South Africa is only hitting the low score of two out of five in delivering on its full potential due a number of barriers and challenges, according to business leaders in the Truth CEO Collective report, released yesterday.
Dr Adrian Saville, the founding director of the Centre for African Management and Markets (CAMM) at GIBS, who led a panel discussion, said the report was “unbelievably sobering”.
There were references made by CEOs to: the government sabotaging business and killing the economy; the government’s failure to address the goodwill that was running out; and at the same time SA was sitting on the cusp of a national election, which was potentially a game-changer, Saville said.
Some CEOs felt that South Africa was currently on a knife’s edge, according to Lee Appleton, the head of Truth Africa, at the launch of the report by Truth Consulting, a unit of Instinctif Partners group, which took place at GIBS Business School in Johannesburg.
This as the report sought to understand what was keeping South African CEOs up at night and the truths required to drive change.
Truth Consulting interviewed 15 business leaders in South Africa in June and July 2023. These companies collectively provide employment to more than 20 000 South Africans and account for around R80 billion in revenue each year.
However, Appleton said business leaders believed the country could be scoring four out of five if it was able to overcome several challenges.
“In the long term there is hope around the future. Together we can change our trajectory. It’s going to take a collaborative effort by South Africa to exercise its constitutional rights,” Appleton said.
Business in SA, the private sector, would have to lead by example such as to fight corruption and step up and be the leading lights. This as the government sorted out of corruption by making examples of people, around foreign policies and did more to do more to help the common person. Corporate SA needed to to talk out more, Appleton said.
The report noted collectively, the business leaders felt that SA was at a crisis moment and government needed to act.
“The executive appears immobilised at a time when we need sweeping reform and a spirit of urgency,” CEOs said in the report.
“The corruption that we are experiencing has almost become genetic and is further taking away from the county’s limited resource,“ said one CEO.
CEOs said the buck stopped at the top. Business leaders were concerned about the government’s decision-making.
“There is a belief that the current government incumbents either lack competence or they are wilfully sabotaging the nation for their own gain,” the report noted.
Challenges included: A nation where many had lost hope; policies not allowing natural resources to flourish; unfulfilled tourism due to the fear of crime; a broken infrastructure; ill-informed or abstinence from voting; destructive foreign policy; challenged public sector; some businesses being complicit; constant negativity coming from the media; too much red tape; an economy on its knees; as well as political risk.
One CEO in the report said: “Emigration makes it very hard to find skilled people in business. I’m from Joburg. It’s the economic hub of Africa, yet still people are leaving in droves. Nobody seems to be wanting to address that.”
The result was a skills gap across the spectrum with fewer skilled workers, which inhibited business’s ability to grow as well as the economy.
Vuyiswa Ramokgopa, the national chairperson of Rise Mazansi, a panellist member at the unveiling of the report, said: “Some of the issues that are driving a sense of hopelessness in SA is that people no longer trust that politics are able to deliver the type of outcome that everyone understands. There is a loss of trust in the system. That is very dangerous.”
Dr Stravros Nicolaous, a senior executive at Aspen Pharmacare, said: “I give SA a resilient two (out of five). Some of the core issues was that the social cohesion project has failed, which has caused social tension under-pined by inequality, equal opportunity ...
“What is important is how we fix it. That is why you’ve seen business become a lot more vocal recently. The way forward is to build a more capable state,” Nicolaous said.
He said the question was how “do we contribute to providing, in many instances pro bono, capacity to restore these institutions?”
He said the private and public working together under the right governance strategies represented the best prospect of success. CEOs were working closely with the government on energy security, infrastructure, logistics and production.
Businesses could provide expertise, skills and capacity to support, but it had to be government-led, Nicolaous said.
In the report, CEOs said to get to the four out of five, it would take a collaborative effort to ease the short-term challenges from citizens, the government and the private sector to put the foundations in place for long-term growth.