Durban Chamber of Business comments on key points raised by SONA

PRESIDENT of the Durban Chamber of Commerce and Industry, Nigel Ward, has warned that the disruptive start to SONA, given the context, significance and stature of the address, could negatively impact business and investor confidence and sentiment regarding South Africa and the economy.

“As organised business, we are appealing to the government and our elected representatives to be mindful of this, as the country needs to bolster business and investor confidence and sentiment,” he said.

Commenting on the main talking points for organised business, namely, state-owned enterprises (SOEs) and corruption Ward said SOEs held a significant position in the country’s economy with a leading role in crucial sectors such as electricity and water, transport and telecommunications.

“South Africa’s SOEs are in a state of financial and operational collapse, suffering from chronic mismanagement, plagued by on-going corruption and characterised by a complete lack of adherence to effective governance and compliance frameworks. This is severely impacting the country’s economy and investment profile as well as negatively affecting our country’s growth and development prospects,” said Ward.

He urged the government to end the repeated bailouts of SOEs and government guarantees that drain the economy and society as a whole, with taxpayers (organised business and ordinary citizens) bearing the brunt of the effects.

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“The Durban Chamber is pleased by President Ramaphosa’s announcement that government will action crucial legislation that will enable the development of additional grid capacity from renewable energy and that municipalities in good financial standing will be allowed to procure their own power from independent power producers. This will provide relief to businesses, especially those that are dependent on energy for their operations. The business community anxiously awaits government’s timeline for the implementation of the promised initiatives and plans, including proposals on how organised business can support the government to action these plans.”

He said the Durban Chamber was deeply concerned about the financial health of SAA, and by the fact that the President did not announce any concrete action plans related to the beleaguered national carrier.

“The cancellation of domestic flights to Durban will have severe and direct operational impact on businesses across numerous industry sectors. It will also negatively impact the economic growth and development of the province as a whole. We believe this decision needs to be reviewed as a matter of urgency. A public-private partnership may be the most viable route to rescuing the ailing airline,” he said.

With regard to the inefficiencies, ineffectiveness and congestion at Durban’s Port which cost KwaZulu-Natal billions of Rands in revenue, he said the business community was pleased that the President had committed to undertake a fundamental overhaul of the Durban port to reduce delays and costs.

On the topic of corruption and non-performance, he said what was missing, in the case of corruption and state capture, was clarity on the remedial action and punitive consequences.

“So far, despite the abundance of evidence, no-one has been charged, tried and compelled to face the consequences of corruption. Until the criminals involved in state capture and corruption suffer severe consequences for their acts of economic sabotage, then there will be no real change in the status quo,” he said.

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