Jannie Durand, CEO of R69bn investment powerhouse Remgro, says a lack of trust between government and business is holding back critically needed infrastructure reforms and economic growth.
“Government still sees business as white monopoly capital. We're struggling to get past that. It's becoming more and more urgent that we have one-on-one conversations on a much more regular basis to sort out these problems, because things are really, really getting critical out there now.”
Business and government need to put their differences aside, accept each other's bona fides and agree on what is best for the country, he says.
“If we say yes, we want a corrupt-free South Africa, we want a growing economy, we want people to actually live here and not to emigrate, we want to build up skills, fix education, fix infrastructure, then we can figure out how to get there.
“Because of the lack of trust, we can't even agree on where we want to be.”
Business organisations that meet government congratulate themselves because they're being listened to, but this is not enough.
“You can listen to somebody and agree on something, but then it comes to execution. You need to have the capability to execute on that. If there's no execution, it doesn't matter how much somebody is listening.”
The private sector can help with execution, but ideological resistance and mistrust are still standing in the way.
The devastating consequences of this are staring the country in the face, he says.
“Look at our logistics infrastructure. If we can't get our goods to the markets things are going to go haywire, as they are.
“Look at energy. What's happened on the energy side is just actually shocking.”
This happened because of the government's resistance to the participation of independent power producers.
When President Cyril Ramaphosa lifted the cap on private-sector generation last year it showed what could be if hurdles to private-sector involvement were removed.
“It's absolutely amazing to see all these projects the private sector is now doing. In the next 18 to 24 months, how many gigawatts of capacity will come on line just because it has been deregulated to allow the private sector, which has the execution capability to do this?”
He's encouraged by news that Ramaphosa read the riot act to Transnet executives on the need to speed up infrastructure reform.
“I just hope something comes of it,” he says.
“If you speak to the president and his minister, they want it done tomorrow. My big concern is executing this at ground level. I don't think Transnet has got the competence to do this.”
South Africa's crisis is so deep that getting the country out of it is no longer just about implementing, it's about implementing quickly. Time is running out and we need to implement quicker and quicker
— Jannie Durand, CEO, Remgro
The dire economic consequences were again illustrated when Western Cape fruit farmers recently dumped their rotten plums at Cape Town's port. They couldn't export them because of logistics failures there.
“We need to get the private sector much more involved, quickly. We don't have time. That's why business is starting to speak up more and more urgently. That's the message we're trying to land with government.”
Those who doubt its capacity to run rail and ports need only look at the performance of rail lines in African countries concessioned to former Remgro logistics company Grindrod.
They were worse than anything in South Africa before Grindrod took them over, he says.
“Look at the throughput and efficiencies of Maputo port, where Grindrod's got a concession, and compare it to South African ports. It's like chalk and cheese.”
Durand, whose company has significant stakes in food industries, says his biggest nightmare is food security and social unrest.
“If supply chains get broken, not only dry goods but cold chains, we won't be able to feed the nation.
“We've got three chicken plants, but if certain stages of load-shedding happen and we can't process chickens then we can't supply the population.”
He points out that 74% of protein people rely on is chicken.
The same goes for bread, maize meal and every other foodstuff that requires factories, milling operations and processing plants.
“At stage 8 load-shedding you can't run your factories to produce the amount of food people need. That will have serious, serious implications if the shelves start getting empty.”
He worries that for the next 18 to 24 months it's going to be even tougher for retailers and producers to maintain the integrity of food supply chains because of the incapacity of Eskom to generate more electricity.
He believes the Competition Commission's report blaming food retailers for manipulating prices shows no understanding of the challenges and costs food producers and retailers are battling with daily because of load-shedding.
"Yes, we’re ‘manipulating prices’ because we’re not making any money. Obviously, prices went up because costs went up. And they’ve gone up by much more than the prices went up. So there’s margin squeeze in all food industries. Retailers are not making more, they’re making less."
The tendency to “scapegoat” the private sector adds to the trust deficit between business and government, he says.
The unpredictability of load-shedding makes it “extremely difficult” to protect the integrity of food supply chains.
“I've spoken to ministers about this, that we need consistency. Then we can do long-term planning as business. We can plan our factories, when they run, when they don't run. But don't tell us one week it's stage zero, the next it's stage 6, then stage 3, then up again to stage 7.
“It makes long-term planning almost impossible. Especially if you're dealing with agricultural products and livestock, it plays havoc with your supply chain. You can't just switch it on and off.”
Durand, who tends to understate problems, says South Africa's crisis is so deep that getting the country out of it is “no longer just about implementing, it's about implementing quickly. Time is running out and we need to implement quicker and quicker.”
At the same time, business needs to become “more and more the master of our own destiny so we rely less and less on government”.
“We cannot be beholden to government for energy or water.”
He sees water as the country's next crisis.
“Sanitation, for instance, is going to be a very, very sensitive area going forward. We're going to have to be more and more self-sufficient for all water-related needs.”
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