Johannesburg - The administration to come after tomorrow’s general election should strengthen the small and medium enterprise (SME) sector and extend the growing relationship between the government and business to labour, business leaders said yesterday.

Neren Rau, the chief executive of the SA Chamber of Commerce and Industry, said business had invested a lot in that relationship and the new administration should start with a stronger footing.

The ANC has said the next cabinet to be appointed would have a minister for SMEs.

“We don’t believe there is enough capacity in the SME sector to face the current challenges. We accept some regulatory framework may be put in place. We hope to breach the trust deficit between government and business,” Rau said.

He said this was not just talk or a political speech and he hoped the new ministry would not be a regulator.

“We need to take a serious look at our competitiveness, not only in Africa but in other emerging economies. We need to utilise whatever relationship we have with our partners, particularly those in the Brics bloc,” Rau said.

Sandile Zungu, the general secretary of the Black Business Council, said his organisation expected the next government to focus on measures to sustainably stimulate growth.

“We expect the economic cluster of ministries will be strengthened through greater co-ordination. Our expectations are the new ministry will be well resourced to be able to deal with the huge challenges.”

Investment Solutions chief economist Chris Hart said yesterday that South Africa’s economy would probably be “in deep trouble” if President Jacob Zuma was not replaced within one or two months after tomorrow’s general election.

The economy was reaching the point of “maximum pessimism” and could be in an upward cycle by the end of this year. Changing the leadership would determine whether the country had a strong upward cycle or a weak one, he said at a Ford Motor Company of Southern Africa breakfast.

This was because policies, such as the National Development Plan (NDP), would continually be mangled by unions while Zuma was president.

Under Zuma’s leadership, there was a lot more union involvement and intrusion in policy making, which was one of the reasons the economy was experiencing problems.

“We have a tainted president who is in fact helping to guide the country leftwards. But if you do get a change of leadership, the NDP gets firmly onto the agenda… and you can get back to 5 percent to 6 percent growth with that kind of plan,” Hart said.

Zuma was tainted because of the expenditure on his Nkandla homestead, which in a constitutional modern urban setting was “just plain theft”.

He said five years after the global financial crisis it was clear the biggest problems facing South Africa were not the external global situation but internal problems and policies shifting more to the left each year since the ANC’s Polokwane conference in 2007.

This was illustrated by the unemployment rate, which had increased in South Africa since 2008 but declined in other emerging markets.

There was a dip in economic growth rates in emerging economies after the global financial crisis but these economies had rebounded to the same level as before the crisis. South Africa’s growth rate had been at 4 percent and was now down to 1.9 percent.

Hart said emerging economies had largely maintained their debt to gross domestic product (GDP) ratios at the same level as before the global financial crisis, but South Africa’s debt to GDP ratio had virtually doubled.

“We have had all this countercyclical expenditure and only managed 1.9 percent growth. Much more debt and much lower growth again suggest the problems are internal rather than external.”

This election was important because, like the past few polls, it was about the Struggle and the legacy of the Struggle.

However, Hart said the electorate was changing and the number of people voting had been dropping because people did not like the ANC but could not vote for another party, which meant there was a pool of disconnected people who were potentially part of the swing that had started to occur.

Annabel Bishop, the chief South Africa economist at Investec, said a potential move towards a more pragmatic approach to managing the economy after the election was likely to put the ANC at risk of its losing its alliance partners, Cosatu and the SACP.

She said: “Should the tripartite alliance be in real danger of breaking up, the ANC may consider forming a coalition with the Economic Freedom Fighters to create an even more populist party to regain power and the support of Cosatu and the SACP.

“However, this is an uncertain and potentially an unlikely outcome.” - Business Report