BLSA urges government to speed up reforms
JOHANNESBURG - Business has urged the government to speed up implementation of policies to enhance economic growth, in particular to address the delay in new energy generation and power cuts.
Business Leadership SA (BLSA) said yesterday (MON) that the country had a shortage of trust as the load shedding crisis had not been resolved after years of many promises.
In her weekly newsletter, BLSA chief executive Busi Mavuso said businesses must have trust in the commitments from leaders that reform is under way to turn around the economy.
Mavuso said the lack of urgency displayed about important policy issues had resulted in the prevailing low business confidence.
“Without trust, businesses cannot invest shareholder capital into multiyear projects and the economy won’t recover,” she said.
Mavuso said it was encouraging to see President Cyril Ramaphosa last week expressing his frustration over delays such as spectrum auctions and that self-generation and competition in energy must be delivered through regulatory review.
Ramaphosa promised that new infrastructure investment was now ready to be delivered and that implementation would be directed from his office to ensure proper co-ordination.
Mavuso said what helped cement trust was that within days there were clear moves by Ramaphosa to deliver as Deputy President David Mabuza on Friday announced that the bid window five of the renewable energy programme would be concluded by December.
“These are powerful signals to business that the president is following through on promises,” Mavuso said.
This as Finance Minister Tito Mboweni admitted at the weekend that Eskom and the security of electricity supply remained the biggest stumbling block to economic recovery.
Mboweni said the government would continue to put in place an enabling regulatory environment that gives consumers and business confidence to invest in the economy.
“A practical example of how the government enables investment and growth is the commitment we made to unlocking private investment in electricity generation,” Mboweni said.
“By committing to expeditiously processing applications by commercial and industrial users for self-generation and fast-tracking window five of the Renewable Energy Independent Power Producer Programme, we enable private investment to support our economic recovery.”
Mboweni also said the second-quarter headline contraction of 16.4 percent in the economy could be bigger than the estimated 7.3 percent.
He said that government debt could grow further if structural reforms and fiscal discipline were not implemented urgently as investment growth also declined for the 13th quarter.
“This erosion in our capital base is a big concern because it reduces our long-run potential growth and therefore the ability of the economy to recover. Our public finances, which reached an unsustainable position before the pandemic, are now dangerously overstretched,” he said.
FINANCE Minister Tito Mboweni admitted at the weekend that the insecurity of the country’s electricity supply remained the biggest stumbling block to an economic recovery. | Reuters