GNU must build culture of accountability – BLSA CEO

The new administration in the form of the GNU must build a culture of accountability as the auditor general (AG) pointed out last week as she reported on the audits of government.

Busisiwe Mavuso, CEO of Business Leadership South Africa (BLSA) says the AG, Tsakani Maluleke, has a unique perspective on the performance of the public sector. “Maluleke and her team have a bird’s eye view of government as a whole.

“Last week when she presented her latest report on the performance of national government entities, it was impressive how she could go beyond the numbers to assess the underlying performance of the public sector.”

On the numbers, the AG’s report shows government has been doing better, including a marked improvement in the number of national government entities getting clean audits. That has increased from 93 five years ago to 142.

Mavuso says those institutions must be congratulated but it also shows persistent problems, including entities simply ignoring the law. “Institutions like SAA[South African Airways], the Post Office and the Unemployment Insurance Fund did not file their financial statements on time. Maluleke particularly highlighted the UIF[Unemployment Insurance Fund] which has been late for the past five years yet manages a significant amount of money and plays a key role in our socioeconomic framework.”

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Accountability and consequences

Maluleke’s recommendations for the new administration were clear: build a culture of accountability and consequences. Mavuso points out that the recommendations section of the report is full of good guidance for the new administration on how to do that, from accounting offices to parliamentary oversight.

“It is about building infrastructure, systems and professionalism, managing service delivery risks better, planning better and having greater capacity to ensure good performance. Above all it is about ensuring when government departments and institutions fail to meet their legal obligations, there must be consequences.”

Mavuso says there has already been much positive momentum from the government of national unity (GNU) and the AG’s report provides an excellent set of objectives that the GNU would be wise to pursue.

“It requires a broad approach, from provinces through to parliament, ensuring the effective financial management of our national and provincial government institutions. The AG has once again held the line on accountability and nudged the government in a positive direction to ensure long-term performance and the better utilisation of scarce public resources.

“She has given guidance on what they should be paying attention to, shining the spotlight on what can make a difference.”

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SA takes on G20 leadership

Mavuso also points out that South Africa officially took on the chairmanship of the G20 on Sunday, 1 December. “The year ahead gives us an opportunity to showcase ourselves and to demonstrate our reemergence as a force to be reckoned with, not only in Africa but among emerging economies around the world.

“With momentum growing in structural reforms that are delivering for our economy domestically, we need to leave a lasting impression that South Africa is the place to go, for business as well as tourism and put South Africa back on the map.”

She says the G20 agenda itself is driven internationally but when we host events next year, the world’s attention will be on us. “I am reminded of the 2010 Fifa World Cup and the opportunity it presented to get our house in order to host a global event. Our cities must be planning to ensure infrastructure is up to the task. Johannesburg in particular has work to do.”

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Competition Commission and Vodacom/Maziv merger

Mavuso has before expressed her concern that competition policy and its implementation in South Africa risks being at odds with our broader public interest by compromising investment and growth.

“BLSA was pleased to host a council session with Competition Commissioner Doris Tshepe last week to discuss the commission’s work. It was frank and forthcoming. The commission, as Tshepe pointed out, is an implementation body, not one that sets policy directly.”

Therefore, she says it was also notable last week to read that the minister of trade, industry and competition, Parks Tau, is appealing against the Competition Tribunal’s decision to block the acquisition by Vodacom of fibre business Maziv.

“The transaction was set to unleash major new investment in fibre infrastructure that would have improved data access in rural areas and created jobs. The minister’s intervention signals a concern for the needs of the economy. It is notable that even some of Vodacom’s competitors have indicated they think the deal should be allowed, in line with a global trend toward consolidation that enables the scale of investment that is needed to provide necessary data infrastructure in the country.”

She notes that the minister’s appeal comes before the Tribunal has published its reasons, but a deadline for appeals was looming. Both the merging parties have also signalled their intention to appeal.

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Minister’s intervention is interesting

“But the minister’s intervention is interesting given his department oversees the competition authorities and leads on policy. Competition policy should, as the commissioner told us, prove attractive for investors by ensuring there is a level playing field. But too often the application, particularly of the public interest provisions in competition law, has led to decisions that make deals unpredictable and expensive.

“Many investors will not even take the risk. In our wider effort to drive an industrial policy that improves the competitiveness of the whole economy and ultimately its ability to compete in international markets, we need a rethink of both competition policy and its application.”