owned entities on a stable footing where their role, their viability and their governance withstands scrutiny.

BUSA stated that the departure of many of the Ministers implicated in state capture is a step towards restoring confidence in the Executive. A positive illustration is the appointment of Deputy Minister of Finance, Mondli Gungubele who has been an outspoken critic of corruption, particularly with respect to State Owned Enterprises. In addition, the stability provided by retaining Ministers in Trade and Industry, Economic Development, Agriculture, Forestry and Fishing, Environmental Affairs and Labour was welcomed.

BUSA also commented on other key changes:

A number of key appointments are directly relevant to areas of policy focus for BUSA.

• Jeff Radebe into the Energy ministry provides a welcome sign that there will be consultation on the Integrated Resource Plan and Integrated Energy Plan, which will provide the much-needed framework and direction for energy planning, pricing and resourcing.
• Naledi Pandor’s appointment into the Higher Education portfolio will do much to position the country for the future.  This provides the opportunity to realign the post school education system in a manner that is demand-led for a competitive and agile economy. It is critical to realign the skills landscape so that it is geared to enable South Africa to compete and to stimulate employment, thereby also driving transformation of the economy. President Ramaphosa has repeatedly stressed the emphasis that will be placed on higher education.
• Gwede Mantashe’s appointment to Mineral Resources is a strong signal that the President has responded to the challenges facing the sector.  Mr Mantashe’s key challenge and priority should be to provide policy certainty.
• The appointment of Susan Shabangu into social development will provide greater confidence that that the social grant system will be repaired and that a framework for comprehensive social security will be put in place.
• The return of Derek Hanekom to Tourism will reinforce the critical growth opportunity for this strategic sector.
• Nkosasana Dlamini-Zuma into the Presidency with responsibility for performance and monitoring will bring renewed focus on holding government to account.

Cohen concludes: “The extent of the reshuffle will result in significant adjustments that will take time and resources. We urgently need the reconfiguration of cabinet referred to by President Ramaphosa to be implemented in order to reduce inefficiencies, misalignment and costs and to demonstrate that the executive is both aligned and accountable”.

Business Unity South Africa (BUSA) welcomes the appointment of President Cyril Ramaphosa and views his appointment as a key milestone in the revival of business and investor confidence in South Africa.

“The positive movement of the local currency following the events of the past few days is indicative of the importance of political certainty, accountability and good governance in advancing South Africa’s economic fortunes. As the business community, we stand ready to work in partnership with the President Ramaphosa in creating a conducive environment for sustainable and inclusive economic growth,” said BUSA CEO Tanya Cohen.

BUSA said the new administration needs to take decisive steps to build business confidence thereby clearing the way for investment in the economy, job creation and transformation. South Africans are looking for the clear signs of consistent, ethical and accountable leadership, acting in the best interests of the country that are starting to emerge, stated BUSA.

BUSA welcomed President Ramaphosa’ s commitment to being accountable to Parliament, and to actively engage in the best interests of the country and in service to the people of South Africa as an encouraging signal of the new leadership.

BUSA stated that the President Ramaphosa along with his new leadership team should immediately occupy themselves with a clear and practical program of action that will redress the country’s declining fiscal and macroeconomic position. The forthcoming budget is expected to be extremely challenging and underscored the need for competent, credible and capable administration, stated BUSA.

“We are under no delusions that the hard work to restore our economic fortunes as a country starts now”, stated Cohen.

BUSA urged President Ramaphosa to embrace the opportunity of strengthening the strategic partnership between government, business and organised labour in Nedlac to effectively deal with issues such as youth employment; stimulating small business growth; addressing the crises at many state-owned enterprises and restoring good governance and accountability in the public and private sector.

Business Unity South Africa (BUSA) welcomes the decision of the ANC NEC to recall President Zuma indicating that the implementation of the decision will require a Constitutional process to lawfully remove the President from office.

“Business views the decision of the NEC to recall President Zuma as a decisive step towards greater policy certainty, accountability and clean governance. The decision of the NEC is a critical one that will inspire greater confidence in the leadership of the ANC provided it is expeditiously actioned within the requirements of the Constitution,” said BUSA CEO Tanya Cohen.

BUSA stated that further delays in implementing the recall of President Zuma will only serve to exacerbate low levels of business and investor confidence currently manifested within the South African economy. BUSA calls on the ANC leadership to act swiftly to institute the necessary leadership changes in the administration.

 

 

Business Unity South Africa (BUSA) has expressed grave concern with the latest cabinet reshuffle, the second in less than 8 months, which has seen a change in ministers in key portfolios including energy, home affairs, telecommunication and higher education all of which are directly relevant to the work that BUSA is engaged in on behalf of business.

“Stability and certainty are a pre-requisite for business confidence, translating directly into the country’s economic growth potential. Political and economic stability is required to ignite inclusive economic growth and generate much-needed employment and revenue to pursue our social goals. This latest reshuffle further undermines prospects for South Africa’s growth.” BUSA CEO Tanya Cohen said.

BUSA expressed particular concern with the lack of stability in the energy sector taking into account that the lack of permanent CEO and Board Chairperson at Eskom, issues around the central energy fund portfolio including Petro SA and the Strategic Fuel Fund,  and that this reshuffle had resulted in the second new Minister of Energy this year.

BUSA has consistently requested the Department of Energy and the Minister to ensure that the Integrated Energy Plan and Integrated Resource Plan take into full consideration business views that have been submitted. The change in Minister may well take the country back another step in this regard, thereby delaying the finalisation of a sustainable and affordable energy solution for the country.

Cohen said BUSA remains anxious about South Africa’s fiscal and macroeconomic position which requires greater certainty on the direction and credibility of government policy, and the impact that these changes will have on the forthcoming Medium-Term Budget Policy Statement.

Business Unity South Africa (BUSA) is deeply concerned about the ramifications of the extensive Cabinet reshuffle announced by the President in the early hours of Friday morning, but respects the President’s prerogative to do so. BUSA intends to work with the new Ministers in the best interests of the economy and the country.

BUSA’s view is that the timing of the reshuffle is most unfortunate. It has the potential to compromise both political and economic stability unless the Executive can demonstrate the necessary capability and consistency, in a responsible manner, to radically transform the economy to achieve the required inclusive growth and employment creation objectives.

The reshuffle has had an immediate impact on the value of the rand. This, together with the uncertain political implications, will have significant impact and may undermine the progress made by business and its social partners, Government and organised Labour over the past year.

“South Africa is a resilient country. We are committed to rallying around South Africa Inc. despite any negative impact from the reshuffle” , says BUSA President, Jabu Mabuza.

BUSA will be calling an urgent special board meeting within the next few days to assess the potential impact of the Cabinet reshuffle on the economy and to business as a whole. “Businesses large and small will be affected by the state of our economy. We will keep the country’s interests at the center of the business response” stated BUSA CEO Tanya Cohen.

BUSA expressed its thanks to the former Minister of Finance, Pravin Gordhan and former Deputy Minister, Mcebisi Jonas for their service to the country and for their principled and capable leadership of the Treasury.

BUSA plans to seek a meeting shortly with the new Minister of Finance Malusi Gigaba, and his Deputy Sifiso Buthelezi with a view to discussing how business can continue to cooperate with Treasury to achieve the much-needed structural shifts required by the economy to meet the developmental objectives of the country.