Johannesburg - Close to 40 percent of executives believed South Africa’s political direction affected their decisions and about 65 percent were postponing investment decisions as a result.
Raymond Parsons, a special policy adviser of Business Unity SA said at a seminar he conducted at the University of North West, yesterday. It was jointly hosted by the university and the business organisation.
In his presentation, titled “Some Economic and Business Perspectives on the 2014 election”, Parsons said there were several red lights flashing about South Africa’s “sluggish economic performance” and he called for structural issues to be effectively addressed soon.
Failure to do this would keep the economy in the low-growth trap between 2 percent and 3 percent a year instead of at levels above 5.4 percent, which were predicted by the NDP.
“Business has already begun to engage with the government on aspects of the NDP, but this engagement needs to be widened and deepened in the period ahead in view of the NDP’s goals at national, provincial and local level,” he said.
Parsons called for the urgent implementation of the The National Development Plan (NDP) so that business could maximise its economic potential.
Asked to comment on the seminar revealations, Sipho Pityana, the chairman of the Advancement of the SA Constitution, said the challenge for government was an overhaul of the “adversarial labour relations” scenario, which has come to symbolise a distorted economic framework that has benefited relatively few since 1994.
He said the tone of the election process showed there was a dire need to explore an inclusive economic agenda because of the failure of the current labour relations framework.
This failure, he said, was evident from the protracted platinum strike, which is already in its 16th week.
“The adversarial labour relations in our country are a symbol of a distorted economic framework, where large numbers of people continue to feel marginalised.”
The NDP “is a very important platform to deal with certain issues that have never been addressed sufficiently”, he said.
Pityana suggested that the policy on black economic empowerment be looked at again. Economic development should embrace practices that gave workers a greater stake in the companies they worked for.
“The policy should push for employee share ownership and worker participation in various shareholding programmes. It should not just talk about bringing in people from the outside, but empower people within the various enterprises,” he said.
Other commentators suggested that South Africa needed to appreciate that the country was part of a global environment and foreign direct investment would always be a crucial part of the economy’s growth.
This required policy and regulatory certainty and ensuring that the integrity of regulators was beyond reproach because corruption remained a huge restraint on foreign investment.
A Bloomberg report hinted that South Africa had failed to ease investor concerns over how the government would handle labour unrest and unemployment.
According to Bloomberg, the rand weakened and bond yields barely moved last week after the ANC won the election.
Themba Dlamini, the managing director of the Black Management Forum, said the black business community was confident that positive perceptions for investment had been created since the ANC victory.
“Our view is that confidence levels have gone up from an investment perspective, which has created a positive platform.
“Entities such as Transnet and Eskom are at the forefront of economic development and the infrastructure programmes that have been rolled out will see positive spin-offs that will create employment opportunities,” he said.