The business sector has called for bold announcements about greater participation of the private sector in critical sectors in South Africa, including energy and logistics, in a bid to solve the enduring economic challenges in the country.
This comes as President Cyril Ramaphosa will deliver the State of the Nation Address (Sona) in Parliament tonight, which outlines the government’s achievements over the course of its administration and sets the tone for the year ahead.
Business Unity SA (Busa) yesterday said they were expecting to see Ramaphosa making a clear acknowledgement of the partnership between the government and business on energy, logistics, and crime and corruption.
Busa CEO Cas Coovadia said they also wanted a clear indication that the government and the private sector must collaborate to address the crises in South Africa.
“We are looking for a commitment from the government to open up space for greater participation by the private sector in building, operating and maintaining critical logistics networks and to generate energy,” Coovadia said.
“There is some progress in this, particularly in energy and also in logistics, with the recent announcement that Transnet Freight Rail was taking delivery of seven sets of batteries procured by Richards Bay Coal Terminal. This is an example of partnerships between business and government working.”
Transnet has hobbled economic activity due to the collapse of the railway network, which led to freight trucks bearing the weight of about 26 million tons of coal to the ports, marking the highest recorded level in South Africa’s history.
The debt-laden state company has implored the National Treasury to consider a R130 billion bailout to ease its debt burden and facilitate a strategic turnaround plan.
Given that this is his last Sona in the current administration, some indication from Ramaphosa that there will be continuity by any new administration post elections is something that business is also looking for.
In his speech last year, Ramaphosa made limited comments on the logistics system, though noted that underperforming rail and ports would be addressed.
However, Business Leadership SA CEO Busi Mavuso said the logistics crisis had rapidly worsened as the performance of rail and ports has deteriorated and jobs were being lost as a result.
Mavuso said the logistics crisis had seen a galvanised response from business and government, with the establishment of the National Logistics Crisis Committee modelled after the National Energy Crisis Committee (Necom).
“It has already produced a logistics road map that represents the best thinking on how to improve our logistics performance,” Mavuso said.
“But it now needs focused attention on implementation, ensuring all parties, particularly Transnet, are aligned in doing so. The president can add the political momentum necessary to accelerate progress.”
Meanwhile, business has continued expressing concern about the impact of crime and corruption on confidence, as well as lack of successful prosecutions.
According to a recently published World Bank report, crime costs the economy at least 10% of gross domestic product every year, and the country is now ranked at a record low of 41 among 180 countries in the latest annual Corruption Perceptions Index, meaning it has fallen into the category of “flawed democracies”.
Deal Leaders International CEO Andrew Bahlmann said Ramaphosa needed to address several key aspects crucial for fostering a conducive environment for business and investment.
Bahlmann said addressing sector-specific challenges through targeted interventions, reforms, and collaboration with industry stakeholders should be highlighted in the Sona.
“Improved governance and upholding the rule of law are fundamental for maintaining investor confidence. Transparency, anti-corruption measures, and institutional strengthening should be emphasised in the Sona to address concerns about corruption, governance, and legal uncertainties,” Bahlmann said.
“Commitment to regional economic integration and leveraging trade agreements can enhance cross-border investment opportunities. Overall, a comprehensive Sona addressing these key aspects would provide much-needed clarity and confidence to investors, ultimately fostering a conducive environment for business growth and investment in South Africa.”