The business industry has called for President Cyril Ramaphosa to put an emphasis on measures to revive economic activity by investing in critical infrastructure in the State of the Nation Address (Sona).
Ramaphosa will deliver the Sona tonight under immense pressure to provide solutions to tackle the country’s worsening energy crisis that has crippled business activity and the economy.
Load shedding, coupled with deteriorating logistics industry, infrastructure vandalism, record-levels of unemployment and rising poverty are among top priority issues that business, labour and economists will be looking out for in the Sona.
The South African Reserve Bank has confirmed that load shedding was costing the national economy between R204 million and R899m a day.
The cost of doing business in South Africa has risen dramatically over the last two years due to escalating inflation driven by the high import costs due to the Russia/Ukraine war, and additional costs for alternative sources of electricity due to heightened load shedding.
In an open letter to Ramaphosa, CEOs of leading food and pharmaceutical retailers warned of the disastrous impact of load shedding on their businesses.
The CEOs of retailers represented in the Consumer Goods Council of SA, including Pick n Pay chairman Gareth Ackerman and Clover SA CEO John Vorster, said they would not be able to guarantee stable supplies of food, medicines and other essential goods if this crisis continues.
They said they required urgent and decisive action from the government to solve the crisis, and specific steps to ensure that the consumer goods industry can fulfil its role as an essential service.
“We are alarmed and dismayed by the levels of load shedding which we have all had to endure over the past decade, and which have escalated catastrophically in recent months,” they said.
“While we have maintained our operations and supply chains so far by using emergency power generators, this has been at an unsustainable financial cost. It is crippling our businesses, and will in the end mean much higher prices for consumers, who are already under severe financial strain.”
South Africa’s largest retailer Shoprite last week reported that it spent an “additional” R560 million on diesel for generators between July and December last year in order to trade uninterrupted during load shedding stages 5 and 6.
The deterioration of other essential infrastructure – including water, roads, rail, and policing – has made the maritime industry request a round table discussion with Ramaphosa and his Cabinet before the 2023 Budget Speech.
The Maritime Business Chamber (MBC) chairperson Unathi Sonti wrote an open letter to Ramaphosa yesterday pointing out certain issues that needed to be addressed within the departments of transport, public enterprises and the SA Revenue Service.
Sonti said South Africa has not yet realised the estimated capable contribution of R177 billion by maritime to the economy due to the government and its stakeholders dragging their feet on the full implementation of the Comprehensive Maritime Transport Policy.
“We believe (that) the implementation of the South African Maritime Charter has the potential revenue of R56.3bn,” Sonti said.
“In your consideration for the appointment of a Transport Minister it must be noted that such a Cabinet Minister needs to be abreast with Maritime Transport matters as maritime has been neglected.”
Another industry that has pleaded with the government to intervene amid ongoing crises is the sugar industry.
Sugar ane growers have suffered tremendously in recent years as a result of destructive unrest in KwaZulu-Natal, devastating floods and skyrocketing input costs.
This was all exacerbated by the placement of sugar milling giant Tongaat Hulett under business rescue in October 2022.
As a result, SA Canegrowers chairperson Andrew Russell called on Ramaphosa to use the Sona to highlight the measures that the government is taking to match the industry’s commitment after disbursing more than R79m in transformation funding for small-scale growers.
“To date, the government has not provided any information on its progress in fulfilling its commitment under the Masterplan to promote the procurement of locally produced sugar in all government departments and state-owned entities,” Russell said.
“Nor has there been any indication that the government is re-evaluating the Health Promotion Levy in accordance with the Masterplan commitment, namely reviewing the industry’s tax policy. These are just two of the measures that are within the government’s exclusive authority that can provide significant relief to embattled sugar cane growers, workers, and dependent communities.”
BUSINESS REPORT