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Action needed to mitigate threats to SA’s economy

by Media Xpose

The lack of leadership and of decision-making, and the inability to implement critical interventions needed to instil confidence, attract investment and grow the economy are the biggest threats to South Africa, says Cas Coovadia, CEO of Business Unity SA (BUSA).

Considering South Africa’s grey listing, how is this expected to impact business?

As regards foreign investment, this will further erode confidence and potential investors will be concerned about South Africa’s ability to combat money-laundering and terrorism financing. This erosion of confidence will also lead to lower investment and an inability to grow the economy to create jobs, thus causing a negative impact on job-creation. Businesses will find it difficult to retain jobs in a shrinking economy.

What are your thoughts on President Cyril Ramaphosa’s calls on the private sector to intervene and find solutions

The private sector has bent over backwards to support government. Examples are the mobilisation of the private sector during Covid and support of the private sector to help NECOM implement the President’s Energy Plan.

How much freedom does the private sector actually have to enact proactive change?

The private sector needs to move away from concentrating on expectations of government’s positive response to offers of help from the sector, to focusing on areas we can implement on our own and make a real difference in the national interest.

What are the tangible solutions and actions to drive sustainable growth in South Africa?

We need to work on specific sectors and identified products to drive growth, but government must work on structural reforms to the economy to enable this. Critical sectors are mining, agriculture, manufacturing, automotive and services.

Is there sufficient intervention from government to help businesses navigate the energy challenge?

There has been some progress on this as laid out in the president’s budget speech. The President’s Energy Plan needs to be implemented urgently to help solve the energy crisis and assist business.

Is the privatisation of SOE’s a viable option, and why?

There must be an option to increase efficiencies, reduce state exposure and drive economic growth; but within the context of the rationalisation of SOE’s and the closure of some.

What are some of the other challenges that can be expected in 2023 and going forward?

Logistics and law and order are critical challenges. Also, a looming water crisis and dysfunctionality of municipal government.

How do you see the rest of the year unfolding from a business perspective?

Jobs will be shed without decisive moves to attract investment and enable growth. Immediate appropriate interventions in energy, logistics and law and order could improve the environment.

Progress in improving leadership in government and implementing critical interventions will help raise confidence. BUSA encourages government to send the message that South Africa is open for business in order to attract investment.

What are some opportunities that can be unlocked?

The private sector generation of energy and driving Transnet towards greater participation of the private sector in logistics. And the South African private sector has the capacity, resources and skills to do this.

Cas Coovadia took over the reins as CEO of BUSA on 1 April 2020, after retiring as Managing Director of The Banking Association SA (BASA) where he spent 15 years. He was instrumental in positioning BASA as one of the leading business organisations in SA and positioning it as a credible voice for the banking industry.

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