Adrian Gore, CEO of Discovery, deputy president of Business Unity South Africa and co-convener of the business-government partnership, says the destabilisation of Gauteng metros is a threat to the 3% economic growth the partners are targeting, and the government needs to address it “quickly”.
“I would like to see steps being taken to stop that, I think it's critical. Anything that destabilises local government and affects economic growth is terrible for the country and for the unemployed and should be opposed. The decline in service delivery and infrastructure is not acceptable. There should be no back-pedalling or soft-speaking about it. Government should be doing more to address it, and quickly.”
Gore told CEOs and government representatives at the launch of the partnership's second phase last week that economic growth of 3% by the end of 2025, with the creation of more than 2.5m jobs in the next five years, was possible.
How could the destabilisation of the economically important metros, Johannesburg, Ekurhuleni and Tshwane, whose mayor Cilliers Brink has just been overthrown by an ANC/EFF/ActionSA alliance, affect this?
“It's a threat to economic growth. Gauteng is the country's economic hub and a lot of work needs to be done to not have this destabilisation and the damage it creates. Economic growth creates jobs, jobs create narrative, narrative is causal of growth. Anything that undermines that virtuous cycle should be avoided.
Local government isn't within the scope of the partnership, which focuses on energy, logistics and crime and corruption. “But maybe it should be over time”, he says.
The Gauteng provincial government is widely believed to have been behind destabilising alliances in the metros in defiance of the government of national unity. Does Gore see the contemptuous attitude of the Gauteng provincial government to the GNU as a threat to the business-government partnership?
“Any threat to a progressive, well governed government is a threat to the partnership and to economic growth. I'm hoping the GNU is resilient, and that the successes achieved by the partnership and elsewhere cement the GNU and its efficacy. Any South African should be concerned about destabilising forces like that, but hopefully progressive forces will prevail.”
He admits that even without the destabilising actions of anti-growth forces 3% economic growth by the end of 2025 will be “quite a stretch”, but doable if they manage to get a further 4GW of renewable energy onto the grid.
What grid?
He concedes there are “a whole range of issues around the thousands of kilometres of transmission lines that will need to be built”, not least the R23bn or so it will cost.
“It is a stretch to get there by 2025, but we believe it can be achieved. Not easily, but it can be achieved.”
After energy capability the second imperative is around ports and rail.
Private sector involvement isn't happening fast enough, he says.
“You can't get economic growth if you can't get your goods to port and get them sold. Private sector participation needs to be accelerated. That is the drive in the second phase of the partnership. Working with Transnet, getting those concessions, getting the reforms so the private sector can do more and Transnet is more effective. I don't see any doubt about the direction in which we're going, it's about getting it done, getting it done well and getting it done quickly.”
The business-government initiative focused on energy, logistics and crime and corruption is driven by a real commitment to liberating the potential of the country
The business-government initiative focused on energy, logistics and crime and corruption is driven by “a real commitment to liberating the potential of the country”, he says.
How real is the commitment within government, given reports of pushback by government officials at all levels and in all spheres against private sector participation?
“There've always been deep levels of ideological difference between government and business. It's a complicated process but this initiative has broken down some of those barriers.”
Turning around load-shedding collectively as a partnership is evidence of this, he says.
“A year ago had we said we'd be done with it there would have been 100 reasons why it couldn't be done. But the fact is we did do it. In the process we broke down a lot of barriers and created trust.”
He talks about 2.5-million jobs in the next five years, but admits that they won't be coming from the big businesses represented in the partnership, and not enough is being done to enable small businesses to create them.
“There's too much red tape for small businesses, which are struggling to survive without the delivery of essential services by dysfunctional local government. Small businesses have had a very tough time. If we achieve 3% growth it will stimulate the sector.”
Can there be 3% growth when taps in the country's economic hub are running dry, and the experts who have been warning about this for years say day zero in Gauteng is now unavoidable?
One of the issues the partnership has touched on is whether water is another area of potential focus, he says.
“It's a critical issue going forward, you can't get growth without it.”
Does business need to be more forthright with its government partners about the need to dump NHI, BEE, cadre deployment and anything else that impedes the growth they're committed to?
“Business must always be forthright and clear about what drives economic growth and jobs, and I think it has been. But the success of this partnership has been about its focus on three streams and making sure we get delivery in those three streams. Other elements of organised business have been forthright about these policies and their economic impact.”
Is 3% growth possible while corruption is still tolerated at senior levels of government?
“Corruption is a pernicious, incredibly destructive force, as we've seen. If we curtail it, it will have a massive effect on economic growth and jobs.”
This is why the third stream of their partnership is about helping to strengthen the ability of the National Prosecuting Authority (NPA) to tackle crime and corruption, he says.
He finds the failure of President Cyril Ramaphosa to act against deeply compromised justice minister Thembi Simelane, who oversees the work of the NPA, “very concerning. Any wrongdoing anywhere has got to be surfaced and dealt with as quickly as possible for us to change the sentiment of the country”.
Having the right sentiment is key to investment, economic growth and job creation, he says.
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