Business Unity South Africa (Busa) President Sipho Pityana chose not to criticise government failures at the organisation’s annual Business Economic Indaba in Sandton on Tuesday. However, he was frank in his call for President Cyril Ramaphosa to back National Treasury and Finance Minister Tito Mboweni’s economic reform proposals.
Addressing 500 captains of industry and government leaders, Pityana said it’s no longer enough for government to acknowledge the economic crisis; urgent action is now required.
Watch: Pityana’s call for action
“Government urgently needs to pronounce far-reaching structural economic reforms that focus on sustainable inclusive growth and a fiscal policy that is aimed at reducing public debt, while simultaneously reducing public spending,” he added.
“We must do all we can to stave off a sovereign rating downgrade.
“A failure to do this will see our economy contract further, more jobs lost and an accelerated flight of skills and investment. This is a path we must avoid at all costs, as with it might come sociopolitical instability,” he warned.
Pityana said South Africa desperately needs an action-oriented blueprint, focusing on key strategic sectors and interventions to revive the economy.
“The Treasury proposals are an important start, but they need unambiguous endorsement from the president and government, and must be finalised urgently.
“We need a single government voice on this, not a debating society reminiscent of the state capture years,” he added.
“The public display of divisions does the country a great disservice.”
Pityana, one of the first vocal critics of Jacob Zuma during his presidency, expressed the full confidence of Busa in Ramaphosa’s leadership. However, he warned that the president and government need to be decisive and agile in dealing with the country’s economic woes.
Beware ‘leadership by consensus’
“As business, we welcome President Ramaphosa’s open and inclusive leadership style. We would, however, caution against an overemphasis on leadership by consensus, for this can condemn our nation to move at the pace of the slowest and the most conservative – or worse still, being vetoed by an unaccountable lot,” he said.
He warned that South Africa “is now facing an unprecedented economic crisis” – the longest economic downswing since 1945. He said the country had an average economic growth rate of 1.5% over the last decade, compared with over 4% in other emerging economies. The World Bank has forecast below 1% GDP growth for 2020.
Pityana is however not without optimism: “We are a country that is capable of going back to our winning ways after the disastrously corrosive and damaging state capture years.
“Need we remind ourselves that we once upon a time trebled the size of our economy after 1994?
“We saw economic growth levels that exceeded 5%. We experienced an era that saw the fastest growth of the black middle class, at the same time that we rolled out massive social security programmes that saw us cushion the poor as we gradually brought them into the net of a growing economy.”
The single biggest concern for business according to Pityana? The power supply crisis.
He also raised concerns around the recent resignation of Eskom Chair Jabu Mabuza and moves to transfer responsibility of Eskom out of the Department of Public Enterprises.
“We take no comfort from the recent resignation of the chair of Eskom,” he said. “We need to be informed what happened to the restructuring recommendations made by both the board and the presidential technical task team.”
He also questioned how governance concerns raised by the board with Parliament are going to be addressed.
“We are deeply concerned by suggestions that leadership appointment considerations at this critical stage might be caught up in ANC factional battles that have nothing to do with national interests.
“We must also guard against using a critical matter like the Eskom crisis as a political football, as evidenced by the attack on [Public Enterprises] Minister Pravin Gordhan and the new-found passion in some quarters for moving Eskom out of the Public Enterprises portfolio.”