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ANALYSIS: SOUTH AFRICA CANNOT SUCCEED FOR AS LONG AS THE GOVERNMENT VIEWS BUSINESS AS AN ENEMY

By 7th Jun 2015Sep 20th, 2019No Comments

The 5,6% growth attained in 2007 was the highest since 1990, and the 3,4% growth registered in 2011 was the highest attained under the Zuma presidency. Since then, the country has struggled to record a growth rate higher than 2%, at a time when South Africa desperately needed more jobs to be created and when the Government itself had promised a million jobs in its first term.

In its election manifesto for the 2009 elections, the ANC pledged to create “more jobs, decent work and sustainable livelihoods”. In particular, it stated: “Make the creation of decent work opportunities and sustainable livelihoods the primary focus of our economic policies. We will make maximum use of all the means at the disposal of the ANC government to achieve this [goal].”

Throughout the 15-page manifesto, growing the economy is not listed as a priority on its own. Instead, it is implied, or referred to in passing, in the context of the social rights on which the organisation places such a heavy emphasis.

In his first state-of-the-nation address on 3 June 2009, President Zuma promised that his Government would create “about 500 000 job opportunities” by December that year and “four million job opportunities by 2014”.

In his own words, he stated: “We will reduce the regulatory burden on small businesses. The matter of being stifled by regulations has been raised by the sector several times. In another intervention to create an enabling environment for investment, government will move towards a single integrated business registration system. This will improve customer service and reduce the cost of doing business in South Africa.”

Regrettably, six years later, the cost of doing business in South Africa is anything but reduced. On top of the various constraints and higher administered costs, now Zuma’s government has deemed it wise to further burden the business community with carbon taxes, unlike the majority of rich, First World countries that have refrained from doing so. Australia, which was on the verge of introducing carbon tax at the beginning of the year, reconsidered its decision and walked away from the concept.

Contrary to some of the promises made by the ANC in its election manifesto in 2009, more people are unemployment now in the manufacturing sector than was the case then. In 2009 1 782 163 were employed in manufacturing, and that number stood at 1 349 262 in 2014. In the metals and engineering sector, 402 625 people were employed in 2009, and that number stood at 394 647 at the end of last year. That means that a massive 432 901 jobs in the manufacturing sector and 7 978 jobs in the metals and engineering sector were lost in President Zuma’s first term in office. Regrettably, the bleeding continues as more companies downsize this year or face the prospects of going out of business altogether.

And what is the Government’s response? It stands aloof and refuses to engage meaningfully with the business community. For the Southern African Metals and Engineering Indaba that took place in Johannesburg last week (28-29 May), President Zuma and a number of his Ministers simply ignored invitations to engage with concerned business leaders.

President Zuma was first invited in September last year to open the conference on 28 May, with subsequent invitations sent to him in November and a number of times this year, but, apart from an acknowledgement of receipt by his office, he steadfastly ignored the invitations and never even bothered to reply.

Much was expected of his deputy, Cyril Ramaphosa, when he was eventually elevated to the second most senior position in the country. Many had thought that, given the fact that he had previously served with distinction first as a labour leader and, in subsequent years, as a business man, he would be much more accessible to all stakeholders, including the business community which creates jobs, but this appears not to be the case.

It was certainly not the case when, spurned by his principal, we turned to him with an invitation for him to open the conference. To our bitter disappointment, he, too, never bothered to reply.

A number of Cabinet Ministers invited to engage with business and labour leaders at the Indaba responded similarly. Economic Development Minister Ebrahim Patel could not be bothered to respond to an invitation to be part of a panel discussing the National Development Plan, or even to acknowledge its receipt, just as Energy Minister Tina Joemat-Petterson, Public Enterprises Minister Lynne Brown and Cooperative Governance and Traditional Affairs Minister Pravin Gordhan ignored invitations to discuss the electricity crisis facing South Africa and its impact on the economy (coupled with some municipalities’ reluctance to pay Eskom for power used).

On other occasions, we have invited, without success, the affable but also inaccessible Lindiwe Zulu, Minister of Small Business.

Nothing speaks more eloquently about the disdain that the Zuma government has for the business and the labour communities (but especially the former), whose leaders participated actively in the conference’s discussions on Thursday and Friday. Present were captains of industry like ArcelorMittal CEO Paul O’Flaherty, Business Leadership South Africa Chairman Bobby Godsell and Telkom Chairman Jabu Mabuza, to mention only three, labour leaders like NUMSA General Secretary Irvin Jim and his Solidarity counterpart Gideon du Plessis and many academics, among others. These are the people to whom the Government showed an up-yours finger.

Unsurprisingly, when political leaders treat others with disdain, the civil service follows suit. That is why Trade and Industry Director-General Lionel October and his counterpart at the Department of Economic Development also ignored our invitations.

At this stage, one must thank Trade and Industry Minister Rob Davies – who subsequently withdrew on the eve of the conference because of ill health – and Labour Minister Mildred Oliphant, who accepted our invitations. Our thanks also go to Democratic Alliance Shadow Ministers Geordin Hill-Lewis (Trade and Industry), Natasha Mazzone (Public Enterprises) and Kevin Mileham (Cooperative Government and Traditional Affairs), who considered it important to interact with the business and labour communities.
It is most unfortunate that our Government does not listen. This is a government that is adept at terminological inexactitudes and grand verbal contortions.

When Eskom warned, before the first bout of load shedding in 2008, about the need to invest in new generation capacity, the then Government chose not to listen (at least President Thabo Mbeki subsequently accepted responsibility and apologised to the nation, without resorting to blaming our ignoble past). Now our government that never accepts responsibility calls our crippling power situation “a challenge”, and not the crisis that it is.

When the poor in the country’s townships urge that the country’s porous borders should be policed more effectively, with only those with scarce skills or the potential to create jobs allowed into the country, the Government responds by saying that its leaders – who were political refugees and not economic ones – were wonderfully treated in the countries where they were in exile in bygone years.

When the people of Gauteng say they refuse to be subjected to double taxation through urban tolls when they are already paying taxes, the Government rides roughshod over their objections and orders them to pay anyway. When business says that carbon taxes will further strangle the economy, the Government goes ahead with it anyway.

This is most unfortunate. The Government needs to understand that, its electoral majority notwithstanding, it cannot move the country forward on its own. It needs to understand that business is not an enemy and that it is in South Africa’s interest that business thrives so that more jobs can be created and more taxes (personal and corporate) can be paid. It needs to understand that South Africa needs a strong business, labour and Government partnership if it is to succeed.

The Southern African Metals and Engineering Indaba will take place again next year and every year after that. We can only hope that the Government will recognise the urgent need to revive manufacturing and participate in the conference in the coming years.

Kaizer Nyatsumba is the CEO of the Steel and Engineering Industries Federation of Southern Africa.

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