Business and government ready to grow economy — BLSA

Business and government are ready to grow the economy this year, kicking off the new year with a positive meeting that spurred momentum to accelerate structural reforms.

Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA), says in her weekly newsletter that the organisation had a very positive meeting with the president and a senior government team last week to provide updates and discuss the agenda for its government/business partnership in 2025 delivered through Business for South Africa.

She points out that the ambition of the second phase of the partnership is to deliver economic growth of 3% by the end of this year. “That is a material ambition, but one that business as well as government are committed to seeing through. That level of growth leads to job creation and triggers a positive self-reinforcing sentiment that supports growth.”

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Business and government must act quickly

However, she warns that business and government must act rapidly if they want to realise that ambition.

“We achieved the end of load shedding, but we must build additional electricity capacity by expanding the grid and adding another 4 000 MW this year. We must boost the recovery of rail capacity to enable 193 Mt to move through our rail system from 152 Mt last year.

“We must get off the Financial Action Task Force (FATF) grey list. We must unlock R100 billion of investment this year. We must also continue the effort to drive the recovery of the criminal justice system, bolstering the investigation and prosecution of complex white-collar crimes.

“The partnership already achieved much, most notably the progress on energy security but continuous work is still needed to keep reforming and ensure we follow through to deliver the kind of growth we need. The message from the president was clear: he wants to see an acceleration of delivery.”

Mavuso says as the president stated last week, ultimately these efforts must result in more jobs, especially for young people. “The partnership’s efforts must consider the employment impact of different options and ensure that all opportunities are grasped to create jobs.

“This is certainly the intended outcome of the reforms that will enable growth. With growth comes expansion as businesses invest to take advantage of opportunities. Investment leads to increased economic capacity which creates jobs at scale.”

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Business and government cooperation a global example

She says the partnership between business and government is a global example of how an emerging economy can tackle its challenges. “What business and government managed to achieve together is in many respects unprecedented.

“We can celebrate partnership milestones but also the partnership itself, which contributes to the business case for SA Inc. We are building what could be a template for the global economy to show how public and private sectors can work effectively together to enable the goals of both.

“The case of SA Inc will be set out this week at the World Economic Forum (WEF) in Davos, where we will promote our hosting of the G20 and B20 this year. Last week government and business also met to coordinate our agenda for Davos, ensuring that we work as a team to convey the case. There was great alignment between us and a clear view of the objectives.

“This year we can point to significant successes, such as the end of load shedding but also the many achievements of government in reversing the impact of state capture, from the rebuilding of Sars back into a world-class institution to the way we conducted elections last year. I feel this year’s WEF is the first where business and government have been in strong alignment as Team SA.”

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Partnership on full display in Davos

Mavuso says the business/government partnership will be on full display in Davos.

“Team SA has a full programme setting out our progress with events ranging from climate change and our energy transition to South African beer and wine tasting.

“Our activation of the B20 South Africa presidency will be driven by a lunch that will convene global leaders with Business Unity South Africa (BUSA) president Mxolisi Mgojo and BLSA chairman Nonkululeko Nyembezi.

“Much of the activity will be around the official programme where we can engage with business and political leaders from around the world to make the case more directly for South Africa.”

She emphasises that 2025 is South Africa’s opportunity to tell the world that it is back in business and worthy of investment attention.

“Last week was encouraging, as our engagements with the president and preparations for Davos demonstrated that our leaders are keenly focused on showcasing South Africa as a country that is making things happen.

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2025 could be pivotal for South Africa

“This year could be pivotal for us as a country, like in 2010, the boom years before the financial crisis and the early years after democracy when so much was done to reform our institutions and put the economy on a growth path.

“We are rebuilding, gaining traction and accelerating reform, while simultaneously making the case for SA Inc. This week will be an exciting one, but the year ahead is filled with opportunities to deliver meaningful change for our country and our people.”